A recent decision of the Federal Court helps to clarify what needs to be shown to establish trademark use in an online context.
The Facts
The registrant owned a Canadian trademark registration of the trademark LIVE, (the Mark), for use in association with three categories of services: advertising and marketing services for others, entertainment services and hotel services.
The registrant is a company based in Baltimore, Maryland and is an affiliate of a group of privately held companies known as The Cordish Companies which develop, construct, manage, and operate large-scale commercial real estate projects with entertainment, gaming, restaurant, residential, and hospitality operations. The registrant is a holding company not actively involved in the businesses operated by The Cordish Companies.
A notice was issued under section 45 of the Trademarks Act requiring that the registrant demonstrate the use of the Mark in Canada during the three-year period immediately preceding the date of the notice. The registrant failed to respond but appealed to the Federal Court from the expungement of the registration. The registrant may file additional evidence on the appeal. As it did so the Court had to conduct a de novo review.
The Appeal
The Court carefully reviewed several recent decisions concerning what must be shown to establish use in association with services. The Court summarized the relevant principles as follows:
- The registrant must demonstrate actual use of their trademark in Canada, with respect to each service specified in the registration, by itself or its licensee (i.e., “use it or lose it”).
- The threshold to establish the use of a trademark is not high, but the evidence must permit a conclusion of use as a logical inference from the facts, rather than from speculation.
- The term “services” is to be given a liberal but not unlimited interpretation.
- A case-by-case assessment is required to determine whether use has been established regarding the words used in the registration to describe the services.
- The mere advertising of services in Canada does not constitute use in Canada in association with a service. Some aspect of the services must be offered to people in Canada or performed or delivered in Canada.
- Hotel reservation services could fall within the meaning of “hotel services” for the purpose of finding use if people in Canada enjoy some tangible and meaningful benefit.
The evidence showed that the Mark was displayed in promotional material sent to Canada, on the websites of several venues, and on booking confirmations. Although the mark also appeared on computer screens and advertising in Canada, no services were offered in Canada. Advertising in Canada or targeting services to people in Canada is not sufficient to show use in association with services where the services are offered, delivered or performed elsewhere.
Potential customers in Canada did not receive a tangible and meaningful benefit simply by accessing a website which made them aware of events or hotels in the US or by using online reservation portals that permit them to purchase tickets or book rooms for venues or hotels in the US. Similarly holding a reservation for a hotel in the US was not a tangible and meaningful benefit enjoyed in Canada, despite the fact that it may ensure that a room will be available upon arrival. A tangible benefit is enjoyed only when the customer leaves Canada and travels to the US and fulfills the reservation. The situation was the same for obtaining information about events, reserving tickets, and knowing they will be admitted to the event when they arrive at the venue in the US.
The judge observed that although the jurisprudence suggests a trend toward an expansive view of “use” and acknowledges that courts must adapt to the realities of e-commerce, the basic principle remains that the use of a trademark in Canada requires that the provision or sale of the relevant services or goods must result in a tangible and meaningful benefit to customers in Canada.
Comment
This decision usefully reviews recent case law and correctly applies the relevant principles. It provides a road map for determining when online activity originating outside the country will be trademark “use” in Canada.
John McKeown
Goldman Sloan Nash & Haber LLP
480 University Avenue, Suite 1600
Toronto, Ontario M5G 1V2
Direct Line: (416) 597-3371
Fax: (416) 597-3370
Email: mckeown@gsnh.com
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer