Executive Summary: Key Legal and Evidentiary Issues

• Leave was granted to Products Unlimited, Inc. to adduce the affidavit of Scott Beier as additional evidence on appeal under amended subsection 56(5) of the Trademarks Act.

• The Court set out a flexible, “interests of justice” framework for leave to file additional evidence, drawing on but not strictly applying the Palmer test.

• The Court confirmed that, where material additional evidence is admitted on a trademark appeal, issues affected by that evidence are reviewed on a correctness (de novo) standard, while unaffected findings remain subject to palpable and overriding error.

• The central registrability question was whether the FILTER DESIGN “position” mark, consisting of a pattern of generally diamond-shaped apertures in offset columns on air filters, was dictated primarily by a utilitarian function under subsection 12(2) of the Trademarks Act.

• The additional evidence explained that the functional performance of the Paint Pockets filters arises from internal pockets and material composition, and not from the diamond shape or the specific pattern and positioning of the apertures on the surface.

• The Court concluded that the features of the FILTER DESIGN trademark are not dictated primarily by a utilitarian function, allowed the appeal, set aside the Board’s refusal, directed registration of the mark, and awarded no costs.                                                                                                                                                                                                                            

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Factual background and the trademark at issue
Products Unlimited, Inc. appealed a decision of the Trademarks Opposition Board refusing its FILTER DESIGN trademark application. The decision under appeal (2025 TMOB 21) had refused Application No. 1,922,128 for the trademark FILTER DESIGN, described as a “positioning of a sign” consisting of a pattern of generally diamond-shaped apertures on the surface of certain air filters, on the basis that the features were dictated primarily by a utilitarian function and therefore unregistrable under subsection 12(2) of the Trademarks Act. The application covered “Air filters for industrial and commercial uses and installations namely filters for paint booths” and was based on use in Canada since at least as early as January 8, 1998, in association with Products Unlimited’s “Paint Pockets”-branded filters. Five Seasons Comfort Limited opposed the application on multiple grounds and was successful before the Board, but it did not participate in the Federal Court appeal, and the Attorney General also did not participate.

The opposition record and the Board’s findings on registrability
Five Seasons filed affidavit evidence and website screenshots, while Products Unlimited responded with its own affidavit evidence. Five Seasons relied on affidavits from Julia Walters, a legal assistant, and a certified copy of the application file history. Products Unlimited filed an affidavit from its Vice President, Michael Beier, and Five Seasons replied with a second affidavit from Ms. Walters attaching screenshots from the Paint Pockets product website. No cross-examinations were conducted, and the opposition proceeded in writing. In its written argument, Five Seasons organized its 15 grounds of opposition under four headings: non-conformity with paragraph 30(2)(a), non-registrability under section 12, non-distinctiveness under section 2, and bad faith under paragraph 38(2)(a.1), with the bad faith arguments invoking the same functionality points as the registrability arguments. The Board’s decision focused on registrability and distinctiveness; it dismissed grounds based on section 18.1 as not valid opposition grounds and concluded that Five Seasons had not met its initial evidential burden on distinctiveness, while finding that Five Seasons had met its initial burden on registrability and that Products Unlimited had not shown the mark to be registrable.

How the Board relied on the Paint Pockets website to find functionality
The Board treated website statements about performance and “unique design” as evidence of functional surface features. Five Seasons cited two passages from the Paint Pockets website stating that Paint Pockets “is the best performing single-stage overspray arrestor,” that its “unique design” holds up to five times more overspray than other filters, that three-dimensional “pockets” embedded in the front face “more than double its surface area,” and that the product has “superior wet tensile strength.” The website also stated that its “unique pockets” enable significant overspray accumulation before restricting airflow and referred to a “patented design” that provides superior depth loading of the filter. The Board considered that the emphasized website passages suggested that apertures embedded in the filters provided functional advantages such as holding more overspray, doubling surface area, and providing superior wet tensile strength, and that at least the positioning of the apertures across the face of the filters was to provide these functional advantages. While the Board noted Michael Beier’s evidence that the diamond shape of the apertures itself was non-functional with respect to other shapes, it held that this evidence did not address the positioning of the apertures, and that in light of the website statements it was at best unclear whether the positioning provided the described functionality. The Board therefore concluded that Products Unlimited had not met its onus of showing that the FILTER DESIGN trademark was registrable under subsection 12(2) and refused the application on that ground, without needing to address the remaining grounds of opposition.

Legislative amendments to subsection 56(5) and the request for additional evidence
The appeal was commenced after subsection 56(5) was amended to require leave for additional evidence, and Products Unlimited sought to adduce a new affidavit. Before April 1, 2025, subsection 56(5) allowed parties to adduce additional evidence on appeal from the Registrar as of right and empowered the Federal Court to exercise any discretion vested in the Registrar. As of April 1, 2025, the amended subsection 56(5) requires the Federal Court to grant leave before additional evidence can be adduced, and the Court may exercise the Registrar’s discretion “with respect to that additional evidence.” The appeal in this case was commenced on April 2, 2025, so the amended provision applied. Products Unlimited filed a new affidavit from another Vice President, Scott Beier, in its application record. That affidavit addressed the website statements in Ms. Walters’s second affidavit, explaining their meaning, their connection to the technical aspects of the Paint Pockets product, and how they relate to functionality. Because the amendments to subsection 56(5) were new, Products Unlimited’s application record did not initially include a formal request for leave to file the Scott Beier affidavit as additional evidence, and the subsequent Federal Court Guidelines requiring such a request at the outset were not yet in place. Products Unlimited therefore sought leave at the hearing of the appeal. No party appeared to oppose the appeal or the leave request, but the Court held that the absence of opposition did not relieve it of the duty to determine whether leave should be granted under subsection 56(5).

The Court’s “interests of justice” framework for leave to adduce additional evidence
The Court declined to apply the Palmer test rigidly and instead adopted a contextual, interests-of-justice approach to subsection 56(5). The Trademarks Act does not specify grounds or factors for granting leave under subsection 56(5), so the Court focused on statutory interpretation, considering the text, context, and purpose of the provision. It noted that the Supreme Court’s Palmer test, as reaffirmed in Barendregt v Grebliunas, governs admission of new evidence on appeal in general and aims to make such admission rare, balancing finality and order with justice. However, the Federal Court of Appeal has indicated that appeals from administrative tribunals should not simply import Rule 351 and Palmer, and that new evidence in that context is treated differently from evidence on appeal from a lower court. The Court emphasized that Parliament had retained a statutory appeal model for Registrar decisions, explicitly contemplated additional evidence on appeal with leave, and preserved the Court’s power to exercise the Registrar’s discretion with respect to that evidence. It also referred to the Explanatory Note accompanying the coming-into-force order, which stated that removing the guaranteed right to file additional evidence on appeal was “balanced with the introduction of the ability for parties to obtain a confidentiality order from the Registrar” and that this change would help prevent “dual litigation” that is both inefficient and potentially abusive, particularly for small and medium-sized enterprises. The Court concluded that, under subsection 56(5), it should assess leave according to the interests of justice, considering all relevant factors, including: the relevance, credibility, admissibility, and usefulness of the evidence; the materiality of the evidence and whether it could have a bearing on the Registrar’s findings; the circumstances surrounding the delay in filing, including the prior legislative framework that allowed additional evidence as of right and the timing of reply evidence and written argument before the Board; and any prejudice to the opposing party. It held that these factors adapt the features of Palmer to the specific trademark-appeal context and reflect Parliament’s intent to end unrestricted additional evidence on appeal while still allowing it where justified.

Granting leave and defining the standard of review
Applying its framework, the Court granted leave for the Scott Beier affidavit and confirmed the applicable standards of review. The Court found that the Scott Beier affidavit was clearly relevant to the central functionality issue, addressed the functionality, structure, and design of the Paint Pockets filters, and spoke directly to the website statements the Board had relied upon. It considered the evidence credible and admissible, and concluded that it was material because it was sufficiently substantial and significant that it could have materially affected the Board’s finding on functionality and would assist the Court. In examining the timing, the Court noted that Five Seasons’s reply evidence and written submissions had been filed when the former subsection 56(5) still allowed additional evidence on appeal as of right, attenuating the usual obligation to put all evidence before the tribunal of first instance. It also noted that Ms. Walters’s second affidavit attached a broad set of website printouts and that Five Seasons only identified the specific passages and inferences it relied on in its written representations, which were filed after all evidence, at a point when the legislative framework still allowed new evidence on appeal. The Court found no indication of prejudice to any other party, particularly since no one appeared to oppose the appeal. It therefore held that the interests of justice favoured granting leave. On the standard of review, the Court reaffirmed that statutory appeals from the Registrar generally attract correctness for questions of law and palpable and overriding error for questions of fact and mixed fact and law. Under the former subsection 56(5), material new evidence could trigger a de novo review on affected issues, and the Court held that this approach remains appropriate under the amended provision, given that Parliament preserved the Court’s power to exercise any discretion vested in the Registrar “with respect to that additional evidence.” The Court summarized that questions of law, including extricable legal questions, are reviewed for correctness; where no additional evidence is adduced, factual and mixed questions attract palpable and overriding error; and where leave is granted for material additional evidence, the Court applies correctness to findings affected by that evidence and palpable and overriding error to findings unaffected by it. Because the Scott Beier affidavit was found to be material to the functionality assessment, the Court applied correctness to that central issue.

Subsection 12(2), the doctrine of functionality, and the new evidence on Paint Pockets
The Court situated subsection 12(2) within the doctrine of functionality and then reassessed whether the FILTER DESIGN mark’s features were primarily utilitarian. Section 12 of the Trademarks Act addresses registrability, and subsection 12(2) provides that a trademark is not registrable if, in relation to the goods or services, “its features are dictated primarily by a utilitarian function.” The Court noted that this provision, added in 2019, incorporates the long-standing doctrine of functionality recognized in cases such as Kirkbi AG v Ritvik Holdings Inc, which emphasize that trademark law is not intended to prevent competitive use of utilitarian product features, but to serve a source-distinguishing function. The word “primarily” reflects earlier jurisprudence holding that combinations of elements primarily designed to perform a function are not proper trademark subject-matter, while also indicating that a mark is not necessarily barred merely because it has some functional aspects; it is enough to make a mark unregistrable that its features are dictated mainly, rather than solely, by function. Against that legal background, the Court examined the FILTER DESIGN mark as described in the application: the position of generally diamond-shaped apertures in which a column of apertures is slightly offset from another column to either side, with the goods shown in dashed outline not forming part of the mark. It observed that the trademark’s features consist of two elements: the diamond shape of the apertures (the sign) and their particular offset positioning (the positioning of the sign). The Board had effectively accepted Michael Beier’s evidence that the diamond shape itself did not have functional advantages over other shapes, but it had found the record unclear on whether the positioning was functional in light of the website statements. The Scott Beier affidavit, read together with Michael Beier’s affidavit, explained that the references on the website to “unique design,” increased overspray capacity, doubled surface area, and superior wet tensile strength related to the design of the internal three-dimensional pockets and filter layers and to the material composition of the filter, not to the diamond-shaped surface apertures or their specific offset pattern. It further stated that the location, orientation, and overall design of the diamond-shaped pattern of apertures on the surface was not selected because it offered a unique functional advantage over another pattern, and that a distinctive pattern was chosen to provide a means of distinguishing the product from other filter products. The Court accepted this evidence and held that the presence of a linkage between apertures and interior pockets did not change the key question, which is whether the features of the trademark as claimed—shape and positioning of the apertures—are dictated primarily by a utilitarian function. It noted that registration of the FILTER DESIGN mark would not prevent other traders from using pockets or apertures in filters. The Court also addressed the website’s reference to a “patented design,” observing that, while the existence of a patent can be evidence of utility, there was no evidence in this case that any patent concerned the shape or positioning of the apertures. The website reference simply described the design of the Paint Pockets filters and their depth loading, which the Court understood as relating to the internal pockets, not to the surface pattern claimed in the trademark application.

The Court’s ultimate ruling and the outcome of the appeal
The Court found that the FILTER DESIGN trademark is not unregistrable under subsection 12(2), allowed the appeal, and ordered registration without costs. In light of the new evidence, the Court concluded that Products Unlimited had satisfied its onus to show that the features of the FILTER DESIGN mark—its diamond-shaped apertures and their offset positioning—are not dictated primarily by a utilitarian function. It held that the functionality of the Paint Pockets product is attributable to its interior pocket design and material composition rather than to the specific surface aperture pattern, and that the concerns raised by the Board based on the website statements were satisfactorily explained and clarified by the Scott Beier affidavit. The Court noted that Five Seasons had not responded to the appeal, that no other ground of opposition had been upheld by the Board or pursued on appeal, and that the finding on registrability therefore remained the only determinative issue. It allowed the appeal, set aside the Board’s decision, and, pursuant to section 40 of the Trademarks Act, directed the Registrar to register the application for the FILTER DESIGN trademark (Application No. 1,922,128). Products Unlimited had not requested costs, and the Court awarded none. The judgment does not specify any monetary amount ordered in favour of any party.