2012 FCA 60 (February 21, 2012)
Overview
The Federal Court of Appeal affirmed a decision of the Federal Court, in turn affirming a decision of the Registrar of Trademarks, that the trademark TEACHERS' for use in association with the administration of a pension plan for teachers is unregistrable as it is clearly descriptive of the character or quality of the services. This case is particularly of interest since the Federal Court of Appeal confirmed the broad scope of section 12(1)(b) of the Trademarks Act and that a descriptiveness analysis requires one to consider what impression the trademark, understood in its proper context with the wares and/or services offered by the applicant, would make in the mind of a reasonable person.
Abstract
The Federal Court of Appeal affirmed a decision of the Federal Court, in turn affirming a decision of the Registrar of Trademarks to refuse to register the trademark TEACHERS' for use in association with services described as the "[a]dministration of a pension plan, management and investment of a pension fund for teachers in Ontario" as being clearly descriptive of the character or quality of the services, contrary to section 12(1)(b) of the Trademarks Act (the "Act"). The Court of Appeal confirmed that an analysis under section 12(1)(b) of the Act requires one to consider what impression the trademark, understood in its proper context, would make in the mind of a normal or reasonable person. After finding that a reasonable person would readily understand that the appellant administers a pension plan for teachers and provides management and investment services for the exclusive benefit thereof, the Federal Court of Appeal held that the trademark TEACHERS' was clearly descriptive of an intrinsic character or quality of the services provided.
Case summary
Facts. On February 17, 2011, the Ontario Teachers' Pension Plan Board ("the appellant"), appealed the decision of the Federal Court affirming the decision of the Registrar of Trademarks to refuse to register the trademark TEACHERS' for use in association with services described as the "[a]dministration of a pension plan, management and investment of a pension fund for teachers in Ontario" as being clearly descriptive of the intrinsic character of the services, contrary to section 12(1)(b) of the Act.
In the Registrar's opinion, the trademark was "an apt trade term for describing the intrinsic character of the administration, management and investment of a plan/fund for teachers and, as such, should be left available for others to use, since descriptive words are the property of all and cannot be appropriated by one person for their exclusive use." After considering the new evidence before it, the Federal Court, proceeding on a de novo basis, agreed with the appellant that the trademark did not clearly describe the services with which it was associated and that it did not describe the conditions of or the persons employed in the production of the services or their place of origin as teachers are merely the intended user of the services. However, the Court noted that section 12(1)(b) of the Act refers to both "wares or services" and went on to assess descriptiveness of the trademark in the broader context of a pension plan, and ultimately agreed with and affirmed the Registrar's decision.
Analysis. On the preliminary issue of standard of review, Justice Nadon of the Federal Court of Appeal confirmed established case law that, on appeal, questions of law are subject to a standard of correctness while questions of fact and of mixed law are subject to the standard of palpable and overriding error, except where there exists an extricable question of law, in which case the standard will be that of correctness. Justice Nadon held that the Federal Court Judge properly understood the relevant test and that, therefore, the only remaining issue was whether the Trial Judge erred in concluding that the trademark was clearly descriptive of the character of the services in association with which the appellant uses the trademark.
The appellant put forward three arguments. First, and most importantly, it argued that the judgment of the Federal Court was internally inconsistent since the Trial Judge had held that the trademark "does not clearly describe the services provided" and then upheld the Registrar's decision to refuse the registration when considering the trademark in the broader context of a pension fund. Second, the appellant argued that the Trial Judge's concern that the registration of the trademark would provide it with a monopoly over the word TEACHERS' was unsupported by the evidence and "misguided" in that it could not be said that such would prevent other financial services providers from using the word TEACHERS'. Lastly, the appellant argued that its application ought to have been approved for publication and for opposition purposes, since the Trademarks Opposition Board is the proper forum to debate and adjudicate monopoly issues.
Justice Nadon summarily disposed of the appellant's second and third arguments. In regards to the second argument, the Justice of Appeal reiterated the rationale behind section 12(1)(b) of the Act, namely, that it aims to prevent traders from obtaining a monopoly over words that belong "in the public stock of commonplace words that should remain available to all traders in describing their wares or services." Thus, the Court of Appeal held that if a registration were to result in the removal of a word from the public stock of commonplace words "which is apt or would ordinarily be used by traders to describe the particular goods or services, and thus remove the right of other traders in the normal carrying-on of their business to employ the same or similar words," then the mark is clearly descriptive. Consequently, whether one can say with any degree of certainty that the appellant would receive a monopoly over the word or words was beside the point and the main issue remained whether the trademark is clearly descriptive.
With respect to the third argument, the Justice of Appeal held that the legislation is clear and that the Registrar cannot defer the matter to the Trademarks Opposition Board if he is satisfied that a trademark is not registrable.
Lastly, in regards to the appellant's first argument, Justice Nadon reiterated his understanding of the law that the issue under section 12(1)(b) of the Act is what impression the trademark, "understood in its proper context," would make in the mind of a normal or reasonable person. In that respect, the Justice of Appeal held that such a reasonable person would readily understand that the appellant administers a pension plan for teachers and provides management and investment services for the exclusive benefit of those teachers. Thus, Justice Nadon was satisfied that the trademark TEACHERS' clearly described those whose pension plan the appellant administers and in whose benefit the management and investment services are rendered and thereby described a "highly prominent feature, trait or characteristic belonging to the appellant's services."
Conclusion
This case is instructive insofar as it addresses the application of section 12(1)(b) of the Act and in particular, confirms that "clearly descriptive" within the meaning of the Act requires a consideration of the character or quality of the wares and/or services in association with which the trademark is used. In this regard, the question that arises is what impression the trademark, understood in its proper context with the wares and/or services offered by an applicant, would make in the mind of a normal or reasonable person. It is interesting to note, however, that while the application refused by the Federal Court of Appeal was based upon proposed use, the appellant has since filed an application for the same trademark based on use dating back to at least 2002. Thus, on this second application, the appellant may be able to successfully overcome the descriptiveness objection by establishing that the trademark has acquired distinctiveness as per section 12(2) of the Act.
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