Word Mark Doesn’t Extend to Distinctive Graphic Elements, Canada Appeals Court Rules

By Barry Gamache, Robic LLP, Montreal; email: info@robic.com

A recent decision by Canada’s Federal Court of Appeal provides guidance on the scope of protection granted by the registration of a word trademark (Domaines Pinnacle Inc. v Constellation Brands Inc., 2016 FCA 302).

As previously reported here, Canada’s Federal Court had allowed in 2015 an appeal against a decision by Canada’s Trade-marks Opposition Board. The board had rejected an opposition by the owner of the trademark “Pinnacles” against an application for registration of a design trademark that included the words “Domaine Pinnacle.” The Federal Court of Appeal has reinstated the Opposition Board’s decision, reversing the Federal Court.

The Federal Court of Appeal disagreed with the lower court’s ruling that, in likelihood of confusion analysis, the rights granted by a word mark extended to graphic elements that suggested the ideas of the distinctive design elements of another party’s mark. The Court of Appeal ultimately concluded that the Opposition Board’s initial decision was reasonable.

The appellant, Domaines Pinnacle Inc., is a producer of apple-based alcoholic and non-alcoholic beverages and food items. On June 3, 2004, it filed an application to register the trademark “Domaine Pinnacle” and design in association with apple-based alcoholic beverages and other apple-based food products such as compotes, purees, jellies, jams and pies. The design portion of its trademark included representations of an apple as well as a snowflake.

On August 5, 2008, various entities including Constellation Brands Inc. and Franciscan Vineyards Inc. filed an opposition against the application. One ground was the likelihood of confusion created between the applied-for trademark and the registered word mark “Pinnacles” for (grape) wine in the name of Franciscan Vineyards.

A trademark identified only in a textural form allows its owner to use the word “Pinnacles” in any size and with any style of lettering, color or design, as stated by Canada’s Supreme Court in Masterpiece Inc. v. Alavida Lifestyles Inc., [2011] 2 SCR 387.

Would confusion be likely between the parties’ respective trademarks?

The Opposition Board.

The Trade-marks Opposition Board ultimately concluded that Domaines Pinnacle had established that confusion was unlikely to take place. The board underlined the inherent weakness of both marks that had a laudatory connotation in association with beverages. The board also emphasized that the visual element in each mark was sufficiently different and that the marks suggested different ideas, even if it acknowledged that there was a fair degree of resemblance between them.

Federal Court.

The respondents appealed the board’s decision to the Federal Court. In 2015, the Federal Court agreed with the respondents, finding that the board had erred in not examining the various permitted uses that Franciscan Vineyards might have of its registered word mark.

Since the applied-for mark included the image of an apple and of a snowflake, the court said that the board should have taken into account that Franciscan Vineyards’ registered word mark could be used with any style of lettering, color or design. Some variations would have suggested, for example, the idea of cold and winter, in a way similar to the applied-for trademark, the court said.

The court therefore concluded that the board’s decision was unreasonable and allowed Franciscan Vineyards’ appeal.

Domaines Pinnacle appealed that decision to the Federal Court of Appeal.

Federal Court of Appeal.

The issue before the Federal Court of Appeal was whether the board’s decision was, in fact, unreasonable. For it to be unreasonable, the decision had to fall outside the range of reasonable outcomes open to it on the facts of the case and the law.

The Federal Court of Appeal concluded that the board’s decision was reasonable, reversing the lower court. The registration for the word mark “Pinnacles” did not extend to the use of the distinctive graphic elements, namely the design of an apple and of a snowflake that were central components to the applied-for mark. While the registration of a word mark does allow its owner to use any style of lettering, color or design, such right did not extend to distinctive design features found in other marks.

The Federal Court of Appeal stated that even if Franciscan Vineyards used in the future the same font as Domaines Pinnacle’s for its “Pinnacles” trademark, the board’s ruling on the likelihood of confusion would remain reasonable since the design elements in the applied-for mark (the apple, the snowflake) were sufficiently distinctive. Moreover, Franciscan Vineyards’ rights over its registered word mark did not extend to cover distinctive design elements found in other parties’ marks.

No Extension of Word Marks.

The Federal Court of Appeal’s decision appears to signal that rights granted by the registration of a word mark do not extend to cover any type of distinctive design that might be similar to a design found in another party’s trademark. If such were not the case, it would no longer be necessary to register any design trademark since the registration of a word mark would implicitly protect various undisclosed distinctive designs that could come to light further to any allegedly conflicting use by a third party design trademark (as stated in somewhat similar terms by the Federal Court of Appeal in Pizzaiolo Restaurants Inc. v. Les Restaurants La Pizzaiolle Inc., 2016 FCA 265).

In short, distinctive design elements found in marks other than word marks always remain relevant in assessing likelihood of confusion, especially when the party alleging confusion only owns a registration for a word mark.