The Federal Court of Appeal Ruled on Issue of Distinctiveness in Boston Pizza International Inc. v. Boston Chicken Inc.

© 2003, Deeth Williams Wall LLP. All Rights Reserved. By: Hung Nguyen (May 20, 2003)

INTRODUCTION

Section 18 of the Trade-marks Act ("Act") provides for a number of grounds to invalidate a registration. One of those grounds is lack of distinctiveness. In the recently decided case of Boston Pizza International Inc. v. Boston Chicken Inc., [2003] F.C.J. No. 395, the Federal Court of Appeal addressed the issue of distinctiveness of the trade-mark BOSTON CHICKEN. This article summarizes the case and considers some practical effects resulting from the decision.

FACTS

Boston Pizza International Inc. ("BP") filed an application to expunge Boston Chicken's ("BC") registrations for BOSTON CHICKEN, both in word and design forms, for use in association with take-out restaurant and catering services. The main grounds for the application included: (1) the BOSTON CHICKEN marks were not distinctive of BC's services contrary to subsection 18(1)(b) of the Act; and (2) the marks were not registrable at the date of registration because they were confusing with BP's prior registration for BOSTON PIZZA.

At trial, the issue of distinctiveness of the marks was discussed, but only in the context of assessing confusion between the marks. In considering confusion, the trial judge found the mark BOSTON CHICKEN to lack inherent distinctiveness and to not have acquired distinctiveness through long use in Canada. However, the court went on to consider other factors and concluded that that there was no likelihood of confusion between the marks BOSTON CHICKEN and BOSTON PIZZA. As a result, BP's application was dismissed.

BP appealed the trial judge's decision.

RULING

On appeal, BP argued that, having regard to the trial judge's conclusion that BOSTON CHICKEN lacked inherent distinctiveness, and considering the limited use of the mark in Canada, the trial judge should have expunged BC's registrations on the ground of lack of distinctiveness.

As there was no evidence or argument presented on the appeal with respect to the issue of distinctiveness of the BOSTON CHICKEN design mark, the Court of Appeal found no basis upon which to expunge that mark. However, the appellate court allowed the appeal with respect to the word mark. The Court held that the word mark BOSTON CHICKEN should be expunged for lack of distinctiveness.

According to the Court of Appeal, a trade-mark is distinctive if: (1) it "actually distinguishes" the wares or services through actual use, or, (2) it is "adapted" to distinguish the wares or services.

(1)    Actually Distinguishing Wares or Services ("Acquired Distinctiveness")

For a mark to "actually distinguish", it must be shown that it had acquired distinctiveness through use in Canada. According to the trial judge, there was very little evidence of use of the BOSTON CHICKEN mark in Canada. Therefore, the Court of Appeal found that the BOSTON CHICKEN mark had not acquired distinctiveness through actual use in Canada.

However, BC argued that acquired distinctiveness could arise from use of the mark outside of Canada. It pointed out that section 16(2) of the Act provides for registration of marks in Canada on the basis of use and registration abroad (without actual use in Canada). According to BC, if distinctiveness cannot be acquired by foreign use of a mark, then such a registration would immediately be liable to be expunged on the ground that the mark was not distinctive because it had not been used in Canada.

The Court of Appeal rejected this argument. The Court noted that section 14 of the Act required a foreign registered trade-mark to have "distinctive character" in Canada to be eligible for registration here. In other words, to maintain a registration in Canada based on a foreign registration, the foreign registered trade-mark must be inherently distinctive or have acquired distinctiveness through use in Canada.

(2)    Adapting to Distinguish Wares or Services ("Inherent Distinctiveness")

The Court of Appeal held that the words "adapted to distinguish" were intended to address a proposed trade-mark or one that had not enjoyed a long and extensive use in Canada. In these circumstances, the mark must be inherently distinctive, or have the inherent capability to distinguish the wares or services without the need to establish acquired distinctiveness through use in Canada.

Since the trial judge found the BOSTON CHICKEN mark to lack inherent distinctiveness, the Court of Appeal concluded that the mark was not adapted to distinguish the services.

CONCLUSION

To be valid, a trade-mark must be distinctive whenever it is challenged. This case offers a useful analysis of the issue of distinctiveness as a ground of invalidation. More importantly, it provides a reminder of how a delay in using a mark following registration can work against a registrant in an expungement proceeding. As a result of this decision, the following points should be kept in mind whenever considering distinctiveness of a mark:

Contact Hung Nguyen for more information on Distinctiveness and Trade-marks.