Trademark for rum held to be deceptively misdescriptive

In Ron Matusalem & Matusa of Florida Inc v Havana Club Holding Inc SA ([2010] FC 786, 21st July 2010) the Federal Court of Canada found that the additional evidence filed on appeal by Ron Matusalem & Matusa of Florida Inc did not justify overruling the decision of the Canadian Trademark Opposition Board, and that the trademark THE SPIRIT OF CUBA, when viewed in its entirety, was deceptively misdescriptive of the place of origin of the goods.

In accordance with the Canadian Trademarks Act, a trademark is registrable if it is not either “clearly descriptive or deceptively misdescriptive” in the English or French language of the character or quality of the goods in association with which it is used or proposed to be used. In addition, a trademark is said to be distinctive when it actually distinguishes the goods in association with which it is used from the goods of others. Therefore, a trademark will be held to be deceptively misdescriptive if the general public in Canada is misled into believing that the goods with which the mark is associated have their origin in the place of a geographic name contained in the mark. One must place oneself in the position of the average Canadian consumer of ordinary intelligence and education who sees the trademark used in association with the goods. A person should not carefully and critically analyse a trademark, but rather apply common sense to determine the immediate impression created by the mark as a whole in association with the goods. Therefore, the etymological meaning of the words in a trademark is not necessarily the meaning of the words used as a trademark.

In the case at hand, it was argued that the word "spirit" has two meanings, both of which are relevant to rum. First, Matusalem argued that the word "spirit" means a mental condition or attitude. Second, respondent Havana Club Holding Inc SA argued that the word "spirit" means strong, distilled liquor. The court agreed with the opposition board’s findings that when a trademark comprises two words, one meaning "alcoholic beverage" and the other being the name of a country known for its rum, the average Canadian consumer of rum confronted with the mark used in association with rum was likely, by first impression, to think that the rum originated from Cuba.

It is undisputed that where no evidence is filed on appeal that would have materially affected the board’s findings, the standard of review is reasonableness if the issue is of fact or mixed fact and law. However, the court must come to its own conclusions if the additional evidence filed would materially affect the board’s findings.

On appeal, Matusalem filed additional evidence - namely, evidence regarding the use of the word "spirit" in modern English, the results of a survey of 1,054 respondents to determine their reactions to various terms and phrases related to the mark, as well as the history of rum and the rum industry. Havana Club filed new evidence explaining the use of the word "spirit" to commercially refer to distilled liquor in Canada.

The court concluded that the additional evidence filed by Matusalem would not have materially affected the board’s findings of fact or mixed fact and law. The additional evidence was merely a detailed repetition of previously filed evidence and did not add anything new in respect of the first impression of a potential consumer. However, it did corroborate the board’s factual findings that using the word "spirit" on a bottle of rum would lead a consumer to interpret it as an alcoholic beverage originating from Cuba.

The appeal was thus dismissed.

This article first appeared in World Trademark Review Daily, published by The IP Media Group (www.worldtrademarkreview.com).