Creator of the '4Cs' of diamond value prevents registration of confusing acronym

Canada

In Gemological Institute of America Inc v Gemology Headquarters International LLC (2014 FC 1153), the Federal Court of Canada has refused registration of the proposed mark GHI for use with diamond grading and other gemological services based on a likelihood of confusion with the well-established mark GIA for the same services.

The Gemological Institute of America (GIA) is a non-profit gem research institute dedicated to protecting the public by providing education and objective, unbiased gem evaluations. GIA was the founder of the '4Cs' of diamond value: colour, clarity, cut and carat, and over 60% of diamonds sold globally are accompanied by a GIA grading report. Gemology Headquarters International (GHI) does not yet provide services in Canada and filed its trademark application on a proposed-use basis.

The dispute turned on the likelihood of confusion between the marks GHI and GIA. The test for confusion is considered from the perspective of the first impression of an ordinary consumer with an imperfect recollection of the established mark when exposed to the new mark. In determining confusion, a decision maker will take into account all surrounding circumstances, including:

  • the distinctiveness of the marks;
  • the length of time in use;
  • the nature of the goods, services and businesses; and
  • the degree of resemblance between the marks in terms of sound, appearance and ideas suggested by them.

The matter was an appeal from a decision of the Trademark Opposition Board. In the opposition proceeding, the board found that both marks lacked inherent distinctiveness and were weak marks consisting only of letters, without words or design features. The board noted that weak trademarks can enhance their inherent distinctiveness through use and promotion, but while the evidence showed some use of the mark GIA, it was not sufficient to conclude that the mark was well known in Canada with a significant level of acquired distinctiveness.

Given the inherent weakness of the marks, the board applied a stricter test for confusion than for distinctive marks in which comparatively small differences are sufficient to avert confusion and a greater degree of discrimination may fairly be expected from the public. Using this stricter test, the board found that there were significant differences between the marks GHI and GIA. In assessing all relevant factors for confusion, the board held that based on the weakness of the marks in terms of distinctiveness and the significant differences between them, that there was no likelihood of confusion.

New evidence is permitted on an appeal to the Federal Court. Where it is found that the new evidence would have materially affected the board’s findings of fact or exercise of discretion, then the court will render a fresh decision. Otherwise, the court will only overturn the board’s decision if it is found to be unreasonable. Substantial additional evidence was filed which established that GIA was very well known in Canada (and globally), with a 60% market share, over 40 years of use and advertising, and a significant media presence. Therefore, the court concluded that GIA had acquired a high degree of distinctiveness and a strong reputation.

The court further found that the marks were very similar in degree of resemblance, both marks being three-letter acronyms, with two of the same letters and both beginning with 'G'. The court held that because “the otherwise weak mark GIA has gained distinctiveness due to use and reputation, it deserves protection and small differences in the marks of others will no longer be enough to avert confusion”.

The court held that all of the surrounding circumstances favoured GIA and that GHI had not met its burden to establish that there was no likelihood of confusion between the marks.

This decision affirms the principle that acronyms in Canada are initially treated as weak marks entitled to a more narrow scope of protection, but where an acronym acquires distinctiveness through substantial use and reputation, it is entitled to the broader protection enjoyed by other distinctive marks.

An appeal to the Federal Court of Appeal was filed by GHI on January 2 2015.

Daniel Anthony, Smart & Biggar/Fetherstonhaugh, Ottawa

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