CANADA DRUGS not clearly descriptive or deceptively misdescriptive

In Thorkelson v Pharmawest Pharmacy Ltd (2008 FCA 100, March 13 2008), the Federal Court of Appeal has allowed an appeal from a Federal Court decision in which the latter granted Pharmawest Pharmacy Ltd's application for an order under Subsection 57(1) of the Trademarks Act to expunge the trademarks CANADADRUGS.COM and CANADA DRUGS from the register.

The marks at issue were registered on May 20 2003 in the name of Kris Thorkelson for use in association with the "operation of a drugstore, dispensary and pharmacy; online operation of a drugstore, dispensary and pharmacy".

Since 2002 Pharmawest had provided distance-based prescription services to international consumers via the Internet. Pharmawest used the trade names GetCanadianDrugs.com and GetCanadianDrugs, as well as a design mark incorporating such words. Thorkelson acquired the domain name 'CanadaDrugs.com' in 2001 and provided the same services as Pharmawest.

At trial, Pharmawest alleged pursuant to Paragraph 18(1)(a) of the act that the marks were not registrable at the date of registration because they were clearly descriptive or deceptively misdescriptive of the character or quality of the services in association with which the trademarks were used, and of their place of origin, contrary to Section 12(1)(b) of the act. The trial judge found that the prohibition in Section 12(1)(b) prevented any single trader from monopolizing a term that is clearly descriptive or common to the trade. The trial judge considered the importance of the phrase 'Canada Drugs' with respect to internet search engines and search terms, and found that the generic terms 'Canada' and 'drugs' would be used by ordinary consumers to locate pharmacies in Canada on the Internet. The trial judge concluded that the evidence showed that many businesses would match this description and thus refused to permit the words to be trademarked so as to prevent an undue disadvantage for legitimate competitors (for further details please see "CANADA DRUGS marks viewed as descriptive and misdescriptive").

On appeal, Thorkelson argued that the trial judge's decision was based on:

• one or more palpable and overriding errors of fact; or
  
  
• one or more findings of fact that had no evidentiary foundation.

The Court of Appeal considered 13 affidavits submitted at trial on behalf of Pharmawest and/or Thorkelson. The evidence consisted of:

• internet or other search results, which included official trademark records maintained by the Canadian Trademarks Office incorporating the terms 'Canada' and 'drugs'; and
  
  
• results of internet investigations of domain names, trade names and trademarks incorporating these terms.

The court found that the affidavits did not interpret the search results or explain what factual inferences might be drawn from the results. Several other affidavits consisted of personal knowledge of use of the terms 'Canada' and 'drugs' in the Canadian pharmaceutical marketplace, but these did not provide time references. Therefore, the evidence could not support Pharmawest's application for expungement.

The court concluded that there was no evidence capable of establishing that, as of the date of the registration, the marks were clearly descriptive or deceptively misdescriptive of the character or quality of the operation of an online pharmacy business. The court allowed the appeal on the basis that the only support for the trial judge's decision was:

• his own impression of the meaning of the words 'Canada' and 'drugs' when used in association with an online pharmacy business; and
  
  
• the inferences that he drew, without any evidence, about what consumers would or would not understand.

It is axiomatic that a trial judge may not base a decision on his or her own impressions rather than on the evidence. This decision underscores the importance of providing clear evidence to support factual findings when submitting search result evidence, such as interpreting or explaining what factual inferences may be drawn from the search results. It also highlights the importance of providing appropriate time references when alleging that a trademark was not registrable at the date of registration.

Airlie McGhee, Osler Hoskin & Harcourt LLP, Ottawa