Supershuttle Loses Rebuttal – Canadian Registration Scuttled

In a recent Federal Court of Canada (the “FC”) decision, 2015 FC 1259, the FC dismissed an appeal by Supershuttle International, Inc. (“Supershuttle”) to overturn a decision of the Registrar of Trade-marks (the “Registrar”), expunging its Canadian trade-mark registration for SUPERSHUTTLE (the “Mark”) for non-use.

Supershuttle provides ground transportation services to and from airports in cities that are all located outside of Canada.  Canadians wanting to utilize Supershuttle’s services can and do book tickets and make reservations through their website, which is accessible to persons who are physically in Canada.  In December 2003, Supershuttle registered the Mark in Canada for use with “airport passenger ground transportation services” (the “Registered Services”).

In February 2012, a summary cancellation proceeding was brought against the Mark pursuant to section 45 of the Trade-marks Act, requiring Supershuttle to provide evidence demonstrating use of the Mark in Canada in the three preceding years.  Despite the evidence submitted by Supershuttle, the Registrar concluded that Supershuttle had not used the Mark in association with the Registered Services in Canada.  The Registrar’s decision was based largely on the fact that Supershuttle did not actually operate any shuttles or vans in Canada, and on the basis that simply advertising the Registered Services in Canada through its website, without those services actually being available for performance in Canada, was not sufficient to demonstrate use.

Supershuttle subsequently appealed to the FC and raised the following issues:

  1. Did the Registrar err in its interpretation of the statutory meaning of “use”; and
  2. Is a trade-mark “used” in Canada in connection with a service if an essential step in the performance of that service happens in Canada?

The FC ultimately denied Supershuttle’s appeal on the basis that, while the observation of a trade-mark by individuals based in Canada may demonstrate use of that mark, the services with which that mark is purportedly being used must still be performed in Canada.

In this case, despite the Mark being advertised and known in Canada and used by Canadians for the purposes of making bookings and reservations, “reservation services” were not included as part of the Registered Services; as such, the Mark was not being “used” in connection with the Registered Services.  Consequently, the FC concluded that the Mark could not be maintained.

The decision in this case seems to run contrary to at least one previous decision of the FC, where the “use” of the trade-mark at issue in association with travel services was deemed to also be “use” in association with incidental or ancillary services, such as ticketing and reservation services.  While the trial judge in Supershuttle recognized that “use” of a trade-mark in relation with a service must be decided on a case-by-case basis, the apparent inconsistency in the case law is a good reminder that trade-mark applicants should exercise caution when deciding upon the services to be included as part of a trade-mark application.  In particular, applicants should be cognizant of the risk associated with including services that are, in fact, not offered in Canada – even if the trade-mark can be observed by individuals in Canada.

 

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Proposed New French Language Requirements in Québec

As discussed in our previous blog entry, after losing the battle in court over the requirement that businesses must add French language to English trade-marks displayed on signage outside their stores, in June 2015 the Québec government announced its intention to make modifications to Québec’s Regulation respecting the language of commerce and business (“Regulation”).

As recently reported in the media, the Québec government has just announced the proposed changes to the Regulation, the stated purpose of which is to ensure that commerce in Québec has more of a French language presence. The proposed changes require businesses to ensure that when trade-marks in languages other than French are used on exterior signage (as defined by the proposed rules), a French language component is displayed on the site as well. The proposed amendments set out the circumstances in which the new rules will apply, including when the trade-mark is displayed on interior signage that is intended to be seen from the outside, or when exterior signage is located in a mall or shopping centre complex.

The French language component may take the form of a slogan, a generic term or description, or other information concerning the products and services offered by the business. The proposed rules do not require that the French component be predominant over the non-French trade-mark, but they require that the French component be permanently visible in a manner similar to that of the non-French trade-mark being displayed, and be legible in the same visual field as the trade-mark.

A helpful illustration of acceptable and non-acceptable signage under the proposed changes can be found here.

A 45 day period for public feedback on the proposed amendments commenced on May 4, 2016. We will report again when there is a further update. In the meantime, brand owners using trade-marks in languages other than French in Québec should start considering how they will comply with the new French language requirements, assuming those requirements are passed into law, and whether their proposed strategy necessitates any changes to their current Canadian trade-mark portfolio.

 

 

Federal Court of Appeal considers “special circumstances” in appeal of trade-mark expungement

In a recent decision of the Federal Court of Appeal (“FCA”), the FCA took the rare opportunity to consider an appeal from a section 45 expungement proceeding. In One Group LLC v Gouverneur Inc, the FCA reviewed the Registrar’s decision not to expunge One Group LLC’s (“One Group”) trade-mark registration for STK (the “Mark”) on the basis of non-use, as well as the subsequent Federal Court (“FC”) decision to overturn the Registrar’s ruling.

One Group operates high end restaurants using the Mark outside of Canada.  In preparation for a new restaurant in Toronto, One Group registered the Mark in Canada. However, due to failed discussions with hotels and developers, a Toronto restaurant never materialized.

In due course, Gouverneur Inc. (“Gouverneur”) brought a section 45 proceeding, alleging that One Group failed to use the Mark in the three preceding years. The Registrar refused to expunge the Mark on the basis that there were special circumstances that excused the non-use, namely that the non-use was not in the control of One Group, and that there was evidence that One Group was close to coming to an agreement with a hotel chain which would see the Mark used in Canada.

Gouverneur appealed to the FC on the basis that the Registrar misunderstood or misapplied the test for special circumstances. The FC agreed and overturned the decision of the Registrar on the basis that it was not a reasonable finding that special circumstances excused the non-use of the Mark, and ordered the Mark expunged.

One Group then appealed to the FCA. In a relatively brief decision, the FCA allowed the appeal and reinstated the ruling of the Registrar.

This decision highlights a number of points:

  • First, the FCA emphasized that deference must be given to the Registrar in expungement proceedings, as well as in those instances where the Registrar is applying its “home statute”. As a result, courts should not disturb the Registrar’s findings of fact except in those circumstances where such findings are clearly not correct.
  • Second, it appears that there is a general willingness of the Registrar to preserve registrations. Hence, to the extent the Registrar makes factual findings in support of preserving a registration, the court’s deference to those findings on an appeal presents a potentially difficult hurdle to overcome.
  • Third, this case is a reminder that there is a “special circumstances” exception to non-use which can be used to preserve registrations. The criteria for determining if “special circumstances” exist are:

- the length of time during which the trade-mark has not been used;

- whether the reasons for non-use were beyond the registered owner’s control; and

- whether the registered owner has a serious intention to shortly resume use of the trade-mark.

Whether special circumstances exist will be determined by the Registrar from the evidence. Such findings, as stated above, will be given deference by the courts.

With this deference in mind, the FCA found no error in the Registrar’s decision that justified judicial intervention, and restored the decision of the Registrar.

About the Blog

The authors of the Canadian Trademark Blog are all members of the Canadian law firm Clark Wilson LLP, based in Vancouver, Canada. Each author's practice focuses–either in whole or in substantial part–on Canadian intellectual property law. Together, they manage the trade-mark portfolios of local, national and international brand owners in nearly all industries and markets.

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