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12 August 2013
Trademark opposition proceedings in Canada are decided at first instance by a specialised tribunal, the Trademarks Opposition Board. Both the applicant and the opponent have an opportunity to file evidence, as well as to make written and oral submissions to the board. The board then issues a reasoned decision either allowing or refusing the trademark application.
Decisions of the board may be appealed to the Federal Court of Canada pursuant to Section 56 of the Trademarks Act. While appeals are often decided on the same evidentiary record as the lower court, appeals under Section 56 are somewhat unusual in that both parties are permitted to file new evidence in addition to that which was considered before the board.
When deciding the appeal, the standard of review which the court will apply to the board's decision depends in part on the nature of the new evidence filed. If the new evidence would not have materially affected the board's decision (or if no new evidence is filed), the court will apply the 'reasonableness' standard of review. The reasonableness standard of review pays significant deference to the board's decision and the court will not overturn the decision unless it is "clearly wrong". New evidence which is merely repetitive or confirmatory of that which was filed before the board will result in the court applying the reasonableness standard of review.
However, if the new evidence is sufficiently significant and probative that it would have materially affected the board's decision, the court will apply the 'correctness' standard of review, which effectively allows the court to consider the evidence afresh and reach its own conclusion.
The ability to file new evidence on appeal might tempt parties to cut corners when preparing their evidence before the board, on the assumption that any weaknesses in the evidence can be corrected on appeal in the event of an adverse decision by the board. However, recent jurisprudence reinforces the risks inherent with this approach. In particular, convincing the court that the new evidence is sufficiently significant to apply the correctness standard of review can be difficult, and if this threshold is not met, the chances of the court overturning the board's decision are very low.
This risk and its repercussions were exemplified in a recent case. In Retail Royalty Co v Hawke & Co Outfitters LLC (2012 FC 1539), Hawke & Co Outfitters LLC applied to register the trademark HAWKE & CO. OUTFITTER and bird design in association with various clothing items. The application was opposed by the clothing retailer American Eagle Outfitters (AEO) based in part on a likelihood of confusion with its trademark AMERICAN EAGLE OUTFITTERS and design; both parties' marks included a silhouette of a bird of prey. Before the board, Hawke filed evidence to suggest that trademarks which incorporated bird designs were commonly used in association with clothing, and consequently argued that AEO's trademark was entitled to a narrow scope of protection. However, Hawke's evidence in this regard was limited to two third-party trademark registrations. The board found this evidence to be insufficient and ultimately refused Hawke's application, in part due to the absence of convincing evidence that trademarks incorporating bird designs or the word 'outfitter' were commonly used in Canada in association with clothing.
On appeal, Hawke filed new evidence, including over 100 third-party trademark registrations which included the term 'outfitters' or 'outfitter', or which incorporated a bird design in association with clothing. Hawke argued that this new evidence addressed the deficiencies in its earlier evidence and was thus sufficiently significant to warrant the application of the correctness standard of review. However, despite the new evidence, after a detailed review the court concluded that the new evidence would not have materially affected the board's decision, and applied the reasonableness standard. Applying this more deferential standard of review, the court concluded that the board's decision was reasonable and dismissed Hawke's appeal.
Retail Royalty illustrates the necessity of filing the best possible evidence at first instance before the board. Despite the opportunity to file new evidence on appeal, there is a high threshold to convince the court that the new evidence is sufficiently significant to apply the correctness standard of review. Consequently, the safest approach for achieving success in opposition proceedings, including any appeals, is to file the best possible evidence at first instance before the board.
For further information on this topic please contact Timothy Owen Stevenson or Philip Lapin at Smart & Biggar/Fetherstonhaugh by telephone (+1 613 232 2486), fax (+1 613 232 8440) or email (firstname.lastname@example.org or email@example.com).
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