City of Terrace loses Kermode name court fight

Kelowna distillery free to use name on vodka brand

  • Sep. 4, 2014 11:00 a.m.

The City of Terrace has lost a court battle to protect the Spirit Bear name from being used on a logo for a brand of alcohol.

Terrace and the north coast First Nation band Kitasoo have jointly owned the Spirit Bear name since 2006 and have defended the use of the name in court several times since then.

Last August the city and Kitasoo entered a trademark challenge against Kelowna-based Urban Distilleries which produces a line of Spirit Bear gin and vodka.

Terrace mayor Dave Pernarowski said at the time that the main reason for the challenge against Urban Distilleries was that using the Spirit Bear name on a brand of alcohol was considered inappropriate.

However this week a federal court decision came back against the city and in favour of Urban Distilleries and the company will be allowed to continue producing its Spirit Bear line of products.

Moreover, the court also ruled that the Terrace/Kitasoo trademarks are unenforceable and that the parties would have to reapply for the trademarks to continue defending the name.

The ruling includes the names Kermode, Spirit Bear, as well as the Tsimshian name for the white bear, Moksgm’ol, all of which were trademarked by the city. These are various names for the white subspecies of black bear only found in northwestern B.C.

“There is first, no public display, and second, no evidence that SPIRIT BEAR was used as mark in the traditional sense,” states the ruling. “It must be apparent that the mark is in fact being used as an official mark – not just a section of a letter … as in the case of the city, or as part of a tour name, as is the case of the tour brochure of Klemtu Tourism Ltd.”

The ruling also states that the city is on the hook for the legal fees paid by Urban Distilleries.

“It was huge relief for sure,” said owner Mike Urban, adding that the court challenge had “a big impact” on his bottom line—lost income he says he will be trying to recoup through further legal action against the city in small claims court.

Urban nonetheless believes the outcome is a win for Terrace taxpayers.

“They are paying the huge bills,” he said of the various court actions Terrace and the Kitasoo have taken against companies trying to use the Spirit Bear name.

“I could have brought out new products, new sizes, but I’ve been holding off on that in case it [the trademark challenge] didn’t turn out not in our favour,” said Urban.

He said his Spirit Bear logo and name are the central branding for his company worth between $500,000 and $1 million.

City corporate administrator Alisa Thompson said the city is unable to comment on the ruling at this time because it is currently involved in a legal process.

“We will be discussing it with council at this point,” said Thompson. “Council will have to consider their options.”

The city and Kitasoo also have an arrangement with the Spirit Bear Coffee Company where they allow the company to use their trademark under the condition that a percentage of profits be directed toward Kermode bear conservation efforts in the Kitasoo’s traditional territory.

Thompson could not say if this arrangement will continue now that the courts have deemed the city’s claim of the trademark to be inadequate.

“There is no bar to the city of Terrace and Kitasoo Band Council reapplying for these official marks,” says the court decision.


Terrace Standard