By Scott Hervey

Canada has made a fundamental change in its Trade-mark Examination practice. It had been a longstanding practice in the Canadian Intellectual Property Office (the governmental body responsible for reregistering trade-marks) of determining the priority of applications based on the earliest of the following: the date of first use or making known in Canada, the date of filing in Canada, or the date of filing of the Paris Convention priority application. The legitimacy of assessing priority in this regard was challenged and overturned by the Federal Court of Appeals in May of this year in Attorney General of Canada v. Effigi (2005 FCA 172).

The facts of the Effigi case begins with a December 19, 2000, trade-mark filing by Effigi to register the mark MAISON UNGAVA, on an intent to use basis for the following goods: bed clothes, bath linen and table linen. On October 19, 2001, Tricorn Investments Canada Ltd. filed an application to register the mark UNGAVA for household linen, bed clothes and window coverings, claiming that the mark had been in use in Canada in connection with the goods since 1981.

On May 2, 2002, the trade-marks examiner assigned to Effigi’s application issued an initial examination report refusing registration of Effigi’s mark on priority grounds. The examiner stated, pursuant to Section 16 of the Trade-marks Act, Effigi did not appear to be entitled to the registration of the MAISON UNGAVA trade-mark, because this trade-mark is confusing with another pending trade-mark, namely Tricorn’s UNGAVA mark, that had been previously used in Canada.

Effigi filed a reply to the examiner’s report, disputing the Registrar’s objection and arguing that a recent Court of Appeal case, Unitel International Inc. v. Canada (Register of Trade-marks), had held that the alleged dates of first use in two pending applications were irrelevant when applying paragraph 37(1)(c) of the Act. The examiner disagreed, concluding that Unitel did not apply to Effigi’s situation. The examiner stated:

The Office thinks the Unitel decision of the Federal Court of Appeal is consistent with the longstanding practice of the Trade-marks Office in relation to paragraph 37(1)(c). Considering the facts in that case, the Court upheld the decision that, where two pending applications are confusing with each other, the application that has both a prior date of filing and a prior date of first use should be advertised, and the other one should be rejected in accordance with paragraph 37(1)(c). The judge’s observation that “… the dates of first use are not a relevant consideration under paragraph 37(1)(c)” is considered obiter dicta and not binding upon the Office.

The examiner eventually issued a final refusal, from which Effigi appealed to the Federal Courts. On July 16, 2004, Mr. Justice Shore of the Federal Court of Canada allowed the appeal and ordered the Registrar to advertise (publish) Effigi’s mark. The Registrar appealed.

In determining whether the Registrar was empowered by statute to determine priority in accordance with its longstanding practice, the Court of Appeal reviewed the applicable sections of the Trade-marks Act.

Section 16 of the Trade-marks Act details an applicant’s right to register a trade-mark. That section provides that any applicant who has filed an application to register a trade-mark that is registrable and that he or his predecessor has used in Canada or made known in Canada in association with wares or services is entitled to registration unless at the date on which he or his predecessor in title first so used it or made it known it was confusing with: (a) a trade-mark that had been previously used in Canada or made known in Canada by any other person; (b) a registered or prior pending trade-mark; or (c) a trade-name that had been previously used in Canada by any other person.

Section 37 of the Trade-marks Act describes the Registrar’s authority to refuse a registration application. Section 37 provides that the Registrar shall refuse an application for the registration of a trade-mark if he is satisfied that, among other things, the applicant is not the person entitled to registration of the trade-mark because it is confusing with another trade-mark for the registration of which an application is pending.

The Court of Appeals stated that the examiner’s authority to refuse registration of an application pursuant to Section 37 is limited to, among others, where mark is not entitled to registration solely because it is confusing with a mark that is either already registered or the subject of a prior pending application, but not for the reasons set out in Section 16. The Court noted that had Parliament intended to empower the Registrar to refuse registration on the grounds that a mark is confusingly similar to a later filed but previously used mark, it would have explicitly said so.
The Federal Court stated that its interpretation of Section 37 of the Trade-marks Act would appear to be more logical and easier to apply than that suggested by the Registrar. The court noted that in the normal course of things, the Registrar summarily examines the applications in chronological order, beginning with the one that has the earliest date of filing. If there is no confusion with a mark that is pending when the application is filed, and if the other requirements of subsection 37(1) are fulfilled, the application is accepted for advertisement by the Registrar and anyone who claims a previous use and confusion with his own mark may file a statement of opposition under section 38. The court also noted that counsel for the Registrar was unable to cite to us any disadvantage whatsoever that might result from a “first come, first served” policy in terms of administration of the Act.

Although this ruling has affected the way in which the Trade-marks Office administers trade-mark applications, the decision does not change substantive Canadian trade-mark law. Canada, like the United States, ties superiority of rights to priority of use.
As a result of this decision, businesses that have pending applications in Canada can no longer depend on the Trade-marks Office to determine priority. Businesses will be required to take a more active role in opposing or expunging registrations. For most domestic businesses with a substantial trademark portfolio, this will not require much of a protocol change since Canada’s new system mirrors the “first to file” system used by the USPTO. However, businesses considering using a mark in Canada should, just as in the United States, proceed with clearing the mark and filing an application as soon as reasonably possible.

Scott Hervey is a partner at Weintraub Genshlea Chediak Tobin & Tobin and manages the 2,000 plus U.S. and international trademarks the firm handles on behalf of its clients. In addition to being licensed in California, Scott is licensed to prosecute trade-mark applications in Canada before the Canadian Intellectual Property Office. Scott has written and lectured extensively on the subject of intellectual property law, and has been quoted in a number of newspapers and periodicals. For more articles on intellectual property law, please visit Weintraub’s IP law blog at www.theiplawblog.com.