Voluntary Disclaimers – May Still Be A Good Idea

In my previous posting I noted that there is case law which holds that a lack of a disclaimer is not a proper ground for an Opposition and that, therefore, the recent Practice Notice (which states that the Canadian Trade-mark Office will no longer require disclaimers) is probably not going to result in increased oppositions; even if no voluntary disclaimers are made by applicants.

However, there was some hint in that case law which suggested that a lack of a disclaimer might be a concern for a trade-mark owner further down the road. In particular Mr. Justice Heald, in the case of Schenley Distilleries Ltd. v. Registrar of Trade Marks and Bodegas Rioja Santiago, S.A. (1974), 15 C.P.R. (2d), stated that “…[i]t seems to me that the proper time for the appellant to raise his argument on disclaimer… would be after registration”.

How could this be then? Three of the four grounds for holding that a registration is invalid, listed in Subsection 18(1) of the Trade-marks Act, are pretty much equivalent (in substance) to the grounds of opposition listed in Subsection 38(2); i.e. (i) the trade-mark is not registrable, (ii) the trade-mark is not distinctive and (iii) the applicant is not the person entitled to registration of the trade-mark. Thus if a lack of a disclaimer is not a ground for opposition (which includes these three), how would it be a ground for “invalidation” (where these three are, in substance, pretty much the same)? The fourth ground for holding that a registration is invalid is that the trade-mark has been abandoned. But nowhere in s.18(1) is there any explicit reference to a lack of a disclaimer. Where then is the concern, you might ask?

Well, a careful look at Section 57 will reveal that there the Act provides the Federal Court with powers to amend or strike entries in the register and it also uses rather broad wording (e.g. without listing itemized grounds or conditions as is the case with s.18 and s.38). Section 57 simply reads as follows:

The Federal Court has exclusive original jurisdiction, on the application of … any person interested, to order that any entry in the register be struck out or amended on the ground that at the date of the application the entry as it appears on the register does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark.

Hmmm, having a registration without a disclaimer to a descriptive portion of the mark is probably not an accurate expression of the rights of the registered owner.

See, for example, the case of General Motors of Canada v. Decarie Motors Inc. (2000) 9 C.P.R. (4th) 368. There the Federal Court of Appeal, in a Section 57 application, compelled the trade-mark owner enter a disclaimer to the surname DECARIE (surnames are objectionable due to paragraphs 12(1)(a) of the Act). In particular, the Federal Court of Appeal , at para. 41, ordered:

… the respondent to file, within sixty days of the present judgment, a disclaimer to the exclusive right to use the word DECARIE outside the trade-mark DECARIE LOGO DESIGN; following which I would request the Registrar of Trade-marks to amend accordingly the trade-mark DECARIE LOGO DESIGN, number TMA 474,485, dated April 10, 1997. If the respondent does not comply with such order, within sixty days of the present judgment, the said trade-mark would be expunged in toto.

Thus there is certainly some risk in having a registration without a proper disclaimer, should the registration be challenged in Federal Court under Section 57. This risk ranges from being compelled to enter a disclaimer to a total expungement of the registration.

Therefore it may not always be in a trade-mark applicant’s best interest to obtain a registration without a disclaimer. And with the Trade-marks Office now no longer requiring disclaimers, and with the lack of a disclaimer not being a ground for opposition, I suspect that we will see an increase in such Section 57 applications at Federal Court (where costs can be awarded against a trade-mark owner who is compelled by the Court to subsequently enter a disclaimer).

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