The Board held that there was no likelihood of confusion, and rejected the oppositions. In response, Clorox appealed to the Federal Court.
On appeal, Clorox filed new evidence, an affidavit from the Vice President and Secretary of Clorox that purportedly included results from brand awareness surveys, and additional evidence supporting use of the JAVEX marks in Canada. The Federal Court found the new evidence "sketchy" and held that it did "not make it possible to determine the extent of [the use of the marks] nor to assess the extent of the marks' acquired distinctiveness".
In Clorox Company of Canada, Ltd. v Chlorotec s.e.c., Clorox argued before the Federal Court of Appeal that the Federal Court had erred in rejecting the new evidence filed, and in applying the reasonableness standard to the Board's decision. The Federal Court of Appeal noted that the Supreme Court's Vavilov decision had "no bearing on the standard of review that this Court must apply when examining the Federal Court's finding in relation to the materiality of new evidence", and that a palpable and overriding error standard applied. It also observed that if new material evidence was filed (i.e. sufficiently substantial and significant and of probative value), the Federal Court could exercise any discretion vested in the Registrar, effectively resulting in an appeal de novo, and the application of the correctness standard to the Federal Court's decision.
However, the Court of Appeal also observed that if no new evidence is adduced or if it is rightly found not to be material or sufficiently substantial and significant, Vavilov requires a "fresh start" for the standard of review. In such cases, the appellate standards of review from the Supreme Court's Housen decision would apply, requiring questions of fact and mixed fact and law be subject to the palpable and overriding error standard, and that questions of law be subject to the correctness standard.
Looking at the new evidence filed by Clorox before the Federal Court, the Court of Appeal noted that none of the survey evidence was presented to the Court through a qualified expert, as required by the Supreme Court in Mattel, and that it was therefore hearsay. The surveys were not contemporaneous with any of the relevant dates for the case, and the affiant's statements about the JAVEX marks marketed and advertised in Canada were vague, un-particularized, and unsupported by any kind of figures. A chart that apparently detailed the JAVEX brand sales in Canada was unhelpful because the sales figures for each year over nine years was the same rounded number – and there was no breakdown of the sales by the various JAVEX marks at issue. The Court of Appeal noted that to show actual use of marks, it expected evidence by way of detailed sales reports, invoices of advertisements, and financial statements. None of that was to be found in Clorox's new evidence.
Accordingly, the Court of Appeal concluded the Federal Court had properly rejected Clorox's new evidence, and made no palpable and overriding error in accepting the Board's decision on likelihood of confusion and its rejection of the oppositions. The appeal was dismissed, and costs were awarded in favour of Chlorotec. Perhaps with better evidence, Clorox could have worn the "white" hat on appeal. It seems that for Chlorotec, however, it all "came out in the wash". It remains to be seen whether Clorox will try to "brighten" its prospects by seeking leave to appeal to the Supreme Court of Canada.
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