Location, Location, Location – The issue of descriptiveness in Canadian Trademark Applications

Can you register the name HOLLYWOOD for films and entertainment services? What about MUNICH for beer and pretzels? A resident of Haliburton recently registered the trademark HALIBURTON in association with various goods, causing much debate and controversy amongst the local government officials – particularly in light of recent case law in Canadian trademark law.

The Federal Court of Appeal reached a landmark decision in MC Imports Inc. v. AFOD Ltd. (“MC Imports”) clarifying whether geographic names are registrable in Canada. Following the decision, a practice notice was released to clarify the how the Trademarks Office will evaluate place of origin marks. In short, if your trademark is the name of a geographical location and the goods originate from that location, the trademark is descriptive and would not be valid.

In MC Imports, the appellant MC Imports Inc. owned the trademark LINGAYEN which was registered in association with Filipino food products, such as fish sauce and fish paste. AFOD Ltd. imported food under its trademark “Napakasarap”. In some cases, AFOD Ltd. used the phrase “Lingayen style” on its product packaging. In response to this, MC Imports initiated a court proceeding claiming infringement and passing off.

The Federal Court not only dismissed MC Import Inc.’s action for infringement, but expunged the LINGAYEN trademark. MC Import Inc. appealed the decision to the Federal Court of Appeal only to have the Federal Court’s decision affirmed. Why? Both Courts held that LINGAYEN was descriptive of a geographical location.

The Federal Court enumerated the following three-part test to determine if a trademark is descriptive of a location:

  1. Determine whether the trademark is or contains a geographical name (whether depicted, written or sounded);
  2. Determine whether the relevant goods or services originate from that geographical area; and
  3. If so, has the owner used the mark in a manner which makes it distinctive of its goods or services?

If the primary meaning of the mark is primarily a geographic term then the first limb of the test is fulfilled - even if the geographic term is not well known to the Canadian public. MC Imports Inc. argued that the Canadian public would not associate LINGAYEN with a geographic location. The Court rejected this argument. The justification being that the owner of a trademark should not benefit from the consumers lack of knowledge in geography. Consumer perception is relevant for this limb only when the word has multiple meanings, for example MILAN or SANDWICH.

If the goods or services originate from the geographical area identified in the mark, then the mark is clearly descriptive. If the goods or services do not originate from the geographical area identified in the mark, and it can be demonstrated that there is deception, then the mark will be found to be deceptively misdescriptive. For misdescriptive trademarks, consumer understanding will be considered. In MC Imports, the goods originated from the municipality of Lingayen.

Despite the first two parts of the test being fulfilled, it is possible for a descriptive mark to remain valid if the owner has used the mark in Canada to the extent it has become distinctive. Unfortunately for MC Imports Inc., no evidence was submitted to suggest that the name meant anything but a geographic region. As a result, the mark was expunged.

The HALIBURTON registration mentioned above was filed before the MC Imports Case and was approved before the Practice Notice was released. It is very likely if this was filed today, it would receive an objection.

There remains uncertainty regarding how this will be applied to future applications in Canada. How would this apply for an application for a street name or a well-known location – for example BLOOR WEST, PARLIAMENT HILL or THE ROCKIES?

The key consideration is whether the mark is being used and is perceived as a trademark. Any applicant should evaluate what message their mark conveys to the customer; does the mark identify the business or does it merely describe a location. If it’s the former, then its more likely the trademark will be a valid mark, if it’s the later, it is likely the mark will be objected to. In either event, the owner should ensure the trademark is being used properly. If used properly, in some cases even descriptive trademarks can remain valid. Rule of thumb – pick a distinctive trademark, if it is not distinctive, use it so it becomes distinctive.