Canada: Federal Court Reiterates The Low Evidentiary Burden For Overcoming Section 45 Cancellation Proceedings

Last Updated: November 21 2016
Article by Julia Kelen

Most Read Contributor in Canada, October 2018

In the recent decision of Black & Decker Corporation v. Method Law Professional Corporation, 2016 FC 1109, the Federal Court allowed the appeal of the Registrar of Trademarks' decision to amend the registration for PIRANHA (reg. no.TMA330,222) pursuant to section 45 of the Trade-marks Act.

Section 45 of the Trade-marks Act provides that a registered owner of a trademark must provide evidence showing, with respect to each of the goods or services specified in the registration, whether the trademark was in use in Canada at any time during the three-year period immediately preceding the date of the Notice (known as the "Relevant Period"). The failure to provide evidence of use, or a reason excusing non-use, will result in the registration being amended or expunged.

The burden of proof imposed by section 45 is not an onerous one. Keeping in mind that the purpose of section 45 is to provide a simple and expeditious means of clearing the Register of trademarks that have fallen into disuse, the owner of a mark must simply establish a prima facie case of use within the meaning of the Act. This means providing sufficient evidence from which the Registrar or the Court can make a determination as to whether the registered trademark was in use, in Canada, in association with the registered goods or services during the Relevant Period. The threshold of proof is low. Evidentiary overkill is to be avoided and there is no single type of evidence prescribed.

The trademark PIRANHA (the "Mark") was registered for use in association with "saw blades for power saws" and "circular saw blades" (the "Goods") on July 17, 1987. At the request of Method Law Professional Corporation, the Registrar of Trademarks issued a section 45 Notice requiring The Black & Decker Corporation to provide evidence showing use of the Mark in association with the Goods between April 3, 2011 and April 3, 2014.

In response to the Notice, The Black & Decker Corporation filed evidence showing use of the Mark on circular saw blades, on jigsaw blades for use on power saws, on associated product packaging, on price lists, and on sample invoices. Total sales figures setting out the combined sales of the Goods during the Relevant Period and printouts from major online retailers displaying the availability of the Goods for purchase in Canada were also provided.

While the Registrar accepted that the evidence established use of the Mark on the Goods themselves and the availability of the Goods for purchase in Canada, he found that the lack of differentiation between the Goods in the total sales figures provided and the fact that the invoices only documented sales of the "circular saw blades" created an ambiguity as to whether "saw blades for power saws" were actually sold. This ambiguity was resolved against the interests of the Owner and the Registrar ordered that TMA330,222 be amended to delete the claim for "saw blades for power saws".

On Appeal, the Federal Court found the Registrar's Decision to be unreasonable. The Court reiterated that the burden of proof imposed by section 45 is not a heavy one and that section 45 was not intended to limit the scope of rights accorded to marks that are in fact in use.

The Court found that when the evidence was considered as a whole it more than satisfied the threshold of establishing a prima facie case that the Mark was in use in association with the Goods during the Relevant Period. The Federal Court has clearly stated that it is not necessary to provide invoices in section 45 proceedings. The failure to provide an invoice setting out the sale of the "saw blades for power saws" should not have been determinative. Even if an ambiguity as to use had been created, which the Court denied, in light of the other evidence filed this ambiguity should have been resolved in favour of The Black & Decker Corporation.   On this basis, the Court found the Registrar's decision to be unreasonable.

The Court also considered the new evidence filed on appeal. The evidence included specific sales figures for "saw blades for power saws" during the Relevant Period in excess of $70,000 and eighteen sample invoices documenting sales of the blades. This new evidence indisputably demonstrated use of the Mark. The Court allowed the appeal and ordered the registration for PIRANHA to be amended to restore the claim for "saw blades for power saws".

This case serves as an important reaffirmation of the purposive interpretation with which section 45 is intended to be applied. While sufficient evidence must be provided so that the decision maker can make an informed determination as to whether the trademark was in use during the Relevant Period, the threshold of proof required is low. All that section 45 requires is that the owner of a mark provide sufficient quality of evidence from which the decision maker can form an opinion as to whether the trademark was actually in use. This means showing how, where, and when the trademark was used. While a mere assertion of use will not suffice, a sense of proportion in the evidence required must be maintained.

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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