Canadian Trademark Blog

Maintained by Clark Wilson LLP

Battle Royal(e): Use of Trademarks Beyond Sales Representative Agreement Constitutes Infringement and Passing Off; SCC Dismisses Appeal

By In Branding, Case Law, Domain Name Disputes, Domain Names, Litigation, Protection & Enforcement

On May 6, 2021, the Supreme Court of Canada (SCC) dismissed an application for leave to appeal in the case of Dong, et al. v. Royal Pacific Real Estate Group Ltd., et al., 2020 BCCA 323 (39550). The lower courts in the Province of British Columbia, both at the trial level and on appeal, had held that the appellant’s use of certain licensed trademarks owned by the respondent, outside of the precise terms of the parties’ Sales Representative Agreement, constituted infringement and passing off; as a result of the SCC’s dismissal, the BC Court of Appeal decision now stands.

This case serves as a good reminder for licensees to carefully review trademark license provisions in sales representative, product distribution and similar agreements for their specific terms relating to permitted use of relevant trademarks – and to consider the risks of using  such trademarks outside the  activities specifically permitted in such agreements.

The respondent in this case is a well-known, Vancouver-based real estate company “Royal Pacific Group” (consisting of Royal Pacific Real Estate Group Ltd. and Royal Pacific Realty (Kingsway) Ltd.), owner of the registered trademark ROYAL PACIFIC Logo and the unregistered trademarks ROYAL PACIFIC and ROYAL PACIFIC REALTY (collectively, the “Trademarks”). In 2012, Royal Pacific Group entered into a Sales Representative Agreement (the “SRA”) with the appellant, Mr. Steven Dong (the “Mr. Dong”), pursuant to which Mr. Dong was licensed to act as a real estate representative for Royal Pacific Group.

However, in 2013, Royal Pacific Group discovered that Mr. Dong had, without the knowledge or consent of Royal Pacific Group, launched a separate referral platform for real estate professionals under the name “Bliip Box”. The website for this service used the domain name royalpacific.co and displayed the Trademarks. Mr. Dong was also sending emails to third parties containing the Trademarks and the following language: “Royal Pacific Realty is one of BC’s largest brokerages and now we are looking to endorse local businesses on our Bliip Box.”

Shortly after this discovery, Royal Pacific Group sent a cease and desist letter to Mr. Dong, demanding that he take down the website and cease using the domain name royalpacific.co.  When there was no immediate compliance, Royal Pacific Group also sent notice of termination of the SRA. However, Mr. Dong continued to operate the website at royalpacific.co as well as a related Facebook page (royalreferrals) that also displayed the Trademarks.

The BC Supreme Court (2018 BCSC 1272) held that Mr. Dong was liable for infringement and passing off, as the SRA did not grant Mr. Dong rights to use the Trademarks in connection with his Bliip Box business, which was outside the scope of his activities as a sales representative. Moreover, the judge rejected Mr. Dong’s arguments that Royal Pacific Group had provided consent or acquiesced to such use. According to the trial judge (at para. 100):

Mr. Dong has failed to appreciate the difference between his using the Trade-mark in connection with his duties as a sales representative of [Royal Pacific Group] and using it in a manner that represents that there is an association between the Royal Pacific Group and the Bliip Box technology or other businesses that Mr. Dong was pursuing.

The trial judge further noted (at para. 120-120) that, in the context of the Vancouver real estate industry, in which Royal Pacific Group has a well-recognized name and reputation:

[U]se of the domain name royalpacific.co for the website together with numerous references to aspects of [Royal Pacific Group’s] business and the fact that the webpage was offering real estate related products would have caused confusion in the mind of an “ordinary hurried consumer”, who could have confused the owner of the website with the Royal Pacific Group.

The BC Court of Appeal upheld the lower court’s decision, further dismissing a counterclaim brought by Mr. Dong that Royal Pacific Group had wrongfully denied him the right to use the Trademarks and had terminated the SRA for an unlawful purpose.  By dismissing Mr. Dong’s appeal, the SCC has tacitly agreed with the decision of the BC Court of Appeal.  The lesson arising out of this decision is that parties to agreements such as sales representative agreements, which contain provisions relating to and restricting use of trademarks, need to carefully consider whether any proposed activities will be offside the license provisions relating to such trademarks.

CIPO targets Canadian trademark prosecution backlog

By In CIPO, Foreign Protection, Legislation, Registration, Trademark Practice

The Canadian Intellectual Property Office (CIPO) published two new Practice Notices on May 3, 2021, aimed at tackling the impact of its significant and growing backlog of Canadian trademark applications filed under the national, as opposed to the Madrid, system.  Following Canada’s June 2019 accession to the Madrid Protocol system for filing trademark applications in multiple jurisdictions at the same time, applicants who file applications in Canada using the national, non-Madrid system have experienced increasingly lengthy delays in the initial and subsequent prosecution of their applications.

The average time, from the date of filing an application under the non-Madrid system to first examination, is currently in the 28 – 30 month range – and there are fears that delay may increase over the next few years.  This stands in stark contrast to applications designating Canada pursuant to the Madrid system, which under the terms of Canada’s accession to Madrid, must be examined within 18 months of filing.  The reasons behind this significant difference are varied and complex.  While it certainly wasn’t CIPO’s intention or desire, a two tiered system has arisen, with applicants who make direct national filings in Canada being significantly disadvantaged in contrast to those applicants who are able to utilize the Madrid system.

To its credit, CIPO has recognized the untenable situation that has arisen.  The publication of these two Practice Notices is an attempt by CIPO to correct course.

Expedited Examination Requests – The first Practice Notice provides that CIPO will begin accepting requests for expedited examination of trademark applications.  The reasons justifying the grant of such a request include:

  • the applicant requiring registration of its trademark in order to protect its intellectual property rights from being severely disadvantaged on online marketplaces;
  • a pending or anticipated court action in Canada with respect to the trademark; and
  • the applicant being in the midst of combatting counterfeit products bearing the trademark at the Canadian border.

It remains to be seen how much of CIPO’s already limited examination resources will be diverted away from prosecution of applications to responding to requests for expedited examination.  It should be noted that this new provision for expedited examination requests is in addition to the ability to request expedited examination of applications for marks that include goods or services related to COVID-19.

Measures To Speed Up Examination – The second Practice Notice sets out three specific measures that CIPO has adopted to speed up processing of applications.  First, Examiners will now provide fewer examples of goods and services descriptions that would be considered acceptable when issuing an objection to such descriptions.  The second is that priority will be given to applications that include statements of goods/services that are selected from a pre-approved list.  The third measure will see Examiners being required to maintain a particular submission or argument only once.  If an applicant’s response to an initial Examiner’s Report doesn’t adequately address all of the Examiner’s objections, a final refusal will be issued rather than another Examiner’s Report maintaining the initial objection.  The impetus is now on applicants and their counsel to advance all arguments in response to an Examiner’s Report, rather than piecemeal.

The efficacy of the above measures will take time to play out and the proof will be in the proverbial pudding.  Watch this space for updates on CIPO’s progress in reducing its trademark prosecution backlogs.

Wheat Kings and Alleged Wrongdoings: The Tragically Hip Sues Mill Street over “100th Meridian” Beer

By In Famous Marks, Litigation, Protection & Enforcement

On February 9, 2021, THE Incorporated – better known as “The Tragically Hip” or “The Hip” – filed a Statement of Claim (the “Claim”) in Canada’s Federal Court, alleging trademark infringement, copyright infringement, passing off, and other causes of action against Mill Street Brewing. The Claim has been previously reported in Canadian media.

Read more

Bricks and Mortar or Online Order? Federal Court of Appeal decides what Constitutes Trademark “Use” in Association with Hotel Services

By In Case Law, CIPO, Trademark Practice

Over the last few decades, Courts in Canada have grappled with whether “hotel services” and “motel services” can be performed in Canada in the absence of physical hotel premises in the country. In its decision in Hilton Worldwide Holding LLP v. Miller Thomson LLP (2018 FC 89) (“Hilton Worldwide FC”),  the Federal Court of Canada (the “Court”) found that, in some circumstances, such services can indeed be performed in Canada, even in the absence of a physical hotel in Canada. On appeal to the Federal Court of Appeal (the “Court of Appeal”), in  Miller Thomson v Hilton Worldwide Holding LLP, (2020 FCA 134) (“Hilton Worldwide FCA”), the Court of Appeal agreed and affirmed most of the earlier findings of the Court. Read more

CIPO Issues Blanket Extension to Trademark Deadlines (Again): Until August 31, 2020

By In CIPO, Legislation, Trademark Practice

After previously announcing what was supposed to have been the final (for now) blanket extension of time, the Canadian Intellectual Property Office has made yet one further automatic extension, effectively until August 31, 2020. This is to account both for continuing COVID-19 disruptions and certain critical maintenance to CIPO’s systems, which was to occur at the end of the previous (final) automatic extension and would have meant CIPO’s online and fax services would have been unavailable for a period.

These extensions now effectively cover deadlines falling between March 16, 2020 and August 30, 2020. No further automatic extensions are anticipated in the short term, though should the evolving situation with the pandemic warrant, we may see these again. As we noted when CIPO made its last announcement, further extensions of time may still be available on a case-by-case basis, due to ‘exceptional’ circumstances that are ‘beyond the control of the person concerned’ (in addition to any standard extensions of time that may be available).

As a best practice, we recommend still meeting the original deadlines for all Canadian trademark matters, where possible. Clark Wilson LLP’s trademark group remains accessible and available to assist, and is working to meet such deadlines where we have timely instructions.

CIPO’s latest announcement on these automatic extensions, first made March 17, 2020 (and last updated August 19, 2020), can be found here.

CIPO Issues Notice of Final Blanket Extension (for now)

By In CIPO, Legislation, Trademark Practice

The Canadian Intellectual Property Office has just published notice of its decision to further extend the “designated days” period on account of continuing COVID-19 disruptions. Since the onset of the pandemic in Canada in early March, CIPO has issued nine such notices, effectively creating a “blanket extension” of all CIPO deadlines arising since then.  This latest extension will expire on August 21, 2020, which means all deadlines falling between March 16 and August 23 will now come due on August 24—assuming, of course, they haven’t already been addressed.

In a departure from its prior notices, CIPO has indicated that this is the last blanket extension it intends to grant for the time being. However, CIPO’s standard extension practice notice does provide for extensions of time in ‘exceptional’ circumstances that are ‘beyond the control of the person concerned’, so it may be possible for applicants to obtain further extensions on individual matters. Some explanation of unique hardship, however, will likely be necessary to justify the extension request; pointing merely to the existence of the pandemic will likely not suffice. Careful, case-by-case consideration should be given to the deadline faced to ensure the appropriate response.

CIPO Again Extends Trademark Deadlines Due to COVID-19: Until August 10, 2020

By In CIPO, Legislation, Trademark Practice

Now for the eight time, the Canadian Intellectual Property Office has again extended its earlier automatic extensions on account of continuing COVID-19 disruptions, until at least August 10, 2020 (the previous and seventh extension discussed here). These extensions now effectively cover deadlines falling between March 16, 2020 and August 9, 2020. Yet again, CIPO has not indicated this is the last automatic extension, and therefore further extensions are likely though not certain.

As a best practice, we recommend still meeting the original deadlines for all Canadian trademark matters, where possible. Clark Wilson LLP’s trademark group remains accessible and available to assist, and is working to meet such deadlines where we have timely instructions.

CIPO’s latest announcement on these automatic extensions, first made March 17, 2020 (and last updated July 15, 2020), can be found here.