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Canadian Federal Court of Appeal Maintains Finding of Confusion, Despite Co-Existence Agreement

By: Lawrence Veregin and Cristian P. Delfino

A recent Canadian Federal Court of Appeal decision maintained a finding of likelihood of confusion between two non-identical marks, despite a co-existence agreement between the owners of the marks. The court also commented on the limits of evidence concerning the state of the Register of Trademarks (the “Register”) in overcoming confusion objections.

This decision offers guidance for brand owners when approaching issues of co-existence and evaluating the state of the Register in Canada.

Background

Tweak-D sought registration of the wordmark TRIBAL CHOCOLATE with respect to hair care products such as shampoo, conditioner and dyes for distribution via “mass market retailers, drugstores, home shopping channels or internet retailers, but specifically excluding beauty salons and spas.” The Registrar of Trademarks (the “Registrar”) objected to the TRIBAL CHOCOLATE application, as it was likely to be confused with an existing TRIBAL registration which was registered in association with “hair colourants and hair dyes” (with no express limitation as to channels of trade).

Registrar’s Decision

Tweak-D attempted to overcome the objection on the basis that: (i) the Register includes two other marks comprising TRIBE or TRIBAL in association with what Tweak-D argued were similar goods (TRIBAL INDULGENCES for use in association with various skin and body care products and URBAN: TRIBE for use in association with hair care products, including colourants and dyes, to be “exclusively sold in beauty salons and hairdressers”); and (ii) Tweak-D had a co-existence agreement with the owner of the TRIBAL mark which includes, among other things, limits on the channels of trade.

The Registrar ultimately maintained the objection and refused the TRIBAL CHOCOLATE application. Notably, the Registrar found:

  • the first word of the mark is the most important for the confusion analysis and both marks begin with the word TRIBAL;
  • the state of the Register did not reveal any “clear pattern of registrability” of marks similar to TRIBAL CHOCOLATE or TRIBAL;
  • the fact that there had been no actual confusion despite concurrent use of the TRIBAL and TRIBAL CHOCOLATE marks since 2016 was not determinative;
  • the co-existence agreement was not dispositive of the issue of confusion in the marketplace – the agreement was a contract between the two parties, whereas the Trademarks Act is focused on consumer protection; and
  • although the TRIBAL CHOCOLATE application was amended to restrict the channels of trade, the owner of TRIBAL did not reciprocally amend their registration, and overlap remained.

Federal Court Decision

Tweak-D appealed the decision to the Federal Court[1] which upheld the Registrar’s decision. 

On appeal, Tweak-D argued that the Registrar’s decision was inconsistent with the Registrar’s previous decisions. In particular, TRIBAL was registered despite the existence of TRIBAL INDULGENCES and URBAN: TRIBE. Further, an additional mark, TRIBE, was registered notwithstanding the previously registered TRIBAL mark (after the owner of TRIBE restricted the channels of trade). The court dismissed this argument, observing that a “clear pattern of registrability” typically involves “far more” than three relevant registrations. Further, the court noted there was no evidence of actual use of any of the previously registered marks that could help demonstrate an absence of a likelihood of confusion in the marketplace.

The court then found, as a matter of first impression, that the use of TRIBAL CHOCOLATE and TRIBAL for hair care products would likely lead to the inference that the products were associated with one another, stemming from the same source. The Registrar correctly noted that an absence of evidence of confusion is not determinative of the issue. Further, the Registrar appropriately considered the co-existence agreement but noted its limitations in providing only protection between the parties. It was thus open to the Registrar to find that there was a likelihood of confusion between the marks and to refuse registration.

Federal Court of Appeal Decision

Tweak-D commenced a further appeal to the Federal Court of Appeal[2] which also upheld the rejection of the TRIBAL CHOCOLATE application.

Notably, the Federal Court of Appeal found:

  • as a matter of first impression, the concurrent use of TRIBAL CHOCOLATE and TRIBAL for hair care products would likely lead to the inference that the products emanated from the same source;
  • it is generally irrelevant that a given mark may have been registered in the past; each application must be assessed on “its intrinsic value, the proposed services, and its particular context”;
  • inferences based on the Register should only be drawn if there is a “large number of relevant registrations” and evidence of actual use; and
  • it was open to the Registrar to conclude that the co-existence agreement does not “trump” other factors in the confusion analysis.  

Key Takeaways

This decision reinforces the limits of the effectiveness of co-existence agreements in overcoming confusion objections in Canada. Parties to a co-existence agreement should review their applications and registrations to limit any clear overlap. The decision also highlights the need for fulsome evidence concerning the state of the Register – which should ideally include not only evidence of prior registrations but also actual use in the marketplace.

The Trademarks & Branding Group at Aird & Berlis LLP is made up of experienced trademark experts available to provide tailored advice and guidance on usage of co-existence agreements in Canada. Please contact a member of the group if you have questions or require any assistance with branding matters.

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