Canada: No Cookies For You! – Federal Court Confirms Jurisdiction To Issue Split Decisions In Trade-Mark Oppositions

In Les Marques Metro / Metro Brands S.E.N.C. v. 1161396 Ontario Inc., 2017 FC 806, Metro appealed a Trade-marks Opposition Board decision which allowed S&M Enterprises' registration of a mark in the word "IRRESISTABLES" in association with

The main issue was whether the applicant was required, pursuant to subsection 30(b) of the Trade-marks Act, to prove use of the mark only in association with the "general class" of "candy and snacks" or to prove use in association with each individually named specific goods. The Court agreed with S&M that a plain reading of the section appears to only require an application containing the date of first use for "each of the general classes of goods or services described in the application". However, the question was whether this trade-mark application was for a general class or for individually named specific goods. A general category of "candy and snacks", on its own, would not have been an acceptable category without further specification. Thus, the application was not for wares of one general class but for individually named specific wares.

The Court allowed the appeal and removed "cookies and biscuits" from the wares to which the mark could apply, since the S&M had not filed evidence to substantiate use in association with "cookies and biscuits". Allowing registration in association with a general class of goods when the mark hadn't been used in association with all goods listed within the class would lead to an absurd result: the applicant would receive registration on the basis of prior use without having actually used the mark in association with some of the listed goods. This would permit avoidance of the need to file a declaration of use for those particular goods, as it would have been required to do if it had applied for the registration on the basis of proposed use.

Without use, trade-mark rights do not exist. The law cannot be interpreted to allow circumvention of the fundamental requirement of use. Thus, while s. 30(b) only requires a date of first use with regards to each general class of goods or services, the mark must nevertheless have been used in association with each of the specific goods or services that are identified within the general class prior to the filing date.

S&M argued that the Registrar did not have jurisdiction under subsection 38(8) to issue split decisions (i.e. where an application is accepted in relation to some good(s) or service(s) and refused for others). This question appeared to have been answered in Produits Ménagers Coronet Inc. v. Coronet-Werke Heinrich Schlerf GmbH (1986), 10 CPR (3d) 482 (FCTD), which the TMOB has consistently relied on for over 30 years as authority to issue split decisions in over a hundred cases. However, no decision seems to have actually analyzed the Act to determine whether it confers the jurisdiction to issue split decisions.

Subsection 38(8) provides: "After considering the evidence and representations of the opponent and the applicant, the Registrar shall refuse the application or reject the opposition and notify the parties of the decision and the reasons for the decision." The Court found the provision ambiguous since it does not specify whether an application or opposition can be refused or rejected "in part" or only "in its entirety".

Split decisions allow the Registrar to maintain a proper balance between free competition and fair competition and to promote public interest. The rejection of an opposition in its entirety, regardless of whether it is justified for some of the goods/services, would be unfair to the opponent and promote unfair competition. Similarly, refusing an application, regardless of whether some of the goods/services should be registrable would be unfair to the applicant and stifle free competition.

The Court presumed that Parliament intended the registration process to be efficient. Refusing to recognise the Registrar's jurisdiction to issue split decisions would have the perverse effect of encouraging inefficient practices. Upon refusal, trade-mark applicants would need to go through the entire application process again with a narrower statement of goods and services. Such a practice would impel applicants to file multiple applications to avoid refusal based on a single good or service listed in the application. This would vastly increase the number of applications and opposition proceedings, and cause unnecessary delay and costs.

The Court thus affirmed the Coronet decision and held that the Registrar has jurisdiction to issue split decisions pursuant to section 38(8) of the Act.

A copy of the decision can be found here.

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