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Weighing the Options: Federal Court Confirms Standard of Review for Appeals from Decisions of Registrar of Trademarks

In Pentastar Transport Ltd. v. FCA US LLC, 2020 FC 367, the Federal Court confirmed the standard of review applicable to decisions of the Registrar of Trademarks and dismissed an appeal which sought a re-weighing of the evidence from first-instance.

The appellant, PTL, owns a registered mark for “PENTASTAR” in association with certain services in the oil industry. The respondent, FCA US (Fiat Chrysler Automobiles), applied for a “PENTASTAR” trademark in association with  goods described as “engines for passenger motor vehicles, namely automobiles, pick up trucks, vans, and sport utility vehicles.” PTL opposed the application on the basis that that it did not conform with s. 30(e) of the Trade-marks Act (as it was prior to the 2019 amendments) insofar as FCA US did not have a genuine intention to use the mark in Canada in association with the listed wares.

Opposition proceedings involve a two stage inquiry. First, the opponent bears an evidential burden to establish that the facts alleged to support the issue exist. If established, then the applicant bears a legal burden to show that its application does not contravene the provisions of the Act as alleged.

The Registrar held that PTL failed to meet its evidential burden and, in any event, FCA US met its legal burden. PTL’s evidence focused on a lack of actual use when the issue for determination was intended use. The Registrar noted that there is no requirement for an Appellant to use its proposed mark until it is allowed. FCA US’ evidence also established intended use, including through issued press releases celebrating the upcoming launch of the PENTASTAR engine, and use of the mark (after filing of the application) on point-of-sale material and invoices.

Justice Kane held that decisions of the Registrar of Trademarks are reviewable on the appellate standard of review. In Canada (Minister of Citizenship & Immigration) v Vavilov, 2019 SCC 65, the Supreme Court held that administrative decisions are presumptively reviewed on the reasonableness standard, but this presumption can be rebutted where the enabling statute provides for a statutory right of appeal. Section 56 of the Act (both before and after the June 2019 amendments) expressly provides for an appeal to the Federal Court. Thus, the Court held “that to give effect to Parliament’s expressed intention in section 56 of the Act, the decision of the Registrar of Trademarks should be reviewed on the appellate standard of review.” The appellate standard of review is that established in Housen v Nikolaisen, 2002 SCC 33: the standard of “palpable and overriding error” applies to questions of fact or questions of mixed fact and law, whereas the standard of correctness applies to extricable questions of law. In this case, the palpable and overriding error standard applied since PTL alleged the Registrar erred in application of the law to the facts (a question of mixed fact and law).

The Court affirmed the Registrar’s finding that PTL conflated the requirement to show intent to use, upon which FCA US based its application, and actual use of the mark. The Act contains distinct provisions governing actual and intended use. The Registrar did not err in finding that FCA US had an intent to use the mark even though FCA US had not yet actually used the mark.

PTL argued that its evidence far exceeded that required to meet its light evidential burden and that, based on certain evidence, the Registrar should have found that PTL met its burden. A Court’s role on appeal is not to reweigh evidence and Justice Kane found that PTL “appears to seek a different result based on arguing that the evidence should have been weighed differently”. PTL’s arguments assumed that the Registrar should have attributed more weight to certain evidence and should have interpreted that evidence in a particular manner. These weight arguments did not amount to palpable and overriding error.

The Court rejected PTL’s argument that the Registrar raised the level of the evidential burden, finding instead that the Registrar’s decision was to the effect that “the evidence relied on by PTL did not meet the light burden”.

A copy of the decision can be found here.