Federal Court of Appeal Tightens Criteria for Design Mark Registrations in Canada

A recent Federal Court of Appeal decision, Therme Development v. Nordik Spa Village (2026 FCA 85), has introduced a more stringent approach to registering trademarks in Canada that contain descriptive wording alongside significant graphic or logo elements. This ruling may complicate efforts to register composite marks where descriptive text is present, even when accompanied by substantial design features.

Historically, trademark owners have leaned on the 2004 Best Canadian decision, which allowed marks containing descriptive wording to be registrable if the overall design created a sufficiently distinctive impression. In Best Canadian, the Court ultimately found the wording to be the dominant feature, rendering the mark clearly descriptive when pronounced.

In Therme, the Federal Court of Appeal clarified that the lower court erred by treating the word portion as dominant solely because the design elements could not be sounded. Instead, the Court emphasized that the correct analysis requires comparing the overall visual impression created by the combination of textual and design elements, considering their relative size and the distinctiveness of the design.

The marks at issue in Therme contained substantial graphic components, including complex designs that were larger and more visually intricate than the textual parts. Despite this, the Court determined that the word "THERME" remained the dominant feature. The rationale was that consumers would likely recall the word "THERME" more readily than the less easily described graphic elements when viewing the marks.

Importantly, the Court observed that it is rare for design elements alone to outweigh wording in a trademark. This underscores the challenge of overcoming descriptiveness through design features alone.

While the Therme decision does not overturn Best Canadian, it signals a potentially stricter approach going forward. Practically, businesses may find it increasingly difficult to rely primarily on logos or graphic elements to offset descriptive wording in trademark applications.

The ruling suggests Canadian courts may be moving toward an approach akin to that used in the United States for assessing "unitary" composite marks. In the U.S., the key question is whether the wording and design elements combine to create a single, inseparable commercial impression or whether consumers primarily perceive and remember the descriptive wording.

U.S. practice sometimes permits registration of descriptive wording within composite marks when the design and wording are so integrated that consumers perceive the mark as a unified whole rather than as descriptive text accompanied by a logo. Strategies to achieve this include:

- Using graphic elements closely integrated with the wording rather than merely adjacent or backgrounded

- Designing marks where wording and graphics visually interact to form a single commercial impression

- Employing distinctive symbols, icons, mascots, or graphic devices that consumers can independently recognize and recall

- Avoiding marks where descriptive wording remains visually dominant and immediately recognizable

- Building acquired distinctiveness through consistent marketplace use and consumer recognition over time

U.S. cases finding marks to be "unitary" often involve designs physically connected to the wording or layouts where the visual arrangement creates a distinct overall impression beyond the literal meaning of the words. Conversely, courts generally reject unitary status when descriptive wording appears simply inside ordinary borders, shapes, or decorative designs.

Therme thus narrows the path for registration of composite marks containing descriptive wording in Canada. The Court’s focus on what consumers are likely to remember and articulate may indicate a shift toward a U.S.-style treatment of composite marks, where descriptive wording remains difficult to protect unless it is truly integrated with design elements to form a unified commercial impression.

As a result, trademark applicants in Canada should carefully consider the visual integration of wording and design elements in composite marks, especially when the wording is descriptive. This decision underscores the importance of creating marks where the design can independently contribute to distinctiveness and consumer recognition.