Condiment Trade-mark Rejected by the Federal Court

On January 7, 2016, Justice LeBlanc of the Federal Court released the amended judgment and reasons in Kabushiki Kaisha Mitsukan Group Honsha v. Sakura-Nakaya Alimentos Ltda., 2016 FC 20. The case involved the appeal of two decisions of the Registrar of Trade-marks (Trade-marks Opposition Board) rejecting Kabushiki’s opposition to the registration of the word mark SAKURA and the design mark SAKURA AND DESIGN (in association with sauces and condiments) by Sakura-Nakaya (the Respondent). The TMOB’s decision may be found here.

Before the Trade-marks Board Kabushiki claimed: (i) that the Respondent’s mark was confusing with another trade-mark SAKURA that had been used in Canada by Kabushiki or its distributor licensee Mizkan with respect to vinegar products; and (ii) that the proposed SAKURA mark was not distinctive under section 2 of the Trade-marks Act.

Kabushiki’s opposition was rejected in its entirety. The Registrar found that Kabushiki failed to prove that its own mark was used or made known in Canada prior to March 25, 2011 (the Material date). The Registrar found that the only evidence that could demonstrate Kabushiki’s use of the SAKURA trade-mark in association with vinegar were labels affixed on the boxes of SAKURA vinegar, but the labels did not identify Kabushiki as the owner of the SAKURA trade-mark and only made reference to the distributor licensee Mizkan. Although a licensee’s use of a mark can be relied upon as proof of use by the owner (section 50 of the Trade-marks Act), the license between Kabushiki and Mizkan was executed on December 13, 2011, months after the Material date.

With respect to distinctiveness, the Registrar found that the only evidence of use that would enure to the benefit of Kabushiki was that of Mizkan between the effective date of the license agreement, December 13, 2011, and the Material date for this ground of opposition (the filing date of the statement of opposition, June 19, 2012). The Registrar was not satisfied that the alleged trade-mark SAKURA, had become known sufficiently to negate the distinctiveness of the Respondent’s proposed SAKURA trade mark as of June 19, 2012.

 Kabushiki brought this appeal. The Respondent opposed the appeal, but did not file a record nor did they attend the hearing. On appeal Kabushiki advanced additional evidence that was not before the Registrar: a Declaration from a director at Mizkan which stated that: (i) Mizkan’s use of the SAKURA trade-mark was carried out at all times since 1998, well before the Material date; and (ii) Mizkan and Kabushiki had a verbal license agreement that pre-dated the written license and was in force since at least 1998.

The court observed that while decisions of the Registrar are normally reviewed on a standard of reasonableness, where additional evidence is presented on appeal that would have materially affected the Registrar’s findings of fact or exercise of discretion, the decision must be reviewed on the correctness standard. The new evidence must be sufficiently substantial in terms of probative value and should add something of significance. Justice LeBlanc held that the un-contradicted evidence of the Mizkan director confirms the existence of a verbal license agreement and is sufficient to establish the application of section 50 of the Trade-marks Act. Therefore, the fresh evidence fills in gaps in the evidentiary record before the Registrar and would have materially affected the Registrar’s decision. On this basis, the standard of review was correctness.

Having made this finding Justice LeBlanc had to consider afresh whether there was confusion between the SAKURA trade-marks. Justice LeBlanc found there was confusion, allowed the appeal, and set aside the Registrar’s decision.

A copy of the decision can be found here.