Application for leave to amend opposition referred back to TMOB


In Parmalat Canada Inc v Sysco Corporation (2008 FC 1404, October 2 2008), the Federal Court of Canada has ordered that Parmalat Canada Inc's application for leave to amend its statement of opposition be referred back to the Trademark Opposition Board (TMOB) for reconsideration.

Parmalat, the owner of several trademarks including the words 'black diamond', commenced opposition proceedings objecting to the registration by Sysco Corporation of the trademark BLACK DIAMOND for kitchen utensils. In light of a recent decision, Veuve Clicquot Ponsardin v Boutiques Cliquot Ltée ([2006] 1 SCR 824), Parmalat subsequently sought leave to amend its statement of opposition to add a ground of opposition. According to Parmlat, Sysco could not have been satisfied that it was entitled to use the BLACK DIAMOND mark, as it was aware of Parmalat’s use of its BLACK DIAMOND marks. It sought to plead that any use of BLACK DIAMOND by Sysco would result in the depreciation of the value of the goodwill attached to Parmalat’s marks pursuant to Section 22 of the Trademarks Act.

The hearing officer of the TMOB denied leave to amend the statement of opposition, finding that “Section 22 of the act is not a proper ground of opposition under Section 38(2) of the act. Parmalat appealed to the Federal Court.

A recent decision of the Federal Court of Appeal confirmed that a refusal to amend a statement of opposition to add a new ground is an interlocutory decision (see Simpson Strong-Tie Co v Peak Innovations Inc (2008 FCA 235). As a general rule, when an alternative remedy exists, the Federal Court will not hear interlocutory judgments on appeal, unless special circumstances exist. At the close of opposition proceedings, the first appeal level under the act is to the Federal Court. Therefore, in the present case, the court decided that Parmalat had no alternative remedy.

Parmalat argued that the hearing officer’s decision was based on legal grounds, rather than on the nature of the issue before him. Sysco claimed that the hearing officer was well within his discretion in refusing to grant leave to amend a statement of opposition pursuant to Rule 40 of the Trademarks Regulations, and raised the argument that the TMOB did not have jurisdiction to consider allegations of depreciation of goodwill under Section 22 of the act. Parmalat responded that it was not asking the TMOB to decide allegations of depreciation of goodwill, but only sought leave to amend its statement of opposition to include a legitimate ground under Section 38(2) of the act.

The Supreme Court of Canada has set two standards of review: correctness and reasonableness (the standard of reasonableness being used when there is a question of fact, discretion or policy). In this case, the court decided that the standard of review was one where the TMOB was interpreting its own statute, which is the standard of correctness.

The court found that the hearing officer had erred in formulating the issue to be decided. In particular, it held that the question of whether depreciation of goodwill could stand as a sole ground of opposition was not the proper formulation of the question. It was the hearing officer’s decision to determine whether the statement of opposition could be amended pursuant to Rule 40 of the regulations.

In conclusion, the court found that the TMOB had ignored relevant jurisprudence cited by Parmalat as to the scope of the grounds of opposition under Section 38(2) of the act. It further noted a decision of the TMOB in which the latter had found that Section 7(b) of the act is a valid ground of opposition “under the general principle that the registrar cannot condone the registration of a mark if the applicant’s use of the mark would violate federal legislation” (see Bojangles’ International LLC v Bonjangles Café Ltd ((2004), 40 CPR (4th) 553)). Parmalat’s request to amend the statement of opposition (pleading that the use of BLACK DIAMOND by Sysco would result in depreciating the value of the goodwill attached to its marks) was pursuant to the federal legislation.

The case was referred back to the TMOB for determination taking the court's reasons into account.

Jennifer Powell, Fasken Martineau DuMoulin LLP, Vancouver

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