The recent decision of the Federal Court in SuperShuttle International, Inc v Fetherstonhaugh & Co, 2015 FC 1259, is a helpful reminder to registered rights holders of the dangers of not using their trademarks in association with the specific goods or services covered by their registrations. In this case, the registrant, SuperShuttle International, Inc. ("SuperShuttle"), appealed from a decision of the Registrar of Trade-marks, which had concluded that SuperShuttle had not used its registered trademark SUPERSHUTTLE in Canada in connection with its registered "[a]irport passenger ground transportation services". Consequently, the registrant's SUPERSHUTTLE trademark was found to be "deadwood", and expunged from the trademarks register pursuant to section 45 of the Trade-marks Act.
The late Brian Isaac of our Toronto office successfully represented the respondent.
Issues on appeal
The registrant raised two issues on appeal.
First, did the Registrar err by interpreting the meaning of "use" in section 4 of the Act, such that the registrant's activities in Canada did not constitute use of the mark with the registered services?
Second, is a mark "used" in Canada with a service if an essential step in the performance of that service, including the provision of a benefit to consumers, happens in Canada?
Issue No. 1: Did the Registrar misinterpret the statutory definition of "use"?
With respect to the first issue, the Court found that the Registrar did not err. None of the evidence filed by the registrant at first instance demonstrated use of the mark with the registered services. Rather, the Registrar found, and the Court agreed, that the registrant in this case did not operate an "[a]irport passenger ground transportation" service in Canada, but only advertised, and allowed Canadians to reserve, that service in Canada. Since "reservation services" were not the registered services, the Registrar "was not satisfied that the [a]pplicant performed the registered 'airport passenger ground transportation services' in Canada and consequently decided that the [trademark SUPERSHUTTLE] should be expunged from the trademarks register".
Issue No. 2: Does an "essential step" in the performance of a service amount to a performance of the service itself?
The Registrar, the Court ruled, also did not err with respect to the second issue, finding that the occurrence in Canada of a single "essential step" in the performance of a registered service does not constitute a performance of the service itself. While, on the one hand, the Court agreed with the registrant that, generally speaking, "services" are to be given a liberal interpretation because they are not defined in the Act, and that there is to be no distinction between primary, incidental or ancillary services so long as Canadians receive a benefit from the activity, it also, on the other hand, recognized that "that liberal interpretation is not unlimited", and that, ultimately, "the registered services must still be offered in Canada". The Court ruled that the Registrar was therefore reasonable in concluding that advertising and reserving a "ground transportation" service in Canada, without more, did not constitute a performance of the service itself, as the registrant did not have any "wheels on the ground" in Canada. In both the Registrar's and the Court's view, the registered trademark SUPERSHUTTLE could not be maintained by virtue of the registrant's reservation services alone being available in Canada.
Both the Registrar and the Federal Court have previously recognized that, in the context of a cancellation proceeding pursuant to section 45 of the Act, a mark may be found to have been used in connection with its registered services if it has been used only in connection with services "ancillary" to those registered services. For example,
- in Société Nationale des Chemins de Fer Français SNCF v Venice Simplon-Orient-Express Inc (2000), 9 CPR (4th) 443, the trademark ORIENT-EXPRESS was held to be in use in association with "travel services, namely railway passenger service" in the absence of an ORIENT-EXPRESS train service operating in Canada, because "train reservations and ticketing services" were nevertheless provided in Canada;
- in TSA Stores, Inc v Registrar of Trade-Marks, 2011 FC 273, trademark registrations relating to the operation of retail sporting goods stores under the trademark THE SPORTS AUTHORITY were maintained, even though no such stores were located in Canada, because the brand owner's website provided information to Canadians;
- in HomeAway.com, Inc v Hrdlicka, 2012 FC 1467, the Federal Court confirmed that the display of the trademark VRBO on a non-Canadian website viewed from Canada in association with services provided in Canada constituted use and advertising of the mark in Canada under the Act; and
- in Wolfie Furs Inc v Nygård International Partnership, 2015 TMOB 64, the Registrar found that the registrant's use of the trademark FASHIONISTA SOCIETY & Design in association with an online fashion blog through which visitors could access the registrant's online store was sufficient to support a finding of use of the mark in association with online, "[p]ersonalized shopping services".
However, the "ancillary services principle", as it has come to be known, has its limits, and the best way to maintain a trademark registration and prevent its cancellation for non-use is to use the mark in Canada in connection with those goods or services registered in connection therewith. Furthermore, as the services that a court deems "ancillary" are inherently and inextricably linked to the services listed in the registration, the performance of related services, or services that constitute a single "essential step" in the performance of the registered services, likely will not suffice to maintain a trademark registration if such services are not encompassed by the registered services. Where those services with which the mark is actually used (e.g. reservation services) do not fall within the scope of those services with which the mark is registered (e.g. transportation services), the mark, as SuperShuttle clearly demonstrates, is liable to be cancelled for non-use.
All brand owners are therefore well-advised to regularly review both their trademark portfolios and the services that they provide in Canada to ensure that their trademark portfolios adequately capture and protect such services. If a brand owner is using a mark in association with services that are not covered by its trademark registration, it should retain experienced trademark counsel to help protect the trademark registration against prospective cancellation proceedings and, if necessary, prepare and file an "extension application" with the Canadian Trademarks Office to capture and protect those "ancillary services".
For further information on cancellation proceedings, and how to best protect your brand in Canada, please contact a member of our firm's Trademarks group.
The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.