In Worldwide Diamond Trademarks Limited v. Canadian Jewellers Association (2010 FC 309), the Federal Court of Canada (“FC”) dismissed an appeal under s. 56 of the Trade-marks Act (“the Act”) by Worldwide Diamond Trademarks Ltd. (“Applicant”) from a decision of the Registrar of Trade-marks (sitting as the Trade-marks Opposition Board) dismissing the Applicant’s three applications under s. 12(1)(b) of the Act for being clearly descriptive of their wares and services.

In April 2004, the Applicant applied to register three trade-marks (CANADIAN DIAMOND REPORT, CANADIAN DIAMOND CERTIFICATE, CANADIAN DIAMOND APPRAISAL) in association with diamonds, diamond certificates and diamond appraisals; diamond cloths, magnifying loops; point of purchase countertop displays; posters; and pens; and diamond appraisal services. The Applicant disclaimed exclusive use of virtually all descriptive words as well as the phrase “A diamond that is mined, cut, and polished in Canada” apart from the mark. In September 2005, the Canadian Jewellers Association (“Respondent”) opposed. The issue was whether the addition of certain key words to the descriptive phrases rendered the marks non-descriptive.

On 11 March 2009 the Registrar determined that the “key additions” were insufficient to render the marks non-descriptive. The Registrar concluded that the flag design was not the dominant portion of the mark, nor did it prevent the mark from being clearly descriptive when sounded. Even if it was dominant, it would still clearly describe the wares/services as being related to “Canadian diamonds” as the logo is clearly a play on the Canadian flag with a diamond in place of a maple leaf. Second, the extra words of “Report”, “Certificate” and “Appraisal” clearly describe the services offered. The Applicant is required to support its diamonds by issuing a report pursuant to the Canadian Diamond Code – an industry code of conduct. Appraising and issuing certificates comprise much of what the Applicant does. As a whole, the Registrar concluded that the average diamond consumer would perceive that the marks describe wares/services that relate to “Canadian diamonds” that are mined, cut and polished in Canada, thus describing their inherent quality or character. The Registrar also found that the Applicant presented insufficient evidence to establish that the marks had acquired distinctiveness as per s. 12(2) of the Act.

On appeal, the Applicant argued that the marks were not clearly descriptive since they contain words which form parts of already registered trade-marks. While the Court recognized that the Registrar had already registered 20 trade-marks that contain many of the words in the Applicant’s proposed marks, it found that the previously accepted marks were themselves clearly descriptive. The Court concluded that two wrongs do not make a right: “a trade-mark which clearly describes the goods for which the trade-mark is sought is not entitled to be registered notwithstanding outlying decisions which allowed clearly descriptive trade-marks to be registered, or the fact that similar goods have been granted a similar trade-mark from the Registrar in the past.” The Court added that while the words “report”, “certificate”, and “appraisal” do not accurately describe the wares in question, they do clearly describe them; “Seeking such a trade-mark for a Canadian diamond is analogous to seeking a trade-mark such as ‘THE COFFEE SHOP’ for a coffee shop.”

The Court also agreed with the Registrar that the flag design was not the dominant portion of the mark and did not prevent the mark from being clearly descriptive when sounded. This aspect of the decision could not have been materially affected by the new evidence of use filed on appeal.

The Court found that the evidence marshalled by the Applicant to prove acquired distinctiveness, argued in the alternative, was not “sufficiently probative to justify the Court’s intervention.” Most evidence of use did not relate to the relevant date for considering distinctiveness – the date of filing an application for registration – but rather to subsequent use. The rest included disjointed parts of two of the proposed three trade-marks. The Court seemed annoyed that the Applicant disclaimed virtually every word in the proposed marks and took the time to stress the necessity for strong, relevant evidence in order to prove acquired distinctiveness despite clear descriptiveness.