Jurisprudence of “Use” And “Correlation” of Trademarks in Non-Use Cancellation Proceedings

Following my article “A Day in Virtual Court House Proceedings” and the Non-Use Cancellation Proceedings decision in Sim & McBurney and en Vogue Sculptured Nail Systems Inc., it is intriguing to learn the importance of applying the correct standard of review and the correlation of evidence with its trademark, particularly in this case where it applies to the litigation of the mark “en Vogue”.  

Granting monopoly and exclusivity rights to a company/brand owner for a trademark vastly depend upon the owner demonstrating “use” in “correlation” with its description of classified goods and services. Also, the 2020 amendments to the Trademarks Act, RSC 1985, c T-13 have emphasized the importance of “use” in many contexts. Recently, in Miller Thomson LLP v Hilton Worldwide Holding LLP, we witnessed that evolving jurisprudence of “use” in trademarks when the courts deviated from the old concept of brick and mortar presence. However, in non-use cancellation proceedings, the Canadian Intellectual Property Office (CIPO) maintains that a trademark owner should establish a direct correlation and association of goods and services with the trademark’s use. The Federal Court notes that they are considering the “use” on a case-by-case based on both fact and law in the meaning of section 4 and 45 of the Act. Section 45 proceedings are not a mala fide attempt of unwarranted expungement (which is filed under Section 57 of the Act), but to clear out “dead wood” from the trademark database and create space for other brand owners to register their trademarks.

a) Summary – Federal Court Upheld the Trademarks Opposition Board Decision

Justice Fuhrer upheld the decision of G.M. Melchin, Trademark Hearing Officer (THO), CIPO in the matter of Sim & McBurney and en Vogue Sculptured Nail Systems Inc. The Federal Court (FC) reiterated that a preponderance of evidence is not required to prove the use of the trademark in Canada, but rather emphasizes that, in non-use cancellation proceedings, the evidence must correlate with the goods/services. Accordingly, the FC did not find any palpable and overriding errors in the THO process and decision. As per the Hearing Officer’s order dated January 09, 2020, the description of goods for the trademark “en Vogue”, (TMA789,288) needs to be amended to delete the goods “adhesives used in industry”, “nail adhesives”, “nail brush cleaners”, and “apparatus for lighting, namely, UV lamps (not for medical purposes)” from its description because the Applicant failed to demonstrate a correlation between the evidence submitted for the trademark “en Vogue” and the aforementioned goods. Justice Fuhrer dismissed the appeal with costs payable by the Applicant to the Respondent.

b) Application of Standard of Review by the Federal Court 

The Supreme Court of Canada established in Canada (Minister of Citizenship and Immigration) v. Vavilov that the appellate court’s role is to identify whether a Hearing Officer has erred in their findings and, if so, to narrow their analysis to any palpable and overriding errors in the inference drawn from the evidence. Only at this point can the Federal Court delve into mixed facts and other inferences which the Hearing Officer reasonably may have drawn from the evidence. Simply put, the appellate court must first identify which standard of review applies to the issue in question, then apply it appropriately. Since the Applicant’s evidence does not support their factual conclusions and the Respondent did not present new evidence, Justice Fuhrer applied this principle in her analysis and dismissed the appeal. Therefore, a preferred interference with the weight assigned to correlation of use cannot be drawn.

c) Correlation or Overkill via Evidentiary Documents 

Many summary non-use cancellation proceedings have affirmed that a trademark owner is not required to provide an evidentiary overkill to demonstrate “use” (meaning not all examples of use must be evidenced), but merely that a single document can substantiate the “use” within the last three years. However, pertinently the owner’s evidence should directly demonstrate a correlation between the mark and its associated goods and services. The Court in Cassels Brock & Blackwell LLP v Pacific Sky Global Tradeworks Inc. (“Pacific Sky”) observed that although the “use” threshold is not stringent, particularly to use within the last three years, for a decision-maker to infer an association and correlation between the evidence and the description of goods specified under the registration, relevant and definitive facts within the submitted evidence must suggest a direct correlation. Hence, the THO is not just emphasizing “use”, but also “use” in “direct correlation” between the “classified description of goods” and the “evidence” so brought on record.  

d) Ambiguity in establishing correlation via evidence/affidavit

In the present case, the Applicant’s affidavits, filed by its President, failed to explicitly demonstrate their use pf the mark in association with the said goods and services. The Federal Court suggests that a sworn affidavit can establish use of a mark. An Affidavit is produced in absence of evidence or to combat the risk of breaching confidentiality. In Pacific Sky, the Applicant’s binding officer filed an affidavit because it could not furnish evidence associated with “consumer and industrial safety products namely flashlights, flares” and “consulting and assessment services” and pleaded confidentiality. However, the court concluded that the Applicant’s affidavit did not explicitly suggest “use” for the identified goods and services and was vaguely attested.

IN CONCLUSION, trademark-owners should maintain evidence that they consciously label their sales revenues, advertisements, and merchandise products with their registered mark to safeguard themselves from non-use cancellation proceedings. If they don’t, trademark registrants who cannot generate evidence that they have used their mark in association with their specified goods and services can lose their trademark rights and suffer huge monetary losses. Consequently, the brand owner might have to dispose of all property depicting the logo or trademark.

Written by Aishwerya Kansal, IPilogue Contributor. Aishwerya is pursuing Master’s in Law in International Business Laws at Osgoode Hall Law School, and she is also an IP Innovation Clinic Fellow.

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