Official Marks Unenforceable Rules Federal Court in Litigation Over “Spirit Bear”

2014-10-14

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OFFICIALMARKSUNENFORCEABLERULESFEDERALCOURTINLITIGATIONOVER“SPIRIT
BEAR”

BARRYGAMACHE*
ROBIC,LLP
L
AWYERS,PATENT&TRADEMARKAGENTS

ArecentdecisionbyCanada’sFederalCourthasruledthatofficialmarksownedby
theCityofTerrace,inBritishColumbiaandtheKitasooBandCouncil,inthesame
province,areunenforceableandcannotbeassertedagainstamanufacturerofspirits
usingtheunregisteredtrade-marksSPIRITBEARVODKA,SPIRITBEARGINand
SPIRITBEARESPRESSOINFUSEDVODKA(CityofTerraceandKitasooBand
Councilv.UrbanDistilleriesInc.,2014FC833(F.C.),MartineauJ.,September2,
2014).
TheKermodeibearisknownasthe“spiritbear”inBritishColumbia.Accordingto
informationprovidedtotheCourt,itisasub-speciesoftheblackbear,ararewhite
variant.Thespiritbearhasplayedanimportantroleforsuccessivegenerationsof
aboriginalgroupsinBritishColumbia.Becauseofitsimportantculturalaspects,the
KitasooBandCouncilappliedfortheSPIRITBEARmarkasanofficialmarkin
November2006.Accordingly,theRegistrarofTrade-marksgavepublicnoticeon
December20,2006thatSPIRITBEARhadbeenadoptedandusedbytheKitasso
BandCouncilasanofficialmark.
OfficialmarksareaspecialfeatureinCanadiantrade-marklaw.Theownerofan
officialmarkisgrantedspecificrightsflowingfromparagraph9(1)(n)(iii)ofCanada’s
Trade-marksAct,R.S.C.1985,c.T-13(the“Act”).Thisparagraphprovidesinpart
thatnopersonshalladoptinconnectionwithabusiness,asatrade-markor
otherwise,anymarkconsistingof,orsonearlyresemblingastobelikelytobe
mistakenfor,[…]anybadge,crest,emblemormark[…]adoptedandusedbyany
publicauthority,inCanadaasanofficialmarkforwaresorservices,[…]inrespectof
whichtheRegistrar[ofTrade-marks]has,attherequestof[the]publicauthority[…]
givenpublicnoticeofitsadoptionanduse.Anofficialmarkcanonlybeadoptedand
usedbyapublicauthority(asopposedtoanyprivatecommercialentity).Apublic
authorityhasbeendescribedasanentitythatissubjecttogovernmentcontroland
engagesinactivitiesthatbenefitthepublic(UnitedStatesPostalServicev.Canada
PostCorporation,2007FCA10).Anapplicationforanofficialmarkescapesthe
scrutinyoftheusualtrade-markexaminationprocessbytheRegistrarofTrade-
marks.Ascanbeseenfromparagraph9(1)(n)(iii),itprovidesclearadvantagestoits

©CIPS,2014.*BarryGamacheisamemberofROBIC,LLP,afirmoflawyers,patentandtrademarkagents.
PublishedintheNovember2014issueofWorldIntellectualPropertyReport.Publication142.288.

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ownerinallowingaclaimagainstanyoneusing,asatrade-markorotherwise,any
markconsistingof,orsonearlyresemblingastobelikelytobemistakenforthe
officialmark.
Inthisinstance,theCityofTerrace,BritishColumbia,alsoappliedfortheofficialmark
SPIRITBEAR.ItsapplicationwasfiledearlierthantheonesubmittedbytheKitasoo
BandCouncilsothatthepublicnoticeofitsadoptionanduseofthemarkwasgiven
bytheRegistrarofTrade-marksmorethantwoyearsearlier,onJanuary21,2004.
WhileboththeCityofTerraceandtheKitasooBandCouncilareeachapplicantof
recordfortheSPIRITBEARofficialmark(sincethereisnoexaminationprocessthat
wouldpermittherefusalofthesecondidenticalmark)andwhiletheremighthave
beensomefrictionbetweenthetwointhebeginning,theynowshareuseofthe
SPIRITBEARmarkthroughalicencingagreement.Bothapplicantsalsolicence
SPIRITBEARtootherswhentheyconsideritappropriate.

InJanuary2011,UrbanDistilleriesInc.commencedthemanufactureofspiritsunder
theunregisteredtrade-marksSPIRITBEARVODKA,SPIRITBEARGINandSPIRIT
BEARESPRESSOINFUSEDVODKA.Thesetrade-marksappearonUrban
Distilleries’packagingalongwithitstrade-name,thatisalsoprominentlyusedasa
trade-mark.
Earlier,in2010,UrbanDistillerieshadfiledanapplicationtoregisterthetrade-mark
SPIRITBEARVODKA.WhiletheExaminerattheTrade-marksOfficeappeared
satisfiedthatUrbanDistilleries’trade-markwasregistrableandallowedittobe
publishedforoppositionpurposes,theCityofTerraceandtheKitasooBandCouncil
opposedtheapplication.AsUrbanDistilleriesdecidednottodefenditsapplication,its
markwasdeemedabandonedinSeptember2011.UrbanDistilleriesdecided
howevertocontinueusingthistrade-markandotherunregisteredSPIRITBEAR
marksinassociationwithitsproducts.
OnAugust22,2013,theCityofTerraceandtheKitasooBandCouncilcommenced
proceedingsbeforeCanada’sFederalCourtinordertoobtaininjunctivereliefagainst
UrbanDistilleries.ThePlaintiffssoughtfromtheCourtanorderagainstUrban
Distilleriestodestroyitsproductsnotalreadyonthemarketandtosurrenderits
profitsflowingfromthesaleofitsproductsundertheSPIRITBEARtrade-mark.Inits
defenseandcounterclaim,UrbanDistilleriesclaimedthatthePlaintiffs’officialmarks
wereunenforceableastherehadbeennoadoptionanduseofthempriortothe
publicnoticegivenbytheRegistrarofTrade-marks.UrbanDistilleriesalsoalleged
thateachPlaintiffwasnotapublicauthorityandthat,inanyevent,theusebyUrban
DistilleriesofanytypeofSPIRITBEARtrade-markwasnotlikelytocauseanytypeof
confusion.
OnApril29,2014bothPlaintiffsfiledamotionforsummaryjudgmentaskingthe
Courttoconsiderseveralissues,including:“1)arethe[P]laintiffspublicauthorities
entitledtoregistrationofanofficialmarkunderparagraph9(1)(n)(iii)oftheAct;2)
havethePlaintiffsshownadoptionanduseasoftherelevantdate,thedateof

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publicationoftheofficialmark;3)dotheUrbanDistilleriesunregisteredmarksconsist
oforsonearlyresembleastobelikelytobemistakenforthePlaintiffs’officialmark
SPIRITBEARundersection9(1)oftheAct;and4)doanyofthelimitationsperiod,
estoppelorlachesargumentsapply?”.
WhilevariousissueswereraisedbythePlaintiffs,theCourtexaminedPlaintiffs’
claimsthattheyeachhadestablishedtheadoptionanduseoftheirrespectiveofficial
marksasofthedateofpublicationofeachpublicnoticegivenbytheRegistrarof
Trade-markssince,intheCourt’sview,thiswasthedeterminativeissue.Shouldthe
Plaintiffs’evidencenotestablishtheiradoptionanduseoftheirrespectiveofficial
marks,theCourtcouldthendeclaretheirmarksunenforceableandrejecttheirclaims
againstUrbanDistilleries.
Whileadoptioncanbeestablishedbyasimplestatement,useofanofficialmarkbya
publicauthoritycanbeevidencedbyanypublicdisplayoftheofficialmarkpriortoits
publicationbytheRegistrarofTrade-marks.Theofficialmarkmustalsobe
associatedwithaparticularwareorservice.
ThecityofTerracesubmittedevidencethatithaddiscussedKermodeibearsonits
website.However,SPIRITBEARasamarkwasnotshown.Citycommunications
referringtoSPIRITBEARweredescribedbytheCourtasinternaldocuments.Even
ininternalcitycorrespondence,intheCourt’sview,itwasunclearwhetherthe
expression“spiritbear”wasusedasanofficialmarksinceitdidnotstandoutfrom
thesurroundingmaterial.Finally,intheexamplesofusesubmitted,theredidnot
appeartobeanypublicdisplayofSPIRITBEARorthatitwasusedasamarkinany
traditionalsense.
TheevidencesubmittedbytheKitasooBandCouncilalsoappearedproblematic.The
Courtdescribedinitsreasons(atpar.15)thedifficultiesassociatedtherewith:“There
isnodoubtthatthespiritbearplaysanimportantroletomanyaboriginalgroups.The
affiantDouglasNeasloss,amemberoftheKitasooBandCouncil,statesthatthespirit
bearhasbeenpartofhisband’scultureforgenerations.Includedasevidence,isa
diaryentryofhereditaryChiefErnestMasonJr.,providedtotheCourt.Thisis
hearsayevidence.ThediaryentrywasphotocopiedOctober21,2013,accordingto
LarryGreba,whohand-wrotethisfactonthephotocopy.LarryGrebaisnotanaffiant
inthisproceeding.Theentryisundatedandnon-contemporaneous;itisunclear
whentheeventsmentionedoccurred.Theaffiantstatestheyoccurredin2002.The
diaryentrydiscussesaspiritbearmaskcarving,acompositiontitled“songforthe
spiritbear”,andaliving,breathingspiritbearvisitingthesiteofanewlyerected
replicabighouse.WhilethespiritbearisimportantintheKitasooculture,thisisnot
enoughtoriseittothelevelofuseonwaresorservicescontemplatedforanofficial
mark.”
AccordingtotheCourt,thePlaintiffs’evidencefailedtoestablishthattheyhadused
theirrespectiveofficialmarksasoftherelevantdates(wheneachwasgivenpublic
noticeofitsadoptionandusebytheRegistrarofTrade-marks).TheCourtconcluded

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thatbothofficialmarkswereunenforceable.UrbanDistilleries’counterclaimwasalso
allowed.
Whilesomeinthelegalcommunityhavequestionedtheprivilegedpositiongiven
underCanadiantrade-marklawtoofficialmarks,theproofofuseofsuchmarksisnot
withoutsomedifficultiesasthisdecisionillustrates.Anypublicauthoritywhorequests
thatpublicnoticebegivenofitsadoptionanduseofanofficialmarkshouldmake
suretoadequatelydocumentthedisplayofitsmarkasanofficialmarkbeforeit
presentsitsapplicationtotheRegistrar.Shouldthisdocumentationbedefectivein
anyway,itmightfinditselflickingitswoundsasinthepresentcase.

OnOctober2,2014,theKitasooBandCouncilfiledaNoticeofAppealbeforethe
FederalCourtofAppeal(fileA-436-14)againsttheCourt’sdecision.

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pharmaceutiquesetobtentionsvégétales;secretsdecommerce,know-howet
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agroupoflawyersandofpatentandtrademarkagentsdedicatedsince1892to
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biotechnologies,pharmaceuticalsandplantbreeders;tradesecrets,know-
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