Before a Canadian trademark is registered, it must be advertised and exposed to third-party opposition before the Canadian Trademarks Opposition Board (“TMOB”). Procedural complexity has triggered criticism of Canadian trademark opposition proceedings as formalistic. For example, appeals from the TMOB to the Federal Court are available as of right and it has always been a peculiar feature of Canadian trademark oppositions that the parties get an evidentiary “do over” on appeal. This practice of dragging out litigation by withholding evidence at the first instance is changing.
If material new evidence is adduced on appeal from a decision of the TMOB, the standard of review is higher – correctness – rather than the more deferential standard of reasonableness applied in cases where there is no new evidence proffered on appeal. This discrepancy in the standard of review has caused many parties (particularly those with deeper pockets) to limit the evidence they file in opposition proceedings. Pending changes to the Canadian Trade-marks Act will require litigants to obtain leave before they are permitted to file fresh evidence on appeal to the Federal Court. Although this obligation is not yet in place, a recent Federal Court of Appeal decision in Seara Alimentos Ltda. v Amira Enterprises Inc., 2019 FCA 63, provides guidance on how the Court will evaluate requests to adduce fresh evidence on appeal.
Seara appealed two TMOB decisions (2016 TMOB 167 and 2016 TMOB 168). The TMOB had refused Seara’s applications to register the marks SEARA and SEARA & Design for use in association with meat, fish, poultry and game on the basis that they were likely to be confusing with Amira’s trademark SERA that was registered for use in association with various Turkish food products.
On appeal, Seara submitted new evidence comprised of two supplementary affidavits; one of which pointed out that (1) Seara presently sells frozen poultry products in Canada, and (2) since 2014, there has never been confusion between Seara’s products and those sold in association with the SERA mark. The Federal Court refused to admit this evidence on the basis that it would not have changed the outcome. The Federal Court found that the TMOB’s decision was reasonable and dismissed the appeal.
The proper standard of review depends on the materiality of the fresh evidence. Admitting new evidence does not necessarily displace the TMOB’s findings in respect of every issue. Only those issues to which the new evidence speaks warrants a fresh analysis by the Court. Otherwise, the TMOB’s findings are to be assessed on a reasonableness standard. In reviewing the Federal Court’s decisions (2018 FC 351 and 2018 FC 352), the Federal Court of Appeal considered: (1) whether the trial judge used too high a standard for the materiality test for new evidence, and (2) whether the appeal of the Board decisions should be allowed.
Federal Court of Appeal’s analysis
The Federal Court of Appeal began its analysis by considering the permissive language in subsection 56(5) of the Trade-marks Act allowing “evidence in addition to that adduced before the Registrar” to be admitted on appeal if it’s “material”. That is: “could this new evidence, because of its significance and probative value, have had a bearing on a finding of fact or the exercise of discretion of the TMOB?” Consideration of the new evidence does not require that it necessarily produce a different outcome.
The Federal Court of Appeal admitted the new evidence and accepted that it was material. Nevertheless, the Federal Court of Appeal did not find the new evidence dispositive and so dismissed the appeals.
Moving forward: Considerations for trademark owners
The Seara decision confirms the applicable test for the admission of new evidence on appeal from the TMOB. Importantly, given the changes to the Trade-marks Act taking effect in June of this year and the need to obtain leave to adduce fresh evidence, the Seara decision provides a roadmap for how the admissibility of that fresh evidence will be considered. The unavoidable conclusion is that trademark owners should put their best foot forward in oppositions or risk being prevented from doing so on appeal.