A recent decision of the Federal Court expunged the registration of a trademark on the grounds the mark was not distinctive at the time the proceedings were brought due to widespread use of the mark by others.
The registrant is a sole proprietorship doing business as "DIAL-A-BOTTLE" (or as "Dial a Bottle" and variations). The registrant operates a call centre which receives orders and distributes them to drivers and businesses, primarily in Ontario. The registrant purchased the registration for the trademark DIAL-A-BOTTLE (the Mark) from Dial-a-Bottle Services Ltd on January 15, 2015. The registration was issued on July 17, 2009.
The Applicants are liquor delivery service companies which operate as "DIAL-A-BOTTLE" in Ottawa and Toronto. The Applicants deliver convenience store items and alcohol. The business name, DIAL-A-BOTTLE, was registered as a business name in 2008 and the applicants have operated under this name from that time.
The Applicants initiated an application to expunge the registration under section 57 of the Trademarks Act on the grounds that: the Mark lacked distinctiveness at the time of the commencement of the application; and, the Mark was not registrable at the time of its registration in 2009 because it had become generic or synonymous with alcohol delivery services.
It was shown that at the date of the commencement of the application the DIAL-A-BOTTLE name and variations of it had been used by many businesses and persons for many years. The registrant and his predecessor had done nothing to enforce their right to the exclusive use of the Mark before 2015. The registrant's efforts to assert his rights only began after he purchased the registration in 2015 and his efforts were selective and ineffective to distinguish his services from those of others.
The judge referred to the basic principle that the purpose of a trademark is to function as a symbol of the source and quality of goods and services of a merchant, to distinguish those goods and services from those of others, and to prevent "confusion" in the marketplace. To be distinctive three conditions must be shown: (1) the mark and the services must be associated; (2) the mark's owner must use this association in selling its services; and (3) this association must enable the mark's owner to distinguish its services from those of others. In short, the message to the public must be that the registrant is the source of the services.
It is well established that if an owner permits widespread use of its mark by others; the mark will lose its distinctiveness as the registrant will not be seen as the source of the services.
As a result, the judge concluded that at the relevant date the Mark had lost its distinctiveness due to the use of the DIAL-A-BOTTLE name and variations of it by many businesses and persons for many years.
The applicants failed to establish that the Mark was generic or synonymous with alcohol delivery services but succeeded on the basis of the loss of distinctiveness. As a result, the registration was expunged.
The message for brand owners is clear: make sure you are seen by the public as the source of the goods and services you provide. Concerns will arise as the result of widespread infringement of significant duration by one infringer or in the "death by a thousand cuts" scenario illustrated by this decision.
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