In SC Prodal 94 SRL v. Spirits International B.V. (2009 FCA 88), the Federal Court of Appeal overturned, on procedural fairness grounds, a Federal Court ruling declaring a trade-mark that had been voluntarily cancelled to be retroactively invalid and prohibiting its re-registration.

Spirits, owners of the vodka mark “Stolichnaya“, had applied to the Court for expungement of Prodal’s more recent vodka mark “Stalinskaya“. Prodal, in response, filed a new application for the mark “Stalinskaya” for the Registrar to consider, and cancelled the existing trade-mark before the hearing on Spirits’ application, leaving the issue seemingly moot. The Federal Court judge nonetheless allowed the application, issued a declaration that the cancelled trademark was confusing, stayed proceedings on Prodal’s new application, and permanently enjoined the Registrar of Trade-marks from considering it.

This injunction had not been requested in Spirits’ initial application. As Prodal had cancelled the mark in question before the Federal Court hearing, they did not file a notice of appearance in response to Spirits’ application for expungement and consequently, as allowed by rule 145 of the Federal Court Rules, were not served with the memoranda wherein Spirits first requested the declaration and injunction. The Federal Court of Appeal, in considering the appropriateness of this relief, relied upon this fact in holding that, as Prodal had not received notice of, or an opportunity to respond to, the requested relief, it was procedurally unfair for it to be awarded. Prodal’s appeal was thus allowed, and the injunction and declaration were set aside.