CANADA DRUGS marks viewed as descriptive and misdescriptive

In Candrug Health Solutions Inc v Thorkelson, the Federal Court of Canada has found that the word marks CANADA DRUGS and CANADADRUGS.COM issued to the Canadian pharmacist Kris Thorkelson were not only "clearly descriptive", but also "deceptively misdescriptive" under Section 12(1)(b) of the Canadian Trademarks Act.

On February 28 2001 Thorkelson registered the domain name 'CanadaDrugs.com'. On March 19 2001 Thorkelson started to use it in association with the online operation of a drugstore. On March 23 2001 Thorkelson applied for the registration of the trademark CANADADRUGS.COM, and on May 15 2001 he applied for the registration of the trademark CANADA DRUGS, both based on proposed use. Two years later, on May 2 2003, Thorkelson filed a declaration of use of these marks and the registrar issued both registrations. This was done after the registrar's review of the arguments filed by Thorkelson's trademark agent on whether or not the marks were clearly descriptive or deceptively misdescriptive. Registrations were issued with the right to the exclusive use of the words 'CANADA' and 'DRUGS' disclaimed.

On November 21 2002 Pharmawest Pharmacy Ltd registered the domain name 'GetCanadianDrugs.com' and has, since December 2002, used GETCANADIANDRUGS.COM both as a design trademark and a trade name. In February 2006 Pharmawest received a letter from Thorkelson requesting that Pharmawest cease all use of the domain name 'GetCanadianDrugs.com'. In reply, Pharmawest challenged the validity of Thorkelson's marks before the court.

The evidence showed that:

• pharmaceuticals supplied by Thorkelson's business do not all originate from Canada;
  
  
• around 50% of the pharmacies that actually dispense and ship the pharmaceuticals are not located in Canada;
  
  
• less than 5% of Thorkelson's customers are Canadian and 95% are from the United States;
  
  
• The terms 'Canada' and 'drugs' are used by the press in describing pharmaceuticals from Canada, and not to refer specifically to Thorkelson's business and services;
  
  
• the Canadian Trademark Register contains other registrations and pending applications for trademarks incorporating the words 'Canada' or 'drugs' in combination; and
  
  
• In 2005 there were 3.5 million visits to Thorkelson's website and over $5 million has been spent in promotion of Thorkelson's marks and business, the bulk of which targeted US consumers.

The court rejected Thorkelson's arguments and found that the CANADADRUGS.COM and CANADA DRUGS marks were clearly descriptive since "as a matter of first impression and […] common sense, the ordinary consumer would consider the descriptive character of the marks to go to the material composition of the services". The court also added that 'Canada' and 'drugs' are "two generic terms that would be used by the ordinary consumer identified in this case to locate pharmacies in Canada on the Internet". This trademarking of words common to the trade was viewed by the court as an undue disadvantage for legitimate competitors.

While the fact that the pharmaceuticals used to fill the prescriptions were not all manufactured in Canada may not have been sufficient to find that the marks were deceptively misdescriptive, the fact that the prescriptions were not always filled by a Canadian pharmacy was determinative in the court's finding that the marks were in fact deceptively misdescriptive. On that issue, the court also emphasized the significance of the fact that "Canadian consumers would trust prescription fulfilment from a Canadian pharmacy more than that from other countries".

Even if the marks were found clearly descriptive and deceptively misdescriptive, they could have remained registrable had Thorkelson been able to show that they had become distinctive of Thorkelson's services at the date of filing the applications for registration. However, since Thorkelson started the operation of his website less than three months prior to the filing of the applications, the court found that this was not sufficient for the marks to have acquired distinctiveness among Canadian consumers. Therefore, an order for the expungement of the marks was issued.

Marcel Naud, Léger Robic Richard LLP, Montreal