The Federal Court of Appeal has confirmed that it is not appropriate to set aside decisions made by Hearing Officers of the Trademarks Opposition Board unless a clear error has been made. https://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/517192/index.do
In April of 2019, we discussed a decision of a Judge of the Federal Court allowing an appeal from a decision of a Hearing Officer of the Trademark Opposition Board. The Hearing Officer allowed an amendment to be made to the statement of opposition at the hearing of the opposition. https://www.johnmckeownblog.com/post/the-application-of-the-reasonableness-standard
The Facts
The opponent's statement of opposition referred to an incorrect subsection number of the Trademarks Act dealing with entitlement to a mark. The statement of opposition referred to subsection 16(3), which applied to applications based on the proposed use and provided that entitlement was determined as of the date of filing of the application in issue. The opponent sought leave to amend to refer to subsection 16(1) which applied to applications based on use and which provided that entitlement is determined as of the date of first use of the applied-for mark. The application was applied for on the basis of use. Section 16 has since been amended.
The Practice Notice in Trade-mark Opposition Proceedings sets out the matters to be considered in determining if leave to amend a statement of opposition should be granted. They are:
- the stage the opposition has reached;
- why the amendment was not made earlier;
- the importance of the amendment; and
- the prejudice suffered by the other party.
The Hearing Officer had the benefit of seeing or at least hearing the respective parties make their submissions on this point. As summarized by the Judge the Hearing Officer balanced the four criteria: (1) the leave to amend was requested at a late stage of the proceeding; (2) no explanation has been provided as to why the amendment was not made earlier; (3) the amendment was important; and (4) the prejudice that the applicant would suffer was minimal because the applicant knew the opponent's intention to plead subsection 16(1). The Hearing Officer added that the opponent intended to rely on subsection 16(1) of the Act and that the reference to subsection 16(3) was merely a typographical error. He concluded that the effect of the last two criteria outweighed the adverse effect on the opponent of the first two and granted leave to amend the statement of opposition.
The Hearing Officer rejected the grounds of opposition except for the ground-based on subsection 16(1). The application was refused.
The Appeal to the Federal Court
The Judge allowed the appeal because she said the Hearing officer should have refused leave to amend. First, the opponent sought the amendment only after the hearing began, and the applicant was not given additional time. Second, the opponent offered no explanation, not even inadvertence. Finally, contrary to the Hearing Officer's conclusion, it did not appear "clear" that the applicant knew that opponent intended to plead subsection 16(1) of the Act despite its references to subsection 16(3)." The opponent's error did not appear to be "merely a typographical error" as the Board concluded. The appeal was allowed, and the matter was returned to the Board for a new determination.
The Appeal to the Federal Court of Appeal
The Standard of Review
The Judge applied a standard of review of reasonableness. This was the proper standard of review at that time. However, the decision of the Supreme Court of Canada has changed things. Where there is a statutory appeal of the decision of an administrative decision-maker (as is the case here), the appellate standard is now two-fold. The standard of correctness applies to questions of law, and the standard of palpable and overriding error applies to questions of fact or of mixed fact and law in which there is no extricable issue of law. This standard is highly deferential and authorizes appellate intervention only where an error is both obvious and determinative of the outcome.
When the new evidence is filed in support of an appeal to the Federal Court and is material—which has been interpreted to mean "sufficiently substantial and significant" and of "probative value" - the Federal Court "may exercise any discretion vested in the Registrar". This results in an appeal de novo subject to the correctness standard.
The parties did not direct the Court to any decision that addressed which standard should apply. The Court said it was unnecessary to deal with this issue.
On the reasonableness standard, the Court said the Judge misdirected herself in applying the standard when she applied her own views concerning the criteria to be considered in assessing the request to amend. She focused on her own analysis and reached a different conclusion from that of the Board. Instead, she should have considered only whether the decision made by the Board — including both the rationale for the decision and the outcome to which it led — was unreasonable. The Court concluded there was nothing unreasonable about the Board's decision and said the Judge was in error.
The Court said the same conclusion would apply if the appellate standard applied. The Board did not make an extricable error of law or any palpable and overriding error when it reached its conclusion. The Board correctly recognized the error as one of form rather than substance. There was little or no prejudice suffered by the applicant and it knew the opponent intended to rely on subsection 16(1).
The appeal was allowed.
Comment
A statement of opposition should be carefully drafted and refer to the correct subsections of the Act. As a result of the error, this matter has been before the courts for a significant time and significant expenses have been incurred.
The effect of the change in the standard of review should result in limiting the scope of appeals from hearing Officer's decisions except for cases where material new evidence is filed.
A version of this article originally appeared in the Lawyer's Daily published by LexisNexis Canada Inc.
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