One company files a Canadian trade-mark application for IREWARD based on “proposed use” for a customer loyalty program. In other words, they intend to use it, but haven’t yet launched their service. However, they know that when they do start using the mark, they’ll benefit from their October 15th filing date.  A month later, unaware of the first mark, another company files an application for IREWARDS, a mark that is virtually identical, also for a customer loyalty program. This time, it’s based on actual use of the mark.  They have a November 16th filing date, meaning that they arrived at the trade-marks office one month later than the competing mark.

So, who wins?

Both marks were filed in 2001. After a lengthy battle, the decision in Indigo Books & Music, Inc. v. Preferred One Inc., 2010 TMOB 100 (CanLII) was recently handed down.  Indigo (a Canadian retail book store chain) was the later applicant for the IREWARDS mark. They commenced substantial use of their mark immediately, expending millions of dollars in advertising, merchandising and promotion.  Preferred One, the original applicant for the IREWARD mark never commenced use of their mark. Indeed, they put their program on hold when they found out that their opponent was a powerful national retailer.  This proved to be fatal to their mark.  Indigo eventually won the case since they could show that Preferred One’s mark was confusing with their mark as of the date of the opposition in 2004, by which time Indigo’s IREWARDS brand was firmly established across Canada.

Lessons for business?

• Search With Caution: Indigo conducted trade-mark searches before they filed. But their searches did not disclose Preferred One’s earlier IREWARD mark, since that application had not yet been indexed by the trade-marks office database. There is a lag of several months before marks will show up on search results. Thus, it is important to remember that searches are important, but not perfect due to this lag time at the trade-marks office.
• Invest in Your Brand: This case was really determined by the business realities of Indigo’s brand investment. If they had not invested so heavily in the promotion of their mark, they would not have been able to show distinctiveness at the relevant date.

Calgary – 08:00 MST