Federal Court considers whether professional designations may be used in trademarks

In Canadian Council of Professional Engineers v Kelly Properties LLC (2012 FC 1344), the Federal Court of Canada has considered whether a company that provides personnel employment services could use a professional designation - engineering - within its trademark.

The case was an appeal from a decision of the registrar of trademarks that approved Kelly Properties LLC’s application to register the trademark KELLY ENGINEERING RESOURCES and rejected the Canadian Council of Professional Engineers’ opposition to the trademark application. In overturning the decision of the registrar, the Federal Court considered three main issues:

1. What is the appropriate standard of review when new evidence is adduced?
2. Did the officer err in her assessment of the date of first use of the trademark?
3. Did the officer err in her assessment of whether the trademark was clearly descriptive or deceptively misdescriptive?

The court first considered the appropriate standard of review. Generally, officers’ decisions are reviewed on a standard of reasonableness; the court should not intervene unless the officer came to a conclusion that is not “transparent, justifiable and intelligible and within the range of acceptable outcomes based on the evidence before it”. However, where new evidence has been filed and such evidence would have materially affected the officer’s findings of fact or exercise of discretion, the court must adopt a standard of correctness and come to its own conclusion.

In this appeal, the appellant introduced new affidavit evidence from five individuals which provided information that was not available to the officer and specifically directed to concerns raised in her decision. Since a determination of the appropriate standard of review requires a comparison between the evidence that was before the officer and the new evidence filed in the appeal, this analysis is conducted separately for each individual issue.

Applying this analysis to the new evidence, the court reviewed each issue as follows:

1. The finding that April 1999 was the date of first use of the trademark KELLY ENGINEERING RESOURCES was reviewed on a standard of reasonableness.
2. The finding that the trademark is not clearly descriptive was reviewed on a standard of reasonableness.
3. The finding that the trademark is not deceptively misdescriptive was reviewed on a standard of correctness.

Having found that the new evidence relating to the date of first use did not have sufficient probative significance to have materially affected the officer’s findings of fact on this issue, the court reviewed the officer’s decision on a standard of reasonableness.

Then, the court concluded that the hearing officer’s decision was unreasonable in finding that April 1999 was the date of first use of the trademark KELLY ENGINEERING RESOURCES as claimed in the respondent’s application. First, the court ruled that the hearing officer erred in requiring the appellant to prove that the evidence that it relied on was clearly inconsistent with the claims set forth in the respondent’s trademark application. Since the appellant was relying on its own evidence, rather than on the respondent’s evidence, the officer should have applied a lighter evidentiary burden respecting the issue of the respondent’s non-compliance.

Second, the court noted that the hearing officer, in her own review, acknowledged the absence of evidence on the use of the trademark in Canada as of April 1999. While there was evidence that the respondent was present in Canada as of April 1999, there was no evidence of 'use' as defined in the Trademarks Act, such as that the respondent displayed the trademark KELLY ENGINEERING RESOURCES on any of its marketing materials. The material only displayed other trademarks owned by the respondent, such as KELLY SERVICES (CANADA) LTD and KELLY SCIENTIFIC RESOURCES. 

However, the respondent’s trademark application was not defeated on this ground as the application was also filed on the basis of use and registration in the United States. Since the appellant did not raise this as a ground of opposition, the court found insufficient basis on which to deny the trademark application.

This affirmed a previous decision by the Trademarks Opposition Board which found that failing to provide evidence of prior use in a trademark application does not necessarily defeat the application if there is a separate claim on the basis of use and registration in a different country (Aetna Life Insurance Co of Canada v SNJ Associates Inc). In other words, an application may be allowed to proceed on the basis of use and registration in another country notwithstanding the failure to prove use in Canada.

On the issue of whether the trademark was clearly descriptive, the court adopted the reasonableness standard of review and concluded that it was reasonable for the hearing officer to find that the trademark was not clearly descriptive.

On the issue of whether the trademark was deceptively misdescriptive, the court found that the new evidence adduced by the appellant held probative significance which warranted a correctness standard of review. Considering the new evidence, the court found that the trademark was deceptively misdescriptive of the respondent’s business as the trademark opens up the possibility that a customer who hires the respondent to find a qualified engineer ends up with an engineer that is not licensed to practice engineering in Canada. Since the trademark would run the risk of opening up the door to abuse, thereby placing the public interest at risk, the court reversed the decision of the registrar of trademarks and issued an order refusing the trademark application. 

In conclusion, the takeaway points can be summarised as follows:

1. Generally, officers’ decisions are reviewed on a standard of reasonableness; however, where new evidence has been filed and such evidence would have materially affected the officer’s findings of fact or exercise of discretion, the courts will review hearing officers’ decisions on a standard of correctness.
2. When filing a trademarks application, companies should claim as many bases for registration as facts allow. Even if one basis is successfully opposed, the trademarks application may be saved on other bases.
3. Professional designations may not be used in a trademark where (a) the applicant is not registered to engage in the professional practice, and (b) the trademark has the potential to mislead the public.

Jennifer Lee, Fasken Martineau DuMoulin LLP, Vancouver