Opponent digs up the dirt on applicant's alleged use

In Coastal Culture Inc v Wood Wheeler Inc, the Federal Court of Canada has upheld an opposition to an application to register DIRT SHIRT as a trademark for red dirt dyed t-shirts.

Prince Edward Island (PEI) is known, among other things, for its red dirt roads. In 2002 local company Wood Wheeler Inc applied to register DIRT SHIRT as a trademark based upon its use of the mark since May 20 1997 in association with various types of clothing. Although it was not mentioned in the application, Wheeler's products were souvenir items dyed with the island's red dirt. Coastal Culture Inc, which was producing similar souvenir items under the phrases 'PEI Red Mud Shirts' and 'Red Dirt Shirt', opposed the application.

The registrar rejected the opposition, finding that even if Coastal had established that Wheeler was aware of Coastal's use of the phrase 'Red Dirt Shirt', it did not stop Wheeler from truthfully making a statement to the effect that it was entitled to use the mark in Canada.

Further, the registrar held that Coastal had failed to prove that the term 'DIRT SHIRT' was used descriptively in Canada. Even if the t-shirts were dyed using PEI's soil, the term could not be considered to be plainly descriptive of the character or conditions of their production. Coastal also tried to rely on evidence of the existence of other souvenir items dyed with dirt to demonstrate the descriptiveness of the expression. However, the registrar pointed out that it was not necessary for other traders to use the expression 'dirt shirt' to refer to their products. The registrar also held that Coastal had failed to meet its burden of showing that the mark had an accepted definition in Canada as being the name of t-shirts.

Further, the registrar found that the evidence did not demonstrate that Coastal had used the expression 'Red Dirt Shirt' as a trademark within the meaning of Section 4(1) of the Trademarks Act. If there was in fact any evidence of trademark use, it was not before June 20 2002. Wheeler's application was based on use since May 20 1997 and no reliable evidence of Coastal predated that first use.

The registrar also concluded that there was no direct evidence that 'Red Dirt Shirt' had become known sufficiently as to negate the distinctiveness of Wheeler's DIRT SHIRT mark.

Coastal finally alleged, as part of its evidence and written submissions, that Wheeler had not used the trademark DIRT SHIRT, but rather PEI DIRT SHIRT or THE ORIGINAL PEI DIRT SHIRT. Coastal therefore submitted that Wheeler had not really used the trademark applied for as of the date of first use alleged in the application. The registrar refused to consider this ground of opposition because it had not been raised in the statement of opposition.

On appeal, the Federal Court considered only the ground of opposition based on Section 30(b), namely that Wheeler had not used the trademark DIRT SHIRT as of the date of first use alleged in the application.

The court found that even if Coastal had not pleaded this ground of opposition in the original statement of opposition, the argument had been raised in Coastal's evidence and written argument. Wheeler had addressed the issue of non-use in its own evidence. In deciding not to consider this additional ground of opposition, the registrar reviewed the sufficiency of the pleadings in isolation from the evidence of both parties.

The Federal Court concluded that the registrar had erred in refusing to consider the issue of non-use. More particularly, the registrar should not have limited the review to the statement of opposition, but should have also weighted the evidence and arguments of both parties to decide whether the ground of opposition had been properly addressed.

As part of its evidence, Coastal had shown that Wheeler was not using DIRT SHIRT, but PEI DIRT SHIRT and THE ORIGINAL PEI DIRT SHIRT. The evidence produced by both parties indicated that the name PEI was always written in the same height and size as the words DIRT SHIRT on Wheeler's products. The words 'THE ORIGINAL' were smaller and displayed above the words PEI DIRT SHIRT. Wheeler alleged that the words 'The original PEI' were added to differentiate its goods from those of other vendors. Even if the statement was true, there was no evidence that Wheeler ever used its trademark DIRT SHIRT without the name PEI.

The Federal Court concluded that PEI had always been an element of the alleged mark. Since it had always been part of the mark, it was not a simple deviation of a previously used mark. Use of the trademark DIRT SHIRT in and of itself since May 1997 had not been established.

The decision confirms that it is possible to allege additional grounds of opposition not pleaded in the statement of opposition, provided that sufficient notice is given to the other party. Thus, a careful review of the opponent's evidence is warranted to make sure that an applicant covers all alleged and potential grounds of opposition in its own evidence. The decision also reaffirms the importance of carefully drafting a trademark application so as to allege the correct use.

France Lessard, Léger Robic Richard LLP, Montreal