The Federal Court of Canada recently handed down a decision in APEC v iSpring, 2022 FC 388, on APEC’s application to strike iSpring’s APEC WATER word mark from the trademark register under the Trademarks Act [TMA], s 57(1).
California-based APEC had registered its trademarks in the United States, but not in Canada. APEC made its first Canadian sale in 2005, and its products remain available for purchase in Canada under various trademarks, including APEC and APEC WATER. Georgia-based respondent iSpring also sells water treatment systems. APEC applied to register APEC WATER in Canada in 2019, only to learn iSpring had beat them to it, having already registered the mark in association with water treatment devices, among other things.
APEC brought this application to strike iSpring’s registration for APEC WATER. While iSpring adduced an affidavit from its CEO as to iSpring’s use, the Court found such evidence to be inconsistent and not credible on cross-examination, preferring the evidence of APEC. The latter included evidence from an investigator who did not find any use of the APEC WATER trademark by iSpring. The Court held in favour of APEC, and ordered iSpring’s registration for APEC WATER to be struck from the register.
All of the grounds advanced by APEC, except one, were successful.
- iSpring was not entitled to register the mark per the TMA, s 18(1)(d). iSpring would not be entitled to register the mark if confusing with another mark. The material date for this analysis was the date of first use in 2012, as claimed in iSpring’s application for registration. APEC WATER was identical to the mark APEC used previously, and the parties compete in the same business. Thus, the Court held the marks confusing, and iSpring to be non-entitled to register APEC WATER.
- iSpring’s registered mark was not distinctive per the TMA, s 18(1)(b). Since the mark as registered was identical to the mark as already used by APEC, the mark was not capable of distinguishing iSpring’s goods from APEC’s. The material date was the commencement of the proceeding. The Court held that the mark was non-distinctive of iSpring and, therefore, not registrable.
- iSpring abandoned the mark per the TMA, s 18(1)(c). The Court found that, without credible evidence of use, iSpring had abandoned the mark.
- iSpring’s registration was not in bad faith per the TMA, s 18(1)(e). The analysis acknowledged a question as to iSpring’s motivation, especially without credible evidence of iSpring’s use. However, the Court was not satisfied either that iSpring was aware of APEC’s use of the mark in Canada or that iSpring intended to harm APEC with its registration. On this point, the only evidence was that of iSpring’s CEO, that he was unaware of any others’ entitlement to the mark. Despite finding a possibility of wilful blindness, the Court held that such was not sufficient to establish bad faith.
- iSpring’s application included a material misstatement. Given a lack of credible evidence that iSpring used the mark in Canada, the Court found the 2012 date of claimed first use to be false, which rendered the registration void ab initio.
This case underscores the significance of the evidentiary record in applications of this nature. Notably, the Court attributed low weight to iSpring’s evidence in view of various discrepancies and ambiguities.
This case also solidifies the principle that constructive knowledge is not grounds for bad faith in trademark law. Evidence of actual knowledge must underpin any successful bad faith allegation in these disputes.
Finally, as a practical matter, the case underscores the importance of brand owners to be proactive in protecting their registrations in countries in which they are carrying on business. Obtaining a trademark registration can save a lot of resources, whereas failure to do so in a prompt manner can put a brand owner in the position of having to commence court proceedings to invalidate a registration.
Hoffer Adler LLP partner Stephanie Chong acted for the successful party APEC in this proceeding.