Federal Court of Appeal scotches opposition to whisky trade-mark

by Jenna Wilson and Alan Macek

Originally published by LexisNexis in The Lawyers' Weekly, May 8, 2009.

Note: The Scotch Whisky Association sought leave to appeal this decision to the Supreme Court of Canada in March 2009. A decision on the leave application is expected in June 2009.

In the January decision of Glenora Distillers International Ltd. v. Scotch Whisky Association, [2009] F.C.J. No. 35, 2009 FCA 16, a Cape Breton distillery won the opportunity to register its trade-mark, and the Federal Court of Appeal confirmed that the "non-dissection" principle applies when challenging trade-marks on the basis of genericness.

The Canadian distillery, Glenora, had applied for a trade-mark registration for GLEN BRETON for its single-malt whisky produced in the style of Scotch whisky. The application was opposed by the Scotch Whisky Association on a number of bases, including the allegation that "glen" had become recognized in as designating Scotch whisky, and was therefore a prohibited mark under section 10 of the Trade-marks Act. Prohibited marks cannot be registered as trade-marks pursuant to section 12(1)(e) of the Act.

Section 10 of the Trade-marks Act provides that if a "mark" has, by ordinary commercial usage, become recognized as designating the place of origin, quality, or other certain characteristics of any wares or services, it cannot be adopted by anyone as a trade-mark for use in association with wares or services of the same general class. This section of the Act prevents traders from having a monopoly over marks that have become generic or common to the trade and well-understood as designating a particular quality of wares or services. Section 10 also prohibits the adoption of similar marks that are likely to be mistaken for the generic mark. The Association claimed that the use of "glen" by its Scottish members in their trade-marks for Scotch whiskies resulted in an association between the word "glen" and whiskies distilled in Scotland.

The opposition was dismissed by the Trade-Marks Opposition Board ([2006] T.M.O.B. No. 4), but on appeal and with further evidence ([2008] F.C.J. No. 872), Justice Sean Harrington of the Federal Court found that Scotch whiskies with "glen"-prefixed names—such as Glenlivet, Glenmorangie, and Glenfiddich—enjoyed a significant reputation in Canada. Justice Harrington concluded that Glenora’s adoption of GLEN BRETON was therefore prohibited and unregistrable under sections 10 and 12(1)(e). Glenora then appealed to the Federal Court of Appeal.

Writing for the court, Justice Edgar Sexton of the Federal Court of Appeal reversed the decision and ordered that Glenora’s application to register GLEN BRETON be allowed by the Registrar. The Court of Appeal held that the lower court erred in law in failing to consider whether "glen", having only been used previously as a component in various trade-marks was, in fact, a mark within the meaning of section 10.

A "mark", as contemplated in section 10 of the Trade-marks Act, is broader than a "trade-mark" and need not function to distinguish a particular trader. However, the Court of Appeal found that no evidence had been advanced to show that "glen" was a mark, or that "glen", standing alone, had even been used as a trade-mark in Canada. To be able to conclude that "glen" was a mark, it would have been necessary to isolate the "glen" component of either the GLEN BRETON mark or the Association members' trade-marks. The Court of Appeal declined to do this, observing that while there was no authority for the proposition that a segment of a trade-mark could stand alone as a mark, trade-mark jurisprudence generally discouraged the dissection of trade-marks for the purpose of analyzing registrability. Rather, the first principle of analysis is that trade-marks are to be considered in their totality, because segmenting a trade-mark may afford stronger protection to a component than is due.

In any event, the court noted that even if "glen" had been established as a mark on its own, its presence in GLEN BRETON did not dominate that trade-mark when considered as a whole. Therefore, GLEN BRETON would have been registrable even if "glen" had been found to be a prohibited mark pursuant to section 10.

The Glenora case was slightly unusual. Previous cases concerning prohibited marks under section 10 concerned marks that were inherently descriptive of the wares or services at issue. Here, however, the alleged "glen" mark was not inherently descriptive of Scotch whisky, and the Court of Appeal noted that the Association's members had not incorporated "glen" into their trade-marks for the purpose of designating the Scottish origin of their products, although "purpose" is not a factor in a section 10 analysis. Justice Sexton did comment that if the Association had prevailed, their success in having "glen" ruled a prohibited mark would have likely jeopardized their own Scottish whisky trade-marks—after all, they contained "glen" as a component as well.

For opponents of compound or composite trade-marks containing a prohibited mark, the Glenora decision highlights the need to present evidence that the generic component of the trade-mark is indeed a "mark" within the scope of section 10 of the Trade-marks Act, and that the generic component is the dominant feature of the opposed trade-mark.