Federal Court Allows Appeal Following De Novo Review of TMOB Decision

In BrandStorm, Inc. v. Naturally Splendid Enterprises Ltd., 2021 FC 73, BrandStorm, Inc. (“BrandStorm”) appealed the Trademark Opposition Board’s (“TMOB”) decision to reject its opposition to Naturally Splendid Enterprises Ltd.’s (“Naturally Splendid”) registration of the trademark ‘NATERA’.

Justice Walker of the Federal Court found that the new evidence presented on appeal was “sufficiently substantial and significant” to justify a de novo review of the TMOB’s decision and ultimately allowed the appeal.

Background

On July 16, 2013, Naturally Splendid filed an application for registration of its ‘NATERA’ mark (the “Application”) based on the proposed use of the mark in association with food and drink products, health supplements, and pet food.

On April 21, 2015, BrandStorm filed an application for registration of its ‘NATIERRA’ mark based on the use of the mark in association with packaged fruits, fruit snacks, candy, spreads, and fruit drinks. BrandStorm claimed that it had consistently used its NATIERRA mark in Canada since August 2010.

On April 22, 2015, Naturally Splendid advertised the NATERA application in the Trade-marks Journal.

On June 8, 2015, BrandStorm filed a statement of opposition contesting Naturally Splendid’s Application on four grounds. As part of its statement of opposition, BrandStorm filed an initial and reply affidavit. In its initial affidavit, BrandStorm’s CEO, Thierry Ollivier, stated that, since 2010, BrandStorm had sold its NATIERRA products in Canada through distributors. BrandStorm attached an August 2010 invoice to Mr. Ollivier’s initial affidavit, which showed the sale of NATIERRA products to a Canadian distributor.

Trademarks Opposition Board

The TMOB summarily rejected two of BrandStorm’s grounds of opposition, but considered whether Naturally Splendid was entitled to register its NATERA mark pursuant to s. 16(3)(a) of the Trademarks Act. Naturally Splendid would not be entitled to register its NATERA mark if either: at the date of filing of the Application, the NATERA mark was confusing with the NATIERRA mark, which BrandStorm had previously and continuously used in Canada; or if the NATERA Mark was not distinctive having regard to the NATIERRA mark.

Before turning to the question of whether the NATERA mark was confusing with the NATIERRA mark, BrandStorm had the onus of establishing that it had continuously used its NATIERRA mark in Canada at all relevant times. Upon analysis, the TMOB held that BrandStorm’s evidence failed to establish that: (a) Brandstorm had used the NATIERRA mark on a continuous basis in the normal course of trade prior to July 16, 2013 (the date that Naturally Splendid filed its application for trademark registration); and (b) BrandStorm had not abandoned its NATIERRA mark as of April 22, 2015 (the date of the advertisement of the Application in the Trade-Marks Journal).

The TMOB concluded that Brandstorm had not tendered sufficient evidence of use of the NATIERRA mark in Canada for the following reasons: there was no evidence that the invoice attached to Mr. Ollivier’s affidavit referenced NATIERRA products specifically; it was unclear that the invoiced goods were transferred and sold in Canada; the invoice could not establish that the sale of the NATIERRA products was in the normal course of trade; and finally, the single invoice could not establish continuous use and non-abandonment.

BrandStorm appealed the TMOB’s decision pursuant to section 56 of the Trademarks Act. In support of its appeal, BrandStorm filed new evidence in the form of an affidavit sworn by Claire Bernole, BrandStorm’s Director of Operations, which included further evidence regarding sales of NATIERRA products in Canada (the “Bernole Affidavit”).

The Federal Court Decision

On appeal, Justice Walker reviewed the new evidence contained in the Bernole Affidavit and concluded that it was sufficiently substantial and significant to the issues addressed by the TMOB such that it could have materially affected the TMOB’s decision. As such, Walker J. undertook a de novo review of the evidence to determine whether the TMOB’s decision was correct.

Justice Walker proceeded to analyze whether BrandStorm had provided sufficient evidence from which it could be concluded that the facts in its opposition were true. Justice Walker concluded that the Bernole Affidavit addressed the deficiencies identified by the TMOB in BrandStorm’s initial opposition evidence. Notably, Walker J. stated that neither Ms. Bernole nor Mr. Ollivier were cross-examined on their respective affidavits, and, as such, their respective statements and evidence had not been contradicted and was presumed to be true.

Justice Walker concluded that the evidence in the Bernole Affidavit, which included sales records and purchase orders, was sufficient to established its use of the NATIERRA mark in Canada prior to July 16, 2013, and its non-abandonment of the mark as of April 22, 2015.

With respect to the likelihood of confusion between the NATERA mark and the NATIERRA mark, Justice Walker considered whether the use of both marks in the same area “would be likely” to lead to the inference that the goods associated with the two trademarks were manufactured or sold by the same person.

Justice Walker emphasized the degree of resemblance between the two marks, finding that both marks evoked concepts of nature and the earth, and were similar visually and phonetically. In addition to the fact that the NATIERRA mark had acquired distinctiveness, Justice Walker considered the products in association with which both marks would be used would fall within the same general category, and further utilize the same channels and locations of sale. All of these factors taken together caused Walker J. to conclude that the NATERA mark was confusing with the NATIERRA mark.

Based on the foregoing, Walker J. allowed Brandstorm’s appeal, concluding that that the evidence established two of Brandstorm’s grounds of opposition to the Application.

Author: Nargis Fazli