A recent decision of the Federal Court may leave a sour taste in the mouths of trademark owners wishing to use the summary provisions of Section 45 of the Canadian Trade-marks Act to cancel trademark registrations on the basis of non-use.
The case of Heather Ruth McDowell v. Laverana GmbH & Co. KG2016 FC 1276 illustrates the scope of use which is necessary to satisfy the non-use requirements set out in the Act. The case was an appeal from a decision of the Registrar of Trademarks, dealing with a trademark registration for the trademark HONEY & Design, in which the Registrar had maintained the services covered by the registration, but had ordered that the description of goods be cancelled.
This decision is particularly relevant for trademarks registered for use in association with goods sold by retailers. The Registrar had rejected the evidence of use on the goods, which the Registrar characterized as “essentially price tags". On appeal, the registrant filed additional evidence covering more of the goods, but the evidence was not qualitatively different in any material respect from the evidence which had been filed at the first instance. However, the judge was of the view that hang tags and labels would ordinarily be sufficient to demonstrate use on goods, even in cases where the registrant was a retailer selling the goods of other parties. This finding is at odds with a significant amount of prior case law from the Trademarks Opposition Board in Section 45 proceedings.
The Court further noted that the type of inquiry in which the Opposition Board had engaged was on “contentious matters that were unsuited to resolution under the summary process envisaged by section 45 of the Trade-marks Act".
The most surprising part of the decision was the analysis by Justice Fothergill of the statement by the Board that any ambiguity in the evidence filed on behalf of the registrant must be resolved against the interests of the trademark owner. The Court held that this conclusion was clearly wrong, and that any ambiguity in the evidence should have been resolved in favor of the registered owner. The leading Section 45 case decided in 1981 by the Federal Court of Appeal, in Plough (Canada) v. Aerosol Fillers Inc. (1981) FC 679 had held that any “ambiguity must be resolved against the interests of the owner". This position had been universally followed by the Courts and by the Trademark Opposition Board in the years the following 1981, and it is therefore of some concern that this position may no longer hold true.
It is also noteworthy that the appeal in this case was not contested, and so no alternative view of the case law was provided to the Court in this instance.