On October 12, 2016, Justice Southcott issued his Judgment and Reasons and Cathay Pacific Airways Limited v. Air Miles International Trading B.V., 2016 FC 1125.
The case originated from a Trade-marks Opposition Board decision refusing five of Cathay’s ASIA MILES trade-mark applications (1,271,320, 1,271,440, 1,271,441, 1,276,725 and 1,276,720) for registration in association with the operation of a loyalty reward program and various other wares and services. The TMOB initially refused the applications because the terms of the alleged license agreement between Cathay Pacific and its wholly-owned subsidiary, CPLP, were unclear. As a result, Cathay Pacific was unable to show that it exerted control over the mark used by CPLP. As a result, any use of the mark by CPLP did not accrue to Cathay pursuant to section 50 of the Trade-marks Act.
Cathay’s appeal was heard by Justice O’Reilly, who held that the TMOB’s finding that Cathay did not benefit from the use of the trade-mark by CPLP was unreasonable. In light of this finding, Justice O’Reilly held that he did not need to consider the additional evidence filed pursuant to section 56 of the Trade-marks Act and remitted the matter back to the TMOB to reconsider Cathay’s applications.
Cathay appealed and Air Miles cross-appealed. The Court of Appeal dismissed Cathay’s appeal, but allowed Air Miles’ cross appeal, holding that Justice O’Reilly, while purporting to apply a reasonableness standard of review, improperly applied a correctness standard. The Court of Appeal then remitted the matters raised in the appeal back to a different Federal Court judge.
Justice Southcott’s Reasons
In the redetermination, Justice Southcott refused all five applications. In respect of the effect of the use by CPLP, Justice Southcott held that this issue was materially affected by the new evidence filed, such that the proper standard of review was correctness. While the use by CPLP helped support Cathay’s argument of no reasonable likelihood of confusion, Justice Southcott held that the TMOB had not erred in refusing Cathay’s applications:
 Put differently, Cathay Pacific’s ability to claim licensed use of its marks has an overall favourable impact on its ability to demonstrate that there is no reasonable likelihood of confusion between the ASIA MILES mark and the AIR MILES mark. However, I do not consider this impact to be sufficient to conclude that Cathay Pacific has met this burden. It is still relying on an inherently weak mark in a market in which the AIR MILES mark has become very well known, if not famous, and significantly more well-known than the ASIA MILES mark. My conclusion is that the ASIA MILES mark is not sufficiently different from the AIR MILES mark for Cathay Pacific to be able to demonstrate that there is no reasonable likelihood of confusion.
A copy of the Judgment and Reasons can be found here.