A Registered Trademark Cannot be Clearly Descriptive of the Place of Origin of the Goods

A Registered Trademark Cannot be Clearly Descriptive of the Place of origin of the Goods

The Facts

MC Imports Inc. imports and sells food products in association with the trademark LINGAYEN (the “Mark”). Lingayen is a municipality in the Philippines known for its bagoong shrimp paste products characterized by their distinct aroma and flavour. The Mark was registered for use in association with food products, namely, fish sauce, fish paste, shrimp preserves, salted fish, salted shrimp.

The Action

MC Imports Inc. commenced an action in the Federal Court relating to an alleged infringement of its trademark by AFOD Ltd. By counter-claim, AFOD Ltd challenged the validity of the Mark, on the basis that the Mark was clearly descriptive of the place of origin of the goods.

Paragraph 12(1)(b) of the Act establishes that a trademark is not registrable if it is “either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the goods or services in association with which it is used or proposed to be used … or their place of origin”. The purpose of this prohibition is to avoid granting one trader a monopoly to describe the geographic nature of their goods to the detriment of their competitors.

A judge of the Federal Court after a summary trial dismissed the action for infringement and allowed the counter-claim.[1] The judge found that the Mark was not registrable at the time of registration and invalid, because it was clearly descriptive of the place of origin of the goods in relation to which it was used, contrary to paragraph 12(1)(b) of the Act.

The Appeal

MC Imports Inc. appealed from this decision to the Federal Court of Appeal. They asserted that Canadian consumers in general are not aware of Lingayen or that the goods are from Lingayen. It is a relatively small city in the Philippines; Filipino Canadians represent a small part of the national population and fish products from the Philippines are only a small portion of Canadian imports. As a result there was no basis to conclude that the ordinary consumer would recognize the Mark as descriptive of the origin of the goods.

There are divergent decisions of the Federal Court concerning the registrability of trademarks that describe the place of origin of goods and services. One line of decisions suggests that to determine whether the paragraph applies consideration must be given to whether the ordinary consumer perceives the trademark relates to the goods’ place of origin. The other line of decisions suggests that the ordinary consumer’s perspective is irrelevant and only considers whether the mark clearly describes the actual place of origin of the goods. As a result the court indicated that it would provide its guidance.[2]

The court reviewed the cases and concluded that an analysis of consumer perception is not immediately helpful in this type of case. In order to determine whether a geographic name is unregistrable as a trademark because it is clearly descriptive of place of origin two questions must be considered. First, it must be determined whether the trademark is a geographical name; and second, the place of origin of the wares must be ascertained. The adoption of this approach means that names of places not widely known to Canadians will fall within the ambit of paragraph 12(1)(b)’s prohibition of clearly descriptive trade-marks.

Subsection 12(2) of the Act provides an exception to paragraph 12(1)(b): despite being clearly descriptive or deceptively misdescriptive, a trademark is registrable if it has become distinctive, as of the date of application, due to its use in Canada by the applicant or the applicant’s predecessor in title. In order for this exception to apply evidence must be presented to show that from the perspective of the relevant public — that is, people who actually use the product or service in question — the trademark has become distinctive of the goods. Evidence of use by itself is not enough; there must be evidence of use and acquired distinctiveness.

Unfortunately for MC Imports Inc. the court agreed with the trial judge that the Mark was descriptive of the place of origin of the goods and that there was no evidence of acquired distinctiveness and dismissed the appeal.

Comment

The court seems to have been strongly influenced by the fact that a shrewd trader could monopolize the name of the place of origin of goods to the determent of other traders selling goods from that place.  For example, one trader should not be able to obtain a trademark registration for the name of a foreign wine growing district and preclude others from referring to that name.  In any event the rule is now clear, at least for the time being.

John McKeown

Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1600

Toronto, Ontario M5G 1V2

Direct Line: (416) 597-3371

Fax: (416) 597-3370

Email: mckeown@gsnh.com

These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.