Federal Court Of Canada Strikes iSpring Water Systems’ APEC WATER Trademark From Register

On March 22, 2022, the Federal Court of Canada (the Court) issued its decision in Advanced Purification Engineering Corporation (APEC Water Systems) v iSpring Water Systems, LLC, 2022 FC 388, granting Advanced Purification Engineering Corporation’s (APEC) application to strike iSpring Water Systems, LLC’s (iSpring) APEC WATER trademark (Registration No. TMA969,157) from the register. The Court found that iSpring was not entitled to register the trademark, the trademark was not distinctive, iSpring had abandoned the trademark, and iSpring’s trademark application contained a material misstatement.

The Court first assessed whether iSpring was the party entitled to register the trademark under Section 18(1)(d) of the Trademarks Act (the Act). In its analysis, the Court also considered Section 16 of the Act, which “provides that a party is entitled to register a trademark unless it was confusing with a trademark previously used or made known in Canada”. The Court accepted evidence that APEC had been using its trademark for APEC WATER before iSpring’s claimed date of first use.  The Court also noted that the parties are competitors in the same water filtration business and their marks are identical. The Court concluded there was a high likelihood of confusion and iSpring was therefore not entitled to register the APEC WATER trademark.

In considering whether iSpring’s trademark was distinctive under Section 18(1)(b) of the Act at the time the proceedings commenced, the Court found that iSpring’s trademark was not distinctive as it was identical to and covered the same goods and services as APEC’s mark.

In addition, the Court held that iSpring abandoned the use of its trademark under Section 18(1)(c) of the Act. The Court rejected iSpring’s assertion that there was no evidence that it intended to abandon the trademark despite non-use of the trademark after 2018, finding that iSpring failed to present reliable evidence showing use of the trademark.

Furthermore, the Court considered APEC’s argument that iSpring’s trademark application included a material misstatement because it claimed a date of first use in Canada of August 4, 2012. The Court found no credible evidence of iSpring’s use of the trademark in Canada; accordingly, the date of claimed first use was false and constituted a material misstatement, rendering the registration invalid.

However, the Court declined to find that iSpring registered the APEC WATER trademark in bad faith under Section 18(1)(e) of the Act. The Court stated that although iSpring may have acted in a “wilfully blind” manner, the evidence did not meet the high threshold necessary to establish bad faith. Specifically, the Court was not satisfied that iSpring was aware of APEC’s use of the trademark in Canada, or that iSpring intended to harm APEC’s business.

The Court therefore granted APEC’s application, declared iSpring’s APEC WATER trademark to be invalid, and ordered the Registrar to remove the trademark from the register.

Summary By: Steffi Tran