You’ve done a trademark clearance search, and the results look good. So you file a trademark application based on your intention to use the mark. You’re the first to file, and no one has previously used a confusing name or mark in Canada.

Q: Can you be completely confident that you’ll be able to register the mark?

A: No.

The Trade-mark Opposition Board’s iReward decision (June 28, 2010) shows how a later-entitled opponent can render an applicant’s mark not distinctive (and therefore prevent registration) through use of a confusing mark beginning after the applicant’s filing date. This outcome resulted from peculiar circumstances: the opponent adopted its mark in good faith (after clearance searching), and quickly commenced very substantial use, whereas the applicant never commenced use of its proposed mark at all.

In iReward, the opponent, Indigo, successfully argued that the applicant’s proposed mark (“iReward” for loyalty cards and related services) was not distinctive as a result of Indigo’s own use of the confusingly similar mark iREWARDS for the same kind of services. The novel aspect of the case was that Indigo’s use began after the applicant had filed the proposed use application. Furthermore, the applicant had given Indigo early written notice of its prior entitlement. The Board found that Indigo, by the time it opposed the application, had built up a sufficiently significant reputation in its iREWARDS mark to render the applicant’s proposed mark not distinctive. Central to the decision was the finding that Indigo had adopted its iREWARDS mark in good faith (with no knowledge of the applicant’s trademark application). Also, because the applicant never commenced use of its proposed mark, it could not argue that Indigo’s use was passing off or otherwise illegal.

The decision shows that there can be unusual circumstances in which a proposed use trademark application is not a fully secure placeholder. Canada’s trademark registration regime is not simply a “first-to-file” system, and marketplace circumstances (which can change over the course of prosecuting a trademark application) must be assessed carefully and on an on-going basis.