In a recent decision of the Federal Court of Appeal
("FCA"), the FCA took the rare
opportunity to consider an appeal from a section 45 expungement
One Group LLC v Gouverneur Inc, the FCA reviewed the
Registrar's decision not to expunge One Group LLC's
("One Group") trade-mark registration
for STK (the "Mark") on the basis of
non-use, as well as the subsequent Federal Court
("FC") decision to overturn the
One Group operates high end restaurants using the Mark outside
of Canada. In preparation for a new restaurant in Toronto,
One Group registered the Mark in Canada. However, due to failed
discussions with hotels and developers, a Toronto restaurant never
In due course, Gouverneur Inc.
("Gouverneur") brought a section 45
proceeding, alleging that One Group failed to use the Mark in the
three preceding years. The Registrar refused to expunge the Mark on
the basis that there were special circumstances that excused the
non-use, namely that the non-use was not in the control of One
Group, and that there was evidence that One Group was close to
coming to an agreement with a hotel chain which would see the Mark
used in Canada.
Gouverneur appealed to the FC on the basis that the Registrar
misunderstood or misapplied the test for special circumstances. The
FC agreed and overturned the decision of the Registrar on the basis
that it was not a reasonable finding that special circumstances
excused the non-use of the Mark, and ordered the Mark expunged.
One Group then appealed to the FCA. In a relatively brief
decision, the FCA allowed the appeal and reinstated the ruling of
This decision highlights a number of points:
First, the FCA emphasized that deference must be given to the
Registrar in expungement proceedings, as well as in those instances
where the Registrar is applying its "home statute". As a
result, courts should not disturb the Registrar's findings of
fact except in those circumstances where such findings are clearly
Second, it appears that there is a general willingness of the
Registrar to preserve registrations. Hence, to the extent the
Registrar makes factual findings in support of preserving a
registration, the court's deference to those findings on an
appeal presents a potentially difficult hurdle to overcome.
Third, this case is a reminder that there is a "special
circumstances" exception to non-use which can be used to
preserve registrations. The criteria for determining if
"special circumstances" exist are:
- the length of
time during which the trade-mark has not been used;
- whether the
reasons for non-use were beyond the registered owner's control;
- whether the
registered owner has a serious intention to shortly resume use of
Whether special circumstances exist will be determined by the
Registrar from the evidence. Such findings, as stated above, will
be given deference by the courts.
With this deference in mind, the FCA found no error in the
Registrar's decision that justified judicial intervention, and
restored the decision of the Registrar.
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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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