The recent decision of the Federal Court of Appeal in MC Imports Inc. v Afod Ltd., 2016 FCA 60 (F.C.A., Trudel J.A., February 23, 2016) provides some much needed guidance on the proper test for assessing the registrability of trademarks that describe the place of origin of the goods or services with which they are associated. The Court of Appeal confirmed that if a mark contains the name of a geographic location from where the goods or services emanate, then the mark is clearly descriptive of the place of origin and not registrable. The perception of the consumer is irrelevant for purposes of the analysis.
Section 12(1)(b) of the Trademarks Act precludes registration of trademarks that are either clearly descriptive or deceptively misdescriptive of the character or quality of the goods or services with which they are associated, or their place of origin. Canadian jurisprudence has, however, struggled with the appropriate legal test to apply in cases dealing with trademarks that are geographic place names.
In Conzorsio Del Proscuitto Di Parma v. Maple Leaf Meats Inc., 2001 2 FC 536, the Federal Court, Trial Division, held that though "Parma" was a city in Italy that manufactured meat products, the trademark "PARMA" for meat products was not deceptively misdescriptive of the place of origin of the goods, even though the products did not come from "Parma", since the ordinary Canadian consumer did not recognize the name "Parma" as having any geographic significance. As such, they would not be misled into believing that meat products bearing the trademark "PARMA" would have originated from the city of "Parma". In addition to a mark having geographic name significance, the court in Parma held that the perception of the ordinary consumer was a necessary component of the Section 12(1)(b) analysis. The decision was upheld by the Federal Court of Appeal, 2002 FCA 169.
By contrast, in the 2007 decision in Sociedad Agricola Santa Teresa Ltd. v. Vina Leyda Limitada, 2007 FC 1301, the Federal Court, Trial Division, held that if a mark contains the name of the geographic place from where the goods or services originated, then the ordinary consumer's recognition of the place name was irrelevant for purposes of assessing clear descriptiveness of the place of origin. In this case, since "Leyda" was a wine producing region in Chile, it was necessary to conclude that the trademark LEYDA for wines was not registrable, being clearly descriptive of the place of origin of the products, contrary to Section 12(1)(b).
In Leyda, the Federal Court also distinguished earlier jurisprudence regarding the relevance of consumer perception, noting that it was only applicable to the test for assessing clear descriptiveness of the "character or quality" of the goods or services, and not for an assessment of clear descriptiveness of their "place of origin".
More recently, in Dr Patrick Lum and Dr. P.K. Lum (2009) Inc. v. Dr. Coby Cragg Inc., 2014 FC 1171; 2015 FCA 293, the Federal Court, Trial Division, held that while the mark in issue was the geographic place name from where the services originated, that place name was not "indigenous to" (or known by consumers for) such services and, therefore, the mark could not be clearly descriptive of the place of origin within the meaning of Section 12(1)(b). The Federal Court of Appeal, however, overturned the lower court's decision, finding that the mark was, in fact, clearly descriptive of the place of origin, contrary to Section 12(1)(b), in that it prima facie described the geographic location from where the services were provided.
In the most recent consideration of this issue, the Federal Court of Appeal in MC Imports Inc. v. Afod Ltd, (supra) also found that if a trademark is the name of a geographic place, and if the goods or services originate from that place, then the mark is clearly descriptive of the place of origin and not registrable. Consumer awareness is not relevant in the analysis. However, the Court went on to further clarify the appropriate legal test for determining the registrability of trademarks that describe places of origin of goods and services, noting that there was a need for guidance in this area.
In an attempt to reconcile the apparent doctrinal divide between the Parma and Leyda decisions, the Court acknowledged that there was a distinction between cases dealing with clear descriptiveness of the place of origin and those assessing the issue of deceptive midescriptiveness of the place of origin, and that only the latter type required an assessment of consumer perception. Hence, the Parma case, relying on consumer awareness as a component of the analysis, would not be the proper jurisprudential authority in a case dealing with the issue of clear descriptiveness of the place of origin. Parma dealt with the issue of whether a mark is deceptively misdescriptive of the place of origin. In such cases, even if the mark is the name of a geographic place, it may not be deceptively misdescriptive of the place of origin if the ordinary Canadian consumer would not assume that the goods or services came from that place. By contrast, in a case involving trademarks that are clearly descriptiveness of the place of origin, the perspective of the ordinary consumer would be unnecessary. If a mark is the name of a geographic place, and the goods or services emanate from there, then, as a matter of law, the mark would be clearly descriptive of the place of origin and not registrable.
The recent decisions of the Federal Court of Appeal in both Lum and MC Imports suggest that Examiners and the Courts in Canada are very likely to refuse applications or invalidate registrations for trademarks that are geographic place names from where the associated goods or services originated, barring evidence showing acquired distinctiveness.
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