Trademark Expungement Despite Plans for Future Use

In Scott Paper Limited v. Smart & Biggar, the Federal Court of Appeal overturned a string of case law that deviated from the wording of section 45. The appellate court agreed with the trial judge that the Registrar erred in deciding not to expunge the trade-mark “VANITY” despite 13 years of non-use. We previously discussed different aspects of this “use-it or lose-it” provision.

The issue in this case was whether plans to use the trademark in the immediate future saved an unused trademark from expungement. In determining that future use amounted to special circumstances, the Registrar purported to rely on the three criteria laid down in Registrar of Trade-marks v. Harris Knitting Mills, namely the length of time during which the trademark has not been in use, whether reasons for the absence were due to circumstances beyond the control of the owner, and a serious intention to shortly resume use.

However, the Federal Court of Appeal found that the Registrar was “in fact, relying upon the gloss put upon Harris Knitting Mills in … Lander Co v. Alex E MacRae and Co.. Later in the Scott Paper judgment, the Federal Court of Appeal explained that “[i]t is important to distinguish between explaining an absence of use and excusing an absence of use”. Thus, special circumstances must explain the absence of use and the three criteria are used to determine if the absence is excused. Read more

Official Marks: Federal Court Confirms Clear Evidence of Use Required

In a recent decision, See You In – Canadian Athletes Fund Corporation v. Canadian Olympic Committee, the Federal Court of Appeal agreed with the decision of the application judge which we reported on last May.

The Court of Appeal also concluded that the Canadian Olympic Committee (“the COC”) had not proved use of its official marks, “See You in Torino”, “See You in Beijing” and “See You in Vancouver”, because there was no clear evidence of a public display of the marks at issue and the COC’s evidence on this point was equivocal at best.

The appellant, See You In – Canadian Athletes Fund (“the SYI Fund”) argued, even though it was successful before the application judge, that the judge should not have dismissed its argument that the COC was a licensee of the International Olympic Committee and could therefore not register the official marks. The Court of Appeal declined to consider this argument noting that where an appellant obtains the relief sought, the appellant is not normally allowed to appeal the judge’s reasons. A decision on this point would have been useful to the SYI Fund, and presumably others seeking to challenge official marks registered by the COC.

Opposition and Expungement Proceeding Info Added to CIPO’s Online Database

Following up on an announcement we told you about a few weeks ago, the Canadian Intellectual Property Office has now added information respecting pending trademark opposition and Section 45 (summary expungement) proceedings to its online database.

Working with the information over the last several days, our experience has been that it is a little out of date, relative to the actual status of proceedings. Nonetheless, CIPO’s decision to enhance public access to this information will be beneficial to trademark owners, brand advisors, and their counsel.

Trademark Statistics: The Year in Review

The Canadian Intellectual Property Office released its 2006-7 Annual Report earlier today. The report contains some interesting information:

  • over 45,000 applications were filed in the twelve month period ending March 31, 2007, reflecting a 4% increase over the previous year
  • Canada remains the most common country of applicant origin, with nearly 20,000 applications filed; the US placed second, with over 14,700 applications, while applicants from Germany, France and the United Kingdom rounded out the top 5
  • 90% of Canadian trade-mark applications were filed online; prior to 2004, only 20% of applicants were using the e-filing system
  • despite the addition of several new Examiners, turn-around times remained the same as in the previous year, and an examination backlog of approximately 20,000 files remains to be addressed
  • the number of Statements of Oppositions filed continued to decline, with just over 1100 filings; however, the number of Section 45 (cancellation) notices issued increased slightly over the previous year.

The full report is available here.

Canadian Intellectual Property Office News

Good news from the Canadian Intellectual Property Office: in an announcement posted to their website yesterday, CIPO advised that it will soon be making information concerning the status of both Section 45 proceedings and Opposition proceedings available online.

Currently, CIPO’s database provides limited information to the public respecting Trademark Opposition proceedings, setting out only the names of the Opponent and their counsel, and the date the Opposition was filed. The situation for Section 45 (or summary cancellation) proceedings is worse for those, the database indicates only the name of the Section 45 Requestor and their counsel, and does not even indicate when the Section 45 request was issued. In neither case is information about the current stage of the proceeding available through the database; for a member of the public to get such information they would have to perform a manual review of the physical file located at CIPO’s office in Gatineau, Quebec.

The addition of further information relating to these proceedings will permit interested third parties to make better informed decisions concerning the mark(s) at issue, allowing them to consider the impact such proceedings may have on their own interests. While CIPO has a long way to go before matching the standards set by the USPTO Trademark Office and its excellent Trademark Document Retrieval system, this step is an important one and CIPO should be applauded.

Canadian Trademark Registrations Expunged

Following up on a case we first told you about in March 2007, Canada’s Federal Court of Appeal recently delivered its judgement in the case of Cheap Tickets and Travel Inc. v. Inc.

Disputes between these parties have been underway for some time. In 2002, Cheap Tickets obtained Canadian trademark registrations for CHEAP TICKETS and CHEAP TICKETS AND TRAVEL & DESIGN for use in association with a range of travel agency and other ticketing-related services, claiming use in Canada dating back to July 1997. Emall obtained the domain name in 1999.

In 2003, Cheap Tickets tried to use the CDRP to stop Emall from using the domain. This effort failed, so in late 2004, Cheap Tickets took to the courts, commencing a trademark infringement action against Emall in the Supreme Court of British Columbia.

Likely tired of Cheap Tickets’ attacks, Emall commenced an action in the Federal Court of Canada to expunge Cheap Tickets’ trade-marks. And the Federal Court obliged: concluding that the marks were clearly descriptive of the character or quality of the services in association with which they were registered, the Court expunged Cheap Tickets’ trademarks.

On appeal to the FCA, Cheap Tickets made a variety of arguments: that their marks were not “clearly descriptive” but rather “merely suggestive;” that their marks had acquired distinctiveness at the time applications to register them were filed; that the Design mark contained unique and distinct visual elements, entitling it to remain on the Register.

Again, all of Cheap Tickets arguments failed. The Federal Court concluded that no errors of fact or law could be found in the Trial Division’s judgement; accordingly, Cheap Tickets’ appeal was dismissed.

Beyond serving as another example of the maxim “turnabout is fair play”, there are a couple of important lessons for both trademark owners and advisors arising from this case. For trademark owners, this case is a prime example of the perils of selecting and using trademarks that are strongly suggestive of the products and services offered in association therewith. Such marks, even if secured by a registration, typically enjoy a narrow scope of protection, are highly susceptible to attack, and should be avoided. In addition, if you have already registered trade-marks that “push the limits” of descriptiveness, consider if it is possible to file supporting applications for those marks on the basis of acquired distinctiveness. Had Cheap Tickets done so, or if they had been able to establish acquired distinctiveness at the time of their original filings, they likely would not have lost their registrations.

For advisors: remember that once judgment is rendered and an order made by a court, the Registrar of Trademarks will not tarry in acting upon it, unless a stay is in place. Though it filed an appeal, Cheap Tickets did not seek a stay of the trial judge’s expungement order; accordingly, the Registrar struck Cheap Tickets’ marks from the Registry before the order’s appeal period had even expired. Had a stay been obtained, Cheap Tickets’ registrations would have remained on the Registry through the appeal period, and could have been used to assert claims against third parties while it awaited its hearing before the Federal Court of Appeal.

Judging A Wine By Its Label: A Trademark Issue

In Sociedad Agricola Santa Teresa Ltda. et al. v. Vina Leyda Limitada, the Federal Court considered what constitutes a place of origin for wine such that the place name cannot be registered as a trademark. At issue was section 12(1)(b) of the Canadian Trade-marks Act which states that a trademark is not registrable if it is “clearly descriptive or deceptively misdescriptive” of the “place of origin” of the wares or services.

Vina Leyda Limitada applied in 2001 to register LEYDA as a trademark and on the evidence before the Registrar in an opposition to such application, the Registrar allowed the application. The Sociedad appealed the Registrar’s decision under section 56 of the Act.

The Court allowed the appeal and held that LEYDA could not be registered. According to Harrington J., “Once the Registrar found as a fact, as he did, that Leyda is a wine producing region in Chile, as a matter of law he was required to conclude on the record before him that the opposition was well founded.” Of concern was the fact that if the registration stood the applicants, wine producers from the Leyda Valley, would not be able to refer to that fact on their labels or in their promotional literature and might be limited to calling their wine Chilean red or white. The judge also noted that “producers from a specific region want to promulgate their area in the belief that their wine is superior to the wine of that country as a whole”. A general appellation could lead a consumer to believe a wine is “plonk”.

In reaching his decision Harrington J. relied on a 1970 Supreme Court of Canada decision, Home Juice Co. v. Orange Maison Ltee, for the proposition that “a shrewd trader should not be permitted to monopolize the name of a foreign wine district in Canada by registering it as a trademark”. He also distinguished Prosciutto di Parma v. Maple Leaf Meats Inc. in which the Federal Court of Appeal refused to expunge the trademark PARMA since it had been used in Canada for 39 years and registered for 26. LEYDA had not been in use in association with wine in Canada at the time the application was filed.

On an appeal under section 56 the parties may introduce evidence that was not before the Registrar and the Sociedad put forward that “Vallee de Leyda” was an appellation of origin in Chile. This evidence was taken into account, but Harrington J. specifically noted that whether a name signifies a geographical area under section 12 of the Act and whether that area produces wine are not contingent upon a governement decree.

Finally, it is worth noting that Harrington J. may very well know something about wine. He not only references the origin of the word “plonk” (“There are different legends as to the origin of the word ‘plonk’. The one I prefer is that a Monsieur Plonque was the purveyor of cheap wine to British Troops in World War I.”), but he also begins his reasons stating, “One may not be able to judge a book by its cover, but one should know something about a bottle of wine from its label; the more the better.”