Skip to Content

Nothing “palpable” in Pentastar dispute: trademark case confirms rules for statutory appeals

Daniela Bassan, QC

The Federal Court recently upheld the decision of the Registrar of Trademarks in a dispute over the registration and use of the PENTASTAR word mark in Canada, in Pentastar Transport Ltd. v. FCA US LLC, 2020 FC 367. In doing so, the Federal Court applied – in the intellectual property context – the new rules on standard of review set out by the Supreme Court of Canada in Canada (Minister of Citizenship & Immigration) v Vavilov, 2019 SCC 65 (“Vavilov”).

Trademark context and opposition

In 2005, Pentastar Transport (PT) registered PENTASTAR as a trademark for services in the oil and gas industry.

In 2009, FCA (formerly Chrysler Group) applied to register PENTASTAR as a trademark for proposed use in Canada with engines in passenger motor vehicles.

In 2012, PT commenced a trademark opposition proceeding under the former Trademarks Act, R.S.C. 1985, c. T-13 (i.e. before significant changes were made to the legislation in June 2019).

Specifically, PT opposed FCA’s trademark application on a fairly technical basis, namely, that FCA did not “intend to use” the PENTASTAR trademark in Canada in association with passenger motor vehicles. PT did not allege any confusion between the companies’ trademarks in the two different fields (i.e. oil and gas versus on the one hand, and car manufacturing on the other).

The opposition proceeding was ultimately decided in favour of FCA (as applicant). The Registrar found that PT (as opponent) had not met its initial evidentiary burden to support the grounds of opposition. Alternatively, the Registrar found that FCA (as applicant) had met its corresponding legal burden to show that it intended to use the PENTASTAR trademark. On the basis of this two-part inquiry, the opposition to the PENTASTAR trademark was dismissed.

Statutory appeal and standard of review

PT appealed the decision of the Registrar to the Federal Court under section 56 of the Trademarks Act (which grants a statutory right of appeal).

In the Pentastar case, the Federal Court reviewed the principles of appellate review as follows.

In Vavilov, the Supreme Court of Canada established that reasonableness is the presumptive standard of review for administrative decisions. However, this presumption is rebutted when the enabling statute – such as the Trademarks Act – provides for a statutory right of appeal. There, the appellate standard of review applies. This means that for questions of fact, inferences of fact, and questions of mixed fact and law raised in a statutory appeal, the standard of review is “palpable and overriding error.”

Applying this standard, and relying on Mahjoub v Canada (Citizenship and Immigration), 2017 FCA 157, the Federal Court noted that “palpable error” means:

  • Adopting a “highly deferential” standard of review;
  • Finding an error that is “obvious”;
  • Finding an error that is “overriding”;
  • Not “reweighing the evidence” and simply contemplating a different result;
  • Not merely “pulling at the leaves and branches of a tree” and leaving the “tree standing”.

No palpable error by the Registrar

The Federal Court found that there was no palpable or overriding error in the Registrar’s decision and as such, dismissed the appeal by PT.

In reaching this conclusion, the Court reviewed at length the reasons and analysis of the Registrar, especially in the weighing of affidavit evidence and cross-examination testimony (i.e. the usual format for evidence to be tendered and tested in an opposition proceeding). The Court also refused to revisit findings of fact made by the Registrar in the opposition proceeding, including inferences to be drawn from promotional materials about intended use of the trademark. The Court found that there was no overriding error by the Registrar in any of the factual or mixed factual/legal assessments, in particular with regard to “proposed use” versus “actual use” of the subject trademark. In the end, the trademark “tree” of analysis was standing and FCA prevailed.

The takeaway

The standard of review for statutory appeals, post-Vavilov, is now confirmed in the intellectual property context. This means that for questions of fact or questions of mixed fact and law, a high level of deference will be given to decisions of the Registrar, for which there is a right of appeal under the Trademarks Act. Parties should therefore pay close attention to evidentiary matters in opposition proceedings, including the form, content, and purpose of any evidence which may (or may not) be scrutinized on appeal.


This article is provided for general information only. If you have any questions about the above, please contact a member of our Intellectual Property group.

Click here to subscribe to Stewart McKelvey Thought Leadership articles and updates.

Archive

Energy Watch 2025

Stewart McKelvey is pleased to present Energy Watch – a review of key legislative and policy advancements in the renewable energy sector in 2024 in Newfoundland and Labrador, Nova Scotia and New Brunswick and a look forward to anticipated activities in 2025.

Read More

Land use planning in Prince Edward Island – the year in review

BY Curtis Doyle

By Curtis Doyle Once again, the time has come to review the year that was and to chart the course for the year ahead. For municipalities and planning professionals in…

Read More

The impact of possible tariff changes on Canadian importers and strategies for consideration (Part II)

BY Michelle Chai & Graeme Hiebert

By Michelle Chai and Graeme Hiebert This is the second in a two-part Thought Leadership series. To read Part I, click here. Appearance, design, best use, marketing and distribution While the…

Read More

Canada’s Energy Story: Energy Transition

Lawyers from our Energy Group were pleased to be featured in the latest issue of Canada’s Energy Story, an annual compendium of energy sector articles published by the Energy Council…

Read More

The impact of possible tariff changes on Canadian importers and strategies for consideration (Part I)

BY Michelle Chai & Graeme Hiebert

By Michelle Chai and Graeme Hiebert On January 20th, 2025, Donald Trump will be inaugurated as President of the United States. He has promised to swiftly impose tariffs on all…

Read More

Canada’s new criminal rate of interest takes effect

BY David Wedlake & Noah Archibald

By David Wedlake and Noah Archibald The Federal Government’s changes to the criminal rate of interest under the Criminal Code came into effect on January 1, 2025. These changes reduced…

Read More

Nova Scotia’s Regulated Health Professions Act: What’s in store for 2025 and beyond?

BY Tyana R. Caplan & Jennifer Taylor

By Tyana Caplan & Jennifer Taylor As 2025 begins, the legal landscape for regulated health professions in Nova Scotia remains in transition. Nova Scotia’s Regulated Health Professions Act (“RHPA” or…

Read More

2025 immigration challenges

By Brittany C. Trafford, Brendan Sheridan and Kaitlyn Clarke Recently, the Government of Canada made a number of changes to the immigration landscape in an effort to rein in the population…

Read More

“Be prepared” – Recent Scouts Canada ruling provides new guidance to organizations that engage volunteers

BY Jacob Zelman

By Jacob E. Zelman Many organizations in Canada rely heavily on the efforts of volunteers to assist with the delivery of services they provide. The Ontario Superior Court of Justice…

Read More

Cap or no cap? Court of Appeal confirms damages are substantive law in interprovincial tort claims

BY Joe Thorne & Jennifer Taylor

Joe Thorne & Jennifer Taylor In 2005, a bus accident occurred in Nova Scotia. The people injured in the accident were residents of Newfoundland and Labrador, which is where they sued…

Read More

Search Archive