No Hotel in Canada? No Problem – Trademark Owner Maintains Trademark Registration With Hotel Services

The Federal Court of Canada (the “Court”) recently released its decision in Hilton Worldwide Holdings LLP v Miller Thomson, 2018 FC 895. In the decision underlying this appeal, the Registrar expunged the Canadian trademark registration for WALDORF-ASTORIA, owned Hilton Worldwide Holdings LLP (“Hilton”), on the basis of non-use. The Court allowed the appeal, and found that Hilton had proven the requisite use of its trademark in Canada, notwithstanding the fact that it did not operate a physical hotel in Canada.

Under the Canadian Trade-marks Act (the “Act”) a trademark is deemed to be used in association with services if it is “used or displayed in the performance or advertising of those services.” Courts have found that this statutory provision includes a condition that the services themselves must be performed or delivered inside Canada, and the mere advertisement of services in Canada does not constitute use within the meaning of the Act.

For trademarks associated with hotels, the Registrar has interpreted this condition restrictively. The Registrar has issued a number of recent decisions which found that the operation of a “bricks and mortar” hotel in Canada is necessary to establish the use of a trademark for “hotel” or “hotel services” in Canada (see, for instance, Bellagio Limousines v Mirage Resorts Inc, 2012 TMOB 220; Stikeman Elliot LLP v Millennium & Copthorne International Limited, 2017 TMOB 34; and Ridout & Maybee LLP v Sfera 39-E Corp, 2017 TMOB 149).

In contrast to the Registrar’s decisions involving “hotel services”, the Court has increasingly recognized circumstances in which companies operating outside of Canada can establish use of their trademarks in association with services directed to consumers in Canada. In HomeAway.com v Hrdlicka, 2012 FC 1467, the Court held that the appearance of a trademark on a computer screen via a website accessed in Canada, regardless of where the information may have originated from or is stored, constitutes use and advertising of the mark in Canada. The evidence in HomeAway.com also showed that people in Canada used the service at issue to post available rental properties located in Canada, and that these postings were available online to customers in Canada.

In allowing the appeal brought by Hilton, the Court focused on the ordinary understanding of the term “hotel services”, which would include ancillary services, such as reservation and booking services. Because these ancillary services would be included in “hotel services”, the Court found the Registrar erred in equating these services with “the operation of a hotel” – services which can only be performed at a physical hotel location. The ancillary services, in contrast, go beyond the physical “bricks and mortar” hotel, and the evidence showed that Hilton had performed such services in Canada, despite operating a physical hotel in another country.

Moreover, the type of hotel services which can be delivered online had greatly expanded since Hilton’s registration issued. The scope of the registration, according to the Court, must be considered in light of the development in online commerce as it relates to the ordinary commercial understanding of “hotel services.” Technological developments which occurred post-registration meant that Hilton could provide services online to Canadians who benefited from them. This also supported Hilton’s claim that it used the mark in Canada.

The decision forms part of a growing trend of Canadian trademark decisions which recognize that companies based entirely outside of Canada can offer services in Canada, and that the performance of those services will constitute use in Canada of the trademarks associated with such services.

David Bowden

Canadian Trademarks Law: 2017 in Review

Our very own Scott Lamb’s annual take on major developments in the world of Canadian trademark law has been recently published in the authoritative Annual Review of Law & Practice. A copy of Scott’s insightful update can be found online here. Notably, one of the biggest highlights from 2017 were the publication of draft regulations in relation to the long awaited coming into force of significant amendments to the Canadian Trademarks Act. These were passed back in 2014 and it is now anticipated that these will come into force in 2019 (maybe).

2018 Global 500 Brands: Who Takes Prime Spot?

February is the month Canadians look to for signs winter may come to an early end. It’s also the month when trademark practitioners around the world eagerly await Brand Finance’s Global 500 report. With an impressive 42% increase in brand value, AMAZON jumped from 3rd spot last year, to take the lead this year. Staying steady at number 2 was APPLE, seeing a 37% increase in brand value. The former leader, GOOGLE, now comes in 3rd, with a relatively modest 10% increase in brand value (it’s affiliated YOUTUBE brand, however, saw a 114% increase, vaulting from number 112 to 42!). While there was movement within the top ten brands, as a group these remained the same as last year, highlighting the staying power of already dominant brands. The top brands remained principally tech-focused and for the first time since the Global 500 study began, the top 5 were all technology brands. Rounding out the top ten in 2018 were SAMSUNG, FACEBOOK, AT&T, MICROSOFT, VERIZON, WALMART and ICBC. As is evident, United States-based brands dominated, but Chinese brands continue to make strong gains: in 2008 they accounted for a mere 3% of the total brand value (lagging far behind other countries), and in 2018 they account for 15%, coming in second to the United States (48% in 2008 to 43% today). According to the report, the strongest brand of the year was DISNEY (ranking 31 overall in value), while the top Canadian brand by value was RBC at number 107.

Global 500 Brand Rankings Feature A Shift At The Top

Brand Finance has recently published its 2017 Global 500 Brand Rankings, where GOOGLE has overtaken APPLE in the number one spot for the world’s most valuable brand.  APPLE’s five year dominance at the number one ranking follows a 27% fall in brand value in the past year.  Bringing up third spot again this year is AMAZON.COM, which showed an impressive 53% growth in its  brand value over the prior year.  The top 10 includes a number of other top tech sector brands such as Microsoft, Samsung and Facebook.  The list also includes a number of fast growing brands from China, including Alibaba, Tencent, WeChat, JD.com and Huawei.

New Fee Proposal for Trademarks in Canada

The Canadian Intellectual Property Office (CIPO) has published a Fee-for-service proposal (the Proposal), seeking public input by July 5, 2016.  As previously reported on this blog, the Canadian government significantly amended the Trade-marks Act (the Act) in 2014, in order for Canada to accede to the Singapore Treaty, the Nice Agreement and the Madrid Protocol. Those amendments have not yet come into force, however, pending the adoption of new Regulations on various matters, including fees.  The Proposal is the first step in adopting new Regulations on the fees that will be applicable.

The two most significant changes in the Proposal are that:

– there will be one fee payable at the time an application is filed with CIPO, while the current requirement for payment of a registration fee will be done away with; and

– the application fee will include only one Nice Class of goods or services.  Additional fees will be payable for each additional Class of goods/services that an applicant wishes to include in the application.

The proposed fees themselves will be in line with what applicants are currently used to in Canada, with reductions in some cases, particularly if the application covers only one Class of goods/services.  Having said that, applications that contain more than two Classes of goods/services will face higher fees.  Renewals will similarly be based on the principle of one fee for one Class of goods/services, with additional fees payable for additional Classes of goods/services.  There will also be additional fees payable for applications and renewals that are filed on paper as opposed to online.

Also included in the Proposal are new proposed service standards for issuance of Filing Notices and processing of Renewal requests. The Renewal request processing standard will be different, depending on whether or not the goods/services have previously been grouped into Nice Classes.

CIPO has asked for public input on the Proposal by July 5, 2016 and depending on what complaints might be received by then, an independent advisory panel could be appointed by August 15, 2016.  We will publish further posts regarding the status of the Proposal as matters progress.

Canadian Intellectual Property Office posts proposed amendments to Trade-marks Regulations

The Canadian Intellectual Property Office has today posted proposed amendments to the Trade-marks Regulations at http://bit.ly/1xCOIEj  The consultation period for these proposed amendments is from October 1 to November 30, 2014.   As quoted in CIPO’s press release:

“The proposed regulatory amendments to the Trade-marks Regulations are required to enable Canada to accede to the Singapore Treaty on the Law of Trademarks, the Protocol relating to the Madrid Agreement concerning the International Registration of Marks and the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks.

The new regulations reflect the requirements of the trade-mark treaties and aim to increase legal certainty, streamline and clarify CIPO’s procedures, and align Canada’s trade-mark protection regime with international norms. The proposed amendments also include measures relating to the opposition regime and summary cancellation proceedings.”

 

Official Marks Up For Review

A Private Members Bill was introduced in Canada’s federal parliament yesterday, which, if passed, will result in significant amendments to the official mark provisions in the Trade-marks ActSection 9(1)(n)(iii) of that Act currently sets out a very simple procedure whereby public authorities can attain official mark status for virtually any mark that they have adopted and used.  Once attained, official mark status prevents other parties from adopting, using or registering the same or a very similar mark in association with any wares (goods) or services, unless the public authority consents.  Under the current Act, official mark requests cannot be opposed, there is no specified term or renewal process for such status and there is no process for expunging an official mark if it is no longer in use, unless the public authority voluntarily abandons that status.

Bill C-611 would, if passed, add a definition of public authority to the Act and set out an opposition procedure for third parties to challenge official mark requests.  It would also provide for a 10 term for such status, with the ability to renew for further 10 year periods, each of which could also be opposed.

Time will tell if this Bill gains any traction.  The Member who introduced the Bill is with the minority Liberal party.  This Bill is unrelated to the wide ranging changes to the Act that are set out in Bill C-31.