A recent decision of the Federal Court of Appeal clarifies when
a trademark consisting of a geographic name is unregistrable.
MC Imports Inc. imports and sells food products in association
with the trademark LINGAYEN (the "Mark"). Lingayen is a
municipality in the Philippines known for its bagoong shrimp paste
products characterized by their distinct aroma and flavour. The
Mark was registered for use in association with food products,
namely, fish sauce, fish paste, shrimp preserves, salted fish,
MC Imports Inc. commenced an action in the Federal Court
relating to an alleged infringement of its trademark by AFOD Ltd.
By counter-claim, AFOD Ltd challenged the validity of the Mark, on
the basis that the Mark was clearly descriptive of the place of
origin of the goods.
Paragraph 12(1)(b) of the Act establishes that a
trademark is not registrable if it is "either clearly
descriptive or deceptively misdescriptive in the English or French
language of the character or quality of the goods or services in
association with which it is used or proposed to be used ... or
their place of origin". The purpose of this prohibition is to
avoid granting one trader a monopoly to describe the geographic
nature of their goods to the detriment of their competitors.
A judge of the Federal Court after a summary trial dismissed the action for infringement and
allowed the counter-claim. The judge found that the Mark was
not registrable at the time of registration and invalid, because it
was clearly descriptive of the place of origin of the goods in
relation to which it was used, contrary to paragraph
12(1)(b) of the Act.
MC Imports Inc. appealed from this decision to the Federal Court
of Appeal. They asserted that Canadian consumers in general are not
aware of Lingayen or that the goods are from Lingayen. It is a
relatively small city in the Philippines; Filipino Canadians
represent a small part of the national population and fish products
from the Philippines are only a small portion of Canadian imports.
As a result there was no basis to conclude that the ordinary
consumer would recognize the Mark as descriptive of the origin of
There are divergent decisions of the Federal Court concerning
the registrability of trademarks that describe the place of origin
of goods and services. One line of decisions suggests that to
determine whether the paragraph applies consideration must be given
to whether the ordinary consumer perceives the trademark relates to
the goods' place of origin. The other line of decisions
suggests that the ordinary consumer's perspective is irrelevant
and only considers whether the mark clearly describes the actual
place of origin of the goods. As a result the court indicated that
it would provide its guidance.
The court reviewed the cases and concluded that an
analysis of consumer perception is not immediately helpful in this
type of case. In order to determine whether a geographic name is
unregistrable as a trademark, because it is clearly descriptive of
place of origin, two questions must be considered. First, it must
be determined whether the trademark is a geographical name; and
second, the place of origin of the wares must be ascertained. The
adoption of this approach means that names of places not widely
known to Canadians will fall within the ambit of paragraph
12(1)(b)'s prohibition of clearly descriptive
Subsection 12(2) of the Act provides an exception to paragraph
12(1)(b): despite being clearly descriptive or deceptively
misdescriptive, a trademark is registrable if it has become
distinctive, as of the date of application, due to its use in
Canada by the applicant or the applicant's predecessor in
title. In order for this exception to apply evidence must be
presented to show that from the perspective of the relevant public
— that is, people who actually use the product or service in
question — the trademark has become distinctive of the goods.
Evidence of use by itself is not enough; there must be evidence of
use and acquired distinctiveness.
Unfortunately for MC Imports Inc. the court agreed with the
trial judge that the Mark was descriptive of the place of origin of
the goods and that there was no evidence of acquired
distinctiveness and dismissed the appeal.
The court seems to have been strongly influenced by the fact
that a shrewd trader could monopolize the name of the place of
origin of goods to the determent of other traders selling goods
from that place. For example, one trader should not be able
to obtain a trademark registration for the name of a foreign wine
growing district and preclude others from referring to that
name. In any event the rule is now clear, at least for the
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.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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