Here are three concepts that are not new: trade-marks, borders
and the internet. But the courts are still trying to work out how
to handle the three when they collide, as they did in the case of
HomeAway.com, Inc. v. Hrdlicka. In
this interesting dispute, two parties – an American company
and a Canadian man – clashed over ownership of the trade-mark
VRBO. Some of our readers may be familiar with this as the brand of
a popular vacation property rental site.
HomeAway.com, through its predecessor VRBO.com Inc. commenced
using the VRBO mark in the US in 1996. Mr. Hrdlicka, a Canadian,
filed an application for registration of VRBO as a trade-mark in
Canada on September 2, 2009. At the time the Canadian application
was filed, no actual use was claimed. The application was based on
"proposed use". A declaration as to use of the trade-mark
in Canada was filed on June 28, 2010 but there was no evidence of
any actual use of the mark by Mr. Hrdlicka. The VRBO mark matured
to a registered trade-mark on June 28, 2010.
HomeAway.com, as owner of the VRBO brand in the United States,
came to Canada to contest this registration. The central question
was whether a Canadian registered trade-mark should be
"expunged" (or cancelled) on the basis of the use of the
mark online. Homeaway.com did not have any Canadian retail
presence, nor did they appear to conduct any print advertising or
other "traditional" advertising here.
The evidence showed that prior to September 2, 2009 (the date of
Mr. Hrdlicka's application) HomeAway.com was advertising to and
doing business with Canadians and was displaying the trade-mark
VRBO to Canadians online. Homeaway.com could not rely on the
"making known" provisions of the Trade-marks
Act, which refer to advertising by "any printed
publication circulated in Canada" or "radio broadcasts
ordinarily received in Canada". However, Mr. Justice Hughes
was convinced that use of the trade-mark online was sufficient to
establish "use" of the mark by HomeAway.com in Canada. As
Justice Hughes wrote: "...a trade-mark which appears on a
computer screen website in Canada, regardless where the information
may have originated from or be stored, constitutes for
Trade-Marks Act purposes, use and advertising in
Canada." As a result, since the use by HomeAway.com predated
the filing date of Mr. Hrdlicka's application, and Mr.
Hrdlicka's trade-mark registration for VRBO was cancelled.
What can we take away from this case? There are several
important points to remember:
An unregistered mark used from a U.S.-based website can defeat
a Canadian registered trade-mark;
Any trade-mark that is displayed in Canada online (to use the
words of the Court, any trade-mark that "appears on a computer
screen website in Canada") can be considered to be
"used" as a trade-mark in Canada. This means that
trade-mark screening searches must take into account not only the
marks on the register, but also any mark displayed in
Canada online regardless of where the website or online content
originates. Just think about how many marks that will capture!
Justice Hughes in his judgement correctly reinforced the point
that trade-mark rights do not flow from registration but from use.
It is use which creates rights to a trade-mark and entitles the
owner to registration. Registration merely serves to confirm
ownership on the register, as established through use. Without use,
the registration must fall. That is what occurred in this
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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