Federal Court Of Canada Finds Trademarks Opposition Board Erred In Relying On Recordal Of Change Of Title In Section 45 Proceeding

On June 2, 2023, the Federal Court of Canada (the Court) issued its decision in Kiva Health Brands LLC v Limoneira Company, 2023 FC 774, finding that the Trademarks Opposition Board (the Board) erred in relying on a recordal of change of title and failing to properly assess the alleged assignment of rights to the trademark KIVA from Associated Citrus Packers Inc. (ACP) to Limoneira Company (Limoneira).

In 2019, at the request of Kiva Health Brands LLC (KHB), the Registrar of Trademarks (the Registrar) issued a notice under Section 45 of the Trademarks Act to ACP, requiring ACP to show use of the KIVA trademark during the preceding three-year period.

In 2020, Limoneira filed an affidavit in response to the notice, evidencing its use of the KIVA trademark.  The affidavit also stated that “Limoneira acquired the rights to the trademark KIVA by way of assignment from [ACP], as a result of Limoneira’s acquisition of [ACP] in 2013”; in addition, pursuant to an “Agreement and Plan of Merger” (the Agreement), ACP became a wholly owned subsidiary of Limoneira and Limoneira acquired ACP’s assets, “including the rights in the Trademark KIVA around the world.”

In 2022, the Registrar recorded a transfer of the KIVA trademark registration from ACP to Limoneira two weeks before the hearing before the Board.  The Board maintained the registration, finding that the recordal of Limoneira as the registered owner was dispositive of the ownership issue and Limoneira had established use in Canada during the relevant period.

On appeal, the Court reviewed the jurisprudence relied on by the Board and determined that the jurisprudence indicated that the evidence of an alleged assignment must be assessed by the Board.  

The Court held that while Section 45 affidavits are to be afforded substantial credibility, the Agreement filed in support of the affidavit contradicted “the single paragraph in said affidavit dealing with ownership”.  The Court further noted that the affidavit was “carefully drafted”, as it failed to state that there was no transfer of assets contemplated in the Agreement.  In addition, the Court found that no evidence corroborating a written or verbal assignment of the KIVA trademark was presented to the Board, despite ACP having requested and received a three-month extension (in part for the explicit purpose of preparing and filing the necessary evidence).

The Court concluded that the Board erred when it “refused to consider the evidence filed by Limoneira in assessing who the real owner of the KIVA trademark was” at the time the Section 45 notice was sent and during the relevant period.  The Court therefore granted KHB’s appeal, set aside the Board’s decision, and remitted the matter back to the Board for a new determination.

Summary By: Steffi Tran