In Miller Thomson LLP v Hilton Worldwide Holding LLP, 2020 FCA 134, the Canadian Federal Court of Appeal recently confirmed that a trademark associated with "hotel services" was valid despite no brick-and-mortar presence in Canada. More specifically, the Court acknowledged that providing incidental or ancillary services to the registered service can be considered to be a performance of the registered service itself. Furthermore, the FCA found that the ordinary or commercial meaning of a registered service may change over time, with technological advancements.
Hilton Worldwide LLP (Hilton) owns the WALDORF ASTORIA trademark, which has been registered in Canada in association with "hotel services" since 1988. At Miller Thomson LLP's (Miller Thomson) request, the Registrar of Trademarks (Registrar) issued a notice to Hilton, pursuant to section 45 of the Trademarks Act (the Act), requiring Hilton to demonstrate use of the mark WALDORF ASTORIA in association with "hotel services" in Canada between October 23, 2011 and October 23, 2014 (the Relevant Period).
The Registrar reviewed the evidence presented by Hilton, including evidence of its website and registration service, discounts for customers pre-paying for rooms and its loyalty reward points system, HILTON HHONORS. Ultimately, the Registrar found that the absence of a brick-and-mortar WALDORF ASTORIA hotel in Canada was fatal to Hilton's registration. The Registrar found that it is "contrary to common sense to equate the ability to make hotel reservations or other bookings with the operation of a hotel".
The Federal Court allowed Hilton's appeal of the Registrar's decision, noting several errors.
First, the Registrar failed to consider the evidence presented on the ordinary commercial meaning of "hotel services" in the hotel industry, relying instead on "common sense". Second, the Registrar failed to consider and follow binding authority on the interpretation of the term "services", which have concluded that the Act makes no distinction between primary, incidental or ancillary services. Third, the Registrar relied on a current version of the Goods and Services Manual (Manual) to interpret the scope of a 1988 Registration.
Miller Thomson appealed the FC's decision.
Use of "hotel services"
The Federal Court of Appeal concluded that the Federal Court had applied the correct standards and legal tests in its analysis. The Court of Appeal then reviewed the Federal Court's findings on the meaning of use of "hotel services":
- Ordinary commercial terms: Making a hotel reservation was considered to be part of "hotel services". The evidence showed that the term "hotel services" was customarily understood in the hotel industry to include "reservation services, booking and payment services, and access to hotel rooms". The Court found it was unreasonable for the Registrar to rely on "common sense" instead of addressing the only evidence provided on the ordinary commercial meaning of "hotel services" in its analysis.
- Use of the current Manual to interpret the meaning a 1988 registration: The Court agreed that the Registrar's reliance on a 2017 version of the Manual to interpret a pre-internet trademark was not reasonable. The Court noted that trademark owners are not bound by the precise wording of the Manual, nor should Hilton be faulted for using a term that was pre-approved in the 1988 Manual.
- "Services" include primary, incidental and ancillary services: The Court found that the Act makes no distinction between primary and incidental or ancillary services. Case law has established that a service that is incidental or ancillary to a registered service can be considered to be the performance of the service itself. As long as members of the public receive a benefit from the activity in question, it is a service. The Court agreed that the term "hotel services" includes reservation and payment services.
Hilton demonstrated use WALDORF ASTORIA in association with "hotel services"
The Court found that the WALDORF ASTORIA mark was used in Canada during the Relevant Period based on evidence showing that Canadian customers received many beneficial services including the benefit of the HILTON HHONORS loyalty program.
The Court addressed an earlier decision in Motel 6 Inc v No. 6 Motel Ltd. (1981), 127 DLR (3d) 267,  1 FC 638 (FCTD) (Motel 6). The Motel 6 case was decided in 1981. The Court found that the trademark owner had not established use of its "Motel 6" mark because it did not have a brick-and-mortar motel in Canada. The Court acknowledged that the facts were similar, but distinguished the Motel 6 case because: 1) in Motel 6, the trademark owner had a heavier burden to show use because it was an expungement proceeding under section 57 of the Act, rather than a section 45 cancellation proceeding, in which the trademark owner's onus is lighter; and 2) Motel 6 was decided in the early 1980s, before the internet was available to the general public. Technological advancements have radically changed the manner in which services are offered, and the meaning of terms in trademark registrations can evolve over time.
Accordingly, the Federal Court of Appeal found that the WALDORF ASTORIA trademark was being used in Canada in association with "hotel services" even thought there is no WALDORF ASTORIA hotel in Canada.
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