Canada: Court Clarifies Requirements For Trade-Mark Filing Based On Registration And Use Abroad

Introduction

The recent Federal Court decision in The Thymes, LLC v. Reitmans (Canada) Limited has clarified one of the issues that had divided the Canadian intellectual property community with respect to trade-mark applications which are filed based on registration and use abroad. Unfortunately, this decision has also created a great deal of uncertainty on a related issue.

By way of background, the Canadian Trade-marks Act (the Act) permits an applicant for registration of a trade-mark in Canada to base its application on one or more of the following bases: (1) use of the mark in Canada; (2) proposed use of the mark in Canada; (3) making known of the mark in Canada; and (4) registration and use abroad.

In the case of an applicant which is basing its application in whole or in part upon registration and use abroad, subsection 16(2) of the Act requires that the applicant has already registered the same mark in its country of origin and that the country of origin also be a signatory to either the Paris Convention or the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights. An applicant can base its application on a pending foreign application, but it is necessary that the foreign application mature to a registration in order to perfect this basis. Subsection 16(2) also requires that the applicant must have commenced use of its mark in order to rely upon this basis. All of these requirements will be discussed in greater detail below.

The Thymes, LLC v. Reitmans (Canada) Limited

The Thymes, LLC (Thymes) had filed an application to register the trade-mark THYMES & T design on the following two bases: (1) proposed use in Canada; and (2) registration and use in the United States. Reitmans (Canada) Limited opposed the application on several grounds, including that Thymes had not used the trade-mark in the U.S. as of the date the Canadian application was filed. The Registrar of Trade-marks (Registrar) refused the application finding, among other things, that subsection 16(2) required Thymes to have used the mark in the U.S. as of the Canadian filing date.

Thymes brought an application to the Federal Court appealing the Registrar's decision. One ground of appeal was that the Registrar had erred in finding that Thymes' use of the mark in the U.S. was required as of the Canadian filing date, in order to support a valid claim under subsection 16(2) of the Act.

The Federal Court upheld the Registrar's decision, thereby barring the application from proceeding to registration. Justice Manson held:

There is no doubt a proper reading of that section requires that, at the time of filing the application, if an applicant relies on registration or application and use abroad pursuant to that section, there must have been use of the trade-mark at the time of the application to rely on this section as a valid basis to obtain registration in Canada. [emphasis added]

The Court also held that subsection 16(2) of the Act emphasizes that "use of the mark in the country of origin of the applicant is a requirement for registration in Canada."

Implications of the Decision

This decision provides guidance on the timing of the required use under subsection 16(2) of the Act. It is of note that in this particular case, there was no use in the U.S. at the time the subsection 16(2) claim was made (i.e., the Canadian filing date).

The Act permits an applicant to amend its application, at any time before the application is advertised for opposition purposes, in order to add a claim to registration and use abroad. It is not clear whether the Court's holding in Thymes v. Reitmans would prohibit an applicant who had only commenced use of its mark after filing its Canadian application, from subsequently amending its application to rely upon registration and use abroad.

For example, if Thymes had commenced use in the U.S. after the Canadian filing date, would it be permitted to subsequently amend its application to add a basis of registration and use abroad?

Prior to this decision, there had been no determinative statement on the issue from either the Canadian Intellectual Property Office or the courts. As such, some trade-mark practitioners had taken the position that a registration and use abroad claim could be made after the original filing date, as long as the foreign application had been filed or issued to registration and use had commenced at the time the claim was made. Justice Manson's decision therefore provides some much-needed clarity on this issue.

The Country of Use

The Court also noted in its decision that the use required under subsection 16(2) of the Act must be use in the applicant's country of origin. Unfortunately, this finding appears to be based on a misreading of the Act.

Subsection 16(2) of the Act does not specify that the applicant must have used its mark in its country of origin. First, subsection 16(2) requires that the applicant must have filed an application that complies with section 30 of the Act. Paragraph 30(d) of the Act – the provision dealing with registration and use abroad – in turn, merely specifies that where an applicant has not used or made known its mark in Canada, it must indicate in its application the country where it has used its mark in association with the general classes of wares and/or services listed in its Canadian application. Second, although subsection 16(2) requires that an applicant has used its mark, it does not specify that this use must have occurred in any particular country. Accordingly, it appears that the combination of subsection 16(2) and paragraph 30(d) of the Act would permit an applicant who has registered its mark in its country of origin and used its mark in any country, to register the mark in Canada.

This distinction between use in any country and use in the country of origin has important practical implications. For example, an applicant that has filed an "intent to use" application in the U.S., but has only used the mark in Germany, would be entitled to claim a subsection 16(2) basis in Canada, even though it has not used the mark in the U.S.

Another interesting question is whether use in Canada would satisfy the use requirement. There is nothing explicit in the Act that limits the ability of an applicant to rely on use in Canada to meet subsection 16(2). Moreover, the Trade-marks Office Examination Manual seems to condone this view:

In the event that the application in Canada is based on an application or registration in or for a Union country, and if the trade-mark has neither been used nor made known in Canada, the applicant must specify the name of the country in which he/she used the trade-mark in association with each of the general classes of wares or services described in the application. The country of use need not be confined to a Union country. (section II.7.3.3)

However, subsection 16(2) of the Act is titled "Marks registered and used abroad", and thus an argument could be made that use must be outside of Canada. Furthermore, if the purpose of subsection 16(2) is to provide an additional filing basis beyond use in Canada, then arguably this purpose would be undermined by allowing use in Canada to meet the requirements of this section.

The benefit of being able to rely upon use in Canada is that an application could be filed on the dual bases of: (1) use in Canada; and (2) foreign application or registration and use in any country (in Canada). If the claimed date of first use in Canada was incorrect, the applicant could still rely on the foreign application or registration and use in any country basis to obtain the registration.

Conclusion

This decision is noteworthy given that it addresses, albeit not absolutely, issues relating to filing requirements that have been uncertain amongst Canadian trade-mark practitioners for a number of years. It does, however, create fresh uncertainty as to whether, despite the wording of the Act, an applicant must have used its mark in its country of origin before basing its application on registration and use abroad.

The deadline to file an appeal is in March. It will be interesting to see how the Federal Court of Appeal will deal with the issues raised in this decision, if given the opportunity.

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