Case Law

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

By In Branding, Case Law, Famous Marks, Registration

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

By In Case Law, Legislation, Litigation

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 Trade–marks Act. These were passed back in 2014 and it is now anticipated that these will come into force in 2019 (maybe).

Trader Joe’s trying to make Pirate Joe’s “walk the plank” in U.S. trade-mark case

By In Branding, Case Law, Foreign Protection, Litigation, Protection & Enforcement

In the ongoing dispute between Michael Hallatt, a Vancouver businessman, and U.S. based retailer Trader Joe’s, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) has overruled the 2013 decision of the U.S. District Court for the Western District of Washington (the “District Court”) not to hear Trader Joe’s claim against Hallatt for, among other things, trade-mark infringement, dilution, unfair competition and false advertising.

The dispute arose out of Hallatt’s purchase of products from Trader Joe’s stores in the U.S., particularly in the state of Washington, for resale in Canada (there are no Trader Joe’s stores in Canada).  Hallatt has and continues to mark up and re-sell Trader Joe’s products at his store in Vancouver, named Pirate Joe’s.

The goods are not counterfeit, and the source of the products being sold is not in dispute – the packaging on the products bears Trader Joe’s trade-marks, and Hallatt states on his website that he sells Trader Joe’s products.  Hallatt expressly states on his website that he is not an authorized or affiliated distributor or reseller of Trader Joe’s.  Nevertheless, Trader Joe’s took the view that Hallatt’s conduct violated its U.S. trade-mark rights under the U.S. Lanham Act, and in 2013 it brought a claim against Hallatt in the District Court.

Taking the view that any unlawful conduct by Hallatt would have taken place in Canada rather than the U.S., and that Hallatt’s activities did not cause a cognizable injury to Trader Joe’s in the U.S. or an effect on American foreign commerce, the District Court judge decided in October 2013 that the Court had no subject matter jurisdiction to hear Trader Joe’s claims.  Trader Joe’s appealed that decision to the Ninth Circuit.

The Ninth Circuit disagreed with the District Court judge, opining instead that Hallatt’s activities could affect the goodwill and value of the Trader Joe’s brand in the U.S., and accordingly, its U.S. trade-mark rights.  The Ninth Circuit concluded that the Lanham Act does apply to Hallatt’s allegedly infringing conduct, and in the result, remanded the case back to the District Court for further proceedings.

We will be keeping an eye on this trade-mark case that is likely of particular interest to cross-border shoppers.

In no mood for charity: Federal Court confirms that charities are not necessarily public authorities

By In Branding, Case Law, Protection & Enforcement, Registration

The Federal Court of Canada recently confirmed in Starbucks (HK) Limited v. Trinity Television Inc., 2016 FC 790 (the “Decision”) that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority for the purpose of obtaining an official mark.

(For a discussion about official marks and their interplay with regular trade-marks, please see this previous post on our blog.)

The facts leading up to the Decision are straightforward: in 2013, Starbucks (HK) Limited (“Starbucks”) filed an application to register the trade-mark NOW TV & Design.  During prosecution, an official mark for NOWTV, owned by Trinity Television Inc. (“Trinity”), was cited against the Starbucks application.  In response, Starbucks commenced a judicial review application against the Registrar’s decision – made in June 2001 – to give public notice of the adoption and use of NOWTV as an official mark.

In the result, the Court quashed the Registrar’s decision to grant NOWTV as an official mark to Trinity, clearing the path for Starbucks to move ahead with its application.  Of particular interest were the following points made by the Court:

– the law is now clear that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority; and

– it would be patently unfair and completely contrary to the interest of justice if an entity that is not a public authority was permitted to enjoy the exceptional rights conferred on the holder of an official mark.

As a potential point of distinction when it comes to the precedential value of this case, it is noteworthy that Trinity did not participate in the judicial review application; indeed, the Court was advised by counsel for Starbucks that a former president and director of Trinity had advised that Trinity had sold its business to Rogers in 2005.  That being said, given how easily the Court arrived at the conclusion that charitable status does not necessarily equate to being a public authority, it seems unlikely that Trinity’s participation would have changed the result.

From a practical perspective, the Decision serves as a timely reminder to trade-mark applicants that, while robust, official marks can nevertheless be challenged and removed under the right circumstances.  Where an official mark has been cited during prosecution of a regular trade-mark application, it is important to carefully scrutinize the official mark, in order to ascertain any potential vulnerabilities that could lead to its removal.

On the other hand, the Decision is also a reminder to charities holding official marks that those official marks may potentially be at risk, if challenged via judicial review.  To mitigate that risk, those charities ought to consider filing regular applications to register their trade-marks.

Canada’s Federal Court of Appeal Provides Welcome Guidance on Geographically Descriptive Trademarks

By In Case Law, Registration

Canada’s Federal Court of Appeal (the “Court of Appeal”) has recently had the opportunity to clarify the test for  registrability of geographically descriptive trademarks in two separate decisions. The most recent of these is the decision in MC Imports Inc. v. AFOD Ltd., 2016 FCA 60.  In the proceedings underlying the appeal, MC Imports Inc. (“MC Imports”) brought an action for infringement against AFOD Ltd. (“AFOD”) on the basis that AFOD’s use of the words “Lingayen Style”, which appeared on AFOD’s imported Philippines food products in a relatively small font, infringed MC Imports’ registered trade-mark LINGAYEN. MC Imports’ registration issued in 2003 and covered Filipino food products, including fish sauce and fish paste. Invoking the old adage that the best defence is a good offence, AFOD counterclaimed and sought to invalidate MC Imports’ LINGAYEN registration on the basis that it was either clearly descriptive or deceptively misdescriptive of the place of origin of the claimed goods and therefore not registrable under the Trade-marks Act, and also on the basis that it was not distinctive of MC Imports as the source of the claimed goods.

The lower court (the “Federal Court”) found that LINGAYEN was the name of a geographical location in the Philippines, known for bagoong products; that the LINGAYEN brand goods of MC Imports originated from Lingayen; and that the ordinary consumers of those products were Canadians of Filipino or South East Asian origin.  The Federal Court ruled in AFOD’s favour and declared the registration for LINGAYEN invalid on the basis that it is clearly descriptive of the place of origin of the goods.  However, the Federal Court declined to settle the issue of whether the perspective of the “ordinary consumer” is relevant to a finding that a trade-mark is clearly descriptive of place of origin on the basis that, in this case, the end result would have been the same. On the issue of distinctiveness, the Federal Court also found in AFOD’s favour and held that the mark had not acquired sufficient distinctiveness in Canada through long term advertising and use by MC Imports. Accordingly, the Federal Court ordered that the LINGAYEN registration be struck from the Register.

On appeal, the key issues reviewed by the Court of Appeal were the appropriate legal test for assessing a finding of clear descriptiveness of a place of origin and the definition of the relevant “ordinary consumer”.  In dismissing the appeal of MC Imports and upholding the Federal Court’s decision, the Court of Appeal found that the perspective of the ordinary Canadian consumer is not always relevant for a finding that a mark is clearly descriptive of its place of origin. The Court of Appeal went on to clarify the legal test to be followed when assessing whether a trade-mark is clearly descriptive of place of origin, setting out a three-step assessment:

(1) whether the trade-mark is the name of a geographic place. The Court of Appeal stated that if the primary meaning of the trade-mark is as a geographic place, it was not relevant whether the place was known to Canadian consumers.  If there is more than one meaning (other than geographic) attached to the trade-mark, then the perception of the relevant “ordinary consumer” comes into play in determining the primary meaning of the trade-mark;

(2) whether the goods or services associated with the trade-mark originate from that geographic place. If the goods/services do not originate from that geographic place, the analysis switches to whether the trade-mark is deceptively misdescriptive; and

(3) an assessment of the trade-mark owner’s claims of use, if any. The Court of Appeal concluded that since registration of a descriptive trade-mark can be obtained under Section12(2) of the Trade-marks Act if the trade-mark had become distinctive at the time of filing the application for registration, the perception of the relevant “ordinary consumer” becomes significant at this stage. The Court of Appeal noted that MC Imports’ evidence of use in Canada, although spanning a long period of time (since 1975), was insufficient to support a finding of acquired distinctiveness.

The Court of Appeal agreed with the Federal Court that the ordinary consumer whose perspective should be considered is not the general public in Canada, but the person who would ordinarily buy the products or services associated with the trade-mark. In this case, the actual consumer would have been Canadians of Filipino or South East Asian descent.

The Court of Appeal found that MC Imports’ registration for LINGAYEN was invalid and not distinctive, and dismissed the appeal.  In doing so, the Court of Appeal pointed out that the name of a geographic place “should remain open to all producers of goods and services to describe the origin of what they are selling, even if the ordinary consumer might not be previously familiar with that place”.

This decision comes close on the heels of Lum v. Dr. Coby Cragg Inc., 2015 FCA 293, another Court of Appeal decision on the issue of clear descriptiveness of place of origin in which the registration for OCEAN PARK – registered in association with dental services performed in the Ocean Park neighborhood in Surrey, BC – was similarly invalidated.  While the OCEAN PARK decision was not referred to in the LINGAYEN decision, the analysis and conclusions were similar and serve to consolidate the Court of Appeal’s approach in considering registrability of trade-marks that refer to a geographic place which is the place of origin of the goods or services associated with the trade-mark.

 

 

 

Save the Date: the Importance of the Date of First Use in Canadian Trade-mark Applications (for now)

By In Case Law, Registration, Trademark Oppositions

A recent decision of the Canadian Trade-marks Opposition Board, Constellation Brands Québec Inc. c Sociedad Vinícola Miguel Torres, S.A., 2016 TMOB 4 (“Miguel Torres”), serves as a reminder of the importance of stating an accurate and supportable date of first use, when claiming use as a basis for registration in Canada.

In Miguel Torres, the Applicant filed an application to register the trade-mark HEMISFERIO (the “Mark”) for “wines”, claiming use in Canada since at least as early as October 28, 2011.  As one of its grounds of opposition, the Opponent alleged that the Applicant had not used the Mark in Canada as of the claimed date of first use.

As support for its claimed date of first use, the key piece of evidence relied upon by the Applicant was an invoice dated October 28, 2011, which purportedly corroborated the date of first use asserted by the Applicant’s affiant.  However, the Opposition Board instead agreed with the Opponent’s submission that while the invoice was dated October 28, 2011 and goods were shipped to Canada from Chile on that date, the approximate date of arrival in Canada of those goods was not until January 26, 2012.

Accordingly, because transfer of the property in or possession of the wine bearing the Mark from the Applicant to its Canadian distributors did not take place in Canada until after October 28, 2011, there was no “use” of the Mark in Canada, within the meaning of Section 4(1) of the Trade-marks Act (the “Act”), as of the date of first use claimed in the application.  The application was therefore refused.

While we understand that there will no longer be a need to claim a date of first use in trade-mark applications once the Canadian trade-mark regime changes (likely in 2018), for the time being, trade-mark applicants should strive to claim a date of first use that is accurate and, where possible, supported by documentary evidence.

Location Matters: The Perils of Geographic Names as Trade-marks

By In Branding, Case Law, Protection & Enforcement, Trademark Oppositions

When choosing a trade or business name it may seem like a good idea to incorporate the location of your business into the name. There are benefits: it is helpful for marketing, it gives your audience an idea of where your business is and who your market is, it can help establish your business in a neighborhood, and it can help you build a brand based on community and locality.

However, using the location of your business in your trade or business name can cause difficulties when it comes to registering that name as a trade-mark. Under section 12(1) (b) of the Trade-marks Act, a trade-mark is not registerable if it is clearly descriptive or deceptively misdescriptive of the place of origin of the goods or services with which the trade-mark is used, unless that trade-mark has acquired distinctiveness through its use.

The Federal Court of Appeal recently reviewed section 12(1)(b), and considered the issue of whether a service provider can register, as a trade-mark, the name of a geographic location, purely in relation to its services.

In 2012, a dental practice owned by Dr. Cragg applied to register the trade-mark OCEAN PARK (the “Mark”) in association with dental services based on use since as early as 2000. The Mark was registered for use in association with “dental clinics” in 2013.

Prior to Dr. Cragg applying to register the Mark, another dentist, Dr. Lum purchased an existing dental practice a block away from Dr. Cragg’s and changed the name of the practice to “Ocean Park Dental Group”. Then, after moving the practice, Dr. Lum changed the name to “Ocean Park Village Dental”, and advertised and displayed signage using the trade-name “Village Dental in Ocean Park”.

In early 2014 Dr. Cragg brought an action against Dr. Lum for infringement of the Mark. In response, Dr. Lum brought an action seeking to invalidate the Mark on the grounds that it was not registerable under section 12(1)(b) of the Trade-marks Act.

In the court below, the trial judge held that in order to prove that a trade-mark is not registerable under section 12(1)(b), a plaintiff has to show (1) that a trade-mark refers to a geographic location; and (2) that the location was indigenous to the services in question. Under this analysis, in order for the Mark to be non-registerable, a reasonable person would have equate the geographic location “Ocean Park” with dental services.  Based on the evidence, the trial judge found that this was not the case, and the court dismissed the action to invalidate the Mark.

However, the Court of Appeal held that this was not the correct analysis.  Instead, the analysis under section 12(1)(b) is to focus on:

–          the type of services involved;

–          the average consumers to whom the services are offered; and

–          the character of the geographic location.

Under this analysis, if the trade-mark is the name of the geographic location where the services or goods are provided, then the trade-mark is descriptive within the meaning of 12(1)(b) and non-registerable because the trade-mark is descriptive of the origin of the services or goods.

The Court of Appeal reminded us that the reason why trade-marks that are descriptive of geographic locations are not registerable or protectable is to prevent a single service provider from monopolizing the name of a geographic location, so as to prevent other service providers from using that name to describe their own services.

On the issue of acquired distinctiveness, the problem identified by the Court of Appeal was that while geographic locations can be used in business names and for other purposes, they often do not meet the key requirement of a registerable trade-mark: distinctiveness. In this case, the Mark as registered, OCEAN PARK, was never used by itself in association with dental services. It was always used in the context of the name Ocean Park Dental. In this case, upon hearing “Ocean Park”, consumers would not think about Dr. Cragg’s dental services; as such, it could not be said that the Mark had acquired distinctiveness. Therefore, the Mark was declared invalid and struck from the Trade-mark Register.

This case warns businesses to be careful when choosing geographic locations as business or trade names which they may wish to register as a trade-mark. The use of a geographic location within the context of a broader trade-mark may be permissible. However, it is unlikely that a business can expect to register a trade-mark consisting purely of a geographic location, unless that business and the trade-mark have acquired significant distinctiveness through lengthy and extensive advertising and use.