A cautionary tale on appealing trademark oppositions: Trouble with narrowing distinctiveness grounds and website analytics

In D.M.C. SRL v Giusti, DMC appealed the Trademarks Opposition Board’s rejection of their opposition of Giusti’s trademark application no. 1,611,381. Giusti filed the 381 Application for the trademark GIUSTI PROSECCO, which was opposed by DMC. The TMOB dismissed each ground of DMC’s opposition:

• Sections 38(2)(a) and 30(b): Giusti showed GIUSTI PROSECCO had been used in Canada since the claimed first use date of December 20, 2012.
• Sections 38(2)(b) and 12(1)(a): GIUSTI PROSECCO is not primarily merely a surname as it consists of both a surname and a type of wine.
• Sections 38(2)(c) and 16(1)(a): DMC failed to establish that a DE GIUSTI trademark had been used or made known in Canada before December 20, 2012.
• Section 38(2)(d): There was no evidence that DMC sold wines or other alcoholic beverages in Canada with the DE GIUSTI label.

New evidence

Before the TMOB, DMC sought to file reply evidence. The TMOB refused to admit this evidence on the basis that it was not proper reply. The Court concluded that the TMOB did not err in refusing to admit proposed reply evidence as it was directed to matters raised for the first time in cross-examination and did not respond directly to unanticipated points.

On appeal, DMC filed new evidence pursuant to subsection 56(5): (i) an affidavit by Cristina De Giusti; (ii) the 381 Application file history; (iii) the file history of Giusti’s Canadian trademark application no. 1,972,276; and (iv) the file history of Canadian application no. 1,662,300 requesting protection of PROSECCO as a geographical indication.

The Court failed to see how DMC’s new evidence would have materially affected the TMOB’s findings. DMC’s additional evidence did not show that the TMOB committed a palpable and overriding error. Thus, DMC’s new evidence did not trigger a de novo review and the Court’s analysis was based only on evidence that the TMOB had before it.

Entitlement to use the trademark

DMC alleged that the TMOB erred in refusing leave to add an opposition based on subsection 30(i) to allege that Giusti could not have been satisfied of his entitlement to use the GIUSTI PROSECCO mark given his awareness of the DE GIUSTI marks since at least 2009.

The Court was unable to find that TMOB erred. DMC should have made this request much earlier in the proceedings and provided no explanation for its delay in doing so. DMC argued that it would be prejudiced in being denied the 30(i) amendment, because this ground does not require an opponent to show prior use, but the Court found that Mr. Giusti would instead be prejudiced in having to respond to the delayed opposition.

Substantive Appeal

DMC alleged that the TMOB erred in rejecting each ground of opposition.

Sections 38(2)(a) and 30(b) – date of first use

DMC opposed the TMOB’s finding that Giusti had shown use of GIUSTI PROSECCO in Canada since the claimed first use date of December 20, 2012. The Court was satisfied that, despite the negative inference against him, Mr. Giusti established the date of first use through evidence that a considerable number of bottles had been sold to an importer for subsequent sale by the liquor board. DMC argued that the true date of first use was significantly later than that declared in the 381 Application, based on evidence in two articles that the TMOB had refused to admit. In rejecting this argument, the Court noted that the TMOB accounted for its refusal to admit the articles in making an adverse inference against Mr. Giusti, and that Giusti had established use as of the claimed date despite this inference.

The Court was not persuaded that TMOB made a palpable and overriding error in relying on a single invoice from Società Agricola for wine ordered to Canada to establish use; the invoice evidenced a non-token sale along the chain of distribution and DMC had not challenged the principle that trademark use along the chain of distribution can demonstrate use pursuant to section 4 of the TMA. Even considering the matter de novo in view of the two articles, the Court found that Mr. Giusti’s evidence would refute any doubt as to the accuracy of the claimed first use date. Mr. Giusti explained on cross-examination that the statements made in the two articles were made from a business perspective that was intended to convey slower sales in the early years of business.

Sections 38(2)(b) and 12(1)(a) – primarily merely a surname

DMC originally disputed registrability of the mark for being primarily merely a surname, but now alleged it was a combination of non-registrable elements. The Court agreed with Giusti that DMC had conflated different grounds of opposition in doing so. Since the TMOB found the trademark registrable under 12(1)(a) despite accepting that Giusti is a surname and prosecco is a type of wine, the Court held that DMC’s new argument would not have materially affected the TMOB’s decision. This ground of opposition therefore failed.

Sections 38(2)(c) and 16(1)(a) – non-entitlement

There was no evidence that any DE GIUSTI trademarks were well known in Canada because of online advertising. The assertion that DMC’s prosecco was available to Canadians was not supported by evidence of sales or being offered for sale in Canada. Moreover, while TMOB acknowledged DMC’s online presence, there was no evidence that any Canadians had viewed their websites.

Section 38(2)(d) – non-distinctiveness

Finally, the Court held that the TMOB was right to reject DMC’s non-distinctiveness argument, as it had failed to show that its trademarks had a reputation in Canada that would affect the distinctiveness of GIUSTI PROSECCO. Even on a de novo consideration of non-distinctiveness, the court reiterated that the DMC’s website analytics evidence failed to establish that Canadians had accessed and viewed DMC’s webpages.

A copy of the decision can be found here.