In Sociedad Agricola Santa Teresa Ltda. and Vicente
Isquierdo Menendez v. Vina Leyda Limitada, the Federal
Court considered the scope of paragraph 12(1)(b) of the
Trade-marks Act (the Act). This paragraph
provides that a trade-mark is not registrable if the mark is
(when written or sounded) "either clearly descriptive or
deceptively misdescriptive in the English or French language of
the character or quality of the wares or services in
association with which it is used or proposed to be used or of
the conditions of or the persons employed in their production
or of their place of origin."
Vina Leyda Limitada, a wine producer from the Leyda Valley
region of Chile, had applied to register LEYDA as a trade-mark
for use in association with wine. Vina Leyda's
application was opposed by Sociedad Agricola Santa Teresa Ltda.
and Vicente Isquierdo Menendez, each of which are wine
producers from the same region in Chile.
In rejecting the opposition, the Trade-marks Opposition
Board (TMOB) had held that although wine was produced in the
Leyda Valley, the valley had not been designated by the Chilean
government as an appellation of origin. Because the phrase
"clearly descriptive" modified the meaning of the
term "place of origin," the Registrar felt that there
was insufficient evidence that the average Canadian would
believe that LEYDA branded wine was from the Leyda Valley.
Sociedad Agricola Santa Teresa Ltda. and Vicente Isquierdo
Menendez appealed the decision of the TMOB under section 56 of
the Act, which allowed them to submit new evidence on
the appeal. The new evidence showed that the term "Valle
de Leyda" had been designated an appellation of origin in
2001 by the Chilean Ministry of Agriculture.
In overturning the TMOB's decision, the Court noted
that because the word LEYDA clearly referred to the
wine's place of origin, it was not registrable as a
trade-mark. On a policy level, the Court noted that
"geography is one of the most important considerations in
assessing whether one should try a new wine." Allowing the
respondent to register LEYDA, thereby preventing others in the
region from referring to their wine's place of origin
on labels or promotional literature, would give the respondent
an unfair competitive advantage.
Although the Court did note that a trade-mark that describes
a place of origin might be registrable if it had been used
and/or become distinctive at least as early as the time at
which the application for registration was filed, such a caveat
could not help the application before it, as LEYDA had not been
used in Canada before the application was filed, nor had it
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