On April 4, 2008, the Federal Court of Appeal (FCA) released
its decision in Scott Paper Ltd. v. Canada (Attorney
General). The decision clarifies the law in summary
cancellation proceedings initiated under section 45 of the
Trade-marks Act, and is of special interest because
the FCA took the unusual step of overruling a decision of
another panel of the FCA.
The appeal arose from summary cancellation proceedings
initiated by Smart & Biggar. Summary cancellation
proceedings enable the Registrar of Trade-marks to issue a
notice requesting that the registered owner of a trade-mark
furnish the Registrar with evidence (by way of affidavit or
statutory declaration) showing use of the trade-mark in Canada
at any time during the three-year period immediately preceding
the date of the notice. If the trade-mark is not in use (and if
there are no special circumstances justifying non-use), the
trade-mark will be expunged.
The Registrar forwarded notice under s. 45 of the
Trade-marks Act to Scott Paper, requiring it to
provide evidence of use of the registered trade-mark VANITY in
Canada within the preceding three years.
The evidence filed by Scott Paper did not show use within
the last three years. In fact, it established that there had
been no use in the last thirteen years, but did not provide any
reason for the absence of use during this time. Instead, Scott
Paper relied on evidence that it had planned to recommence
using the mark before it had received the notice from the
Registrar, and that since the date of such notice, use had in
Despite finding that: (i) there had been deliberate non-use
for thirteen years and (ii) no reasons for the non-use were
provided, the Registrar did not order the expungement of the
registration. The Senior Hearing Officer decided to maintain
the registration for the trade-mark VANITY, despite the fact
that there was no evidence of use of the mark in thirteen
years, because Scott had shown that it had resumed use of the
mark. The Senior Hearing Officer held that this intention to
resume use qualified as special circumstances excusing
Smart & Biggar appealed to the Federal Court, which
reversed the decision of the Senior Hearing Officer, and
ordered the trade-mark expunged. Scott Paper then appealed to
the FCA. The FCA upheld the decision of the Federal Court,
holding that deliberate non-use of a trade-mark cannot be
justified by reason of a registrant's intention to use
it in the near future.
In upholding the Federal Court decision, the FCA clarified
the law on special circumstances that may excuse non-use of a
registered trade-mark under s. 45(3) of the Trade-marks
Act. The FCA noted that jurisprudence had evolved in the
direction of treating plans for resumption of use as a special
circumstance excusing non-use. However, the Court went back to
the seminal case on this issue, carefully reviewed the
reasoning, and extracted four core principles: (1) the general
rule is that absence of use is penalized by expungement; (2)
there is an exception to the general rule where the absence of
use is due to special circumstances; (3) special circumstances
are circumstances not found in most cases of absence of use of
the mark; and (4) the special circumstances which excuse the
absence of use of the mark must be the circumstances to which
the absence of use is due.
According to the FCA, the fourth factor was dispositive of
the appeal. As special circumstances may only excuse non-use
where they refer to the actual reason for non-use, it follows
that the intention to resume use cannot constitute special
circumstances, as it is irrelevant to the reasons for the prior
The FCA noted that the Senior Hearing Officer had relied on
jurisprudence that held that an intention to resume use could
qualify as special circumstances excusing non-use. However, the
FCA expressly overturned such jurisprudence, arguing that it
was irreconcilable with both the words of the Trade-marks
Act and the seminal case of Harris Knitting Mills.
The FCA also agreed with the summary of the trial judge who
posed the following question while allowing the appeal from the
Registrar's decision: "Would one excuse a truant
schoolboy for an absence of a month because, when confronted,
he demonstrated that although he had no explanation for his
past absences he genuinely intended to go to school the next
Both the Federal Court and the FCA clearly felt that the
answer to such a query was "no."
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general guide to the subject matter. Specialist advice should
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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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