Tumbling around Glen distilled Canadian(?) Whisky

June, 2009

Aside from kilts, haggis, and bagpipes, Scotland has been exporting whisky to the world for generations.  Over time, the thirst of the world for blended and single-malt whiskies has not been quenched.  Although in Canada, many distillers have sprung up creating their own blended whisky product, Canada has been home to very few, if any, single-malt whisky distilleries.  That is, until Glenora Distillers International Ltd. opened its doors.

Glenora Distillers International Ltd. has been operating from time to time in various forms and under various names since 1990.  Glenora is principally located in Nova Scotia.  Since 2000, Glenora has been selling, among other products, a single-malt whisky under the trademark “Glen Breton” along with the wording “Canada’s Only Single Malt Whisky”.

On November 8, 2000, Glenora filed a trademark application for the trademark “Glen Breton”.  On January 14, 2003, The Scotch Whisky Association, a trade association of the Scotch Whisky industry, filed an opposition against the trademark application.  Thus began the battle for the trademark “Glen Breton” for “Canada’s Only Single Malt Whisky”.

The Opposition Proceeding

The Scotch Whisky Association opposed the trademark application for “Glen Breton” on many grounds before the Trademarks Opposition Board.  All the grounds will not be addressed.  Rather, we will address only the most relevant and most interesting.  In that category, there are two.

The first ground of opposition was that the trademark “Glen Breton” was not registrable because it was deceptively misdescriptive of the place of origin of the whisky and/or the character or quality of the whisky.  The opponent submitted that “glen” is defined as “Chiefly Scottish.  A Valley”.

The second ground of opposition is that the trademark application is not registrable because “glen” has become recognized as designating Scotch whisky.  The applicant’s trademark “Glen Breton” too nearly resembles the prohibited mark “glen” and is likely to be mistaken for it.

First Ground – the trademark “Glen Breton” is deceptively misdescriptive

The opponent submitted that the word “glen”, when used in association with whisky, connotes Scotch whisky.  There are a number of brand name Scotch whiskies, where the name is prefixed by the word “glen”, such as Glenmorangie and Glenfiddich.  Most glen-prefixed brands are for single-malt Scotch whisky rather than blended Scotch whisky.  The majority of single malt whisky distilleries are situated in the glens of Scotland.  Scotch whisky distilleries have registered several glen-prefixed names as trademarks in Canada.   

Glenora says that the trademark “Glen Breton” was chosen because of the associations with Cape Breton Island and with Glenora, Glenville, and the glen stream called MacLellan’s Brook, which is the water source for Glenora’s product.

In its ruling, the Trademarks Opposition Board stated that the opponent is arguing that Canadian users and purchasers of whisky have been educated to associate the word “glen” solely with Scotch whisky.  However, the Board found that the evidence did not support that argument.  The Board found that only a limited number of single malt Scotch whiskies were sold in Canada in association with glen-prefixed trademarks.  The Board found that consumers may have many reactions to the trademark “Glen Breton”, such as, the trademark is a name, the whisky is produced in or near a glen or valley somewhere in Cape Breton, and the trademark has a vaguely Scottish or Gaelic connotation.  The fact that the trademark might be suggestive does not preclude its registration.  Further, the fact that there are several possible likely reactions to the trademark means there is no single reaction, much less one that is deceptively misdescriptive of the place of origin of the whisky.  Therefore, this ground of opposition fails.

Second Ground – “Glen” designates Scotch whisky

The second ground of opposition is that the word “glen” is precluded from registration as being generic, common to the trade or otherwise nondistinctive.

The Board ruled that the evidence did not establish that the word “glen” falls within that prohibition.  At most, there are a few third party glen-prefixed marks used in Canada for Scotch whisky.  However, even if “glen” is precluded from registration, the trademark “Glen Breton” does not so nearly resemble the word “glen” as to be likely mistaken for it.  Therefore, the opposition fails on this ground as well.

In conclusion, the Board rejected the opposition of The Scotch Whisky Association and approved the trademark “Glen Breton” for registration.  The Scotch Whisky Association appealed the decision to the Federal Court.

The Federal Court of Canada

On appeal, Harrington J. of the Federal Court of Canada also considered the two grounds of opposition raised above arriving at a different conclusion on the second ground.

First Ground – the trademark “Glen Breton” is deceptively misdescriptive

The Court spends very little space addressing this ground in its judgment.  Based on the evidence, the Court was not satisfied that the trademark “Glen Breton” was deceptively misdescriptive of the place of origin of the whisky or of its character or quality.

Second Ground – “Glen” designates Scotch whisky

The Court held that there was considerable evidence of actual confusion between the trademark “Glen Breton” and the Scottish brands containing the word “glen” in price lists and articles of the Liquor Control Boards of Ontario, New Brunswick, and Nova Scotia.  Drink lists from bars and restaurants had confused “Glen Breton” whisky with Scotch whiskies containing the word “glen”.  The Court also noted that 933,000 bottles of single malt whisky were sold in Canada bearing the brand names of Scotch whisky containing the word “glen”.  If the Board had had this information, then the Board would not have ascribed a limited reputation to the trademarks containing the word “glen” used in association with Scotch whisky or come to the conclusion that only a few individuals would be familiar with “glen” prefixed trademarks for Scotch single malts.

As most consumers purchase single malt whisky through intermediaries, such as bars, and as the trade is confused with the name “Glen Breton” and the other Scotch whisky brand names containing the word “glen”, the Court found on a balance of probabilities that confusion arises from the use of the word “glen” in the trademark “Glen Breton”.  If the trade is confused, then so must be the ultimate consumer.

The Court found in favour of The Scotch Whisky Association not because of the argument that “glen” is Scottish in origin, but rather, because the word “glen” has long been in actual use in Canada by distillers of Scotch whisky to the exclusion of all others.  It is the association in the mind of consumers, and not the origin of the word, which is relevant.  The trademark applicant appealed the ruling.

The Federal Court of Appeal

Sexton J.A. of the Federal Court of Appeal wasted little time in overturning the ruling of the Federal Court.

First Ground – the trademark “Glen Breton” is deceptively misdescriptive

Quickly, the Appellate Court held that the Federal Court made a distinct finding that the trademark “Glen Breton” was not clearly descriptive or deceptively misdescriptive of the trademark applicant’s products.  The Appellate Court found no error in the Federal Court’s ruling.

Second Ground – “Glen” designates Scotch whisky

The Appellate Court did find that the Federal Court made an error of law by failing to consider whether the word “glen”, which had only previously be used as a part of various registered trademarks, was in fact a “mark” within the meaning of section 10 of the Trade-marks Act.

The word “glen” by itself has never been used as a trademark in Canada for any product.  It has been used as a prefix for many trademarks associated with Scotch whisky.  The word “mark” as it appears in section 10 is not defined.  A mark is not necessarily a trademark.  However, no authority exists that a segment of a trademark can stand alone as a mark; such a conclusion would run counter to numerous authorities, albeit outside the section 10 context, that trademarks should generally should not be dissected and analyzed syllable by syllable.

The true test under this ground of opposition is whether the totality of the mark proposed to be registered is such that it is likely to cause mistake or deception or confusion in the minds of persons accustomed to the existing trademark.  The word “glen”, being a common word and forming part of numerous registered trademarks, is at best a weakly distinctive component of those trademarks.  If those registered trademarks were to be segmented to consider “glen” as a mark on its own, courts would be affording stronger trade protection to that word than is due.

The Appellate Court concluded that the word “glen” has not been shown to constitute a mark within the meaning of section 10 of the Trade-marks Act and therefore cannot be prohibited.  Alternatively, even if “glen” could be considered a mark and is prohibited, the Appellate Court found that it does not dominate the trademark “Glen Breton” when the trademark is considered as a whole.

The Appellate Court also notes that this case is somewhat unusual under section 10 of the Trade-marks Act.  Section 10 commonly prevents a single trader from having a monopoly over a mark that is common to the trade and well-understood as designating a particular quality of wares or services. It would be possible for a mark, that is originally not inherently descriptive of any quality of a product, through ordinary and bona fide commercial usage, to become a designator mark.  However, the current case is unusual because The Scotch Whisky Association is essentially seeking to establish a monopoly over the word “glen”, which is not inherently descriptive, for a group of traders (namely, its members), when it is not clear that any of its member incorporated the word “glen” into their trademarks for the purpose of designating their whiskies as being from Scotland.  Oddly, success in the appeal by The Scotch Whisky Association would jeopardize the trademarks of many of its members.  The Appellate Court directed the Registrar of Trade-marks to allow the trademark application for the registration of “Glen Breton”.

The Supreme Court of Canada

On June 11, 2009, the Supreme Court of Canada’s dismissed the leave to appeal the ruling of the Federal Court of Appeal (most likely against its instinctive desire to expound upon single malt whisky!).

Commentary

This case illustrates a classic case of overreaching by The Scotch Whisky Association seemingly unaware of the price of success.  The Scotch Whisky Association unsuccessfully argued, on the first ground, that “glen” meant a Scottish glen in the minds of most consumers, and on the second ground, that the word “glen” had become recognized as designating Scotch whisky or whisky distilled in Scotland.  Regardless of the outcome of this case, if The Scotch Whisky Association is determined to assert its rights to the word “glen”, it should petition to have the word added to the list of protected geographical indications.  Because “Scotch Whisky” is on the list, only a business distilling whisky in Scotland can identify its whisky as “Scotch Whisky”.  Consequently, it may be prudent for “Glen Breton” to let “Canada’s Only Single Malt Whisky” age for a few more years yet.

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Ryan K. Smith is a lawyer and trade-mark agent at Feltmate Delibato Heagle LLP. He specializes in corporate and commercial law with expertise in intellectual property matters including trade-marks, copyrights, privacy, information technology, and confidential information.  You can reach Ryan at rsmith@fdhlawyers.com and (905) 287-2215.