Executive Summary: Key Legal and Evidentiary Issues

• The central dispute involves whether the trademark FALESCA MOLISANA is confusingly similar to the registered REGINA MOLISANA trademarks under section 56 of the Trademarks Act.

• "Molisana" was determined to be a geographic demonym referring to people or things from Italy's Molise region, rendering it inherently weak and non-distinctive.

• Acquired distinctiveness of the REGINA MOLISANA marks through extensive use in the Canadian marketplace did not overcome the inherent weakness of the shared "Molisana" element.

• Co-existence of LA MOLISANA and REGINA MOLISANA products in Canadian retail channels for an extended period undermined any exclusive distinctiveness claim to "Molisana."

• Standard of review applied was palpable and overriding error for mixed fact and law questions and correctness for pure questions of law.

• No error of law or palpable and overriding error was established by the Applicant to warrant overturning the TMOB decision.

Background of the dispute

This case arose from 996660 Ontario Ltd., trading as Molisana Imports (MI), opposing the registration of the trademark FALESCA MOLISANA by Falesca Importing Ltd. (FI). MI is the owner of three trademark registrations for REGINA MOLISANA, including two design marks, used in association with goods such as processed vegetables, processed meats, vegetable sauces, dried vegetables, cured meats, dried bread, pasta and olive oil. On May 18, 2017, FI filed Canadian Trademark Application No. 1,838,474 for the trademark FALESCA MOLISANA based on proposed use in association with goods including canned tomatoes, dried pasta, olive oils, and preserved vegetables.

MI was incorporated in 1992 and began selling its own brand of REGINA MOLISANA food products in the mid-1990s. The company demonstrated market presence with sales of the REGINA MOLISANA food products exceeding $7 million CAD per year and advertising expenditures of over $2.2 million CAD to advertise in Canada between 2008 and 2020. Products were sold through several large retail chains in Canada such as Metro, Walmart, and Loblaws.

The Trademarks Opposition Board decision

The Trademarks Opposition Board (TMOB) refused MI's opposition in a decision dated March 6, 2024, finding no confusion between the proposed FALESCA MOLISANA mark and MI's trademarks. The Board determined that the common element between the parties' trademarks ("Molisana") was a geographic descriptor with no inherent distinctiveness, as it was not disputed to be a demonym for people or things from the geographic region of Molise, Italy. Because this common element lacked distinctiveness, the TMOB placed limited weight on this element and found that the differences between the parties' trademarks were sufficient to distinguish them.

Analysis of inherent distinctiveness

MI argued the TMOB erred in law by not completing its analysis, as it was required to take the additional step of considering whether the average consumer would recognize "Molisana" as a demonym. MI highlighted that Molise is the second smallest region of Italy with only slightly more than 300,000 inhabitants. The Federal Court rejected this argument, holding that the perspective of the consumer is only meaningfully relevant to the determination of the inherent distinctiveness of a geographically descriptive mark if there is ambiguity as to whether the mark actually refers to a place. Since "Molisana" is undisputedly a demonym, the policy underlying the treatment of descriptions of places of origin continues to apply regardless of how well the place of origin is known. The Court affirmed that the inherent features of originality, uniqueness and inventiveness are equally absent from a term that describes a geographic location, as one that describes the people or things associated with a place (a demonym).

Assessment of acquired distinctiveness

The TMOB found that the REGINA MOLISANA Trademarks had become known in the Canadian marketplace to a substantial extent and therefore had acquired a substantial degree of distinctiveness. However, the Board did not give this factor decisive weight in its overall confusion analysis. MI asserted this approach was legally erroneous, but the Court found the TMOB considered both inherent distinctiveness and acquired distinctiveness in its analysis under paragraph 6(5)(a). The Court noted that even if the TMOB had concluded that the REGINA MOLISANA Trademarks had greater overall distinctiveness than the FALESCA MOLISANA mark, this would not have changed the outcome in view of the other surrounding circumstances, including the lack of resemblance between the parties' trademarks and the impact of the co-existence with the LA MOLISANA mark on the market.

Degree of resemblance between the marks

The TMOB found that as the parties' trademarks each included the word "Molisana" which was not inherently distinctive, the other words in the trademarks, "Falesca" and "Regina", were the most unique elements. These elements served to distinguish the marks as they did not bear any appreciable degree of similarity, particularly in the idea suggested. "Regina" invoked an association with the queen, and thus an idea of "a queen from the region of Molise," while "Falesca" had no immediate apparent meaning. The TMOB noted that when considered in their entirety, the trademarks were substantially more different than they were similar. The Court upheld this analysis, noting that such a detailed side-by-side comparison of the marks is the type of microscopic examination of the marks the Court has cautioned against.

Impact of marketplace co-existence

A significant factor in the analysis was the extensive co-existence of REGINA MOLISANA and LA MOLISANA products in Canadian retail channels. La Molisana SPA (LM), an Italian company located in Molise, Italy, owns the LA MOLISANA trademark and several other LA MOLISANA design marks. MI has been operating under a formal distributorship and co-existence agreement relating to the LA MOLISANA and REGINA MOLISANA brands since July 1998. The evidence established that both REGINA MOLISANA food products and LA MOLISANA food products had been sold extensively in Canada and had co-existed in the marketplace alongside one another in the same channels of trade for an extended time. It was uncontested that there was no confusion in the marketplace between REGINA MOLISANA and LA MOLISANA. The Court agreed with the TMOB that as a result of this concurrent use, the word "Molisana" was not distinctive of either MI or LM and that "Molisana" could not be relied upon to establish confusion. There was no evidence that the public would know about the distributorship and co-existence agreements or that consumers would perceive a relationship between MI and LM.

Ruling and outcome

The Federal Court dismissed MI's appeal, finding that MI had not established that the TMOB erred in law or that it made a palpable and overriding error in its analysis. Justice Furlanetto concluded that the Board properly applied the confusion factors, and reached its conclusion primarily because the parties' trademarks are inherently weak, small differences are sufficient to distinguish such trademarks from one another, and the parties' trademarks are substantially more different than they are similar. Falesca Importing Ltd., the Respondent, was awarded costs of $5,000. The Court declined to award the additional $4,899 in disbursements claimed by FI, largely from alleged travel and hotel costs, due to duplication in the Bill of Costs and the lack of any other information supporting the amounts claimed.