Think You Can Make Your Trade-mark Not Deceptively Misdescriptive By Stating the Country of Origin on the Product Packaging? Think Again…

Canada’s Federal Court of Appeal (FCA) in Ron Matusalem & Matusa of Florida Inc. v. Havana Club Holding Inc., S.A., 2011 FCA 244 recently upheld a Trade-marks Opposition Board (TMOB) decision finding that THE SPIRIT OF CUBA was deceptively misdescriptive for Dominican rum. While the TMOB decision is consistent with previous case law on deceptively misdescriptive marks, the TMOB made a key point that stating a product’s country of origin on packaging does not mean the mark is not deceptively misdescriptive with respect to the product’s country of origin.

Background

Paragraph 12(1)(b) of Canada’s Trade-marks Act states that a trade-mark is not registable if the mark, “whether depicted, 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”.

Ron Matusalem and Matusa of Florida Inc. (collectively, “Matusa”) appealed the Federal Court’s refusal to overturn a TMOB decision refusing the registration of THE SPIRIT OF CUBA for rum on the basis that the mark was deceptively misdescriptive to the FCA. The FCA upheld the Federal Court’s decision, dismissing the appeal with costs.

Matusa’s predecessor-in-title filed a trade-mark application for THE SPIRIT OF CUBA claiming “rum and non-alcoholic cocktails” and “promotion of alcoholic and non-alcoholic beverages via on-premise promotional events at retail stores, bars, restaurants, nightclubs and specialty sponsored events; retail sales of alcoholic beverages”. The application claimed wares and services on a proposed use basis.

Havana Club opposed the application. Its Statement of Opposition alleged that:

  1. The mark was clearly descriptive or deceptively misdescriptive of the place of origin of the wares; and
  2. The mark was not distinctive because it was clearly descriptive or deceptively misdescriptive of the place of origin of the wares.

Before the TMOB, Havana Club filed evidence demonstrating that Matusa’s THE SPIRIT OF CUBA rum was produced in the Dominican Republic. The TMOB found that given that rum is a spirit and also that Cuba is country known for its rum, the mark was deceptively misdescriptive with respect to rum, but not the other wares and the services claimed in the application. In its submissions, Matusa argued, among other things, tgat the rum’s country of origin was clearly stated on the packaging and thus there was not any deception. The TMOB rejected that argument, as a consumer does not always read packaging before purchasing a product. As for the “non-alcoholic cocktails”, the TMOB rejected the opposition against those wares, as the Opponent did not file evidence indicating the place of origin of those goods, and Cuba is not known for its non-alcoholic beverages. Accordingly, the Opponent did not meet its burden regarding those wares.

Matusa appealed the TMOB’s decision to the Federal Court. While both parties filed additional evidence before the Federal Court, the Federal Court held the new evidence would not have materially affected the TMOB’s decision, which in any event was not clearly wrong and was supported by the evidence on record and the public information such as dictionary definitions which the TMOB judicially noted. Accordingly, the Federal Court dismissed the appeal with costs.

Matusa further appealed to the FCA. The FCA found there was no legal error in the Federal Court’s reasons, nor did Federal Court make any palpable and overriding error in reviewing the evidence and applying the relevant law to the findings of fact. Effectively, Matusa was asking the FCA to reassess the evidence before the Federal Court, which the FCA would not do unless the Federal Court judge made an error. Accordingly, the FCA dismissed the appeal with costs.

Significance

The TMOB decision is an authority that a trade-mark that is deceptively misdescriptive as to a product’s country of origin is still a descriptively misdescriptive trade-mark even if the packaging makes it clear as to the product’s origin. This makes sense for a number of reasons.

First, as the TMOB correctly pointed out, consumers do not always read product packaging before purchasing. So a consumer may not see the product of origin statement on the packaging or other material.

Second, paragraph 12(1)(b) of the Trade-marks Act makes it clear that a deceptively misdescriptive trade-mark is not registrable. There is no qualification in that provision stating that marketing material, such as packaging, counteracting the deceptive impression makes the mark registrable.

Bottom Line

If your trade-mark is clearly deceptively misdescriptive, do not expect that a clarifying statement on packaging or other marketing material will transform a deceptively misdescriptive trade-mark into one that is not. Given the benefits conferred by a Canadian trade-mark registration – including the exclusive national right to use the mark across Canada – it is better to select a mark that is registrable.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: