Federal Court Outlines The Test For New Evidence On Appeal From The Trademarks Opposition Board

In April 2025, the Trademarks Act was amended to require parties to obtain leave before filing new evidence on appeal from a decision of the Trademarks Opposition Board (the Board). The amendments did not specify the applicable test. Questions about how the Federal Court would consider leave applications were partially answered earlier this month when the Court released its first decision on the matter. That decision, Products Unlimited, Inc. v Five Seasons Comfort Limited, 2026 FC 48 (Products Unlimited), will provide a roadmap for future requests for leave to file new evidence on appeals from Board decisions. The Products Unlimited decision highlights the importance of tendering relevant and material evidence before the Board and the risks faced by trademark litigants who do not put their best evidence forward at first instance.

Background

Products Unlimited, Inc. (Products Unlimited) applied to register a "positioning of a sign" trademark – a pattern of diamond-shaped apertures on the surface of certain air filters. Five Seasons Comfort Limited opposed the application on the ground that the diamond-shaped apertures claimed in the application were dictated primarily by utilitarian function and were therefore unregistrable pursuant to subsection 12(2) of the Trademarks Act. The Board agreed, granted the opposition, and refused the application.¹

Products Unlimited appealed the Board decision on April 2, 2025, just one day after important amendments to the Trademarks Act and the Trademarks Regulations came into force. As discussed in our previous Cassels Comment, one of those amendments was to subsection 56(5) of the Trademarks Act, which previously provided parties in an appeal of a Board decision with an automatic right to adduce new evidence before the Federal Court, even if that evidence was not adduced in the Board proceeding. The amendment to subsection 56(5) eliminated the automatic right to file new evidence and, instead, introduced express language requiring a litigant to obtain leave from the Federal Court to adduce new evidence. The amendment did not expressly include a test or guidance for determining when leave to file new evidence should be granted. Since Products Unlimited sought to introduce new evidence on the appeal, one of the key issues that the Federal Court had to consider was the proper approach to determining such requests.

The Test for Leave to File New Evidence

The Court began its analysis by considering the traditional test for filing new evidence on appeal that the Supreme Court of Canada outlined in Palmer v The Queen.² That Court acknowledged the rigidity of that traditional test, which not only requires the new evidence to be relevant, credible and material, but also provides that new evidence should generally not be admitted if it could have been adduced at trial.

The Court rejected a strict application of the Palmer test on appeals from the Board. While the Palmer principles remain relevant, the Court emphasized that Parliament intentionally preserved a distinct statutory appeal regime for decisions of the Board, differentiating subsection 56(5) appeals from typical appeals of trial decisions. The Court also concluded that Parliament's choice to expressly address the filing of additional evidence in the Trademarks Act and to maintain pre-existing language in subsection 56(5) giving the Court discretion to consider additional evidence signaled Parliament's intent for a broader and more flexible leave requirement than typically applies.

In considering the interests of justice and all relevant factors, the Federal Court set out the following list of non-exhaustive factors to consider when determining whether to grant leave to introduce new evidence on appeal of a Board decision:

• Relevance, credibility and admissibility of the proposed evidence: As with all evidence filed in the Federal Court, new evidence on appeal must be reliable, credible, and relevant to the issues in dispute and meet the threshold of admissibility.
• Materiality: At the leave stage, the proper question to be asked is whether the new evidence could have materially affected the Board's decision. A court does not need to be satisfied at the leave stage that the evidence definitively would have materially affected the Board's decision, as that question only needs to be answered when considering the merits of the appeal.
• Circumstances surrounding the delay in filing the evidence: Consistent with the traditional Palmer test, it remains important – and in some cases, potentially determinative – to consider whether the new evidence could have reasonably been put before the Board, as litigants are expected put their best foot forward. However, since the test under subsection 56(5) is more flexible than the Palmer test, surrounding circumstances that explain why the evidence was not filed with the Board may be relevant.
• Prejudice to the other party: As is standard when determining whether to grant leave to file further evidence under the Federal Courts Rules, assessing a leave request under subsection 56(5) must consider whether the adverse party would be prejudiced by admitting the new evidence.

Applying these factors to the affidavit evidence sought to be introduced by Products Unlimited, the Court granted leave to admit the evidence. The Court based its decision on the following factors:

• The evidence was directly relevant to the central issue on appeal (whether the apertures in the applied-for trademark were dictated primarily by utilitarian function) and was material in that it could have changed the Board's outcome.
• The previous version of subsection 56(5) was still in force throughout the entirety of the Board proceeding, meaning that Products Unlimited had a reasonable expectation that it would be able to file new evidence on appeal, thus explaining its failure to file that evidence at first instance.
• The relevance of the additional evidence only became clear after the opponent filed its written representations in the Board proceeding, which would have made it more difficult and complicated for Products Unlimited to file the evidence in the Board proceeding.
• No prejudice would be suffered by the respondent, who did not participate in the appeal.

With the benefit of Products Unlimited's additional evidence, the Court went on to find that the trademark at issue was registrable, as the new evidence helped demonstrate that the features of the trademark were not dictated primarily by a utilitarian function.

Key Takeaways

The Products Unlimited decision provides clarity for trademark litigants. It establishes a much-needed framework for assessing requests for leave to file new evidence on appeals from the Board. The decision confirms that the Federal Court will not simply "rubber stamp" requests for leave to file new evidence: leave will be available where evidence is material, the party seeking leave has a reasonable explanation for not having filed the evidence before the Board, and where the interests of justice favour admitting the new evidence.

A significant factor favouring the granting of leave in Products Unlimited was the fact that the Board proceeding took place before subsection 56(5) was amended. Therefore, it may be more difficult for a party to obtain leave to file additional evidence in cases where the underlying Board proceeding took place after the amendments were in force and the appellant was aware of the need to put its "best foot forward" before the Board.

Products Unlimited did not consider when the decision to grant leave to file new evidence on an appeal should be made. The Guidelines³ require an applicant to announce its intention to seek leave to file new evidence from the outset. If so, a case management judge will be appointed and presumably tasked with setting a procedure for determining whether leave to adduce new evidence will be granted. However, the Guidelines also say that all requests for leave to adduce new evidence will be determined by the applications judge. Questions about the procedure and timing of an application judge's decision to grant leave to file new evidence have not yet been answered.

Footnotes

1 See the decision below: Five Seasons Comfort Limited v Products Unlimited, Inc., 2025 TMOB 21.

2 1979 CanLII 8, [1980] 1 SCR 759 at p 775.

3 Case and Trial Management Guidelines for Complex Proceedings, Proceedings under the PM(NOC) Regulations, and Appeals under Subsection 56(1) of the Trademarks Act – July 18, 2025 (Guidelines).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.