In Fairmont Resort Properties Ltd. v. Fairmont Hotel Management, L.P., the Federal Court ruled that, despite the low threshold, the applicant, Fairmont Resort Properties Ltd., was not a "person interested" for the purposes of challenging the respondent’s, Fairmont Hotel Management, L.P.’s, trade-marks (the "Hotel Marks") under s. 57(1) of the Trade-marks Act.
The applicant was incorporated in 1979 as a numbered company for the purposes of marketing timeshare units constructed by Fairmont Hot Springs Resort Ltd. ("Fairmont Hot Springs"), which, at that time, had common ownership and control with the applicant. The timeshare units were located near Fairmont Hot Springs, British Columbia. In 1985, with the consent of Fairmont Hot Springs, the applicant changed its name to its current name. By 1996, the applicant was fully independent from Fairmont Hot Springs. In 2005, it had annual revenues of over $10 million dollars and Fairmont Hot Springs had revenues of over $12 million dollars.
The respondent is a wholly-owned subsidiary of Fairmont Hotels & Resorts Inc. ("Fairmont Hotels") The hotel chain was started by Tessie and Virginia Fair with one hotel on Knob Hill in San Francisco. They alleged to have coined the word "Fairmont" by combining the surname Fair and a description of Knob Hill as a "mont" or mount. Through the respondent, Fairmont Hotels claims to be North America’s largest luxury hotel management company. In 2004, Fairmont Hotels had revenues of over $320 million U.S.
On March 31, 2000, Fairmont Hot Springs transferred to an associated corporation of the respondent all the rights, title and interest of Fairmont Hot Springs in and to its trade-marks, if any, together with the good will associated therewith. It also agreed to withdraw and discontinue its opposition to the registration of the Hotel Marks. In return, Fairmont Hot Springs obtained a licence in respect of all of the assigned marks.
Section 57(1) allows "any person interested" to apply to the Federal Court for an order that any entry in the register be struck out or amended on the grounds that at the date of the application the entry as it appears on the register does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark.
The phrase "person interested" is defined in s. 2 of the Trade-marks Act. A corporation such as the applicant is a "person interested" if it may be affected by any entry on the register or reasonably apprehends that it may be affected by any act or omission contemplated act or omission under or contrary to the Trade-marks Act. In the 2006 Federal Court case of Omega Engineering, Inc. v. Omega SA, the court referred to the test the applicant must meet as a "de minimis threshold."
Despite this low threshold, the applicant was found not to be a "person interested". The applicant waited one day short of five years after the registration of the Hotel Marks to commence this proceeding. The court was "unsympathetic" to the applicant’s claims that this was due to an oversight of their lawyers. Until quite recently, the applicant’s actions demonstrated that it did not perceive itself to be affected by the entry of the Hotel Marks on the register or by the other businesses located near Fairmont Hot Springs, British Columbia, using the word "Fairmont" in their business name.
The only reasonable fear the applicant might have is the entry into the timeshare business in Canada by the respondent, but the only evidence before the Court was the respondent’s allegations that Fairmont Hotels was discussing whether to enter into the timeshare business in Canada and other hotel chains had entered into the time share business. The court, quoting from Mihaljevic v. British Columbia, concluded that “the presence of the Respondent’s trademarks on the register does not diminish or limit in any way the rights of the Applicant which would not be greater if those trademarks were struck.”
However, since the threshold is a low one, the court proceeded to deal with the remaining issues raised by the applicant. Registration creates a presumption of validity and the applicant failed to prove that the Hotel Marks were confusing with the unregistered trade-marks and trade-names of the Applicant or that the Hotel Marks lacks distinctiveness at the time of this proceeding. The court was satisfied that the Respondent was the person entitled to secure the registration of the Hotel Marks. The applicant’s claim was dismissed with costs.