Random Trademark Summary Cancellation Proceedings In Canada: What You Need To Know

A trademark that is not used in Canada may be vulnerable to summary cancellation or expungement under the Canadian Trademarks Act any time three years after it has been registered.

Competitors seeking to clear blocking trademark registrations from the Canadian Trademarks Register have used the summary cancellation provisions for many years. However, as of January 2025, the Registrar of Trademarks is now initiating summary cancellation proceedings on its own on a randomized basis.

The following is intended to provide owners of Canadian trademark registrations some practical guidance to help respond if a notice of summary cancellation is received.

Canada's summary cancellation proceedings (Section 45 Notices for summary expungement)

Once a trademark has been registered for a period of three years or more in Canada, anyone may request that the Registrar of Trademarks initiate a summary expungement proceeding against the registration (in whole or in part).

If the request is accepted, the Registrar of Trademarks issue a notice pursuant to s. 45 of the Canadian Trademarks Act to the registered owner of the subject trademark requiring the owner to prove that its trademark is in use in Canada. This "Section 45 Notice" requires that the registered owner of the trademark file evidence (by way of an affidavit or statutory declaration supported with documentary exhibits) explaining and demonstrating that the subject trademark has been used in Canada within the three year period preceding the notice in association with each of the registered goods and services.

Where a trademark has not been used in association with the registered goods and services during the relevant period in Canada, the registered owner may submit evidence that special circumstances exist that excuse the non-use. Such "special circumstances" are limited in nature.

Requirements to establish "use" of the trademark in association with goods and services in Canada

Use requirements differ for goods and services. Unlike goods, trademark use in association with a service does not need to be demonstrated in the normal course of trade. A trademark will be used in association with services so long as the trademark is displayed in the performance or advertising of the service.

For this reason, trademark professionals will often advise clients to secure registrations for goods and services (if appropriate) to help make the registrations as resilient and effective for enforcement purposes as possible.

Goods

A trademark is used in association with goods if the trademark appears on the goods, on the packaging, or is otherwise clearly associated with the goods at the time the goods are sold or transferred in the normal course of trade to the purchaser in Canada. Evidence of use of the trademark must be shown with each good specified in the registration. Failure to demonstrate use for a specified good in the normal course of trade will result in the good being struck off the registration (subject to special circumstances excusing non-use).

Token sales are insufficient to maintain a trademark registration. If the evidence shows minimal or very low volumes of sales, the affiant must explain why low levels of sales are in the normal course of the registered trademark owner's trade (Wallace v Geoservices (1988), 1988 CanLII 10168 (CA TMOB)).

If the normal course of trade of the branded goods includes intermediaries in the supply chain, evidence demonstrating at least one part of the chain of transfer of the property or possession of the goods occurred in Canada must be provided to establish use in Canada (Manhattan Industries Inc. v Princeton Mfg. Ltd., [1971] F.C.J. No. 1012).

In short, to maintain a registration for goods in the context of a summary expungement proceeding in Canada, a trademark owner must show that it had sold each of the registered goods in association with the trademark in Canada in the normal course of trade in the three years preceding the Section 45 Notice. While evidence of extensive sales or Canada-wide sales is not necessary, evidence of the normal course of trade, including the operation of the supply chain to the purchaser in Canada, must be clearly set out and demonstrated in the evidence to maintain the registered goods.

Services

A trademark is 'used' in association with services if it is displayed in the performance or advertising of those services. The term "services," while not defined in the Trademarks Act, has been given a broad and liberal interpretation by the courts in Canada and the Courts do not distinguish between primary, ancillary, or incidental services. So long as some members of the Canadian public—typically end consumers or purchasers of the services—receive a benefit from the activity, the Courts have found the trademark to be in use for services (TSA Stores, Inc. v Registrar of Trademarks, 2011 FC 273).

A special case for online services and e-commerce platforms

This nuanced difference in demonstrating use of a trademark in association with services often arises in the context of retail businesses operating on e-commerce platforms. Digital retail platforms often reach consumers and markets where physical retail locations of the trademark owner do not exist or even where goods may not be offered for sale directly from the retailer to residents in Canada.

At the fringe of trademark use in Canada, however, are those situations where there is no sale of branded goods to residents in Canada, but a trademark registration for "retail services" or "restaurant services" through online interactions between residents in Canada and the trademark owner is enough to save the registration for those services.¹

For example, in TSA Stores, Inc. v Registrar of Trademarks, 2011 FC 273, the Federal Court maintained a registration for "operation of retail stores for the sale of sporting equipment and clothing" on the basis that the company's website, which had been accessed by more than 300,000 Canadians during the relevant period of time, provided useful information to Canadian consumers akin to that obtained through a sales person at a bricks-and-mortar store.

This information included: a "Help Me Choose Gear" service, which provided detailed product descriptions and information on how to select the correct products/sizes and care for products; a "Shoe Finder" service that allowed users to identify the running shoe that best suits their needs; and a Store Locator that allowed Canadians to find the nearest store in the United States.

Similarly, in Dollar General Corporation v 2900319 Canada Inc., 2018 FC 778, the Federal Court maintained a registration for "retail variety store services" on the basis that the registered owner operated an e-commerce website (which had been accessed by Canadians) in association with the trademark that allowed customers in Canada to review product details, pricing, and availability, and to make online purchases of products by using a credit card with Canadian billing information, which could either be delivered to an address in the United States or to a third-party shipping agent who the customer would pay to ship the goods to Canada.

It was also important in that case that the billing information portion of the owner's website listed "Canada" in the drop-down menu and had boxes labelled "State/Province" and "Zip/Postal Code" demonstrating an orientation and engagement with residents in Canada as well as with residents in the United States.

More recently, in The Little Brown Box Pizza, LLC v DJB, 2024 FC 1592, the Federal Court maintained a registration for "restaurant services" on the basis that the registered owner had provided ancillary restaurant services to Canadian consumers during the relevant period through its branded website and mobile application. The evidence demonstrated that through these branded online platforms, Canadian consumers could search for restaurant locations in the US, access the registered owner's restaurant menu, plan and save customized pizza orders for future ordering, and receive news about the registered owner's products. The registered owner further explained that the customization of pizzas was integral to its offering, that it was taking steps to expand into Canada, and pointed to its online advertising through social media, which the Court found was intended to target Canadian consumers.

This evidence, paired with evidence that the branded website had been accessed by several thousand Canadian users and the mobile application downloaded by one, was sufficient to demonstrate that the subject mark had been used with restaurant services in Canada during the relevant period.

What to do if you receive a Section 45 summary expungement notice

If you receive a summary expungement notice pursuant s. 45 of the Canadian Trademarks Act, consider if the following circumstances apply.

• Direct sales to residents in Canada If residents in Canada have purchased and acquired branded goods in the ordinary course of trade and were offered services directly from the trademark owner or its licensee in Canada, this activity is likely to be deemed to be "use" in Canada in association with goods and services.
• Indirect sales to residents in Canada If residents in Canada have purchased and acquired branded goods in the ordinary course of trade and were offered services through intermediaries, this activity is likely to be deemed "use" in association with goods and services.
• Direct sales to residents in Canada through an e-commerce platform or website Even without a physical presence in Canada, if residents in Canada are able to access the trademark owner's website to place and track orders for goods that are shipped and received by residents in Canada or are available for pickup in Canada by residents in Canada in the ordinary course of trade, this activity is likely to be deemed to be "use" in Canada in association with goods.
• No sales to residents in Canada – Preserving services only

If a trademark owner operates a website or online platform in Canada that is accessible and has been accessed by Canadians, and that offers a sufficient degree of interactivity with and benefit to consumers in Canada such that the services offered are akin to those that one may experience if those services were offered 'in real life', this may be sufficient to maintain the registration for services in some cases. Whether the service will be maintained will depend on the strength of the evidence submitted and whether it can be demonstrated that a benefit was provided to the Canadian consumer.

Footnote

1. "Hotel Services" were maintained in Miller Thomson LLP v. Hilton Worldwide Holding LLP, 2020 FCA 134 while no hotels were located in Canada, consumers could reserve and pay for hotel rooms from Canada. The Federal Court of Appeal stated: "There must, at a minimum, be a sufficient degree of interactivity between trademark owner and Canadian consumer to amount to use of a mark in Canada in conjunction with services over the Internet."