A recent decision of the Federal Court, Brandstorm, Inc. v Naturally Splendid Enterprises Ltd., 2021 FC 73, has confirmed that where "sufficiently substantial and significant" evidence is presented on review, the appeal of a decision of the Registrar of Trademarks (the Registrar) pursuant to section 56(5) of the Trademarks Act (the "Act") can be done de novo.
On July 16, 2013, Naturally Splendid Enterprises Ltd. ("Naturally Splendid") filed a Canadian trademark application for NATERA on a proposed use basis, for use in association with food and drink products, nutritional supplements, protein shakes and additives, and pet food.
On April 21, 2015, BrandStorm, Inc. ("BrandStorm") filed a Canadian trademark application for NATIERRA, for use in association with food and drink products. Originally filed on a proposed use basis by mistake, the application was subsequently amended to claim use since August 2010.
Then, in June 2015, BrandStorm commenced an opposition proceeding against the NATERA application claiming that: (1) Naturally Splendid is not the person entitled to the NATERA mark, as it was confusing with the NATIERRA mark which was previously and continuously used in Canada; and (2) the NATERA mark is not distinctive.
The Registrar rejected both grounds noting that BrandStorm had not met its evidentiary burden to show use of the NATIERRA mark before the filing date of the NATERA application, as its evidence as vague, and there was uncertainty surrounding the use of the mark and whether such use demonstrated ongoing use and non-abandonment in the normal course of trade.
BrandStorm appealed, and in support of its appeal of the Registrar's decision, BrandStorm filed fresh evidence, pursuant to s. 56(5) of the Act, showing use of the NATIERRA products in Canada since 2010.
Standard of Review
In light of the Supreme Court's recent realignment of the standard of review in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, the Federal Court addressed how the fresh evidence affected the appeal.
The Court first noted that, when no new evidence is presented on appeal, or the new evidence is not "substantial and material", the presumptions in Vavilov applied, with the review of questions of law on the correctness standard, and reviewing questions mixed of fact and law on the palpable and overriding error standard.
However, also citing Vavilov, the court noted the blanket presumption can be rebutted with the express intention of the legislature.
Citing recent Federal Court of Appeal jurisprudence, the Court held that, if the new evidence provided is "sufficiently substantial and significant", then section 56(5) of the Act gives the Federal Court the power to hear the appeal de novo. To determine whether the new evidence is "sufficiently substantial and significant", the Court must ask if the new evidence would have enhanced or clarified the record in a way that might have influenced the Registrar's conclusions.
The Court found that BrandStorm's new evidence sought to address the deficiencies noted by the decision maker, notably, by providing background on the company's origins and expansion in Canada, detailing when it first started selling NATIERRA products to Canadian retailers in 2009, providing details on the NATIERRA products' labels and providing specimens, providing images of its website which was accessible to Canadian consumers since 2014, and providing records of sales to Canadian retailers from August 2010 to October 2018. The Court found the new evidence to be sufficiently substantial and significant and thus considered the opposition de novo.
Naturally Splendid is not entitled to the NATERA mark
With the new evidence, the Court found that there would likely be confusion between the NATERA and NATIERRA marks. The Court also held that the NATERA mark was not distinctive because it was confusingly similar with the NATIERRA mark. The Court thus allowed BrandStorm's appeal of the Registrar's decision.
The Court's decision confirms the applicable standard of review when new evidence is filed on appeal of the Registrar's decision. However, as we previously reported, it is important to note that royal assent has been given to an amendment to s. 56(5) of the Act which governs appeals of Registrar's decisions. The amendment, which will be in force on a soon, but as of yet, unknown date, will require parties to obtain leave from the Court to file new evidence on appeal - parties will no longer be able to submit new evidence as of right. As such, parties should remember to present their best evidence forward from the outset.
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