Fermented Fish Paste and Clear Descriptiveness – the Federal Court’s Decision in MC Imports Ltd v AFOD Ltd, 2014 FC 1161 (Rennie J)

Leigh Walters and David Bowden
Published February 4th, 2015

Fermented Fish Paste and Clear Descriptiveness – the Federal Court’s Decision in MC Imports Ltd v AFOD Ltd, 2014 FC 1161 (Rennie J)

The Federal Court recently issued a decision expunging the trade-mark “LINGAYEN” on the grounds that the mark is clearly descriptive of the geographical origin of the wares with which it is used. This case highlights potentially conflicting lines of authority, which appear to posit different tests for analyzing clear descriptiveness as it pertains to geographical origin.

This decision however, stops short of resolving the tension in the authorities. As a result, the state of the law will be somewhat unsettled in future trade-mark disputes involving similar facts at the Federal Court.

The Facts

“Bagoóng” is a condiment made from fermented fish and salt, popular in the Philippines and in Filipino communities around the world. In this summary trial for infringement, the plaintiff (and its successor in title) imported and distributed bagoóng in Canada, along with other Filipino food products, in association the trade-mark LINGAYEN (TMA588314) since 1975. The trade-mark was registered in 2003, and subsequently assigned to MC Imports, a corporation owned by the family of importers.

In May 2011, the defendant imported a single shipment of bangoóng products from the Philippines, marked with the defendant’s trade-mark NAPAKASARAP. The labels on the products also included the language of “Lingayen Style” in lesser script, in a different colour, immediately below the defendant’s trade-mark.

Lingayen is a place in the Philippines in which bagoóng is produced. It is known to some Filipino consumers in Canada for producing bagoóng with a distinct aroma and flavour.

The Law

A trade-mark registration is invalid if the trade-mark was not registrable at the date of registration, pursuant to s. 18(1)(a) of the Trade-marks Act (the “Act”). The Act further provides that a trade-mark is not registrable if it is “clearly descriptive or deceptively misdescriptive” of the “place of origin” of the wares or services with which it is associated (s. 12(1)(b)). The issue on summary trial was whether the word LINGAYEN, when used in association with bagoóng, was not registrable on this ground.

At trial, the parties argued that conflicting precedent existed for the appropriate legal test for establishing clear descriptiveness under the Act:

  • One view, articulated in Sociedad Agricola Santa Teresa Ltda v Vina Leyda Ltda, 2007 FC 1301 (“Leyda”) is that the knowledge, or lack thereof, of the average Canadian consumer is irrelevant for determining whether or not a trade-mark is clearly descriptive of place of origin.
  • The other view, articulated in Consorzio del Prosciutto di Parma v Maple Leaf Meats Inc, [2001] 2 FC 536, aff’d 2002 FCA 169 (“Parma”), is that the perspective of ordinary consumers is relevant to the assessment of clear descriptiveness or deceptive misdescriptiveness.

The Court in Leyda distinguished Parma on the basis that the trade-mark at issue in Parma had been in use for 39 years, 26 years as a registered trade-mark, whereas Leyda concerned an opposition over the registration of a trade-mark based on proposed use – that is to say, a trade-mark that had never been used in Canada. Based on this distinction, the Court stated that it did not think the jurisprudential divide, “if it exists at all,” does so to the extent suggested by the parties.

The Court held that it was not necessary to resolve the apparent tension between these two decisions, as under either test, the trade-mark was invalid on the basis of clear descriptiveness.

The Court went on to find that even if the trade-mark were valid, the defendant did not use the trade-mark as a trade-mark, as defined in s. 2 of the Act, a requirement to establish infringement under ss. 19 and 20 of the Act. The “clear message to the public” was the NAPAKASARAP was used as a trade-mark, and “Lingayen Style” was used to indicate a characteristic of the bagoóng products.

Practice Point: Future Problems

According to the Federal Court, the Parma test requires a consideration of the perspective of the actual consumers of the types of wares in question, and there is “an air of unreality” in positing that the consumers to be considered are the general Canadian public (who may never purchase these particular wares). This statement of the law is valuable, but it is unnecessary for the decision and therefore non-binding; the decision does not clearly state whether or not it is necessary to consider the perspective of consumers at all.

The practical difference between these two approaches may be narrow. Given that Canada is a multicultural society in which many residents were born abroad and maintain close connections with their places of origin, it will become increasingly easier to find a group of consumers familiar with different types of products originating from anywhere in the world.

However, significant tensions will remain in the federal case law regarding clear descriptiveness. For instance:

  • The Court found that there may not be a divide in the jurisprudence, as the Leyda decision distinguished the precedent in Parma based on the prior use of the trade-mark at issue. That statement is accurate – the Court in Leyda held that because of the prior use of a trade-mark, the trade-mark had acquired distinctiveness and therefore was not invalid for lack of distinctiveness.
  • Yet the despite the Court’s analysis in Leyda, the Parma decision does not consider acquired distinctiveness. The Court considered distinctiveness in Parma only after it found the trade-mark “PARMA” registrable because the Canadian public was not familiar with Parma, Italy as a ham-producing region at the time the trade-mark was registered.
  • The difference in the approaches in Leyda and Parma may be due to the differences between opposition and expungement, respectively. If this is the operative difference, then the decision in MC Imports undermines this difference – the LINGAYEN trade-mark was an expungement proceeding concerning a trade-mark continually in use since 1975, and which had been registered for over ten years, yet the Federal Court suggests that the test in Leyda may still be appropriate.

These issues will have to await further litigation for resolution.

The presentation of information in this article does not establish a lawyer-client relationship between you and Sim IP Practice or between you and any professional of Sim IP Practice. This article is for information purposes only. It is not, and should not, be taken as legal advice. You should not rely on, or take, or fail to take, any action, based upon this information only. Never disregard or delay in seeking legal advice because of something you have read in this article. Sim IP Practice professionals will be pleased to discuss resolutions to specific legal concerns you may have.

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