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Federal Court of Appeal Approves One Trademark Application and Rejects Another


January 6, 2022

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The Federal Court of Appeal (“FCA”), in one of two decisions released on the same day (Zara Natural Stones Inc. v Industria De Diseno Textil, S.A. and Industria de Diseno Textil, S.A. v Zara Natural Stones Inc.), approved one of Zara Natural Stones Inc.’s (“ZNSI”) trademark applications, but rejected another.


Background


ZNSI registered the trademarks (a) ZARA (the “word mark”) and (b) ZARA Natural Stones & Design (the “design mark”) based on use of the trademarks in Canada since at least as early as August 29, 2011.


Industria de Diseno Textil, S.A (“Industria”) based on its own application to register the trademark ZARA HOME on September 17, 2003, opposed the trademark applications. In its statement of opposition, Industria cited s. 16 of the Trademarks Act (“TMA”) (among other provisions), which restricts the registration of a trademark that is confusing with “a trademark … which an application for registration had been previously filed in Canada by any other person”.


The Trademarks Opposition Board’s Decision


With respect to the word mark, the Trademark Opposition Board (“TMOB”) refused ZNSI’s trademark application for ZARA, stating that it would be confused with Industria’s ZARA HOME trademark. In its decision, the TMOB noted that Industria cited the wrong provision in its statement of opposition (relying on s. 16(3) [1] of the TMA, instead of 16(1) [2]). Industria requested permission to amend its statement of opposition to cite s. 16(1) instead of 16(3). The TMOB allowed the amendment and ultimately refused ZNSI’s trademark application.


ZNSI appealed the decision to the Federal Court (“FC”).


With respect to the design mark, the TMOB allowed ZNSI’s trademark application for ZARA Natural Stones & Design, concluding that, because the trademarks were visually distinctive, they would not be confused with one another.


Industria appealed the decision to the FC.


The FC’s Decision


With respect to the word mark, the FC reversed the TMOB’s decision and approved ZNSI’s ZARA trademark application. The FC reasoned that there was little indication that Industria intended to rely on s. 16(1) of the TMA (instead of s. 16(3)). Furthermore, based on case law, the FC wrote that Industria’s request to amend its statement of opposition was filed too late and that the TMOB’s acceptance of this amendment prejudiced ZNSI.


Industria appealed the decision to the FCA.


With respect to the design mark, the FC reversed the TMOB’s decision and rejected ZNSI’s ZARA Natural Stones & Design trademark application. In its decision, the FC wrote that, given the similarities of the first word between ZARA and ZARA HOME, the marks would be confused with one another. Additionally, the FC stated that, while the TMOB considered whether the trademarks were visually distinctive, it did not assess whether the trademarks were orally distinctive, which would have influenced its confusion analysis.


ZNSI appealed the decision to the FCA.


The FCA Decision


Word Mark


The FCA overturned the FC and rejected ZNSI’s ZARA trademark application. The FCA wrote that, although Industria referred to s. 16(3) in its statement of opposition, this was an error of form (and not substance), as it was clear that Industria intended to rely on s. 16(1). The FCA also stated that ZNSI would not have been prejudiced by Industria’s amendment to its statement of opposition, as it was filed in time.


Accordingly, the FCA approved Industria’s amendment, allowed the appeal and rejected ZNSI’s ZARA trademark.


Design Mark


The FCA overturned the FC and approved ZNSI’s ZARA Natural Stones & Design trademark application. The FCA stated that, although the FC wrote otherwise, it was clear that the TMOB considered the use of the first word in its confusion analysis.


Furthermore, the FCA clarified that although the first word of a trademark may be an important factor in assessing confusion, it is less important where there are multiple words used in the trademark. Accordingly, because the ZARA Natural Stones & Design trademark uses multiple words, the first word (i.e. ZARA) becomes less important.


The FCA also wrote that the TMOB considered the oral differences between ZNSI and Industria’s trademark, as it assessed whether the trademarks differed “as a whole”.


The FCA ultimately allowed ZNSI’s appeal and approved its ZARA Natural Stones & Design trademark.

 

[1] S. 16(3) of the TMA states, “The right of an applicant to secure registration of a registrable trademark is not affected by the previous use or making known of a confusing trademark or trade name by another person, if the confusing trademark or trade name was abandoned on the day on which the applicant’s application is advertised under subsection 37(1)”.

[2] S. 16(1) of the TMA states, “Any applicant who has filed an application in accordance with subsection 30(2) for the registration of a registrable trademark is entitled, subject to section 38, to secure its registration in respect of the goods or services specified in the application, unless at the filing date of the application or the date of first use of the trademark in Canada, whichever is earlier, it was confusing with (a) a trademark that had been previously used in Canada or made known in Canada by any other person, (b) a trademark in respect of which an application for registration had been previously filed in Canada by any other person or (c) a trade name that had been previously used in Canada by any other person”.

 

Authors: Matthew Erdman and Meghan King

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