Board exceeds jurisdiction by limiting scope of protection of opponent's mark

Canada
In Molson Canada 2005 v Anheuser-Busch Incorporated (2010 FC 283, March 12 2010), the Federal Court has ruled that the Trademarks Opposition Board had exceeded its jurisdiction by limiting the scope of protection accorded to Molson Canada 2005’s trademark registration in its opposition against the registration of the trademark BUDWEISER (and design) by Anheuser-Busch Incorporated for use in association with beer and various merchandising products.  

Molson is the owner of the trademark STANDARD LAGER (and design), which was registered in 1926 in association with standard lager. This registration constituted one of Molson’s grounds of opposition before the Board. Anheuser owns two figurative BUDWEISER marks, registered in 1970 in association with beer on the basis of use in Canada since at least as early as 1957 and 1903, respectively.
 
The present case is not the parties’ first battle regarding these registered marks. One of the most important decisions in their history of litigation is the Court of Appeal’s decision in Carling O’Keefe Breweries of Canada Ltd v Anheuser-Busch Inc ((1986) 10 CPR (3d) 433), ruling that the trademarks at issue were confusingly similar, but admitting Carling O’Keefe Breweries of Canada Ltd’s (the then owner of the STANDARD LAGER mark) equitable defence of laches and acquiescence. Such a defence was successful notwithstanding a certain 'cloud' on Carling O’Keefe’s registration, considering the fact that the trademark, if not an actual copy, was inspired by, and designed with, the knowledge of the BUDWEISER mark. Consequently, both parties’ registrations, although admittedly confusing, remained valid.
 
In the present case, the board, rejecting Molson’s opposition, divided its reasons into two parts based on the products involved: beer and merchandising products. In rejecting the opposition regarding the first category of products on the basis of a 'cloud' on Molson’s initial registration, and hence in deciding that it had jurisdiction to determine whether Molson should be allowed to rely on its STANDARD LAGER mark, the board relied heavily on the Court of Appeal’s decision. Regarding the second category of products, the board found that there was no reasonable likelihood of confusion between both parties’ marks and rejected each of the grounds of opposition.
 
On appeal, the court was of the view that the 1986 Court of Appeal’s decision did not apply to the opposition matter. The BUDWEISER application was a new application for a unique trademark, although considered as an updated version. The issues previously addressed by the Court of Appeal were different from the issue standing before the board, namely the registrability of the BUDWEISER application based on proposed use in light of the STANDARD LAGER mark.
 
In addition, the board committed an error in determining that it had jurisdiction to limit the scope of protection accorded to Molson’s registered mark. In an opposition proceeding, the board is limited to determining whether a proposed trademark is registrable, and the opponent’s registered trademark is not an issue. In its analysis, the court also pointed out that:
  • the registrar is a creature of statute with no inherent jurisdiction;
  • the registrar does not have the jurisdiction to make tacit amendments to the register; and
  • its powers on opposition, provided by Section 38 of the Trademarks Act, do not include any reference to equity or a duty to reach a fair or just result.
The court then undertook a confusion analysis based on Section 6 of the act and concluded that, as far as “beer” was concerned, the BUDWEISER application was confusing with Molson’s STANDARD LAGER registered mark. In addition to the factors listed in Subsection 6(5) of the act, the court also considered “two heavily weighted surrounding circumstances":
  • the fact that the Court of Appeal had found two similar marks confusing; and
  • the fact that, in their memorandum of fact and law, both Molson and Anheuser stated that the STANDARD LAGER mark and the BUDWEISER application were confusing.
The appeal of the board's decision in relation to beer was thus allowed.
 
With respect to the remaining products, namely the merchandising items, the court determined, on a balance of probabilities, that there was not a reasonable likelihood of confusion between the STANDARD LAGER mark and the BUDWEISER application, and hence dismissed the second part of the appeal.   
 
Although the issue of jurisdiction is often a grey zone, this case clearly states that only the Federal Court has jurisdiction to alter the register in the manner advocated by Anheuser, and that the board and the parties involved should always be careful when relying on litigation history.

Catherine Bergeron, ROBIC LLP, Montreal

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