In the recent decision of Lum v Dr Coby Cragg Inc, 2015 FCA 293, the Federal Court of Appeal considered whether a trademark having a geographic component is registrable when the services of interest originate from the region associated with the trademark. Given the Court’s reasoning, it may now prove more difficult for one to register a mark having a geographic component if the goods or services of interest actually originate from that geographic location, irrespective of whether the location is known for such goods or services.
The registrant operated a dental clinic under the trade names “Ocean Park Dental Centre” and “Ocean Park Dental” in an area of South Surrey, British Columbia commonly known since the early 1900s as Ocean Park. Its marketing material bore a smiling whale logo and the trade name “Ocean Park Dental Centre”. In 2013, the registrant obtained a registration for the trademark OCEAN PARK alone in association with “dental clinics” based on use since as early as 2000.
Less than one block away from the registrant’s practice, the appellants, Dr. Patrick Lum and Dr. P.K. Lum (2009) Inc., also operated a dental practice, under the trade names “Ocean Park Dental Group”, “Ocean Park Village Dental” and “Village Dental in Ocean Park”. In response to an action for trademark infringement in the British Columbia Supreme Court, the appellants commenced invalidity proceedings against the registrant before the Federal Court to have the registration of the trademark OCEAN PARK declared invalid and expunged from the Register on the bases that it was (1) descriptive of the place of origin of the registrant’s services, contrary to paragraph 12(1)(b) of the Trade-marks Act and (2) not distinctive, pursuant to Section 18(1)(b) of the Trade-marks Act.
Paragraph 12(1)(b) provides that a trademark is not registrable if it is “whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or […] of their place of origin”.
The Federal Court dismissed the action on both grounds. The trial judge held that in addition to establishing that the trademark OCEAN PARK refers to a place, the appellants had to show that this place was indigenous to the services in question (i.e. that a reasonable person would equate the location “Ocean Park” with dental services”), which the appellants failed to do.
Court of Appeal decision
In allowing the appeal, the Court of Appeal opined without detailed reasons that the trial judge had misunderstood the meaning of paragraph 12(1)(b) and that this provision applies to a wide range of situations. By way of one example, the Court indicated that this provision would preclude the registration of SILICON VALLEY for software development services offered outside that geographic location, if the average consumer understood such a mark as meaning that the services at issue originated from Silicon Valley, a region famous for such services. However, the Court noted that the application of paragraph 12(1)(b) was not limited to such type of cases.
The Court added that there was also a public interest aspect to paragraph 12(1)(b), in particular, to preclude a trader or service provider from monopolizing the name of a geographic location so as to prevent other local traders or service providers from using that word to describe from where their own services originate. Notably, the Court referred to other businesses from the same area using the words “Ocean Park” in their trade name (e.g. Ocean Park Automotive, Ocean Park Natural Therapy, Ocean Park Fine Meats, Ocean Park Flowers, etc…).
Since the Court held that the trademark OCEAN PARK was “descriptive within the meaning of paragraph 12(1)(b) of the Act”, it considered whether it could be registrable pursuant to paragraph 12(2) of the Trade-marks Act, which allows for the registration of a clearly descriptive mark if it has acquired distinctiveness at the filing date of the application. However, the Court concluded that since the registrant had never used the trademark OCEAN PARK as a stand-alone mark, it could not have acquired distinctiveness at any time.
In rendering its decision, the Court set out the test to apply for determining if a mark having a geographic component is clearly descriptive of the goods or services’ place of origin where the trademark refers to the actual origin of the goods or services and in doing so, held that such a trademark would indeed be contrary to paragraph 12(1)(b) irrespective of whether consumers, as a first impression, recognize the mark as a place of origin for the particular goods or services.The Court’s interpretation of paragraph 12(1)(b) may therefore make it much more difficult for one to register a mark having a geographic component, especially if the goods or services are actually offered in that geographic location. It remains to be seen the extent to which this decision is followed or distinguished on the basis of its facts.
In any event, an applicant faced with such a descriptiveness objection can still rely on paragraph 12(2) of the Trade-marks Act to salvage its application by demonstrating that the applied-for mark had acquired distinctiveness as of the filing date of the application.
Similarly, if evidence of acquired distinctiveness is not called for by the Examiner during prosecution, but the ensuing registration is challenged on the basis that the subject trademark was not registrable because it is clearly descriptive, paragraph 18(2) of the Trade-marks Act allows for a mechanism whereby a registrant can potentially preserve the registration by establishing acquired distinctiveness as of the date of registration. In this case, however, since the evidence showed that the registrant had never used its trademark as registered, the Court could not maintain the registration on the basis that the mark had acquired distinctiveness.