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.

Implementation of Trademarks Act amendments pushed back to 2018

Since the Canadian Government announced massive changes to the Canadian Trademarks Act (the “Act”) in 2014, practitioners and other stakeholders in the trademark space have been anxiously awaiting its implementation.

Unfortunately we are all going to have to wait a little longer.

It is now expected that the amendments to the Act which have been passed but not yet implemented will not be implemented until sometime in 2018. This pushes out the implementation date again, from an original (and optimistic) implementation date of late 2015, and a revised implementation date of  2017, to 2018.

The implementation of the remaining amendments is expected to coincide with the Canadian Intellectual Property Office’s implementation of the Madrid Protocol, the Nice Agreement and the Singapore Treaty.

We will provide further updates here on the timeline for implementation as more information becomes available.

Nice-ly done: CIPO now accepting voluntary classification of goods and services

Following our post from July 2015, the Canadian Intellectual Property Office (“CIPO”) is now accepting trade-mark applications filed with goods and services classified using the Nice Classification system.  As part of this process, CIPO has also updated the online Canadian trade-marks database, such that “Nice classification” is now a possible search field.  In addition, the Canadian Goods and Services Manual has been updated to allow users to search for specific terms within all 45 Nice classes, and to cut-and-paste or import text containing a list of goods and services for proposed classification by the database.

Once the upcoming changes to the Canadian trade-mark regime come into effect, there will be a requirement to classify the goods and services claimed in an application into Nice classes, and to have that classification approved by an Examiner.  For the time being, however, the classification of goods and services by an Applicant is entirely voluntary.

As another interim point of interest, where the Examiner does not agree with an Applicant’s classification of goods and services for a yet-to-be advertised application, CIPO will nevertheless advertise the application in the Trade-marks Journal if no other requirements and/or objections are outstanding – but without the Nice classification.  Obviously, this will no longer be the case once the changes to Canada’s trade-mark regime come into force.

We will provide an update as soon as it becomes mandatory to classify goods and services in Canadian trade-mark applications.  In the meantime, the ability to search all Nice classes and to view the expanded list of goods and services that are acceptable to CIPO is a welcome update.

Playing Nice: CIPO to accept applications with Nice Classifications this fall

In a milestone step towards harmonization of Canada’s trade-mark regime with most other developed countries, the Canadian Intellectual Property Office (CIPO) announced yesterday that starting this fall, it will accept trade-mark applications filed with goods and services classified using the Nice Classification system.

According to CIPO’s announcement, there will be changes to its website to take advantage of the use of Nice Classification.  In particular, the Goods and Services Manual will be redesigned to facilitate classification of goods and services, and the search capability of the CIPO online database will be updated to allow for searching within specific classes.

Historically, Canada has not used the Nice Classification system when it comes to descriptions of goods and services.  However, as part of the aforementioned harmonization process, Canada will accede to the Nice Agreement.  As we previously reported, CIPO has already started the process of assigning Nice classes to terms in its database.

Happy Canada Day to all of our readers!

C’est vrai: Québec government to continue seeking use of French on store signage

The Canadian media, including the CBC, is reporting that the Québec government intends to continue its fight to require the use of French on signage where trade-marks and business names are otherwise displayed in English.

This is the latest development in a dispute that has gone on for a number of years.  As previously discussed in our post from November 23, 2012, a number of well-known retailers took the Québec government’s French language watchdog, the Office québécois de la langue française (“OQLF”), to Court over a requirement that all retailers must use either a generic French descriptive word or a French language slogan or explanation to reflect what they are selling, if their signage features an English language trade-mark – even if such trade-mark is registered under the Federal Trade-marks Act.

The retailers, which included multinational heavyweights such as WALMART, COSTCO and BEST BUY, were successful both before the Québec Superior Court and, more recently in April 2015, before the Québec Court of Appeal.  The Courts confirmed that the display of English language trade-marks on exterior store signage, without additional French descriptive language, did not violate Québec’s Charter of the French Language (the “Charter”), as retailers in Québec are entitled to post their trade-marks as is – i.e., in English – on the storefronts of their establishments, because of exceptions built into the Charter.

The retailers were therefore granted the declaratory judgment they requested against the OQLF.  The Québec government has until June 26, 2015 to file for leave to appeal to the Supreme Court of Canada, although the CBC reports that the government will not seek such leave.

In the meantime, the Québec government has decided to approach the issue from a matter of legislative change.  Framing the issue as a matter of “politeness” and awareness of the French language, the government will propose legislative amendments in the fall that will “ensure a permanent and visible presence of French” on exterior storefronts.  The government is hoping to have the legislative amendments in place by 2016.

Using as an example the SECOND CUP coffee retailer, which apparently is known as “Les cafés SECOND CUP” in la belle province, Premier Philippe Couillard takes the view that while “everyone knows” they sell coffee, the fact that the company uses “les cafés” in Québec is a recognition on the part of the retailer of the existence of French in Québec.

While there will apparently be no requirement to translate English language trade-marks, there will instead be a need to add descriptive or generic language in French.  Hence, once again, the Québec government is set to challenge the resistance of companies wishing not to use French on their English language signage in that province.

The CBC reports that the Retail Council of Canada has endorsed the move; however, it remains to be seen how companies, including the aforementioned retailers, will react.

Given the history and the nature of the businesses involved, we expect that there are more chapters to come in this story.

Managing the transition: the impact of Canada’s amended Trademarks Act on pending trade-mark applications

The recent amendments to Canada’s Trade-marks Act present many interesting opportunities and challenges to brand owners and their counsel.  This article focuses primarily on the impacts for Canadian trademark applications that are pending at the time the amended Act comes into force—that is, applications that have been filed with the Canadian Intellectual Property Office (CIPO) but that have not yet issued to registration.

As a preliminary comment, there is, unfortunately still no clarity about when the amendments to the Act will come into force. When the amending legislation was passed, CIPO initially indicated that the effective date could be as early as late 2014; subsequent projections were revised to mid-to-late 2015. More recent comments from CIPO suggest that mid-2016 is a more realistic timeframe.  The delay is apparently related to the magnitude of the IT changes required, particularly as connected to implementation of the Madrid  Protocol, to which Canada is becoming a party.

The amendments to the Act are set out in Bill C-31, which reached the last stage in the legislative approval process on June 19, 2014. Those amendments include a number of transitional provisions setting out the legislation’s varied impacts for both registrations and applications, including for applications at different stages of the examination process, as at the date the amended Act comes into force (the Implementation Date). We’ll look briefly at each of these in turn.

Registrations issued prior to the Implementation Date

Under the transition provisions, the amended Act will apply to registrations issued prior to the Implementation Date, with certain exceptions.  Most notably, following the Implementation Date the term of renewal for such registrations will be 10 years, as opposed to the 15 years provided under the current regime. The registration term is not being truncated for registrations issued prior to the Implementation Date; owners will have the benefit of their full 15-year registration terms. Upon renewal, however, only a 10-year term will be available. Of course, prior to the Implementation Date the current regime applies and owners can renew their registrations for 15-year terms.

This shift has led some owners to consider ‘early’ renewal, well in advance of the expiration of their existing registrations, in an effort to obtain the longer 15-year term. However, CIPO has indicated that if the registration anniversary falls after the Implementation Date, any renewal of the registration will be for a period of 10 years, regardless of whether the registered owner submitted the renewal fee and obtained a Certificate of Renewal from CIPO prior to the Implementation Date. CIPO takes this position despite its current practice of issuing renewal certificates at the time fees are paid (and not waiting for the anniversary of registration), with such certificates denoting a 15-year renewal term.  As part of the implementation process, CIPO officers have suggested these certificates may be revised to indicate that if the anniversary of registration falls after the Implementation Date, the registration period will be 10 years, despite other 15-year references on the certificate.

Applications that have been “allowed” prior to the Implementation Date

In the Canadian trademark system, once an application is “allowed”, it means that the application has been approved by a CIPO Examiner for advertisement in the Trade-marks Journal, it has been advertised in the Journal, that no one has filed a Statement of Opposition to that application (or if an Opposition has been commenced it Read more

Combating Counterfeit Products Act Receives Royal Assent

On December 9,2014 Royal Assent was given to Bill C-8, the Combating Counterfeit Products Act. The intention of Bill C-8 is to give the government and holders of trade-marks and copyrights new mechanisms for enforcement, along with substantial remedies, in order to combat counterfeit and black-market goods. Before the introduction of Bill C-8, Canada had been criticized for not having meaningful policies to combat the global problem of counterfeit trafficking which flowed across Canadian borders.

Specific enforcement mechanisms contained in Bill C-8 include:

  • new civil prohibitions under the Trade-marks Act and Copyright Act giving rights holders the ability to start civil actions against those who infringe their trade-mark or copyright by possessing, manufacturing, distributing or trafficking goods for commercial purposes;
  • new criminal offences under the Trade-marks Act and Copyright Act for possessing, manufacturing, distributing or trafficking counterfeit goods for commercial purposes;
  • new provisions giving customs officials ex officio power to independently seize and detain suspected counterfeit goods. This includes the ability for copyright and trade-mark owners to file a “request for assistance” with customs officials to increase the information available to customs regarding possible counterfeit goods.

For a deeper review of the changes contained in Bill C-8, please see our previous post written in March 2013 when the bill was first introduced as Bill C-56.

While the Bill has obtained Royal Assent, it is only partially in force. Changes currently in force include:

  • the introduction of the new criminal provisions;
  • the deletion of section 7(e) of the Trade-marks Act; and
  • amendments to Section 20 of the Trade-marks Act dealing with infringement.

The majority of the amendments to the Trade-marks Act and Copyright Act, including the provisions relating to importation and exportation and ex officio powers of custom officials, will be brought into force by regulation. It is not clear when this will occur. However, it is thought that implementation will be in step with Bill C-31, the Budget Implementation Act, which is also waiting to come into force sometime in 2015 early 2016 and contains further significant amendments to the Trade-marks Act.

We will keep you updated as coming into force dates are announced and these legal tools become available to trade-mark and copyright owners.