MC Imports Ltd. v. Afod Ltd., 2016 FCA 60

• Judge: Trudel, Scott and de Montigny, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: December 02, 2015
• Jurisdiction: Canada (Federal)
• Citations: 2016 FCA 60;(2016), 481 N.R. 381 (FCA)

MC Imports Ltd. v. Afod Ltd. (2016), 481 N.R. 381 (FCA)

MLB headnote and full text

Temp. Cite: [2016] N.R. TBEd. MR.015

MC Imports Inc. (appellant) v. Afod Ltd. (respondent)

(A-569-14; 2016 FCA 60)

Indexed As: MC Imports Ltd. v. Afod Ltd.

Federal Court of Appeal

Trudel, Scott and de Montigny, JJ.A.

February 23, 2016.

Summary:

The plaintiff, MC Imports Ltd., sued the defendant, alleging trademark infringement of its LINGAYEN trademark. The LINGAYEN trademark covered Filipino food products such as fish/shrimp sauce, known as bagoong, fish/ shrimp preserves, fish paste, salted fish, soy sauce, and vinegar (the wares) and food supplier and distributor services (the services). The defendant filed a defence and counterclaim, challenging the validity of the trademark's registration. A motion was brought to have the matter determined by way of summary trial.

The Federal Court, in a decision reported 469 F.T.R. 262, granted the motion for summary trial. The court dismissed the plaintiff's infringement action. The court allowed the defendant's counterclaim and granted a declaration of invalidity on the basis the mark was clearly descriptive of the place of origin of its wares (Trade-marks Act, s. 12(1)(b)). The trademark was ordered expunged from the register. The plaintiff appealed.

The Federal Court of Appeal dismissed the appeal.

Trademarks, Names and Designs - Topic 254

Trademarks - What trademarks registrable - Geographical names - General - [See all Trademarks, Names and Designs - Topic 261 ].

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Marks which are descriptive of the product - Section 12(1)(b) of the Trade-marks Act provided that a trademark that was clearly descriptive or deceptively misdescriptive of the place of origin of its goods or services was not registrable - The Federal Court of Appeal discussed the analytical approach on a s. 12(1)(b) "clearly descriptive" type case: (1) determine if the trademark was a geographical name; (2) determine the place of origin of the wares or services, and (3) assess the trademark owner's assertions of prior use, if any - The court elaborated on these steps - See paragraphs 34 to 76.

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Marks which are descriptive of the product - Section 12(1)(b) of the Trade-marks Act provided that a trademark that was clearly descriptive or deceptively misdescriptive of the place of origin of its goods or services was not registrable - The Federal Court of Appeal set out a three step analytical approach to a s. 12(1)(b) analysis in a "clearly descriptive" type case - At the first stage, the court had to determine if the trademark was a geographic name - The court stated that at that stage resort might have to be had to consumer perceptions if there was ambiguity as to whether the trademark actually referred to a place (e.g., where the word had multiple meanings, not all of which were geographic) - Where such an inquiry was necessary the relevant ordinary consumer from whose perspective that question ought to be considered was the ordinary consumer of the products or services with which the mark was associated (i.e., as opposed to the view of the general public) - See paragraphs 34 to 64.

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Marks which are descriptive of the product - Section 12(1)(b) of the Trade-marks Act prohibited registration of a trademark that was clearly descriptive or deceptively misdescriptive of the place of origin of its goods or services - The Federal Court of Appeal stated that on a s. 12(1)(b) analysis, once it was determined that the trademark referred to a geographic location, the focus moved to whether the wares or services originated from the geographic location used as the trademark - If so, then the trademark was clearly descriptive of the place of origin and therefore, unregistrable - If not, then the trademark was misdescriptive, requiring an analysis to determine whether it was deceptively misdescriptive - The court stated that it should remain open to all producers of goods and services to describe the origin of what they were selling, even if the ordinary consumer might not be previously familiar with that place - See paragraphs 65 to 68.

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Marks which are descriptive of the product - Section 12(1)(b) of the Trade-marks Act prohibited registration of a trademark that was clearly descriptive or deceptively misdescriptive of the place of origin of its goods or services - However, s. 12(2) provided an exception where the trademark had become distinctive due to use - The Federal Court of Appeal discussed the relationship between these two provisions - In a prior-use case, it was open to the registrant to argue that through that prior use the trademark had developed distinctiveness such that it fell within the s. 12(2) exception - It was also at that stage that consumer perceptions became highly relevant - The burden was on the registrant to prove that its trademark had acquired distinctiveness due to use in Canada at the time of registration (i.e., the registrant had to demonstrate that the trademark, although it might be descriptive, had acquired a dominant secondary or distinctive meaning in relation to the wares or services with which it was associated) - Evidence had to be presented to demonstrate that from the perspective of the relevant public, i.e., people who actually used the product or service in question, the trademark had become distinctive of that product or service - Mere evidence of prior use did not satisfy the requirement under s. 12(2), which required both prior use and acquired distinctiveness as a result of that use - See paragraphs 65 to 76.

Trademarks, Names and Designs - Topic 261

Trademarks - What trademarks registrable - Prohibition - Marks which are descriptive of the product - The plaintiff registered a trademark, LINGAYEN, respecting Filipino food products such as fish/shrimp sauce, known as bagoong, fish/shrimp preserves, etc. (wares) and food distributor services (services) - The Federal Court of Appeal affirmed that the LINGAYEN trademark was not registrable because it was clearly descriptive of the place of origin of the goods (Trade-marks Act, s. 12(1)(b)) - Lingayen was a municipality in the Philippines and the goods with which the LINGAYEN trademark were associated originated in Lingayen - No evidence was presented to suggest that the ordinary meaning of the word "Lingayen" referred to anything but the municipality - It followed that the trademark clearly described the place of origin of the goods with which it was associated within the meaning of s. 12(1)(b) - The trademark owner's evidence of prior use was not sufficient to meet the burden of demonstrating that it had acquired distinctiveness at the time or registration such as to fall within the exception to s. 12(1)(b) in s. 12(2) of the Act - The trademark was, therefore, invalid under s. 18(1)(a) of the Act - See paragraphs 77 to 82.

Trademarks, Names and Designs - Topic 265

Trademarks - What trademarks registrable - Distinctive marks - General - [See fourth Trademarks, Names and Designs - Topic 261 ].

Trademarks, Names and Designs - Topic 1804

Trademarks - Infringement - Acts not constituting an infringement (incl. defences) - The plaintiff registered a trademark, LINGAYEN, respecting Filipino food products such as fish/shrimp sauce, known as bagoong, fish/ shrimp preserves, etc. (wares) - The defendant sold its bagoong product, labelled with the defendant's trademark "Napakasarap" and the phrase "Lingayen Style" in lesser script immediately below the defendant's trademark - The plaintiff sued the defendant, alleging trademark infringement - The Federal Court declared the plaintiff's trademark invalid for being clearly descriptive of the origin of the wares contrary to s. 12(1)(b) of the Trade-marks Act - The court opined that there was no infringement of the trademark, in any event, because the defendant used the words "Lingayen Style" as descriptive of the quality and nature of the goods and, therefore, there had been no use of the word "LINGAYEN" as a trademark as required by s. 2 of the Act - The plaintiff appealed, arguing that the judge erred in his conclusion that even if the registration was valid, the defendant did not infringe the trademark - The Federal Court of Appeal rejected the plaintiff's argument - See paragraphs 85 to 106.

Trademarks, Names and Designs - Topic 1807

Trademarks - Infringement - Use - General - [See Trademarks, Names and Designs - Topic 1804 ].

Trademarks, Names and Designs - Topic 4414

Trademarks - Practice - Appeals or judicial review - A trial judge determined that a trademark was not registrable pursuant to s. 12(1)(b) of the Trademarks Act because it was descriptive of the place of origin of the wares and, therefore, invalid - The trademark owner appealed - The Federal Court of Appeal discussed the standard of review - The court stated that the question of whether the trial judge applied the proper legal test under s. 12(1)(b) of the Act was a question of law to be reviewed for correctness - However, issues of validity, distinctiveness and infringement were questions of mixed fact and law - Absent palpable and overriding errors, the appeal court would not disturb the trial judge's findings - See paragraphs 29 to 33.

Cases Noticed:

Consorzio Del Prosciutto Di Parma v. Maple Leaf Meats Inc., [2001] 2 F.C. 536; 205 F.T.R. 176 (T.D.), affd. 291 N.R. 305; 2002 FCA 169, consd. [para. 17].

Sociedad Agricola Santa Teresa Ltda. et al. v. Vina Leyda Limitada (2007), 320 F.T.R. 161; 63 C.P.R.(4th) 321; 2007 FC 1301, consd. [para. 17].

Housen v. Nikolaisen et al. (2002), 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 32].

Teachers' Pension Plan Board (Ont.) v. Canada (Attorney General) (2012), 427 N.R. 328; 2012 FCA 60, refd to. [para. 36].

Atlantic Promotions Inc. v. Registrar of Trademarks (1984), 2 C.P.R.(3d) 183 (F.C.T.D.), refd to. [para. 47].

Cliche v. Canada (Attorney General) (2012), 411 F.T.R. 118; 2012 FC 564, refd to. [para. 60].

Cross-Canada Auto Body Supply (Windsor) Ltd. et al. v. Hyundai Auto Canada (2007), 313 F.T.R. 278; 60 C.P.R.(4th) 406; 2007 FC 580, refd to. [para. 60].

Boston Pizza International Inc. et al. v. Boston Market Corp. et al. (2003), 238 F.T.R. 1; 2003 FC 892, refd to. [para. 61].

ITV Technologies Inc. v. WIC Television Ltd. (2003), 239 F.T.R. 203; 29 C.P.R.(4th) 182; 2003 FC 1056, refd to. [para. 61].

Molson Breweries, A Partnership v. Labatt (John) Ltd. et al., [2000] 3 F.C.R. 145; 252 N.R. 91 (F.C.A.), refd to. [para. 72].

Molson Co.'s Ltd. v. Carling Breweries Ltd., [1984] 2 F.C. 920; 1 C.P.R. (3d) 191 (T.D.), affd. (1988), 93 N.R. 25; 16 C.I.P.R. 157; 19 C.P.R. (3d) 129 (F.C.A.), refd to. [para. 76].

Pepper King Ltd. v. Sunfresh Ltd. et al. (2000), 194 F.T.R. 293; 8 C.P.R.(4th) 485, refd to. [para. 91].

Kirkbi AG et al. v. Ritvik Holdings Inc. et al., [2005] 3 S.C.R. 302; 341 N.R. 234; 2005 SCC 65, refd to. [para. 96].

Target Event Production Ltd. v. Cheung et al. (2010), 409 N.R. 118; 2010 FCA 255, refd to. [para. 96].

Manitoba Fisheries Ltd. v. Canada, [1979] 1 S.C.R. 101; 23 N.R. 159, refd to. [para. 101].

Veuve Clicquot Ponsardin v. Boutiques Cliquot ltée et al., [2006] 1 S.C.R. 824; 349 N.R. 111; 2006 SCC 23, refd to. [para. 101].

Statutes Noticed:

Trade-marks Act, R.S.C. 1985, c. T-13, sect. 12(1)(b), sect.12(2) [para. 16].

Counsel:

David R. Elliott, for the appellant, MC Imports Inc.;

Georges Sourisseau, Layne Hellrung and Scott E. Foster, for the respondent, Afod Ltd.

Solicitors of Record:

Dentons Canada LLP, Ottawa, Ontario, for the appellant, MC Imports Inc.;

Sourisseau & Co., Vancouver, British Columbia, and Gowling Lafleur Henderson LLP, Ottawa, Ontario, for the respondent, Afod Ltd.

This appeal was heard in Ottawa, Ontario, on December 2, 2015, before Trudel, Scott and de Montigny, JJ.A., of the Federal Court of Appeal. The following decision was delivered for the court by Trudel, J.A., on February 23, 2016.