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

A Registered TrademarkCannot be Clearly Descriptive of the Place of origin of the Goods

The Facts

MCImports Inc. imports and sells food products in association with the trademarkLINGAYEN (the “Mark”). Lingayen is a municipality in the Philippines known forits bagoong shrimp paste products characterized by their distinct aroma andflavour. The Mark was registered for use in association with food products, namely, fish sauce, fish paste, shrimp preserves, saltedfish, salted shrimp.

The Action

MCImports Inc. commenced an action in the Federal Court relating to an allegedinfringement of its trademark by AFOD Ltd. By counter-claim, AFOD Ltdchallenged the validity of the Mark, on the basis that the Mark was clearlydescriptive of the place of origin of the goods.

Paragraph12(1)(b) of the Act establishes that a trademark is not registrable ifit is “either clearly descriptive or deceptivelymisdescriptive in the English or French language of the character or quality ofthe goods or services in association with which it is used or proposed to beused … or their place of origin”. The purpose of this prohibition is toavoid granting one trader a monopoly to describe the geographic nature of theirgoods to the detriment of their competitors.

Ajudge of the Federal Court after a summary trial dismissed the action forinfringement and allowed the counter-claim.[1]The judge found that the Mark was not registrable at the time of registrationand invalid, because it was clearly descriptive of the place of origin of the goodsin relation to which it was used, contrary to paragraph 12(1)(b) of theAct.

The Appeal

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

Thereare divergent decisions of the Federal Court concerning the registrability oftrademarks that describe the place of origin of goods and services. One line ofdecisions suggests that to determine whether the paragraph applies considerationmust be given to whether the ordinary consumer perceives the trademark relatesto the goods’ place of origin. The otherline of decisions suggests that the ordinary consumer’s perspective isirrelevant and only considers whether the mark clearly describes the actualplace of origin of the goods. As a result the court indicated that it wouldprovide its guidance.[2]

The court reviewed the cases and concluded that an analysisof consumer perception is not immediately helpful in this type of case. Inorder to determine whether a geographic name is unregistrable as a trademarkbecause it is clearly descriptive of place of origin two questions must beconsidered. First, it must be determined whether the trademark is ageographical name; and second, the place of origin of the wares must beascertained. The adoption of this approach means that names of places notwidely known to Canadians will fall within the ambit of paragraph 12(1)(b)’sprohibition of clearly descriptive trade-marks.

Subsection 12(2) of the Act provides an exception toparagraph 12(1)(b): despite being clearly descriptive or deceptivelymisdescriptive, a trademark is registrable if it has become distinctive, as ofthe date of application, due to its use in Canada by the applicant or theapplicant’s predecessor in title. In order for this exception to apply evidencemust be presented to show that from the perspective of the relevant public —that is, people who actually use the product or service in question — thetrademark has become distinctive of the goods. Evidence of use by itself is notenough; there must be evidence of use and acquired distinctiveness.

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

Comment

Thecourt seems to have been strongly influenced by the fact that a shrewd tradercould monopolize the name of the place of origin of goods to the determent ofother traders selling goods from that place. For example, one trader should not be able to obtain a trademarkregistration for the name of a foreign wine growing district and precludeothers from referring to that name.  Inany event the rule is now clear, at least for the time being.

John McKeown

Goldman Sloan Nash & Haber LLP

480University Avenue, Suite 1600

Toronto,Ontario M5G 1V2

DirectLine: (416) 597-3371

Fax:(416) 597-3370

Email: mckeown@gsnh.com

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