Canada: Retail Business Services?

A recent decision considered whether a trade-mark owner was able to show it had used its registered mark in association with the operation of a retail business in response to a notice under section 45 of the Trade-marks Act.

Section 45 Proceedings

Section 45 provides that the registrar, at any time and at the written request made after three years from the date of the registration of a trade-mark by any person who pays the prescribed fee, must, unless the registrar sees good reason to the contrary, give notice to the registered owner of the trade-mark requiring the registered owner to furnish within three months an affidavit or statutory declaration showing with respect to each of the wares or services specified in the registration, whether the trade-mark was in use in Canada at any time during the three-year period immediately preceding the date of the notice and, if not, the date when it was last so in use and the reason for the absence of such use since such date.

The purpose of this section is to provide a summary procedure for trimming the register of "dead wood". Frequently proceedings under the section will be instituted by third parties who are prevented from obtaining a registration for a desired mark by a registration which is perceived not to be in use.

The registrar must not attempt to resolve any question other than whether the registration is in use. The procedure under the section is not intended to create or rescind substantive rights.

The requesting party cannot file evidence or conduct a cross examination on the affidavit or statutory declaration of the registered owner. The requesting party is limited to filing written argument and taking part in an oral hearing to argue that the registration should be expunged or amended.

The Facts

The registrant owned the trade-mark HOME ENTERTAINMENT SOURCE & Design as shown below:

for use in association with the "operation of retail businesses selling electronic products".

The hearing officer summarized the registrant's evidence as showing that the registrant did not itself sell electronic products at the retail level. The registrant appeared to be in the business of sourcing, buying and re-selling large volumes of brand name products to retailers who are members of the registrant's "network". The registrant did not operate a retail business in a specific geographic location or on the Internet. The primary purpose of the registrant's main website was to inform independent retailers that it was a source of products at a good price for resale to the end consumer. A separate electronic products website encouraged consumers to buy from independent retailers who are affiliated with the registrant.

The hearing officer concluded that the "operation of retail businesses" required that the registrant actually provide retail store services. Such services can be provided through a physical "bricks and mortar" store, through mail order or through the Internet to retail purchasers.

With respect to the Internet, it had by recently found by the Federal Court on an appeal from a determination under section 45, that the operation of a website accessible to Canadians that provided information and pricing concerning specific products, was sufficient to show use in association with "retail store services".

When the registrant's evidence was considered from this perspective the hearing officer concluded that the registrant had not shown it was providing "retail store services" to the public and the registration was expunged.

Comment

The decision emphasizes the importance of ensuring that the services or wares are accurately described when an application for a trade-mark is filed. In addition, in cases where the nature of the applicant's/registrant's business changes with time, a new application or extension application should be filed to ensure it trade-mark rights are adequately protected.

Finally, nothing prevents the registrant in this case from filing a new application for its mark for use in association with the wares or services it is actually offering, but the party originally requesting expungement may attempt to oppose the application and there will be a period of time when the applicant's rights are not protected by a registration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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