Canada: Infringing Use And Distinctiveness

Last Updated: February 14 2019
Article by John McKeown

A recent decision of the Federal Court of Appeal provides a useful summary of the law concerning the effect of infringing use on the distinctiveness of a trademark.

Sadhu Singh Hamdard Trust initially brought proceedings in the Federal Court against Navsun Holdings Ltd. for passing off. While the issues between the parties were complicated by a settlement agreement the Trust succeeded with an action for passing off concerning Navsun's use of design presentation of the word AJIT. Our previous comment concerning that dispute is here. The parties have a lengthy history of litigation.

The Facts

Concurrently with bringing its claims for passing off, the Trust filed a trademark application for the trademark AJIT for use in association with printed publications and newspapers. Navsun opposed the application on several grounds including a claim that the trademark was not distinctive of the Trust because of Navsun's use of the same mark in association with newspapers in Canada.

The Trust's newspaper is a daily publication based in India. It has been distributed in India since 1955. The paper is well-known among the Punjabi population in India. The Trust has also distributed its paper in Canada since 1968, but only a few subscriptions have been sold in Canada.  At best the Trust averaged 29 annual subscriptions.

The Navsun newspaper has been published weekly since about 1993 and is distributed in Vancouver and the Greater Toronto Area. As of filing the opposition, circulation of the respondent's newspaper was roughly 11,000 newspapers per week in Vancouver and another 13,000 per week in Toronto.

Trademark Opposition Board

Board relied on previous case law in the Federal Court that establishes the standard to prove that a trademark is sufficiently well-known to negate another mark's distinctiveness. Under the test, a mark "must be known to some extent at least to negate the established distinctiveness of another mark, and its reputation in Canada should be substantial, significant or sufficient". After a review of the evidence, the Board was satisfied that Navsun's mark was known sufficiently to negate the distinctiveness of the mark applied for by the Trust.

The Federal Court

The Trust appealed to the Federal Court, but the court upheld the decision arrived at by the Board. The Trust relied upon new evidence relating to the notoriety of the its mark arising from online readership and familiarity with the mark among people who have immigrated to Canada from India. However, the judge concluded that the new evidence was irrelevant and not material. The evidence as to online readership was not use in association with the mark as sought to be registered, and any notoriety within the Punjabi immigrant community derived from readership in India was not use in Canada, as required by the Trade-marks Act.

Federal Court of Appeal

The Trust appealed to the Federal Court of Appeal. The Court observed that under paragraph 38(2)(d) of the Trade-marks Act, an application for the registration of a trademark may be opposed on the basis that the mark is not distinctive. The Act defines "distinctive" as referring to any mark "that actually distinguishes the goods or services in association with which it is used by its owner from the goods or services of others or is adapted so to distinguish them". This accords with the organizing principle of trademark law that a mark is first and foremost an indicator of source.

The Board's assessment of distinctiveness was properly concerned with determining whether the mark was capable of distinguishing the particular goods and services of the Trust having regard to the relevant purchasing or consuming public. This question of distinctiveness is primarily one of fact. If the mark was not capable of distinguishing the Trust's goods and services, the underlying cause is irrelevant.

Whether the Trust was the first to use the mark in Canada and whether Navsun's later use was infringing were of no consequence where the parties have used the mark concurrently for over a decade, and, in that time, the Navsun has successfully acquired notoriety in the mark in Canada sufficient to negate the distinctiveness of the appellant's mark.

A brand owner must protect the distinctiveness of its mark, even in the face of infringing use. Infringing prior use may cause a mark to lose its distinctiveness, although the extent or degree to which distinctiveness is eroded by infringing use remains a question of fact to be considered in each case. The allegation of passing off did not preclude Navsun from relying on the alleged infringing use to challenge distinctiveness.

The Court of Appeal agreed with the approach that the Federal Court Judge had taken and dismissed the appeal.

Comment

The message in this decision is very clear. A brand owner must maintain the distinctiveness of its mark. If a brand owner acquiesces concerning the alleged infringing use of a confusing trademark it risks diminished distinctiveness and the potential invalidity of its 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.

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John McKeown
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