The author would like to thank Melissa Wells for her assistance in preparing this article.
Last week, in Hidden Bench Vineyards & Winery Inc. v. Locust Lane Estate Winery Corp., 2021 FC 156, the Federal Court dismissed an application by Hidden Bench Vineyards & Winery Inc. seeking a declaration that it is the owner of the unregistered trademark “LOCUST LANE” and relief for alleged passing off by a neighbouring winery, Locust Lane Estate Winery Corp.
While the Court agreed Hidden Bench had used LOCUST LANE as a trademark, that use had not established sufficient secondary meaning in the marketplace to ground an action in passing off. Given Hidden Bench’s lack of a registration, that left Hidden Bench without a means to prevent use of the same mark by Locust Lane.
Hidden Bench was founded in 2003 and owns three vineyards in Beamsville, Ontario, where it produces all of its wines onsite and sells those products throughout Canada and internationally. In 2019, Locust Lane purchased a property adjacent to Hidden Bench’s property and was issued licences to operate as a winery.
On January 6, 2020 Hidden Bench notified Locust Lane that it claimed ownership to LOCUST LANE as a trademark. It then filed a trademark application on January 31, 2020. However, Locust Lane continued to use its stylized fingerprint tree and the words “Locust Lane Estate Winery” on its entrance signs and wine labels. Locust Lane began selling such wine products in August 2020. The labels used by each contained Locust Lane, but were otherwise relatively distinct:
As a result of Locust Lane’s refusal to halt use, Hidden Bench filed an application to prohibit any use of LOCUST LANE by Locust Lane, on the basis of its alleged unregistered trademark rights.
Early Harvest – the Threshold Issue
As Hidden Bench’s claims relate entirely to unregistered marks, the threshold issue was whether it had a valid and enforceable trademark upon which it could rely. To establish such rights, the first question was whether it had used the mark as a trademark.
The Court noted that while Hidden Bench used the words “Locust Lane”, it was principally used as part of a larger combination of words such as “Locust Lane Vineyard” and “Locust Lane Rose”, each of which operate as a descriptor or as a different trademark, rather than simply using LOCUST LANE as a trademark.
Nonetheless, the Court concluded that Hidden Bench had used LOCUST LANE as a trademark, and not merely as a descriptor.
Accordingly, the Court held that displaying various combinations of words on the wine labels and advertising images of wine bottles bearing the labels, as well as other references to the Locust Lane Vineyards on Hidden Bench’s website, represented use in association with goods within the meaning of s. 4 of the Act.
Maturation – the Existence of Goodwill
Turning to the three-part test for passing off, the Court found that the Locust Lane marks lacked inherent distinctiveness as they embodied a clearly descriptive reference that denotes the geographic location of one of Hidden Bench’s vineyards—the road on which both parties’ vineyards are situated.
In the assessment of acquired distinctiveness, the Court accepted that there had been exclusive use of the Locust Lane marks by Hidden Bench since 2005 and that such use had been continuous. However, the use had not been extensive. Moreover, given the manner in which the Locust Lane Marks were used on the labels aside more prominent and non-descriptive marks, it was difficult for the Court to conclude that such use would have engendered in the minds of customers a secondary meaning of the sort necessary to establish acquired distinctiveness in relation to the descriptive marks.
In the result, the evidence of sales volume, resulting exposure to product labels, and its website was not sufficient for Hidden Bench to surmount the heavy onus to establish that, from the perspective of the consumer, its descriptive marks have acquired a secondary meaning so as to make them distinctive of Hidden Bench’s goods and services. There is an interesting question that arises from this decision about how well known the location must be as a geographic location to the average consumer, in relation to how “heavy” the onus is to establish secondary meaning.
In this case, Hidden Bench failed to establish the goodwill necessary to succeed in its claim under s. 7(b) of the Act. Similarly, the claim under s. 7(c) of the Act failed as there was no evidence that Locust Lane’s goods or services were substituted as and for goods or services ordered or requested from Hidden Bench.
Fortified Trademarks – the Key Takeaways
Registered and unregistered trademarks offer varying degrees of protections. Registration provides the necessary evidential arsenal to enforce rights if needed and can afford greater protection under the Act as compared to the common law. In particular, registration gives the trademark owner the exclusive right to use the mark throughout Canada, prima facie right of ownership, and the presumption of validity.
Simply owning a mark with some reputation will not guarantee success in a passing off action. As highlighted by this case, proving the existence of goodwill in a passing off claim can often be an uphill battle, involving the collection of substantial evidence in relation to inherent and acquired distinctiveness, duration and geographic scope of trade, extent and duration of advertising and marketing, and perceptions in the marketplace. In contrast, the owner of a registered trademark does not need to establish such reputation and can simply rely on its registration. Therefore, it is prudent to register your trademark!