A recent decision of the Federal Court provides a thorough review of the considerations relevant to expungement of a trademark registration and illustrates the problems that can arise with a descriptive trademark.
The Ottawa Athletic Club (the "Applicant"), has operated a fitness facility in Ottawa since at least 1976 offering a wide range of athletic and fitness services under the trade name and trademark OTTAWA ATHLETIC CLUB. The Applicant also filed a trademark application for the trademark OAC & DESIGN, as shown below, which the Respondent opposed.
The Athletic Club Group Inc. (the "Respondent") is the owner of a registration obtained in 2003 for the trademark THE ATHLETIC CLUB & DESIGN, which appears as follows:
The Respondent's trademark was registered for use in association with the following services:
Restaurant services; snack bar services; operation of a facility for fitness training and/or weight training; operation of a facility for aerobics; personal training services; conducting dance classes; operation of a retail store selling sporting goods, men's and women's clothing, health foods and health supplements; fitness assessment services; conducting exercise, fitness and aerobics classes; operation of a tanning facility.
The Application to Expunge
In response to the opposition the Applicant initiated an application in the Federal Court seeking to expunge the registration owned by the Respondent on the basis that on varying dates the Respondent's trademark:
(a) was clearly descriptive of the character or quality of the
services for which it was used,
(b) was not distinctive,
(c) was the name of the services in connection with which it was used,
(d) designated the kind of services associated with it,
(e) was confusing with the previously used trademark/trade name of the Applicant.
The decision provides a detailed review of the case law applying to the grounds mentioned above.
Confusing With a Previously Used Trademark/Trade Name
An attempt to invalidate or expunge a registered trademark on this basis must be brought within five years of the date of the registration of the trademark, unless the Applicant can show that the Respondent had actual knowledge of the Applicant's previous use of the allegedly confusing trademark/trade name before the adoption of the Respondent's trademark.
On this issue the court observed that the onus of proof was on the Applicant to show that the Respondent had the necessary knowledge. When the judge reviewed all of the evidence it was found that the Applicant had not established knowledge of previous use within the five year period and as a result the Applicant could not now allege invalidity on this basis.
The Respondent argued that the word portion of its trademark was not dominant and that the design as a whole was distinctive. The judge disagreed and said that the dominant feature on a first impression basis was the words THE ATHLETIC CLUB. There was nothing distinctive about the oval background portion of the trademark or the script. Based on the dictionary definitions and other evidence the judge found that the mark was clearly descriptive of most of the services in association with which it had been used.
The Respondent argued that its trademark had acquired distinctiveness through substantial use. However, the judge was not satisfied that the evidence that the Respondent had filed was sufficient to show that its trademark had become distinctive. There were significant omissions and no survey evidence or consumer affidavits were filed. In addition, there was significant evidence of the use of "the Athletic Club" by third parties which rendered these words generic in the fitness industry.
The Name of the Services
A trademark that consists of a name in any language of the services in connection with which it is used is not registrable. The judge found that the words "athletic club" were in fact the name of the services being offered by the Respondent and other athletic clubs. The design features of the Respondent's mark were not sufficient to render the trademark distinctive in a way that took it outside of this prohibition.
Designating the Kind of Services
Section 10 of the Trademarks Act provides that where a mark has by ordinary and bona fide commercial usage become recognized in Canada as designating the kind of services no person shall adopt it as a trademark in association with such services.
In order to succeed on this point it was said that the Applicant had to show that the term "athletic club" had been extensively used in Canada by others to designate a type of physical services or facilities and the term had an accepted definition or meaning in the industry.
After reviewing the evidence the judge was persuaded that at the relevant date on the balance of probabilities the term "athletic club" had been extensively used by others in the industry of which the parties form a part and had a well-understood meaning in that industry and amoung users and potential users of the parties' services.
In effect the marks had become a generic term designating facilities similar to those operated by the parties in the application. As a consequence no person was entitled to adopt that mark or a mark that likely to be mistaken for it as a trademark in association with such services or others of the same general class. As a result it was found that the trademark was prohibited under section 10.
The court expunged the registration and granted an injunction permanently prohibiting the Respondent from using directly or via licence the Athletic Club trademark or its common law equivalent.
It appears that the Respondent's decision to oppose the Applicant's trademark application, in retrospect, may have been overly aggressive but a conflict between the parties may have been inevitable.
The decision concerning the issues of descriptiveness and distinctiveness is not remarkable.
The decision concerning section 10 of the Trademarks Act seems to stretch the application of the section. In addition, it seems odd to enjoin the respondent from using the mark or its common law equivalent when it appears that common law versions of the mark were in wide use in the industry.
Finally, the decision illustrates the problems associated with the choice of a descriptive trademark as opposed to a more unique mark.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.