 
Trade-mark Practice in Canada: A Practical Guide

Theresa M. Corneau (ed.)

Smashwords Edition

2011

Borden Ladner Gervais LLP

Canada

Trade-mark Practice in Canada: A Practical Guide

Copyright © 2011 Borden Ladner Gervais LLP

All rights reserved. Although this is a free book, it remains the copyrighted property of the authors, and may not be reproduced, stored in a retrieval system, copied, or transmitted in any form without prior written permission of the authors. If you found this book to be useful, please encourage others to download a copy.

Published in 2011 by Borden Ladner Gervais LLP

ISBN 978-0-9730750-7-6

The information in this publication is of a general nature, and should not be regarded as legal, accounting, or other professional advice. Intellectual Property law is complex and developing rapidly, and must be considered in the circumstances of each individual transaction, case, or issue. If legal or other expert advice or assistance is required, the services of a competent professional should be sought.

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About the Cover

 _  
Charis Tsevis_

The Maple Leaf Design was created by Charis Tsevis, who is based in Athens, Greece. He serves global clients and he frequently contributes to prominent publications with articles on design theory, aesthetics, and cyberculture. His work has been awarded at Epica, NPSA, and Ed-Awards in the United States and Europe. Charis Tsevis has studied design and advertising in Athens and Milan and he now teaches Typography and Editorial Design at AKTO College.

**CONTENTS**

Preface

Acknowledgment

Authors

Chapter 1: General Trade-mark Practice in Canada

Chapter 2: Procedural Requirements

Chapter 3: Specific Requirements for Canada

Chapter 4: Special Trade-mark Applications in Canada

Chapter 5: Opposition Proceedings

Chapter 6: Summary Cancellation Proceedings

Chapter 7: Trade-mark Infringement and Passing Off

Chapter 8: Due Diligence Process

Chapter 9: Domain Names

**PREFACE**

Borden Ladner Gervais LLP has for many years acted as Canadian counsel to several national and multinational companies and worked with colleagues in numerous foreign law firms to provide advice on trade-mark law and practice in this country. We have frequently been requested by clients to respond to inquiries concerning the trade-mark application process and practice in Canada and primarily the differences between the Canadian and US practice.

Chapters 1 through 3 summarize general trade-mark practice in Canada, including the procedural and specific requirements for filing trade-mark applications. Chapter 3 highlights some of the unique aspects of these requirements and the relevant case law related to prohibited marks, including official marks and geographical indications of origin. The chapter also discusses French language requirements and exceptions, as well as sanctions and recourses under the _Charter of the French Language_. Chapter 4 focuses on special trade-marks in Canada, including certification marks, distinguishing guises, and related issues. Chapters 5 through 7 focus on adversarial and/or contentious proceedings such as oppositions, cancellation, passing off, and infringement, and discuss the relevant case law. Finally, chapters 8 and 9 provide an overview of issues related to due diligence and domain names.

We hope this new publication provides guidance and serves to highlight the nuances of the Canadian trade-mark application process and related practice.

We intend to publish subsequent editions of _Trade-mark Practice in Canada: A Practical Guide_ , and we would appreciate receiving suggestions about possible additions or changes for revised editions.

April 2011  
Tracy Corneau  
Borden Ladner Gervais LLP, Ottawa  
Telephone: 613-787-3564  
Email: tcorneau@blg.com

**ACKNOWLEDGMENT**

I gratefully acknowledge the contributions of my colleagues to this book. Their significant undertaking to commit the time necessary to research, write, and review chapters is deeply appreciated.

**AUTHORS**

 _  
Geneviève Bergeron_

**Geneviève Bergeron** is a partner in the Montreal office. Her practice focuses on all aspects of intellectual property and information technology. She has an extensive practice in trade-mark law that includes search opinions, clearances, preparation, and prosecution of trade-mark applications, oppositions and cancellation proceedings, property rights transfers, and negotiation of trade-mark licence agreements. She has expertise in the drafting of distribution agreements and subcontracting agreements involving all aspects of IP and IT law for clients in all types of business. She also provides advice in website-rel ated matters such as the drafting of appropriate disclaimers, terms and conditions, online agreements, copyright and trade-mark use, and privacy policy as well as with respect to the application of the _Charter of the French Language_ in the IP and IT sectors. Geneviève is a member of the Canadian Bar Association, INTA, IPIC, and IT.Can.

 _  
Theresa M. Corneau_

**Theresa M. Corneau** is a partner in the Ottawa office. She has extensive experience in all areas of Canadian and international trade-mark practice including searches, preparation and prosecution of trade-mark applications, opposition proceedings, trade-mark licensing, and property rights transfers. Her practice also involves the drafting and filing of copyright matters, the drafting of licence agreements, and the preparation and presentation of in-house trade-mark seminars to clients. She has been featured in numerous IP publications and has spent several years as a lecturer, speaker, and tutorial instructor for McGill University and IPIC. She has been a committee member on various trade-mark topics for IPIC, INTA, ECTA, and AIPPI.

 _  
Bradley J. Freedman_

**Bradley J. Freedman** is a partner and the Technology Law Practice Leader in the Vancouver Office. He is a member and former director of the Information Technology Law Association of Canada (IT.Can), and a member of the Canadian Bar Association, the American Bar Association, and the International Technology Law Association. His practice focuses on technology, intellectual property, the Internet, electronic commerce, and related matters. He is ranked as a leading trade-mark professional in the _World Trademark Review_ for 2011 and is included in the 2011 edition of _The Best Lawyers in Canada_ and the 2010 Canadian Legal Lexpert Directory. Bradley is a domain name dispute arbitrator for the World Intellectual Property Organization and the B.C. International Commercial Arbitration Centre.

 _  
Anne Lau_

**Anne Lau** is an associate in the Vancouver office. Anne has experience in all areas of Canadian trade-mark practice including searching, preparation and prosecution of trade-mark applications, opposition proceedings, licensing, and property rights transfers. She also has experience managing international trade-mark portfolios and international filings. Anne is a member of the Law Society of British Columbia, the Patent and Trademark Association of British Columbia, and the Intellectual Property Institute of Canada.

 _  
Kathleen Lemieux_

**Kathleen Lemieux** is a partner in the Ottawa office and is fully bilingual, practising in both English and French. Kathleen assists clients with the development, administration, and protection of intellectual property rights, including, in particular, trade-marks and copyrights. She has a wide range of experience in advising clients in trade-mark opposition and cancellation proceedings, and in assisting with litigation involving intellectual property rights. Kathleen also provides advice on transactions involving intellectual property, such as licensing agreements. She is the editor of the BLG IP newsletter and is involved in various committees for IPIC, INTA, CBA, and AIPLA. She is also a member of the Canadian Bar Association and the County of Carleton Law Association.

 _  
LuAnne Morrow_

**LuAnne Morrow** is a lawyer and trade-mark agent in the Calgary office. She practises IP law particularly in the areas of trade-marks and copyright, entertainment, and advertising/sponsorship law for clients in a wide variety of industries. Her other practice areas include patent licensing, software licensing and development, and Internet and computer law. She was selected by her peers for inclusion in the 2010 and 2011 editions of _The Best Lawyers in Canada_ for intellectual property law. LuAnne has been a member of the Alberta Bar Association since 2002 and is a member Canadian Bar Association and INTA. She is an associate member of the Intellectual Property Institute of Canada, and Past Chair of the Canadian Bar Association—Intellectual Property and Technology Southern Alberta Subsection.

 _  
Hafeez Rupani_

**Hafeez Rupani** is an associate in the Ottawa office. His practice focuses on the resolution of trade-mark, copyright, domain name, and related commercial disputes before all levels of court. Hafeez has represented clients in trade-mark infringement, passing off, and expungement proceedings before the Federal Court; trade-mark opposition and cancellation proceedings before the Trade-marks Opposition Board; tariff proceedings before the Copyright Board of Canada; and subsequent judicial review proceedings before the Federal Court of Appeal. He assists clients in the acquisition, licensing, and enforcement of intellectual property rights in Canada and around the world, and in advising clients on the application of intellectual property rights in employment and online contexts, including social media. He is a member of the Canadian Bar Association, Ontario Bar Association, IPIC, INTA, Advocates Society, and CCLA.

 _  
Kathryn E. Szymczyk_

**Kathryn E. Szymczyk** is an associate in the Ottawa office and is conversant in Russian. Her practice focuses on all aspects of trade-mark law including prosecution, opposition, licensing, and enforcement. Kathryn also handles the prosecution of industrial designs and provides advice on domain name and trade-mark issues on the Internet. She was the Head of the Russian Representative Office of a Canadian firm from 2000 to 2003 and then a director overseeing a number of offices for an Eastern European IP firm in the Balkans from 2005 to 2008. She is familiar with the European Community trade-mark system and has extensive experience dealing with international registrations made through the Madrid System. Kathryn was recognized as "highly recommended" in intellectual property law in Russia by _Global Counsel 3000_ and ranked as a leading trade-mark professional in the _World Trademark Review_ for 2011. She is a member of the Canadian Bar Association, IPIC, CCLA, the North American Anti-Counterfeiting Subcommittee of INTA, and the Vice Chair of the MARQUES Brands and Marketing Committee.

 _  
Jessica Yeung_

**Jessica Yeung** is a trade-mark agent in the Vancouver office and is fluent in English, Cantonese, and Mandarin. Jessica has experience in all areas of Canadian trade-mark practice including searches, preparation and prosecution of trade-mark applications, opposition proceedings, trade-mark licensing, and renewals. She is a member of the Patent and Trademark Association of British Columbia.

**CHAPTER 1**

GENERAL TRADE-MARK PRACTICE IN CANADA

In Canada, the law related to trade-marks and unfair competition, including passing off, is covered by both federal statute and provincial common law. The current federal statute, the _Trade-marks Act_ ,[1] which has codified much of the common law with respect to trade-marks, creates a regulatory system that encompasses registered as well as unregistered trade-marks.[2] A foundational purpose of the Act and the common law is to create a regulatory system that ensures that commercial considerations and the rights acquired by way of trade-mark use and registration are protected, while contemporaneously safeguarding the public from any confusion, misrepresentations, or deceit with respect to the origin and quality of goods and services.

Trade-mark protection and enforcement is practised by way of both regulatory and non-regulatory proceedings. Regulatory proceedings consist of quasi-administrative/quasi-judicial trade-mark opposition and cancellation proceedings, which generally serve to prevent the registration of a trade-mark and expunge the registrations of unused trade-marks, respectively. Non-regulatory proceedings are court proceedings that, in general, deal with trade-mark infringement, depreciation of goodwill, and the expungement of trade-mark registrations and with common law rights, including those associated with unfair competition and passing off.

The Supreme Court of Canada in _Mattel Inc. v. 3894207 Canada Inc._ [3] distilled the purpose and basis of trade-marks and trade-mark law to the following:

Trade-marks are something of an anomaly in intellectual property law. Unlike the patent owner or the copyright owner, the owner of a trade-mark is not required to provide the public with some novel benefit in exchange for the monopoly. Here, the trade-mark [BARBIE] is not even an invented word like "Kodak" or "Kleenex." The appellant has merely appropriated a common child's diminutive for Barbara. By contrast, a patentee must invent something new and useful. To obtain copyright, a person must add some expressive work to the human repertoire. In each case, the public through Parliament has decided it is worth encouraging such inventions and fostering new expression in exchange for a statutory monopoly (i.e. preventing anyone else from practising the invention or exploiting the copyrighted expression without permission). The trade-mark owner, by contrast, may simply have used a common name as its "mark" to differentiate its wares from those of its competitors. Its claim to monopoly rests not on conferring a benefit on the public in the sense of patents or copyrights but on serving an important public interest in assuring consumers that they are buying from the source from whom they think they are buying and receiving the quality which they associate with that particular trade-mark. Trade-marks thus operate as a kind of shortcut to get consumers to where they want to go, and in that way perform a key function in a market economy. Trade-mark law rests on principles of fair dealing. It is sometimes said to hold the balance between free competition and fair competition.

Fairness, of course, requires consideration of the interest of the public and other merchants and the benefits of open competition as well as the interest of the trade-mark owner in protecting its investment in the mark. Care must be taken not to create a zone of exclusivity and protection that overshoots the purpose of trade-mark law.

A. THE TRADE-MARKS ACT: OVERVIEW

The Act was enacted in 1954 and arose from the dissatisfaction with its preceding legislation — namely, the _Unfair Competition Act_ of 1932 and Canada's first "Dominion Act" dealing with trade-marks, the _Trade-mark and Design Act_ of 1868. The _Trade-mark and Design Act_ as well as the _Unfair Competition Act_ were considered too narrow in scope, difficult to interpret, and contradictory.

1. What Is a Trade-mark?

Under section 2 of the Act, a trade-mark is defined as follows:

"trade-mark" means

(a) a mark that is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others,

(b) a certification mark,

(c) a distinguishing guise, or

(d) a proposed trade mark.

While the term is not defined in the Act, a "mark" must be something that can be represented visually and, in association with wares at least, use of a verbal description is not use of a trade-mark within the meaning of the Act.[4] As a result, sounds, scents, and holograms, for example, will not _currently_ meet the definition of a "trade-mark" in Canada.

2. Types of Trade-marks

In Canada, the Act enumerates four definitions of a trade-mark. These definitions permit the registration of the following trade-mark types.

a. Word Marks

A word mark is represented in block letter format and generally affords the owner of a block letter trade-mark registration the broadest protection. In particular, a block letter word mark is considered to encompass acceptable use of the trade-mark whether or not the mark is used in a particular font, colour, or design. By contrast, if registration is sought and/or obtained for a particular design or font and the mark is not used in Canada in such manner, the registration is subject to cancellation on the basis of non-use.[5] As an extension to simple word marks, slogans may also be registered as trade-marks.[6]

b. Design Trade-marks (Logos)

A design, alone or in conjunction with words, may be registered as a trade-mark. Notably, a composite mark (a trade-mark comprising both design and word elements), when sounded, is not registrable pursuant to section 12(1)(b) of the Act if it contains word elements that are:

(1) clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin; and also

(2) not the dominant feature of the mark.

c. Special Trade-marks

i. Distinguishing Guises

In Canada, an owner may also secure rights in trade-marks referred to as "distinguishing guises." A distinguishing guise is a trade-mark used to identify the unique shape of wares or its package/mode of wrapping. It is necessary to provide evidence of acquired distinctiveness of these types of marks as of the date that an application for registration for the distinguishing guise was filed. As a result, an application to register a distinguishing guise can only be based on use in Canada.

ii. Certification Marks

A trade-mark may also be a certification mark, which is used to identify wares and/or services of a defined standard. It is owned by one entity but licensed to others to identify wares and/or services that meet the defined requirements. The purpose of such standards is to distinguish and indicate a consistency with respect to:

• the character or quality of the wares or services,

• the working conditions under which the wares have been manufactured/produced or the services performed,

• the class of persons by whom the wares have been produced or the services performed, or

• the origin or the area within which the wares have been manufactured/produced or the services performed.

iii. Colours, Sounds, Smells, and Holographic Images

While it is possible to obtain a trade-mark registration in Canada for a colour, such registration is usually considered weak, difficult to protect, and may require the filing of affidavit evidence of acquired or secondary meaning.

The Canadian Trade-marks Office takes the position that sound, smell, and holographic images represented as trade-marks are not eligible for registration. The foregoing is based on the position that a trade-mark must be represented visually in order to be registrable. Although some applicants have attempted to assert rights primarily in the category of "sound" marks, most have as yet been unsuccessful. It is likely that the Courts may need to determine whether such marks are eligible for registration under the Act as well as the nature of any evidence or other guidelines or requirements for seeking protection of the same.

3. Does a Trade-mark Need to Be Registered?

In Canada, trade-mark rights may be acquired for both registered and unregistered trade-marks. In particular, a trade-mark does not need to be registered to benefit from the protection and rights afforded under the Act and the common law. Notwithstanding the foregoing, a trade-mark registration provides several additional benefits over and above those attached to unregistered trade-marks, including providing:

(1) exclusivity to the trade-mark across all of Canada rather than to the geographical scope of a trade-mark's reputation;

(2) the basis for filing a trade-mark in another Convention country;

(3) the basis for ground of opposition against a third party in opposition proceedings before the Trade-marks Office used to prevent a third-party trade-mark application from proceeding to registration;

(4) the basis for a trade-mark infringement action in Canada;

(5) the basis for alerting others of your rights in the context of trade-mark availability searches, as all trade-mark applications and registrations are entered on the Trade-mark Registry;

(6) the basis for determining rights in a licensing regime; and

(7) the basis for valuation of trade-marks.

[1] _Trade-marks Act_ , R.S.C. 1985, c. T-13 ["the Act"].

[2] The most salient distinction between registered and unregistered trade-marks is that more extensive rights are afforded to an owner of a registered trade-mark.

[3] _Mattel, Inc. v. 3894207 Canada Inc._ , 2006 SCC 22 at paras. 21-22.

[4] _Playboy Enterprises, Inc. v. Germain_ (1978), 43 C.P.R. (2d) 271 (F.C.A.).

[5] For more information related to cancellation and expungement proceedings, please see Chapter 6.

[6] Although protectable, such marks are often highly suggestive and may be more difficult to protect than a traditional trade-mark.

**CHAPTER 2**

PROCEDURAL REQUIREMENTS

At first blush, filing a trade-mark application may be viewed as a simple, straightforward procedure. However, such a view does not reflect reality. Preparing a trade-mark application and following it through the process can be a complex task — particularly if an objection is received from the Trade-marks Office or a third party challenges the rights to the trade-mark. An appropriate strategy and careful consideration should be given to the requirements of the _Trade-marks Act_ [1] with respect to filing an application to ensure that correct and relevant information is provided to the Trade-marks Office without unduly restricting and/or jeopardizing the trade-mark owner's rights.

A. FILING REQUIREMENTS

There are several filing requirements for trade-mark applications, including:

(1) The name and address of the applicant. The current name and address of the applicant or owner seeking protection and registration of the trade-mark must be provided. Notably, a P.O. box will not be accepted. The full name of the applicant must also be provided (inclusive of the designations Ltd., Co., etc.) or the Trade-marks Office will inquire as to whether the name provided is the full legal name of the applicant. It can be very time consuming and expensive to correct an error in the owner's name. In some instances, the Trade-marks Office may refuse to allow a correction and require the refiling of the application.

(2) The basis for filing the application must be provided (for greater detail, see section B below). However, unlike some other jurisdictions, it is _not_ possible to amend a Canadian application that was filed based on proposed use in Canada to one that is based on use in Canada.[2]

A trade-mark is deemed to have been used in association with goods if it appears on the goods themselves or on their packaging at the time of the transfer of property or possession of the goods in the normal course of trade. This generally coincides with a sale of goods. A trade-mark will be considered to be used in association with services if the trade-mark is used or displayed in the performance or advertising of the services and if the applicant is performing the services in Canada or is prepared to do so.[3]

An application may also include a filing basis related to the registration and use of a corresponding trade-mark in a Convention country.[4] In order to rely on a foreign application or registration as a basis for registration in Canada (or for claiming priority, discussed below), the applicant must be a citizen or national of that country, must be domiciled in that country, or must have a real and effective industrial or commercial establishment in that country.

(3) A clear indication of the trade-mark must be provided. As mentioned earlier, a block letter word mark usually provides the broadest protection to the owner. Once filed, only minor changes may be made to the trade-mark prior to advertisement in the _Trade-marks Journal_ (possibly due to a typographical error).

If the applied for trade-mark is a design mark, then a representative drawing of the mark must be provided.

(4) A list of the goods and/or services covered by the trade-mark application. Because Canada does not adhere to the international classification system, it is possible to list as many goods and/or services as needed in the application _without incurring additional government fees_.

(5) An official filing fee[5] required at the time of filing, or the application will not be processed.

(6) If not in English or French, a translation will be required with respect to any information and/or documents filed — for example, certified copies of trade-mark registrations. A certified copy of a priority document is _not_ required.

(7) All applications filed by an applicant outside of Canada must include a Canadian representative for service (usually a registered trade-mark agent and/or law firm located in Canada).

(8) All applications filed in Canada must include a claim to entitlement that the applicant is entitled to use the trade-mark in Canada.

(9) An application may also include other claims to support registrability of a proposed trade-mark and can be made at the time of filing of the application or prior to advertisement of a trade-mark application in the Canadian _Trade-marks Journal_. For a more specific and thorough discussion of such issues, see Chapter 3.

Applications may also include a claim to priority on the basis of an earlier filed application abroad. A priority claim provides the benefit of obtaining an entitlement date in Canada based on the foreign filing date. Notably, a priority claim merely provides a means for obtaining a priority filing date — it is _not_ an independent filing basis for the purposes of minimum filing requirements.

In order for an applicant to make a claim of priority based on an earlier filed application, a declaration setting out the date and country of filing of the earlier application must be filed within a period of six (6) months after the date on which the _earliest_ application was filed for the registration of the same or substantially the same trade-mark for use in association with the same kind of wares or services.

Lastly, there is no requirement for specimens of use related to the wares and/or services listed in an application, a Power of Attorney, or translation if the application is filed in English or French.

B. BASIS FOR FILING APPLICATIONS IN CANADA

At the time of filing, the applicant is required to provide the basis upon which the trade-mark application is being filed and for which registration is sought. In this regard, the applicant must state which particular, or what combination, of the four filing bases below it is relying upon:

• actual use in Canada (section 16(1) of the Act);

• proposed use in Canada (section 16(3) of the Act);

• registration and _use_ in a Convention country (section 16(2) of the Act ); and

• having made known the mark in Canada (section 16(1) of the Act).

1. Proposed Use in Canada

As indicated earlier, an application may be filed based on the applicant's "intention to use" the trade-mark in Canada. As the wording suggests, such a basis requires that the applicant has not used the trade-mark as of the date of filing the application in Canada. Unlike in some jurisdictions, including the United States, it is not possible to amend an application based on "intention to use in Canada" to "use in Canada" if such use precedes the filing date of the application.[6]

2. Use in Canada

An applicant may also file an application based on the use of the trade-mark in Canada. Section 4 of the Act defines "use" of a trade-mark in association with goods and services as follows:

The date of first use must be provided at the time of filing of the application in Canada. The date of first use may be entered as (1) a precise date, (2) a particular month of a certain year, or most broadly, (3) a specific year. If only the month and year is provided, the Trade-marks Office considers such date to be the last day of the month of that particular year. If only the year is provided the Trade-marks Office considers such date to be the last day of the last month of the year provided. Notably, it is not necessary to choose the earliest date of first use, particularly if there are no records to confirm such use because the Trade-marks Office will permit an applicant to refer to a date of first use as "since at least as early as."[7]

3. Registration and Use in a Convention Country

An application may also be based on use and registration abroad in another Convention country. It is generally considered that an applicant must confirm that it has used and filed or used and registered its trade-mark abroad as of the Canadian filing date. If there has been no use abroad at the time of filing in Canada, the Canadian application or resulting registration may be rejected or deemed invalid.[8]

4. Having Made Known the Mark in Canada

An application may also be filed based on "making known" in Canada — corresponding to the use of a trade-mark abroad but not in Canada. Under this filing basis, an applicant must demonstrate through affidavit evidence that, due to the extent of use and advertising in another country, the trade-mark has become known to Canadians as of the filing date of the application.[9]

5. Multiple Filing Bases

An applicant may assert multiple filing bases in association with both wares and services in a single application. While the applicant may not assert actual use in Canada and proposed use in Canada in association with the exact same wares and/or services, the applicant may assert actual use for some wares and/or services and proposed use for other dissimilar wares and/or services. Each filing basis will be reviewed and assessed independently to ensure that the formal requirements are met. There are no additional government fees associated with entering multiple filing bases.

C. EXAMINATION/PROSECUTION STAGE

Once a trade-mark application is filed, an Examiner at the Trade-marks Office reviews the application to ensure that the application is registrable. This stage is generally referred to as the "examination" or "prosecution" stage. There are several technical and substantive objections that may be cited by the Trade-marks Office with respect to the registration of a particular trade-mark application.

The technical requirements to be met for a new application have been provided above under the title "Filing Requirements." Substantive objections to the registrability of the subject application can include whether the trade-mark

(1) is the name or surname of a living individual (section 12(1)(a));

(2) is clearly descriptive or deceptively misdescriptive in English or French of a character or quality of the goods and/or services (section 12(1)(b));

(3) is the name of the goods or services in any language (section 12(1)(c));

(4) can be confused with a prior application or registration of record (section 12(1)(d)); and

(5) can be confused with a prohibitive mark under sections 9 and 10 (section 12(1)(e)); and

(6) is considered a geographical indication of origin (sections 11.14 and 11.15).

A more thorough discussion of each of the noted substantive objections can be found in Chapter 3 of this book.

D. APPROVAL

If there are no objections issued by the Trade-marks Office or once a response to any technical or substantive objection(s) have been submitted by the applicant and accepted by the Trade-marks Office, the application will be approved for advertisement in the Canadian _Trade-marks Journal_. To document the foregoing, an Approval Notice for the relevant application is issued to the applicant.

The Approval Notice may also refer to a mark(s) that has been deemed as "associated" with the approved trade-mark. Trade-marks are "associated" if the applicant is the owner of other marks with which the mark being applied for could otherwise be confused.[10]

E. ADVERTISEMENT

The Canadian _Trade-marks Journal_ is published weekly and is available for public review every Wednesday. Any interested person has two (2) months from the date on which a trade-mark application is advertised to oppose the application by initiating an opposition proceeding or to request an extension of time within which to do so. It is possible to request a retroactive extension of time to oppose if there are sufficient exceptional circumstances to warrant such an extension.

F. OPPOSITION

In Canada, opposition proceedings are considered by an administrative tribunal — the Trade-marks Opposition Board. Notably, opposition proceedings constitute a method to determine rights to the registration of a particular trade-mark application and not to determine rights in the Canadian marketplace related to the use of a trade-mark. Separate legal proceedings must be undertaken to determine any infringement or passing-off issues.

Opposition proceedings are adversarial and include the following stages:

(1) the filing of a Statement of Opposition by an opponent;

(2) the filing of a Counterstatement by the applicant;

(3) the filing of the Opponent's affidavit evidence, which is optional (and any cross-examination(s) of the affiant(s));

(4) the filing of the applicant's affidavit evidence (and any cross-examination(s) of the affiant(s));

(5) the filing of the Opponent's reply evidence, which is optional (and any cross-examination(s) of the affiant(s));

(6) the filing of the Written Arguments of both parties (the filing of a Written Argument is optional). If filed, the Written Argument is forwarded to the Trade-marks Office in duplicate and remains sealed until both parties' submissions are available;

(7) the attendance (optional) of each party at an Oral Hearing; and

(8) the appealing (optional) of the decision of the Trade-marks Opposition Board by the relevant parties.

Although Canadian opposition proceedings can take a minimum of two or three years to complete, there are extensions available to the parties if sufficient reasons and/or consent is provided. The proceedings can be a complex, lengthy, and expensive process, but are usually not as lengthy or expensive as a US opposition. There are no costs assessed at the Opposition Board level nor damages awarded.

An in-depth review of opposition proceedings is included in Chapter 5.

G. ALLOWANCE

If no opposition is filed or the Trade-marks Opposition Board has rendered a decision in an opposition proceeding in favour of the applicant that is not appealed, the trade-mark application will be allowed and a Notice of Allowance will be issued to the applicant. The Notice of Allowance may include a request to file a Declaration of Use (if the application includes the "intention to use" in Canada filing basis), and/or the filing of the final registration fee. Specimens are not required to be filed in association with a Declaration of Use. Once the Notice of Allowance issues, it is no longer possible to oppose the application.[11]

H. REGISTRATION AND RENEWAL

The final stage of an application is the issuance of a Certificate of Registration. In order to obtain a Certificate of Registration, a registration fee[12] is required to be paid. The renewal period for a registration is 15 years from the date of registration. A registration may be renewed indefinitely for subsequent 15-year periods (assuming that the trade-mark remains in use in Canada). Unlike other jurisdictions, specimens and/or Declarations of Use are not required to be filed periodically after registration. Registration is renewed by way of a request to the Trade-marks Office and the payment of the appropriate renewal fee.[13]

I. POST-REGISTRATION ISSUES

1. Registration Information

Once registered, it is important to ensure that information is provided to the Trade-marks Office concerning any changes to:

(1) the ownership of the registration,

(2) the address of the owner listed in the registration,

(3) the wares or services listed in the registration, and/or

(4) the trade-mark itself.

If the ownership and address listed in the registration is not updated on a timely basis, important notices related to renewal deadlines, summary cancellation notices, legal proceedings, etc. that affect the trade-mark registration may not be received by the owner.

Furthermore, any changes to the list of goods and/or services or to the actual trade-mark could also allow the registration to be subject to cancellation. The foregoing changes may require the filing of a new trade-mark application to ensure that the owner's rights continue to be protected. If not undertaken at the relevant time, significant time and costs may be incurred to evidence such rights.

2. Trade-mark Enforcement/Litigation

A trade-mark owner also has the right to enforce or defend its trade-mark in federal or provincial court in the context of infringement actions, passing-off actions, or other related legal proceedings. A discussion of the various proceedings related to trade-marks initiated in Canadian courts is included in Chapter 7.

J. DOMAIN NAMES/INTERNET

The rapid development and commercial significance of the Internet has created many unique issues in relation to intellectual property rights. Issues involving jurisdiction, domain names, and the use of trade-marks on Web pages represent just some of the novel problems that can be encountered in the ever-changing world of cyberspace. Chapter 9 of this book provides an overview of trade-marks as related to the Internet.

[1] _Trade-marks Act_ , R.S.C. 1985, c. T-13 ["the Act"].

[2] _Trade-marks Regulations_ , SOR/96-195, s. 32.

[3] See _Trade-marks Act_ , _supra_ note 1, s. 4.

[4] _Ibid._ , s. 34.

[5] Currently, the official filing fee is $250.00 (CAD).

[6] _Trade-marks Regulations_ , _supra_ note 2, s. 31.

[7] _Marineland Inc. v. Marine Wonderland & Animal Park Ltd._ (1974), 16 C.P.R. (2d) 97 (F.C.T.D.).

[8] _Allergan Inc. v. Lancôme Parfums & Beauté & Cie, société en nom, collectif_ (2007), 64 C.P.R. (4th) 147 (T.M.O.B.).

[9] _Trade-marks Act_ , _supra_ note 1, s. 5.

[10] _Trade-marks Act_ , _supra_ note 1, s. 15.

[11] _Trade-marks Act_ , _supra_ note 1, s. 39.

[12] Currently, the registration fee is $200.00 (CAD).

[13] Currently, the renewal fee is $400.00 (CAD).

**CHAPTER 3**

SPECIFIC REQUIREMENTS FOR CANADA

A. FILING BASIS OF A TRADE-MARK APPLICATION

As briefly noted in Chapter 2, the _Trade-marks Act_ [1] sets out the information that must form part of the contents of any trade-mark application under section 30. In order to obtain a filing date, one of the minimum requirements is to indicate the filing basis of the trade-mark application. As indicated previously, an application may be based upon any of the following:

• use in Canada,

• proposed use in Canada,

• use and application/registration in a country of the Union.

• making known.

An application can also be based on a combination of these filing bases, each of which will be reviewed independently, on its own merits.

1. Use in Canada

a. Determination of the Date of First Use

In order to register a trade-mark on the basis that it has been "used" in Canada per sections 16(1) and 30(b) of the Act, the applicant must provide a date of first use of the mark in Canada.

The Act does not require the applicant to indicate the actual date of first use of the mark, and an applicant who has used its mark prior to filing may "out of a super abundance of caution"[2] claim any date subsequent to the actual date of first use. The applicant can indicate either the exact day, month, and year on which such use began, a specific month and year, or only a year. It is important to note that when indicating only the month and year, the use will be deemed to have commenced on the last day of that month, and when indicating only a year, the use will be deemed to have commenced on December 31, the last day of that year. This date is important, because it will be regarded as the "effective date" for the purpose of determining entitlement in cases of alleged confusion with third-party trade-marks. For obvious reasons, the applicant should look for the earliest date of use possible as prior use.

Section 30(b) of the Act specifies that the date of first use is required only with respect to each general class of wares or services described in the application and, therefore, is not required for each specific ware or service within a general class.

Furthermore, the applicant must provide, in accordance with section 30(i) of the Act, a statement to the effect that it is satisfied that it is entitled to use the mark in association with the wares and services described in the application.

b. Use in Accordance with Section 4

Use of a trade-mark in Canada can be established by the applicant itself, by a licensee, or by a named predecessor in title. The concept of "use" is core to the notion of trade-marks because trade-mark rights may be acquired through use. Section 2 of the Act defines "use" in relation to a trade-mark as meaning "any use that by section 4 is deemed to be a use in association with wares or services."

To assess whether the trade-mark is effectively in use in association with wares or services, we must therefore refer to section 4 of the Act. Section 4(1) of the Act sets out the following:

(1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or in possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person whom the property or possession is transferred.

For use to occur "in association with" wares, there must be a sale — that is, a transfer of possession in Canada in the normal course of trade. Also, in order to comply with section 4(1) of the Act, the trade-mark must be marked on the wares themselves or on the packaging, or must be so associated with the wares at the time of transfer that notice of the association is given. It has been established by the courts that use of a trade-mark in general advertising and promotional material in Canada is usually not considered "use of the mark in association with wares." However, advertising _at the point of sale_ may constitute use at the time of transfer of the wares if the advertising is sufficiently close in proximity to the wares on display for sale.[3]

The concept of "transfer in the normal course of trade" is not defined in the Act. The jurisprudence has held that a trade-mark does not need to be used along the entire chain of distribution ending with an ultimate consumer.[4] The "normal course of trade" includes use by intermediaries such as in the context of a sale from the manufacturer to the distributor or from the distributor to a retailer.

Also, if a trade-mark is affixed on wares or on their packaging in Canada, when the wares are exported from Canada, the trade-mark is deemed to be used in Canada in association with those wares.[5]

With respect to services, section 4(2) of the Act states that:

(2) A trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.

Contrary to the definition of "use in association with _wares_ ," the use of a trade-mark in the context of advertising a _service_ may constitute use of that mark as long as the service is also available in Canada. It may be sufficient that the applicant is offering and is prepared to offer the services in Canada;[6] however, displaying a trade-mark in the pre-launch advertising of a service that is not yet available in Canada does not constitute use of the mark.[7] Similarly, advertising the trade-mark in association with services in publications that circulate within Canada, without the service actually being available in Canada, does not constitute use of the mark in Canada.[8]

c. Predecessor in Title

If the applicant acquired a trade-mark from a third party, it can nonetheless benefit from the use by its predecessor in title provided the applicant can establish continuous use of the mark and a clear chain of title. To establish and rely on the use by a predecessor in title from the date of first use that is claimed in the application, the applicant must submit the name of all its predecessors in title, along with a statement that each named predecessor in title used the trade-mark in connection with each of the general classes of wares or services listed in the application. The failure to identify a predecessor in title from the claimed date of first use can invalidate the application, because it constitutes a violation of section 30 of the Act.[9]

d. Use by Licensee

In a situation where the applicant itself does not use the trade-mark in Canada, but has granted a licence to a third party in compliance with the requirements of section 50 of the Act, the use by this licensee will enure to the benefit of the applicant. The applicant can therefore rely on the use of the trade-mark of its licensees in Canada in support of the claimed date of first use.

2. Proposed Use

Pursuant to sections 30(e), 16(3), and 42(2) of the Act, an applicant may file an application for a trade-mark that has not yet been used in Canada in order to secure a filing date that will be considered the date of entitlement of the trade-mark against conflicting marks that could subsequently be filed or used in Canada. However, such trade-mark rights will only be acquired where use of the mark ensues. Indeed, the registration will issue only after the applicant has filed a Declaration of Use indicating that the trade-mark is in use in Canada in association with each of the wares and services specified in the application.

An application based on proposed use must include a statement that "the applicant, by itself or through a licensee, or by itself and through a licensee, intends to use the trade-mark in Canada."[10] Therefore, if the applicant intends to use the mark itself rather than through a licensee, it must state its intention at the time of filing of the application. Alternatively, if the applicant does not intend to use the mark itself, and instead only through a licensee, it must also indicate this when filing its application.

a. Possible Prior Use

It is important to note that an application based on proposed use can be refused for non-compliance with section 30 of the Act if the applicant has actually used its trade-mark in Canada prior to the date of filing.[11] Should it be established in opposition proceedings against an application based on proposed use only, that the trade-mark was used prior to its filing date, the Registrar will refuse the application on the basis that the statement made by the applicant in accordance with section 30 of the Act is false.

b. Declaration of Use

Once an application based on proposed use is allowed for registration, section 40(3) of the Act requires the applicant to file a Declaration of Use within six months of the date set out in the Notice of Allowance, or within three years of the filing date of the application in Canada, whichever is the later date.

The Declaration of Use must include a statement to the effect that the applicant, the applicant's successor in title, or a licensee has commenced use of the trade-mark in association with the wares and services in Canada that are specified in the application.[12] An applicant can choose to file a complete or partial Declaration of Use. If there has been use of the trade-mark in association with all the wares and services specified in the application, not only with certain of the wares or services contained in a general class, a complete Declaration of Use can be filed and the certificate of registration will cover all of the specified wares and services. In the event that the trade-mark is in use with certain of the wares and services only, and that it will not be used with the remaining wares or services, an applicant can file a partial Declaration of Use with respect to those wares and services in association with which the mark is used, and the certificate of registration will be limited to those wares or services. The remaining wares and services will be presumed to have been deleted from the application.

If the trade-mark is not yet in use in association with all of the wares and services specified in the application by the deadline indicated in the Notice of Allowance for the filing of the declaration, the applicant can request an extension of time to file the Declaration of Use. The request must identify the grounds for granting an extension of time and must be accompanied by the payment of the prescribed government fee. The Registrar currently grants extensions of time of six months. Extensions of time of one year can also be granted upon request when an applicant is awaiting approval for a product from a government department.[13] However, in the event that more than three years have passed since the initial deadline to file the Declaration of Use provided in the Notice of Allowance, the Registrar will require "significant substantive reasons which clearly justify a further extension of time"[14] to substantiate any requests that are evaluated on a case-by-case basis. If no Declaration of Use or no request for an extension of time to file a Declaration of Use is filed within the prescribed period, the application will be deemed abandoned.

3. Application/Registration and Use Abroad

In accordance with section 16(2) of the Act, an applicant that has duly registered a trade-mark in or for its country of origin and that has used the trade-mark in association with wares or services in a country of the Union is entitled to secure the registration of said trade-mark in Canada in respect of the same wares and services in association with which it is registered in that country of origin and has been used in a country of the Union.

An applicant can also rely on an application filed in its country of origin; however, the corresponding Canadian application will only be approved and proceed to advertisement once the foreign registration is issued and a certified copy of the foreign registration is submitted along with the prescribed government fee and/or translation if not in English or French.

As per section 2 of the _Trade-marks Act_ , "country of origin" means (a) the country of the Union in which the applicant for registration of a trade-mark had at the date of the application a real and effective industrial or commercial establishment, or (b) the country of the Union where he on that date had his domicile, or (c) the country of the Union of which he was on that date a citizen or national.

The use and registration abroad filing basis permits an applicant to obtain registration of that trade-mark in Canada without having to establish use in Canada, thus eliminating the need to file a Declaration of Use. It also allows an applicant to obtain registration of a trade-mark in Canada that would normally be refused under sections 12(1)(a) and 12(1)(b) of the Act, provided that the trade-mark is not without distinctive character, as per section 14 of the Act.

The following conditions must be respected in order to assert a use and registration abroad filing basis pursuant to section 16(2) of the Act:

• at the time of filing of the Canadian application, the applicant must be the owner of an application or a registration that subsists[15] and is valid in its country of origin, which must be a country of the Union;

• the name of the country of the Union where the trade-mark has been used in association with the listed wares or services must be indicated in the Canadian application;

• the details of the corresponding foreign application/registration must be provided; and

• before approval, a certified copy of the certificate of the corresponding foreign registration must be filed along with the prescribed government fee and/or any relevant translation.

It is not necessary to assert the filing basis of use and registration abroad at the time the corresponding Canadian application is filed. This filing basis can be added at any point prior to advertisement of the application in the _Trade-marks Journal_ , in accordance with section 32 of the _Trade-marks Regulations_.[16] There is also no requirement to file evidence of use of the trade-mark in a country of the Union when filing the corresponding Canadian application. However, it is important to note that the use of the applied-for trade-mark must have already occurred at the time of filing the Canadian application, either in the country of origin or another country of the Union.[17] In a decision of the Opposition Board, _Allergan Inc. v. Lancôme Parfums & Beauté & Cie, société en nom collectif_,[18] the Canadian trade-mark application, which was filed based on use and registration in France, was refused on the grounds that the applicant had not established use of the trade-mark in its country of origin at the time the Canadian application was filed.

For the use and registration abroad filing basis to be valid, the "foreign registration of the trade-mark must exist at least until the date upon which registration is granted in Canada."[19]

4. Making Known

In the case of a trade-mark that is not in use in Canada, sections 5, 16(1), and 30(c) of the Act allow an application to be based on the trade-mark having been "made known" in Canada. In order to file an application on the basis of making known in Canada, the application must contain the following information: (a) the name of a country of the Union in which the trade-mark has been used by the applicant and (b) the date and the manner in which the applicant has made it known in Canada in association with the wares and services.[20]

For a trade-mark to be "deemed" to be made known in Canada, section 5 of the Act stipulates three conditions:

A trade-mark is deemed to be made known in Canada by a person only if it is used by that person in a country of the Union, other than Canada, in association with wares or services, and

(a) the wares are distributed in association with it in Canada, or

(b) the wares or services are advertised in association with it in

(i) any printed publication circulated in Canada in the ordinary course of commerce among potential dealers in or users of the wares and services,

(ii) radio broadcasts ordinarily received in Canada by potential dealers in or users of the wares and services,

and it has become well known in Canada by reason of the distribution or advertising.

Therefore, the trade-mark must be used by the applicant in a country of the Union, the wares and services must be distributed or advertised in Canada, and the trade-mark must be well known in Canada.

The _Valle's Steak House v. Tessier_ [21] decision clarified that for a trade-mark to be considered well-known in Canada, it is not necessary that it be well-known across the entire country, as long as it is well known in a substantial part of Canada.

B. AMENDMENT OF THE FILING BASIS OF THE APPLICATION

The Regulations allow an applicant to add, delete, or modify some of the filing bases prior to advertisement of the application in the _Trade-marks Journal_ under certain conditions, while other amendments are prohibited once the application is filed.

1. Amendment to the Date of First Use or Making Known

Section 31(c) of the Regulations stipulates that "no application for the registration of a trade-mark may be amended where the amendment would change the date of first use or making known in Canada of the trade-mark to an earlier date, except where the evidence proves that the change is justified by the facts."

Despite the general rule prohibiting an amendment that asserts an earlier date, the applicant may request such a change by submitting evidence in the form of an affidavit or a statutory declaration to justify the amendment. The change of date to an earlier date will only be allowed if the Registrar finds that there is sufficient evidence.

It is, however, possible, before the application is advertised in the _Trade-marks Journal_ , to change the date of first use or making known in Canada for a date that is subsequent to the claimed date of first use.

Once the application has been advertised, it is no longer possible to change the date of first use or making known,[22] unless the applicant can prove that there was a clerical error by the Trade-marks Office.[23]

2. Amendment from Actual Use or Made Known to Proposed Use

Section 31(d) of the Regulations does not prohibit, prior to advertisement of the application in the _Trade-marks Journal_ , an applicant from changing its trade-mark application based on actual use or making known in Canada to one based on proposed use instead. The reason for allowing such an amendment is that it does not introduce an earlier date of entitlement. Thus, the applicant's date of entitlement becomes the filing date of the application, which is subsequent to the date of first use or the date of making known in Canada.

However, once the application has been advertised, it is no longer possible to change an application from one alleging use or making known to one based on the proposed use of the trade-mark.[24]

3. Amendment from Proposed Use to Use

Section 31(d) of the Regulations prohibits, at any time after filing, the change from an application based on proposed use to one based on use or making known in Canada.

If an applicant notices, after the filing of its application, that the trade-mark has been in use in Canada prior to the filing date, then its only option is to file a new application on the correct basis, along with the prescribed filing fee. If the basis is challenged during opposition proceedings, the application may be found to be invalid.

4. Amendment of an Application Based on Application/Registration and Use Abroad

An applicant is only prohibited from adding the basis of use and registration abroad to its application after it has been advertised in the _Trade-marks Journal_. At any time before advertisement, the applicant can add this basis as long as the foreign application/registration existed at the time of filing of the Canadian application, and that use had occurred in a country of the Union prior to or at the filing date in Canada.

A use and registration abroad basis can also be removed at any time prior to the registration of the mark.

5. Multiple Bases

For applications filed with two or more bases, it is possible for an applicant to delete some of the bases prior to registration. Therefore, for an application based on proposed use in Canada, as well as use and registration abroad, the applicant may wish to consider deletion of the proposed use basis and to obtain the registration based on use and registration abroad (if the foreign registration covers the same wares and services). The approach outlined above forgoes the need to await use of the trade-mark in Canada and the filing of a Declaration of Use.

C. PRIORITY CLAIM

It is important to note that a priority claim is not a filing basis, but merely a claim to obtain an earlier date of entitlement based on the prior filing of a foreign application. As mentioned above, the filing date of an application is determined by the application filing bases — namely, use in Canada, proposed use in Canada, use and application/registration in a country of the Union, or making known.

Pursuant to section 34 of the Act, where an application has been filed in any country of the Union, and an application is subsequently filed in Canada for the registration of _substantially_ the same trade-mark by the _same applicant_ in association with the _same kind of wares or services_ , the date of filing of the Canadian application will be deemed to be the date of filing of the foreign application.

To be valid, the priority claim must also respect the following requirements:

• the Canadian application must be filed within six months of the date of filing of the corresponding foreign application; and

• the applicant must, at the time of filing of the Canadian application, have a real and effective industrial or commercial establishment in the country of the Union, or have a domicile, or be a national of the country of the Union.

By asserting a priority claim, the applicant could be in a position to claim prior rights over alleged conflicting applications filed earlier in Canada, but within that six-month period. In order to provide guidance on priority claims, the Trade-marks Office issued a new Practice Notice in 2010.[25]

D. DOCUMENTS REQUIRED

1. Power of Attorney

In Canada, the filing of a Power of Attorney is not required to enable a trade-mark agent to validly file a trade-mark application on behalf of an applicant.

2. Certified Copy of Priority Document

In practice, when asserting a priority claim, a copy of the corresponding foreign application does not need to be filed with the Trade-marks Office. The applicant must, however, provide the filing date of the corresponding foreign application, the application's serial number, and the country of filing. The Trade-marks Office may also request that the applicant furnish any evidence necessary to fully establish its right to priority at any time before the _allowance_ of the application.[26]

3. Registration Abroad

As mentioned previously, an application for registration of a trade-mark that is based on an application/registration and use abroad cannot proceed to advertisement in Canada until a certified copy of the registration is filed in Canada, along with the prescribed government fee. If the certified copy is in a language other than English or French, the applicant must submit a photocopy of the certified copy together with a translation in English or French.[27]

E. SPECIFIC STATEMENT OF WARES AND SERVICES

It is important to note that Canada does not adhere to the international classification system. As a result, it is not permitted when filing an application to simply refer to the Nice classification or to a general class of wares and services. However, an applicant may list as many wares and services in its application as it wants, without incurring additional expenses.

Section 30(a) of the Act requires that the application contain "a statement in ordinary commercial terms of the specific wares or services in association with which the mark has been or is proposed to be used." In drafting the statement of wares or services, the applicant can refer to the _Trade-marks Wares and Services Manual_ of the Canadian Intellectual Property Office, which can be consulted online in both official languages. The _Trade-marks Wares and Services Manual_ contains a representative listing of acceptable wares and services as well as indefinite terms, but it is not exhaustive. The wares and services not only have to be stated in ordinary commercial terms, they must also be _specifically_ described. When a trade term is described in ordinary commercial terms, but can have two completely different meanings, the Registrar will request that the term be further specified. Wares such as "computer software," "telecommunication equipment," and "clothing" are not acceptable because they encompass a broad range of possibilities.

With respect to services, the Act and the Regulations do not provide any definition of the term "services." It has been given a broad and liberal interpretation by the courts and could include services that are "incidental" or "ancillary" to the applicant's sale of wares.[28] However, the jurisprudence also affirms that the service must be an activity that offers a benefit to the public.[29] Mere marketing or advertising of the applicant's own services, where the only person who would benefit is the applicant, does not constitute a service and will be refused as such.[30]

Once the trade-mark application is filed, section 31(e) of the _Trade-marks Regulations_ prohibits any amendment or addition that would broaden the statement of wares or services. The drafting of the statement of wares and services at the time of filing is therefore essential because an applicant would not want to unduly restrict the scope of its protection, but must nonetheless comply with the obligation to describe the wares and services in specific and ordinary commercial terms. After the application is filed, an applicant may delete or restrict its statement of wares and services at any time as long as such deletion does not broaden the scope of the wares and services.

Even if a statement of wares and services is approved by the Registrar for publication, non-compliance with section 30(a) of the Act could be raised in the context of an opposition proceeding, and the application could be refused on the grounds that the wares and services are not described in specific and ordinary commercial terms.

Where an applicant relies on a foreign application/registration and use abroad filing basis for its Canadian application, the scope of wares and services must fall within the same general class of wares and services. For wares or services not covered by the foreign application/registration, the applicant can rely on proposed use or use in Canada. Furthermore, if the statement of wares and services of the Canadian trade-mark application appears to exceed the scope of the corresponding foreign application, the Trade-marks Office will likely raise an objection.

As previously indicated, it is not possible to extend the statement of wares and services of a pending application. However, once the trade-mark is registered, the owner may file an application for amendment of a registration in order to extend the statement of wares or services. This application follows the same process as the initial application and is therefore subject to examination, advertisement, and opposition. If the application to extend the statement of wares and services is allowed for registration, the extended wares and services will become part of the initial registration, and the owner will only have to renew a single registration instead of two.

F. DRAWINGS/SPECIMENS

For applications that cover more than simply a word or words not depicted in a special form, section 30(h) of the Act requires the applicant to file a drawing of the trade-mark with the Registrar as well as such number of accurate representations of the trade-mark as may be prescribed.

To comply with the requirements of the Act, the drawing of the trade-mark must meet the criteria developed by the courts. As held in _Novopharm Ltd. v. Burroughs Wellcome Inc._ ,[31] the drawing is an important component because it is required to define the configuration in order to determine the limits of the trade-mark claimed. This decision has provided some guidance regarding the acceptability of drawings:

(1) The applicant must "provide an accurate drawing of the mark which, either by itself or in conjunction with the description of the mark in the application, delineates the shape of the mark claimed."[32]

(2) The drawing must be a "meaningful representation of the applicant's mark in the context of the written description appearing in the application."[33]

(3) "[I]f a specimen is to form part of the description of the mark, it must specifically be referred to."[34]

Section 27(1) of the Regulations specifies that the drawing must be in black and white and no larger than 7 cm [times] 7 cm. However, as a result of today's technology and for the Trade-marks Office to avoid having to request from the applicant a more suitable drawing for the purpose of reproduction in the _Trade-marks Journal_ , the Trade-marks Office issued a Practice Notice in 2000 asking the applicant to submit a drawing as large as possible up to (but not larger than) 22 cm [times] 35 cm.[35]

The drawing can be submitted on a diskette, on a CD-ROM, or through online electronic filing. The Trade-marks Office will only accept drawings in TIFF format.

Where colours are claimed as a component of the trade-mark, the applicant must submit a written description of the colours, or a black and white drawing lined for colour in accordance with the colour chart described in the Regulations.[36] The description of the colours must be included in the application.[37] In order to provide guidance in describing the appropriate colours, the Trade-marks Office issued a new Practice Notice in late 2010.[38]

Any amendments to the drawing and description are subject to the limitations set out in sections 32 and 33 of the _Trade-marks Regulations_. Therefore, no amendments can be made once the trade-mark has been advertised.[39] Prior to advertisement, only amendments that do not alter the distinctive character of the trade-mark or affect its identity will be accepted. If the drawing does not correspond to the verbal description contained in the application, the applicant will be authorized to amend the drawing to better reflect the description. However, if the amendment is to change the colour of the trade-mark, or if the drawing is inadequate and does not properly represent the trade-mark, it will be considered a change of the trade-mark's identity and the amendment will not be authorized.

G. REGISTRABILITY ISSUES

As per section 12(1) of the Act, there are nine subcategories of trade-marks that are not registrable:

12(1) Subject to section 13, a trade-mark is registrable if it is not

(a) a word that is primarily merely the name or the surname of an individual who is living or has died within the preceding thirty years;

(b) whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin;

(c) the name in any language of any of the wares or services in connection with which it is used or proposed to be used;

(d) confusing with a registered trade-mark;

(e) a mark of which the adoption is prohibited by section 9 or 10;

(f) a denomination the adoption of which is prohibited by section 10.1;

(g) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a wine not originating in a territory indicated by the geographical indication;

(h) in whole or in part a protected geographical indication, where the trade-mark is to be registered in association with a spirit not originating in a territory indicated by the geographical indication; and

(i) subject to subsection 3(3) and paragraph 3(4)(a) of the _Olympic and Paralympic Marks Act_ , a mark the adoption of which is prohibited by subsection 3(1) of that Act.

The following gives a brief overview of each of these categories of trade-marks that are not registrable.

1. Name or Surname of an Individual

Section 12(1)(a) of the Act prohibits the registration of a trade-mark that constitutes as a whole primarily merely the name or the surname of an individual. This restriction applies to the name or surname of individuals who are living or have died within the past 30 years and also covers pluralized surnames as well as surnames in the possessive form.[40]

Therefore, when confronted with a trade-mark that may have name or surname connotations, research will be conducted by the Trade-marks Office in order to determine whether it is in fact the name or surname of a living individual.[41] In accordance with the current Practice Notice of the Trade-marks Office regarding names and surnames, an objection will generally be considered if there are at least 25 entries of the name or surname located in Canadian telephone directories, which include the online directory Canada411.com.[42] Once 25 entries have been identified, the test to determine whether a proposed mark is primarily merely the name or surname of an individual must be applied.[43] The test, as propounded by Justice Jackett in _Standard Oil Co. v. Registrar of Trade-marks_ ,[44] is to determine what the response of the general Canadian public to the word would be. In other words, would a Canadian of ordinary intelligence and of ordinary education in English or French respond to the word by thinking of it as being the name or surname of an individual (rather than a fictitious name), or something else such as a dictionary word or the brand or mark of a business?[45]

In order to overcome an objection based on section 12(1)(a) of the Act and prove that the proposed mark is not "primarily merely" the name or surname of an individual, the applicant must demonstrate that the name or surname has an alternative significance, such as a common dictionary meaning,[46] a geographical location,[47] a given name,[48] or an acronym/invented word.[49] Thus, if the ordinary Canadian is just as likely to think of the name as having another meaning, it cannot be held to be "primarily merely" a name or surname.

It is important to note that if the Trade-marks Office considers that the trade-mark consists of the name or surname of a "famous individual," an objection may be raised, notwithstanding the existence of less than 25 entries in Canadian directories.[50] In these cases, the applicant may once again argue against this objection by demonstrating that the famous name or surname has another common meaning.

It is also possible for an applicant to obtain registration of a name or famous name by proving that the name has acquired distinctiveness in accordance with section 12(2) of the Act, or for a foreign applicant, by demonstrating that the trade-mark is not without distinctive character as per section 14 of the _Trade-marks Act_.

2. Clearly Descriptive or Deceptively Misdescriptive

Section 12(1)(b) of the _Trade-marks Act_ prohibits the registration of a trade-mark "whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in English or French of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions or of the persons employed in their production or their place of origin."

a. Applicable Test

In order to determine whether a word or words are objectionable under section 12(1)(b) of the _Trade-marks Act_ , such words must be clearly descriptive or deceptively misdescriptive as a matter of _first impression_ according to the test laid down in _Drackett Co. of Canada Ltd. v. American Home Products Corp._ [51] Furthermore, according to this test "the word 'clearly' in s. 12(1)(b) of the Act,... is not synonymous with 'accurately' but rather the meaning of the word 'clearly' is easy to understand, self-evident or plain."[52] Therefore, an evaluation of the descriptive character of the mark should not be based on research but rather on the evident meaning of words.[53]

The prohibition under section 12(1)(b) of the _Trade-marks Act_ is for a word or words that are "clearly" descriptive. To this end, the courts have held on numerous occasions that a trade-mark that is merely suggestive of the quality or characteristic of the wares or services or of their place of origin is registrable.[54] As determined in _Thermogene Co. v. Cie chimique de produits de France_ ,[55] "for a word to be really descriptive, it must describe something which is material to the composition of the goods."

A trade-mark that vaguely suggests some association with the wares or services will therefore be registrable. Also, it is important to note that the restriction applies only to a word or words in the English or French language. A trade-mark will not lose its registrability because it has a descriptive connotation in a foreign language.

A recent Practice Notice has indicated that the Trade-marks Office will raise an objection in connection with abbreviations, acronyms, or initials (including professional designations) that are considered to be clearly descriptive of the goods and/or services claimed in the application.[56]

b. Composite Marks

To be refused under section 12(1)(b) of the Act, a trade-mark must _as a whole_ be considered "clearly descriptive" or "deceptively misdescriptive." Therefore, when a trade-mark is made up of descriptive words together with other non-descriptive elements it cannot be considered "clearly descriptive."

With respect to a design element that accompanies words that are clearly descriptive, it is important to emphasize that section 12(1)(b) of the _Trade-marks Act_ stipulates that a trade-mark can be considered clearly descriptive "when sounded." In the decision _Best Canadian Motor Inns Ltd. v. Best Western International_ ,[57] the Federal Court held that the words "BEST CANADIAN MOTOR INNS" were the dominant feature of the mark despite the presence of a design element. Thus, due to the fact that these words were clearly descriptive of the character or quality of the applicant's services _and_ more prominent than the design element, the mark as a whole, when sounded, was held to not be registrable.

On the basis of this decision, the Trade-marks Office issued a Practice Notice[58]regarding the test applicable to composite marks that include words that are the dominant feature of the trade-mark. Under this test, the Trade-marks Office will now consider a composite mark (that is, marks composed of both word and design elements) unregistrable if, when sounded, it contains word elements that are the dominant feature of the mark, and the word elements are clearly descriptive or deceptively misdescriptive in accordance with section 12(1)(b) of the Act. Therefore, when the word element of a composite mark is not the dominant feature of the mark, the Trade-marks Office will consider that the mark in its totality is not, when sounded, clearly descriptive or deceptively misdescriptive and contrary to section 12(1)(b) of the Act.[59]

When facing an objection based on the descriptiveness or misdescriptiveness of the mark, an applicant may overcome it by proving that the mark has acquired distinctiveness in accordance with section 12(2) of the Act or, for a foreign applicant, by demonstrating that the trade-mark is not without distinctive character as per section 14 of the Act.

3. Name of the Wares or Services in Any Language

Although section 12(1)(b) of the Act considers only descriptiveness and misdescriptiveness of words in the English and French languages, section 12(1)(c) of the _Trade-marks Act_ prohibits the use of a name in any language of any of the wares and services in connection with which the trade-mark is used or proposed to be used.

Because the registration confers a monopoly for the use of a mark in association with wares and services, it has been held that "by virtue of para. 12(1)(c) no one may get such monopoly for the name in any language of the wares with which the trade mark is to be used."[60]

Therefore, if the trade-mark as a whole constitutes the name in any language of any of the wares and services, it will not be registrable. However, when only a portion of the trade-mark is clearly descriptive and there are other non-descriptive elements, the trade-mark could be registrable.

4. Confusion with a Registered Trade-mark

Section 12(1)(d) of the _Trade-marks Act_ prohibits an applicant from registering a trade-mark that can be confused with a third-party registered trade-mark.

A trade-mark will be confused with another mark if the use of both marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired, or performed by the same person, whether or not the wares or services are of the same general class.[61] Therefore, in determining whether trade-marks are confusing and could lead to a mistaken inference, section 6(5) of the _Trade-marks Act_ stipulates that the Registrar must consider all the surrounding circumstances including:

(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;

(b) the length of time the trade-marks or trade-names have been in use;

(c) the nature of the wares, services or business;

(d) the nature of the trade; and

(e) the degree of resemblance between the trade-marks or trade-names in appearance or sound or in the idea suggested by them.

It is important to note that the list of factors is not exhaustive and the weight to be given to each factor depends on the circumstances of the case.[62] Other factors that have been taken into consideration by the courts include the notoriety of a trade-mark, any evidence of actual confusion,[63] the lack of any evidence of actual confusion,[64] expert evidence,[65] survey evidence,[66] the existence of a family of trade-marks,[67] and the state of the register.[68]

The Supreme Court of Canada recently held that the test to be applied in the determination of confusion is a matter of first impression in the mind of a casual consumer who is somewhat in a hurry, who has an imperfect recollection of the trade-mark and does not pause to give the matter any detailed consideration or scrutiny or to examine closely the similarities and differences between the marks.[69]

The legal burden is on the applicant to show, on a balance of probabilities, that there is no reasonable likelihood of confusion between the marks.[70]

5. Prohibited Marks

a. Official Marks and Others

Section 12(1)(e) of the Act indicates that a trade-mark cannot be a mark the adoption of which is prohibited under sections 9 and 10 of the Act.

Section 9 lists certain words, devices, symbols, emblems, marks, and other indicia that no person shall adopt in connection with a business, as a trade-mark or otherwise, such as the following:

• the Royal Arms, Crest, or Standard;[71]

• the emblem of the Red Cross on a white ground, or the expression "Red Cross" or "Geneva Cross";[72]

• any matter that may falsely suggest a connection with any living individual;[73]

• the portrait or signature of any individual who is living or has died within the preceding 30 years;[74]

• any national flag of a country of the Union;[75]

• any badge, crest, emblem, or mark of any university[76] or that has been adopted and used by any public authority, in Canada, as an official mark[77] for wares or services, in respect of which the Registrar has given public notice of its adoption and use.

One possible way of overcoming an objection raised under section 9(1) of the Act and being able to adopt, use, or register a prohibited mark, is to obtain the consent of the person that section 9 is intended to protect.[78]

Section 10 of the _Trade-marks Act_ prohibits the adoption and use of any mark that has, by ordinary and _bona fide_ commercial usage, become recognized in Canada as designating the kind, quality, quantity, destination, value, place of origin, or date of production of any wares or services or that so nearly resembles that mark as to be likely to be mistaken for it.

b. Plant Variety Denominations

Section 12(1)(f) of the Act prohibits the adoption of a denomination protected under section 10.1 of the Act. Section 10.1 of the _Trade-marks Act_ stipulates that when a denomination is protected under the _Plant Breeders' Rights Act_ [79] in association with a plant variety, no person shall adopt it or use it as a trade-mark in association with the plant variety or another plant variety of the same species or use any mark that is so nearly resembling that denomination as to be likely to be mistaken therefor.

c. Protected Geographical Indications

Sections 12(1)(g) and (h) of the Act prohibit a trade-mark that is in whole or in part a protected geographical indication for wines or spirits, where this mark is to be registered with a wine or spirit not originating in the territory indicated by the geographical indication.[80]

d. Olympic and Paralympic Marks

Pursuant to section 12(1)(i) of the Act, a trade-mark is not registrable if it is a mark the adoption of which is prohibited by subsection 3(1) of the _Olympic and Paralympic Marks Act_.[81] The purpose of the _Olympic and Paralympic Marks Act_ is to protect marks related to the Olympic Games and the Paralympic Games and to protect against certain misleading business associations.

Section 3 of the _Olympic and Paralympic Marks Act_ prohibits the adoption or use in connection with a business, as a trade-mark or otherwise, an Olympic or a Paralympic mark or a translation of those marks or a mark that so nearly resembles an Olympic or a Paralympic mark as to be likely to be mistaken for it. However, the adoption, use, or registration, as a trade-mark or otherwise, of an Olympic or a Paralympic mark is authorized with the consent of the Canadian Olympic Committee, the Canadian Paralympic Committee, or an organizing committee for Olympic or Paralympic Games in Canada.[82]

The _Olympic and Paralympic Marks Act_ can be invoked to courts during prescribed periods by the Canadian Olympic Committee, the Canadian Paralympic Committee, or an organizing committee for Olympic or Paralympic Games in Canada.[83]

H. ASSIGNMENT AND CHANGE OF NAME

1. Assignment or Transfer

Pursuant to section 48 of the Act, a trade-mark is transferable, whether registered or unregistered, either in connection with or separately from the goodwill of the related business, and in respect of either all or some of the wares or services associated with the trade-mark.

Therefore, an application or a registration can be assigned for the entirety or for part of the wares or services and with or without the goodwill. A trade-mark application based on proposed use can also be transferred.[84] In order to record a transfer or a trade-mark assignment, it is not necessary to provide the Trade-marks Office with the original documents evidencing the transfer; the Trade-marks Office will accept photocopies.[85] The assignment document used to evidence the transfer should be signed by the trade-mark owner/applicant.[86] Once the Trade-marks Office is satisfied with the evidence submitted, it will record the transfer in the register against the pending applications and the registered trade-marks.[87] However, the Trade-marks Office will not record an assignment against abandoned applications or expunged registrations. Under the current practice of the Trade-marks Office, a transfer will be recorded upon payment of a prescribed fee of $100 per trade-mark whether registered or not.

It is important to note that a partial assignment of a trade-mark application or registration will only be authorized if the wares or services transferred to the assignee and the ones retained by the assignor are different enough to avoid confusion as to the source of the wares and services after the transfer.

Similarly, with respect to a change of ownership affecting a group of confusing trade-marks owned by the same owner that are "associated" in accordance with section 15(1) of the _Trade-marks Act_ , section 15(3) of the _Trade-marks Act_ indicates that no amendment of the register recording any change in the ownership or in the name or address of the owner of any one of a group of associated trade-marks shall be made unless the Registrar is satisfied that the same change has occurred with respect to all the trade-marks in the group, and corresponding entries are made contemporaneously with respect to all those trade-marks.

"Associated" marks are marks that the Registrar found to be confusing but that were nonetheless allowed for registration because they were owned by the same person. Thus, the Trade-marks Office will refuse to record an assignment or change of name of only part of the group of the associated trade-marks. When facing an objection by the Trade-marks Office to record an assignment of only some of the associated trade-marks, the owner has two options. One possibility is to try to convince the Trade-marks Office that the trade-marks are not confusingly similar considering all of the surrounding circumstances of section 6 of the Act and, therefore, their disassociation should be permitted. Another possibility is to request that the Trade-marks Office cancel the other registrations, if they are no longer of interest to the parties involved.

2. Change of Name

Pursuant to section 41(1)(a) of the Act, the Trade-marks Office will amend the register to reflect a trade-mark owner's change of name upon receipt of a written request.[88] Under the current practice of the Trade-marks Office, there is no prescribed fee required to record a change of name. A request for a change of name should be supported by corroborating evidence.[89] Also, because an amalgamation is merely a continuation of the amalgamated entity and not a transfer, it is possible to record a change of name that results from the amalgamation of two or more legal entities, as long as the necessary documentation accompanies the request.

Also, as mentioned above, in the case of associated marks, the change of name will be recorded with respect to all of the trade-marks in the group and not only to some of the associated marks.[90]

I. LICENSING REQUIREMENTS

1. Licence

The owner of a registered or unregistered trade-mark can license its mark in Canada in accordance with the requirements of section 50 of the Act, without impairing the distinctiveness of the mark. It is important to note that the owner risks losing its trade-mark rights should the licensing not be in conformity with the Act.[91]

Section 50(1) of the Act states under which conditions a licensee's use of a trade-mark enures to the benefit of the owner:

50(1) For the purposes of this Act, if an entity is licensed by or with the authority of the owner of a trade-mark to use the trade-mark in a country and the owner has, under the licence, direct or indirect control of the character or quality of the wares or services, then the use, advertisement or display of the trade-mark in that country as or in a trade-mark, trade-name or otherwise by that entity has, and is deemed always to have had, the same effect as such a use, advertisement or display of the trade-mark in that country by the owner.

Therefore, in order for a licence to be valid, the owner must retain direct or indirect control of the character or quality of the wares and services that are subject to the licence. There is no obligation under the Act that the licence agreement be in writing; an oral or implied licence may be acceptable in the presence of sufficient evidence of control by the owner of the trade-marks.[92]

2. Control Over the Quality and Character of the Wares/Services

For control to be recognized as sufficient under section 50(1) of the _Trade-marks Act_ , it is important to clearly define the type of control that the owner will exercise. It is also essential that the owner actually exercises it. In the context of a written licence agreement, provisions detailing the manner in which the control by the owner over the character and quality of the wares or services will be exercised (such as the licensee's compliance with the standards and instructions of the trade-mark owner) should be included. The owner should also have the right to inspect the wares and services, either by being allowed on the licensee's premises or by receiving samples of the wares, their packaging, and other material bearing the trade-mark, and to also have clear authority to order modifications to the wares and services if the use of the trade-mark does not meet the owner's standards.

It is important to note that the mere fact that a trade-mark is being used by a related company of the owner of the mark or by a subsidiary is insufficient to meet the requirements of section 50(1) of the _Trade-marks Act_ and establish a licence.[93] There must be evidence of the requisite control being exercised by the owner. Absence of control can lead to the owner's loss of exclusive right over the trade-mark for lack of distinctiveness.

3. Public Notice

Under section 50(2) of the Act, when public notice is given of the identity of the trade-mark owner and of the fact that the use of a trade-mark is under a licence, it shall be presumed that the use is licensed in accordance with the requirements of the _Trade-marks Act_. In order to rebut this presumption, it must be proven that the use is not a licensed use.[94]

The Act does not provide any further information on the type of notice that is required. However, the courts have upheld the validity of public notices that appear on the packaging or labels of wares that indicate the name of the owner and the fact that the use is under licence or under the authority of the owner.[95]

4. Right to Take Legal Proceedings

Pursuant to section 50(3) of the _Trade-marks Act_ , the licensee of a trade-mark, subject to any agreement, can institute proceedings for trade-mark infringement in its own name. This right is open to the licensee provided that the licensee has sent a notice to the owner of the mark, and the latter refused or neglected to take proceeding after two months from receiving such a notice from the licensee. In this case, the owner of the trade-mark must be added to the action as a defendant.

J. FRENCH LANGUAGE REQUIREMENTS

1. General Rule

Being part of a country where English and French are both Canada's "official languages," the National Assembly of Québec adopted, in 1977, the _Charter of the French Language_ [96] to ensure the quality and influence of the French language in Québec. As a result, French is both the official language of Québec and the normal and everyday language of work and commerce. The _Charter of the French Language_ and its regulations have considerable impact on doing business in Québec and, more precisely, on business and trade names, labelling and advertising, signs, websites, and customer relations. Simply put, the general rule is that French predominates and that all printed materials must be in French; nevertheless, another language may also appear, so long as certain specific conditions are met. Nothing in the _Charter of the French Language_ or in the _Regulation Respecting the Language and Commerce of Business_ [97] precludes the use of any artificial combination of letters, syllables, or figures or the use of pictographs, figures, or initials in product inscriptions, commercial publications and advertising, or on public signs and posters.[98]

It should be noted that the exceptions provided for under the _Charter of the French Language_ and regulations thereunder are not limited to the possible use of the English language only but rather apply to the possible use of any language other than French.

2. Trade-mark Exception

The Language of Commerce _Regulation_ allows for a recognized trade-mark within the meaning of the Act to appear exclusively in a language other than French as an inscription on a product or in a commercial publication or advertisement, unless a French version of the trade-mark has been registered.[99]

In the past, there was some uncertainty as to whether an unregistered trade-mark, whose rights are based on the common law, would benefit from the aforementioned exception. The 2006 _Procureur général du Québec v. St-Germain Transport (1994) inc._ [100] decision was the first Québec decision to clearly state that it is not necessary to register a trade-mark in order for it to be considered a recognized trade-mark under the _Trade-marks Act_ and to specify that the use of a trade-mark in association with a particular good or service during a certain amount of time may suffice to establish a right with respect to the particular mark. However, it is up to the owner of the mark to prove the use and reputation of the trade-mark in association with a particular good or service.

This judicial interpretation of a "recognized trade-mark" was adopted for the purposes of the _Charter of the French Language_ 's interpretation of the trade-mark exception and was generally accepted by the _Office québécois de la langue française_ (OQLF), a government body that administers and ensures compliance with the _Charter of the French Language_. However, the OQLF has taken a more restrictive approach to this exception in its most recent annotated _Charter of the French Language_. In its comments, the OQLF specifies that in order to ensure the application of an objective and uniform standard, which will no longer be subject to interpretation, it now considers that the trade-mark exception applies only to a mark that is registered with the Canadian Intellectual Property Office, and only if the registration requirements associated with the trade-mark in question are fulfilled at the time that the trade-mark exception is raised.

To date, there is no case law that refers to the OQLF's new restrictive interpretation of what constitutes a recognized trade-mark for the Charter's purposes. This new interpretation goes against the holding in the _St-Germain Transport_ decision, which established that an unregistered trade-mark may nonetheless be considered a recognized trade-mark under the Act if certain conditions are met.[101]

There are currently two interpretations of the trade-mark exception. Thus, despite the existing case law that, to date, continues to recognize that an unregistered trade-mark, which is recognized under the Act, may appear in English or in another language only as an inscription on a product or in a commercial publication or advertisement, a company must now also consider the OQLF's latest restrictive interpretation, which requires that the trade-mark be registered. Given this ambiguity, it is advisable for a company relying on a valuable unregistered trade-mark in a language other than French to consider having said trade-mark properly registered with the Canadian Intellectual Property Office, particularly if the trade-mark in question is composed of terms that could be found to be descriptive of the wares or services to which they relate.

3. Sanctions and Recourses Under the Charter

The OQLF is responsible for monitoring the linguistic situation in Québec and for receiving observations and complaints from the public.[102] The OQLF has the power to make inspections or inquiries either on its own initiative or pursuant to the filing of a complaint, whether by a member of the public or a competitor of the targeted business.[103] In practice, however, the OQLF usually only undertakes an inspection or inquiry following a complaint. A person making an inspection for the purposes of compliance with the _Charter of the French Language_ may, during business hours, enter any place open to the public. In the course of the inspection, the person may examine any product or document, make copies, and require any relevant information. Hindering an investigation by the OQLF is prohibited. Should the OQLF find that the _Charter of the French Language_ is being contravened, it will issue a formal notice to the offender. Should the offender fail to comply with the notice, the OQLF will then refer the matter to the Attorney General for prosecution.

A person who contravenes a provision of the _Charter of the French Language_ or its regulations is liable, for a first offence, to a fine that ranges between $600 and $6,000 for individuals, and $1,500 and $20,000 for legal entities. The fines are doubled for a subsequent offence. In addition, a person who contravenes the Charter may also be ordered to pay a further fine equal to the financial gain the offender realized or derived from the offence, even if the maximum fine has been imposed.[104] The person may also be ordered to remove or destroy non-compliant signs, advertisements, billboards, etc.[105]

[1] _Trade-marks Act_ , R.S.C. 1985, c. T-13 ["the Act"].

[2] _Marineland Inc. v. Marine Wonderland & Animal Park Ltd._ (1974), 16 C.P.R. (2d) 97 (F.C.T.D.).

[3] _General Mills Canada Ltd. v. Procter & Gamble Inc._ (1985), 6 C.P.R. (3d) 551 (T.M.O.B.).

[4] _Lin Trading Co. v. CBM Kabushiki Kaisha_ (1988), 21 C.P.R. (3d) 417 (F.C.A.).

[5] _Trade-marks Act_ , _supra_ note 1, s. 4(3).

[6] _Bedwell Management Systems Inc. v. Mayflower Transit, Inc._ (1999), 2 C.P.R. (4th) 543 (T. M.O.B.).

[7] _Denman Place Investments Ltd. v. Hefru Food Services Ltd._ (1972), 8 C.P.R. (2d) 199 (Reg. T.M.).

[8] _Parker-Knoll Ltd. v. Registrar of Trade-marks_ (1977), 32 C.P.R. (2d) 148 (F.C.T.D.).

[9] _Hardee's Food Systems, Inc. v. Hardee Farms International Ltd._ (1984), 1 C.P.R. (3d) 417 (T. M.O.B.).

[10] _Trade-marks Act_ , _supra_ note 1, s. 30(e).

[11] _Société Nationale Elf Acquitaine v. Spex Design Inc._ (1988), 22 C.P.R. (3d) 189 (T. M.O.B.).

[12] _Trade-marks Act_ , _supra_ note 1, s. 40(2).

[13] _Practice Notice — Declaration of Use — Significant Substantive Reasons_ , February 4, 1998.

[14] _Ibid._

[15] _Trade-marks Act_ , _supra_ note 1, s. 30(d).

[16] SOR/96-195, as am., SOR/99-292; SOR/2003-209; SOR/2007-91 ["the Regulations"].

[17] _Allergan Inc. v. Lancôme Parfums & Beauté & Cie, société en nom collectif_ (2007), 64 C.P.R. (4th) 147 (T.M.O.B.).

[18] _Ibid._

[19] _Union Carbide Corp. v. W.R. Grace & Co._ (1987), 14 C.P.R. (3d) 337 at 345 (F.C.A.).

[20] _Trade-marks Act_ , _supra_ note 1, s. 30(c).

[21] (1980), 49 C.P.R. (2d) 218 (F.C.T.D.).

[22] _Trade-marks Regulations_ , _supra_ note 16, s. 32(b).

[23] _Ibid._ , s. 33.

[24] _Ibid._ , s. 32(c).

[25] _Practice Notice — Priority Claims_ , September 2, 2010.

[26] _Trade-marks Act_ , _supra_ note 1, ss. 34(1) and 34(2).

[27] _Ibid._ , s. 31(1).

[28] _Kraft Limited v. Registrar of Trade-marks_ (1984), 1 C.P.R. (3d) 457 (F.C.T.D.); _Société nationale des chemins de fer français v. Venice Simplon-Orient-Express Inc._ (1995), 64 C.P.R. (3d) 87 (T.M.O.B.).

[29] _Carling O'Keefe Breweries of Canada Ltd.-Les Brasseries Carling O'Keefe du Canada Ltee Trading as Carling O'Keefe Breweries v. Anheuser-Bush, Inc._ (1985), 4 C.P.R. (3d) 216 (T.M.O.B.).

[30] _Ralston Purina Co. v. Effem Foods Ltd._ (1997), 81 C.P.R. (3d) 528 (T.M.O.B.).

[31] (1993), 52 C.P.R. (3d) 263 at 268 (T.M.O.B.), aff'd (1994), 58 C.P.R. (3d) 513 (F.C.T.D.)

[32] _Ibid._ at 267.

[33] _Ibid._

[34] _Ibid._ at 269.

[35] _Practice Notice — Improving Data Quality — Trade-mark Applications_ , October 4, 2000.

[36] _Trade-marks Regulations_ , _supra_ note 16, s. 28(2).

[37] _Ibid._

[38] _Practice Notice — Colour Claims: PANTONE_ , December 22, 2010.

[39] _Novopharm Ltd. v. Bayer Inc. et al._ (1999), 3 C.P.R. (4th) 305 (F.C.T.D.), aff'd (2000), 9 C.P.R. (4th) 304 (F.C.A.).

[40] _Practice Notice — Paragraph 12(1)(a) of the Act — Name or Surname_ , August 16, 2000.

[41] _Ibid._ ; _Gerhard Horn Investments Ltd. v. Canada (Registrar of Trade-marks)_ (1983), 73 C.P.R. (2d) 23 (F.C.T.D.).

[42] _Ibid._

[43] _Ibid._

[44] (1968), 55 C.P.R. 49 at 59 (Ex. Ct.).

[45] _Ibid._

[46] _Elder's Beverages (1975) Ltd. v. Canada (Registrar of Trade-marks)_ (1979), 44 C.P.R. (2d) 59 (F.C.T.D.).

[47] _Calona Wines Ltd. v. Canada (Registrar of Trade-marks)_ (1977), 36 C.P.R. (2d) 193 (F.C.T.D.).

[48] _Schwalb v. Godbout_ (1987), 15 C.P.R. (3d) 532 (T.M.O.B.).

[49] _Standard Oil Co. v. Registrar of Trade-marks_ , _supra_ note 44.

[50] _Practice Notice — Paragraph 12(1)(a) of the Act — Name or Surname_ , _supra_ note 40.

[51] (1968), 55 C.P.R. 29 at 34 (Can. Ex. Ct.).

[52] _Ibid._

[53] _Wool Bureau of Canada Ltd. v. Canada (Registrar of Trade-marks)_ (1978), 40 C.P.R. (2d) 25 (F.C.T.D.).

[54] _Great Lakes Hotels Ltd. v. Noshery Ltd._ (1968), 56 C.P.R. 165 (Can. Ex. Ct.); _Canada (Deputy Attorney General) v. Jantzen of Canada Ltd._ (1964), 46 C.P.R. 66 (Can. Ex. Ct.).

[55] [1926] Ex. C.R. 114.

[56] _Practice Notice — Descriptiveness and Abbreviations, Acronyms or Initials_ , October 26, 2010. See also _Practice Notice — Professional Designations and Their Initials: Paragraph 12(1)(b) of the Trade-marks Act_ , October 26, 2010.

[57] (2004), 30 C.P.R. (4th) 481 (F.C.).

[58] _Practice Notice — Paragraph 12(1)(b): "Sounded" Test Applied to Composite Marks Which Include Words That Are the Dominant Feature of the Mark_ , February 16, 2005.

[59] _Ibid._

[60] _S.C. Johnson, Ltd. et al. v. Marketing International Ltd._ (1979), 44 C.P.R. (2d) 16 at 24 (S.C.C.).

[61] _Trade-marks Act_ , _supra_ note 1, s. 6(2).

[62] _Gainers Inc. v. Marchildon_ (1996), 66 C.P.R. (3d) 308 (F.C.T.D.); _Mattel U.S.A. Inc. v. 3894207 Canada Inc._ (2006), 49 C.P.R. (4th) 321 (S.C.C.).

[63] _ConAgra Inc. v. McCain Foods Ltd._ (2001), 14 C.P.R. (4th) 288 (F.C.T.D.).

[64] _Mr. Submarine Ltd. v. Amandista Investments Ltd._ (1987), 19 C.P.R. (3d) 3 (F.C.A.); _Mattel U.S.A. Inc. v. 3894207 Canada Inc._ , _supra_ note 62; _Veuve Clicquot Ponsardin v. Boutiques Clicquot Ltée_ (2006), 49 C.P.R. (4th) 401 (S.C.C.).

[65] _Faberge Inc. v. Panax Cosmetics Research Ltd._ (1984), 3 C.P.R. (3d) 401 (T.M.O.B.).

[66] _Mattel U.S.A. Inc. v. 3894207 Canada Inc._ , _supra_ note 62.

[67] _McDonald's Corp. v. Yogi Yogurt Ltd._ (1982), 66 C.P.R. (2d) 101 (F.C.T.D.); _Park Avenue Furniture Corp. v. Wickes/Simmons Bedding Ltd._ (1991), 37 C.P.R. (3d) 413 (F.C.A.).

[68] _Kellogg Salada Canada Inc. v. Maximum Nutrition Ltd._ (1992), 43 C.P.R. (3d) 349 (F.C.A.).

[69] _Mattel U.S.A. Inc. v. 3894207 Canada Inc._ , _supra_ note 62; _Veuve Clicquot Ponsardin v. Boutiques Clicquot Ltée_ , _supra_ note 64.

[70] _Conde Nast Publications, Inc. v. Canadian Federation of Independent Grocers_ (1991), 37 C.P.R. (3d) 358 (T.M.O.B.).

[71] _Trade-marks Act_ , _supra_ note 1, s. 9(1)(a).

[72] _Ibid._ , s. 9(1)(f).

[73] _Ibid._ , s. 9(1)(k).

[74] _Ibid._ , s. 9(1)(l).

[75] _Ibid._ , s. 9(1)(i.2).

[76] _Ibid._ , s. 9(1)(n)(ii).

[77] _Ibid._ , s. 9(1)(n)(iii). For more information regarding "official marks," refer to Chapter 4 of this book.

[78] _Ibid._ , s. 9(2).

[79] _Plant Breeders' Rights Act_ , S.C. 1990, c. 20.

[80] For more information regarding "protected geographical indications," please refer to Chapter 4 of this book.

[81] _Olympic and Paralympic Marks Act_ , S.C. 2007, c. 25.

[82] _Ibid._ , s. 3(4).

[83] _Ibid._ , ss. 5(2) and 8(2).

[84] _Trade-marks Act_ , _supra_ note 1, s. 40(2)(b); _468,241 Ltd. v. Stinu Corp. of America, Inc._ (1990), 30 C.P.R. (3d) 125 (T.M.O.B.).

[85] _Practice Notice — Transfers and/or Change of Name_ , December 5, 2001.

[86] _Ibid._

[87] _Trade-marks Act_ , _supra_ note 1, s. 26(1); _Trade-marks Regulations_ , _supra_ note 16, s. 48.

[88] _Practice Notice — Transfers and/or Change of Name_ , _supra_ note 85.

[89] _Ibid._

[90] _Trade-marks Act_ , _supra_ note 1, s. 15(3).

[91] _Eli Lilly and Co. v. Novopharm Ltd._ (2000), 10 C.P.R. (4th) 10 (F.C.A.).

[92] _TGI Friday's of Minnesota Inc. v. Canada (Registrar of Trade-marks)_ (1999), 241 N.R. 362 (F.C.A.); _Wells Dairy Inc. v. UL Canada Inc._ (2000), 7 C.P.R. (4th) 77 (F.C.T.D.).

[93] _MCI Communications Corp. v. MCI Multinet Communications Inc._ (1995), 61 C.P.R. (3d) 245 (T.M.O.B.); _Dynatech Automation Systems Inc. v. Dynatech Corp._ (1995), 64 C.P.R. (3d) 101 (T.M.O.B.).

[94] _Wells Dairy Inc. v. UL Canada Inc._ , _supra_ note 92.

[95] _Larry Harmon Pictures Corp. v. Pelletier_ (1995), 66 C.P.R. (3d) 99 (T.M.O.B.).

[96] R.S.Q., c. C-11 [ _Charter of the French Language_ or "Charter"].

[97] R.R.Q., c. C-11, r. 9 ["Language of Commerce Regulation"].

[98] _Supra_ note 96, ss. 9, 14, and 26.

[99] _Supra_ note 97, ss. 7, 13, and 25.

[100] 2006 QCCQ 7631 [ _St-Germain Transport_ ].

[101] The _St-Germain_ decision was most recently reaffirmed by the Superior Court of Quebec in _Centre sportif St-Eustache c. Québec (Procureur général)_ , 2009 QCCS 3307.

[102] _Charter of the French Language_ , _supra_ note 96, ss. 157 to 164.

[103] _Ibid._ , ss. 166 to 177.

[104] _Ibid._ , s. 205.

[105] _Ibid._ , s. 208.

**CHAPTER 4**

SPECIAL TRADE-MARK APPLICATIONS IN CANADA

A. CERTIFICATION MARKS

1. What Is a Certification Mark?

A certification mark is a mark identifying goods or services of a designated standard. Certification marks are registered in association with specific wares or services and must also include the standard such wares or services must meet. For example, TMA138840 is the certification mark owned by I.W.S. Nominee Company Limited, known as the "Woolmark," which is registered in association with wares, including chemicals for wool treatment, yarns and threads, clothing, and carpets that meet the following standard:

a) That the wares shall be of high standards and of such style, appearance and quality as shall be adequate and suited to the sale, exploitation and use of such wares to the best advantage and in accordance with the written specification in respect thereof set from time to time by the registered owner and communicated to the licensee in writing; b) That the quality, style, appearance and finish of all wares sold under any sample furnished to and approved by the licensor shall be up to the quality, style and finish of such sample and will not depart therefrom in any respect without the written consent of the licensor.

Manufacturers of wool products may be licensed by I.W.S. Nominee Company Limited to affix the certification mark on their products, thereby designating them as meeting the standards set out above.

Certification marks may also be owned by non-profit organizations promoting products safe for people with certain medical conditions, such as the ASTHMA FRIENDLY mark that is licensed for use with products that have been tested and are demonstrated to be suitable for use by people with allergies. Certification marks are also one means by which Canada complies with its obligations to the World Trade Organization by recognizing geographical indications of origin, such as FLORIDA for fruit juice of a certain quality and characteristic from a specified region.

The owner of a registered certification mark may prevent its use by parties without a licence to use the certification mark or use by a licensee in association with any wares or services in respect of which the mark is registered but to which the licensee's licence does not extend.

2. Who May Register a Certification Mark?

In order for an owner to qualify to adopt a certification mark, such party must not manufacture, sell, or lease the wares or perform the services associated with the certification mark, as stated in section 23 of the _Trade-marks Act_ :[1]

23(1) A certification mark may be adopted and registered only by a person who is not engaged in the manufacture, sale, leasing or hiring of wares or the performance of services such as those in association with which the certification mark is used.

A party who is entitled to use a certification mark may register a trade-mark that is confusing with an existing certification mark, with the consent of the owner of the certification mark, if the proposed trade-mark will be used to indicate that the wares or services meet the standards associated with the certification mark, as per section 24 of the Act.

24. With the consent of the owner of a certification mark, a trade-mark confusing with the certification mark may, if it exhibits an appropriate difference, be registered by some other person to indicate that the wares or services in association with which it is used have been manufactured, sold, leased, hired or performed by him as one of the persons entitled to use the certification mark, but the registration thereof shall be expunged by the Registrar on the withdrawal at any time of the consent of the owner of the certification mark or on the cancellation of the registration of the certification mark.

3. What Are the Criteria for Registration of a Certification Mark?

Certification marks are evaluated in the same manner as trade-marks and must meet all of the same criteria, with the additional requirement of a clearly articulated set of standards.

4. What Constitutes "Use" of a Certification Mark?

The owner of a certification mark cannot manufacture, sell, or lease the wares or perform the services associated with the certification mark. However, the owner will be said to have used the certification mark if it licenses it to other parties who then affix it to wares that meet the designated standard or advertise or provide services in association with the certification mark.

5. How Is the Registration of a Certification Mark Maintained?

As with any trade-mark, certification marks must be renewed every 15 years in order to be maintained. Certification marks are also subject to section 45 proceedings and may be expunged pursuant to that section if they have not been used.

B. SECTION 9 OFFICIAL MARKS

1. An Overview of Section 9

Section 9 of the Act sets out restrictions on what may be adopted as a mark. In particular, it restricts a person from adopting a trade-mark that resembles certain crests, symbols, flags, and emblems of governments, the Royal Family, and certain international organizations such as the United Nations and the Red Cross.

Section 9(1)(n) restricts a person from adopting a trade-mark that resembles any badge, crest, emblem, or mark that has been adopted and used by the military, a university, or any public authority for which the foregoing organizations or institutions have given public notice of its adoption and use. The practical effect of section 9(1)(n) is that the military, universities, and public authorities, when they adopt an official mark may make a request to the Trade-marks Office to have such official mark advertised. Advertised marks are not part of the Canadian Trade-marks Office Register; however, they are made available to the public through the public Canadian Trade-marks Office database.

A unique feature of official marks is that they are not required to be associated with specific, enumerated wares and services. Therefore, they offer the party who has adopted and used the mark and requested its advertisement a very broad scope of protection.

2. Who May Seek Advertisement of an Official Mark?

Sections 9(1)(n)(i) and (ii) refer to badges, crests, emblems, and marks

(i) adopted or used by any of Her Majesty's Forces as defined in the _National Defence Act_ , [or]

(ii)... any university.

In the case of Her Majesty's Forces and universities, it is a simple matter for the Trade-marks Examiner to determine whether the party requesting the official mark be advertised is qualified to make such a request. In the case of the military, the eligible parties are enumerated in the _National Defence Act_ and, in the case of universities, the party requesting advertisement of an official mark must show that the institution is a university under the applicable provincial legislation. There is no requirement, in any case, to provide evidence of the adoption or use of the official mark.

In the case of section 9(n)(iii), which refers to badges, crests, emblems, and marks

(iii) adopted and used by any public authority, in Canada as an official mark for wares or services

what constitutes a public authority is not set out in the Act.

The question of what entities qualify as public authorities for the purposes of section 9(1)(n)(iii) has been considered several times by the courts and, in 2002, the Federal Court of Appeal adopted a two-part test for determining whether an entity is a public authority in the case of _Ontario Association of Architects v. Association of Architectural Technologists of Ontario_.[2]

On February 1, 2006, the Trade-marks Branch issued a Practice Notice summarizing and adopting this test, and such Practice Notice was further refined by a Practice Notice issued on August 22, 2007, which states as follows:

The two-part test is made up of the following elements: a significant degree of control must be exercised by the appropriate government over the activities of the body; and the activities of the body must benefit the public.

In order to satisfy the first element of the two-part test, an entity must be subject to governmental control within Canada and the government exercising the control must be a Canadian government. The test of governmental control calls for ongoing government supervision of the activities of the body claiming to be a public authority for the purpose of sub-paragraph 9(1)( n)(iii).

The test of governmental control requires that the government be enabled, directly or through its nominees, to exercise a degree of ongoing influence in the body's governance and decision-making.

In determining whether a body's functions satisfy the public benefit requirement, it is relevant to consider its objects, duties and powers, including the distribution of its assets. In this context, a duty to do something that is of benefit to the public is relevant as an element of "public benefit," even though it is not a "public duty" in the sense of being legally enforceable by a public law remedy, such as an order of mandamus or its equivalent ( _Ontario Association of Architects_ ).

Requests to the Trade-marks Office for the advertisement of an official mark under section 9(1)(n)(iii) must now be accompanied by proof of government control over and public benefit of the organization seeking advertisement of the official mark.

3. Evidence of Use Requirements

The relevant change in law concerning the adoption and use of official marks under section 9(1)(n)(iii) was made by the Federal Court in the case of _See You In — Canadian Athletes Fund Corporation v. Canadian Olympic Committee_.[3] At issue was a pending trade-mark application of See You In — Canadian Athletes Fund Corporation that was not allowed due to the advertisement of an official mark under section 9(1)(n)(iii) pursuant to a request made by the Canadian Olympic Committee prior to the registration of the trade-mark, therefore making it unregisterable. See You In — Canadian Athletes Fund Corporation sought judicial review of the Trade-mark Examiner's decision to advertise the official mark. The Court concluded that it was not sufficient for the Trade-marks Examiner to simply make a determination as to whether the party seeking advertisement of the official mark was a public authority; it must also require evidence that the public authority has "adopted and used" the official mark.

The Court was not specific as to what constitutes adoption and use; however, it did find that internal use within the public authority is not sufficient and that the evidence must include an element of public display of the official mark. Adoption and use of an official mark by a licensee is not considered adoption and use of the official mark by the public authority.

4. Scope of Protection

The scope of protection afforded public authorities that advertise the adoption and use of an official mark is very broad. Marks advertised under section 9(1)(n) are not limited to specific wares and services, and by virtue of section 9 they can prevent the registration of any trade-mark that is the same or very similar to an existing official mark.

5. Obtaining Consent from Public Authorities

Although the scope of protection of official marks is extremely broad, in practice, most public authorities do not seek to prevent third parties from registering similar or identical marks to their advertised official marks as long as such registration does not interfere with the activities the public authority undertakes in association with its official mark. If an official mark is cited against a trade-mark application, the applicant may seek the written consent of the applicable public authority to the registration of the mark, and such consent typically is sufficient to overcome the Trade-mark Examiner's objectives concerning confusion with the official mark.

6. Maintaining an Official Mark

There are no provisions in the Act for the amendment of an advertised official mark. In practice, the Trade-marks Office will maintain changes to the name of the authority in its files and, in some circumstances, will update the public database. Official marks cannot be expunged, but public authorities may request that an official mark be removed from advertisement if it is no longer in use. The practical result is that the database of advertised official marks may not accurately reflect the name of the public authority that is using the mark. Official marks cannot be assigned. If a public authority transfers its official marks to another entity, the new entity must request advertisement of the official marks and prove that it qualifies as a public authority.

7. The Future of the Official Mark in Canada

The regime respecting the advertising of official marks by public authorities is unique to Canada and, at times, controversial. Trade-mark owners and applicants for trade-marks are often frustrated by the broad scope of protection offered official marks. While there are frequent discussions about revising section 9 as it pertains to public authorities, the likelihood of that occurring in the near future appears to be slim.

C. DISTINGUISHING GUISES

1. What Is a Distinguishing Guise?

The Act defines "distinguishing guise" as (a) a shaping of wares or their containers or (b) a mode of wrapping or packaging wares the appearance of which is used by a person for the purpose of distinguishing or so as to distinguish wares or services manufactured, sold, leased, hired, or performed by him from those manufactured, sold, leased, hired, or performed by others.

13(1) A distinguishing guise may be registered only if

(a) it has been so used in Canada by the applicant or his predecessor in title as to have become distinctive at the date of filing an application for its registration; and

(b) the exclusive use by the applicant of the distinguishing guise in association with the wares or services with which it has been used is not likely unreasonably to limit the development of any art or industry.

(2) No registration of a distinguishing guise interferes with the use of any utilitarian feature embodied in the distinguishing guise.

(3) The registration of a distinguishing guise may be expunged by the Federal Court on the application of any interested person if the Court decides that the registration has become likely unreasonably to limit the development of any art or industry.

2. Content of Distinguishing Guise Applications

The content of an application for a distinguishing guise is the same as that for a trade-mark in that it requires the same basic information pertaining to the applicant, address of applicant, date of first use, and a description of wares and services. A distinguishing guise is depicted in the application by way of drawings of the three dimensional objects that indicate what the shape of the ware or container is or the mode of wrapping or packaging. The appearance of the mode of packaging is considered to consist of all of the visual elements shown in the drawings, unless items that are not part of the distinguishing guise are identified in the application as not being part of the distinguishing guise.

It is possible to register a three-dimensional trade-mark that is not a distinguishing guise — for example, the shape of wares or container that is the subject of the mark is not closely related to the wares as set out in the application. It is therefore possible that the Trade-marks Examiner will determine that certain three-dimensional objects are not distinguishing guises but rather trade-marks.

3. Acquired Distinctiveness by Use

In the event that the three-dimensional object that is the subject of the application is considered to be a distinguishing guise, proof that the distinguishing guise has acquired distinctiveness at the date of filing of the application is required. The onus is on the applicant to prove that the distinguishing guise is distinctive and is a significant burden. The distinguishing guise must be shown to function in the marketplace to distinguish the wares and services of the applicant from others, and it must be distinctive to all probable consumers of the wares or services.[4]

Some examples of evidence that may indicate the acquired distinctiveness of a distinguishing guise are

(1) sales and advertising figures,

(2) specimens of advertisements,

(3) specimens of how the guise has been used,

(4) evidence that no other party is using a similar distinguishing guise, and

(5) survey evidence or affidavits from actual purchasers indicating that they recognize the distinguishing guise.

4. How Is the Registration of a Distinguishing Guise Maintained?

Distinguishing guise registrations, like all trade-marks, must be renewed every 15 years. As long as such renewals are maintained, the registration may last in perpetuity. Section 45, which allows the Registrar to expunge a trade-mark for non-use, also applies to distinguishing guises by virtue of the definition of "trade-mark" in the Act, which includes distinguishing guises. In addition the Federal Court may expunge a distinguishing guise on the basis that it limits the development of any art or industry.

5. Alternative Marks (Smell, Colour, Sound)

In many jurisdictions in the world it is possible to not only register distinguishing guises, but also colours, smells, and sounds. For example, the Yahoo Yodel is registered in the United States, as is the roar of the MGM lion. The colour brown is also registered in association with courier services by UPS and orange, in association with banking by ING. In Canada, due to the requirements for trade-mark applications and distinguishing guises, which include that a depiction of the proposed mark or guise be included with the application, applicants have been effectively prevented from registering such alternative marks unless the mark can be depicted in writing, which can be a barrier when the mark cannot be described or depicted in that way. The Canadian Trade-mark Office has considered registration of colour. However, these types of trade-marks are very difficult to register because they often require significant evidence of acquired distinctiveness and assertions that no other company is using such trade-marks in Canada.

D. AMENDMENTS TO REGISTRATIONS

1. Elements of a Registration or Advertisement That May Be Amended After Registration

Certain elements of a registration or an advertisement may be amended after registration. The following amendments may be made to a registered trade-mark, distinguishing guise, or certification mark:

(1) name of owner,

(2) agent and/or representative for service,

(3) address of owner,

(4) cancellation of the registration,

(5) amendments to the defined standards associated with a certification mark,

(6) addition of a disclaimer, and

(7) extension of the wares and services (see Section E).

2. Amending a Trade-mark, Certification Mark, or Distinguishing Guise Registration

a. Process

With the exception of an amendment to the wares and services that will broaden the scope of the wares or services, the process for which is detailed below, applications for change of name of (a) owner, (b) address, (c) agent/representative, (d) requests for voluntary cancellation of a registration, (e) amendments to the defined standards of a certification mark, and (f) amendments that clarify or restrict the scope of the wares and services, may all be done by way of letter to the Trade-marks Office setting out the proposed amendment as well as the trade-mark registration and/or application numbers, the trade-mark, date of registration, owner, and agent. In the case of the change of name of the owner or the transfer of the ownership of a mark to a new owner, proof of such name change or transfer, such as a certificate of amalgamation or assignment, must also be submitted.

b. Costs

There is no fee for a change of name of owner, address, agent/representative, requests for voluntary cancellation of a registration, amendments to the defined standards of certification mark, or amendments that clarify or restrict the scope of the wares and services. There is, however, a $100 per trade-mark fee to register an assignment of a trade-mark, distinguishing guise, or certification mark.

3. Amending an Advertised Official Mark

Official marks are not on the Register of Trade-marks and, therefore, the rules considering amendments to the Register do not apply to official marks. The database of advertised official marks may be accessed by the public on the Canadian Intellectual Property Office website. In practice, the Trade-marks Office will amend the name of the applicant, if such a name change is the consequence of just a name change of the public authority or university. Changes of names of the public authority or university that are the consequence of an amalgamation will not be noted on the public database, although such changes will be noted on the physical file held by the Trade-marks Office. The address of the applicant and the agent/representative of service may be changed, and such changes will be reflected on the public database. There are no costs associated with any of these changes.

It is not possible to transfer the ownership of an official mark. If a new entity takes ownership of an official mark, it must make a new application and provide evidence of its status as a public authority and adoption and use of the mark.

E. EXTENSIONS TO REGISTRATIONS

1. Expanding the Scope of Wares and Services

a. Process

In order to expand the description of wares and services associated with a registered trade-mark, an application for extension of the wares and services may be filed. Such an application is essentially the same as a new trade-mark application and is evaluated in the same way.

b. Costs

The official filing fee for an application to extend the wares and services associated with a registered trade-mark, certification mark, or distinguishing guise is $450.

c. Issues

Although a party who owns a registered mark may assume that it will have no difficulty obtaining an extension to the associated wares and services, this is not always the case. Other marks may be confusing with the mark as extended for new goods or services. It is, therefore, essential to conduct searches prior to requesting an extension and to generally treat the extension like a new trade-mark application.

F. GEOGRAPHICAL INDICATIONS OF ORIGIN

1. Registration of Marks Containing Geographical Indications of the Origins of Goods

Certification marks are only one way that geographical indications of origin are protected. To fulfill Canada's obligations to the World Trade Organization, changes were made to the Act in 1996 to protect geographical indications of origins for wines and spirits, to prevent the registration of trade-marks in association with wines and spirits that include an indication of origin unless such indication accurately reflects the origin of the wines and spirits with which the trade-mark is used.

The Act states:

11.14(1) No person shall adopt in connection with a business, as a trade-mark or otherwise,

(a) a protected geographical indication identifying a wine in respect of a wine not originating in the territory indicated by the protected geographical indication; or

(b) a translation in any language of the geographical indication in respect of that wine.

(2) No person shall use in connection with a business, as a trade-mark or otherwise,

(a) a protected geographical indication identifying a wine in respect of a wine not originating in the territory indicated by the protected geographical indication or adopted contrary to subsection (1); or

(b) a translation in any language of the geographical indication in respect of that wine.

11.15(1) No person shall adopt in connection with a business, as a trade-mark or otherwise,

(a) a protected geographical indication identifying a spirit in respect of a spirit not originating in the territory indicated by the protected geographical indication; or

(b) a translation in any language of the geographical indication in respect of that spirit.

(2) No person shall use in connection with a business, as a trade-mark or otherwise,

(a) a protected geographical indication identifying a spirit in respect of a spirit not originating in the territory indicated by the protected geographical indication or adopted contrary to subsection (1); or

(b) a translation in any language of the geographical indication in respect of that spirit.

The Act also includes lists of certain exceptions to these sections for generic terms.

The Trade-marks Office may refuse the registration of a trade-mark that contains a geographical indication for wines or spirits if the application for the trade-mark is in association with a wine or spirit that does not originate in the geographical area. In order to overcome such an objection, the applicant must show

(1) that the wares originated from the geographical area;

(2) that the geographical indication is no longer protected by the law of the World Trade Organization member state;

(3) that the geographical indication is no longer used in the member state;

(4) that the geographical indication is identical to a term used in Canada as the name for the particular wine or spirit;

(5) that the geographical indication is identical to a term used in Canada as the name for the particular grape variety;

(6) that the listed geographical indication is a generic term, as set out in section 11.18(3)(4) of the Act (for example, Port or Sambuca);

(7) that the applicant for the trade-mark has adopted and used the geographical indication as a trade-mark for five years or more without any proceedings being undertaken to enforce section 11.14 or 11.15 of the Act;

(8) that the application was filed in good faith; or

(9) that the applicant for the trade-mark has acquired rights to the trade-mark under the common law through use before the applicable section of the Act came into place or the date when the geographical indication became protected by the World Trade Organization member state.

2. Protection of Geographical Indications of Origin

Under section 11.12 of the Act, the Registrar of Trade-marks may maintain a list of geographical indications that identify a wine or spirit as originating in the territory of a World Trade Organization member, where a quality or other characteristic of the wine or spirit is attributable to that territory and are officially recognized and protected by a World Trade Organization member.

The process of having a geographical indication designated in Canada involves a "reasonable authority" making an application to Agriculture and Agri-Food Canada in care of the Trade-marks Office. A reasonable authority is a person, firm, or entity that, because of state or commercial interest, is reasonably connected with and knowledgeable of a particular wine or spirit and capable of being party to any proceedings with respect to objections to the addition of the specific geographical indication of origin on the Registrar's list.

Such an application must include the English or French translation of the geographical indication, whether the geographical indication relates to a wine or spirit, the country of origin and description of the territory where the wine or spirit originates, the name and address of the reasonable authority, the date that the geographical indication was recognized in the country of origin, a statement of the quality, characteristics or reputation of the wine or spirit that qualifies it as a geographical indicator, a statement by the reasonable authority that there are laws and regulations in force in the country of origin to protect geographical indications and that the requirements for such protections are equivalent to the requirements set out in the World Trade Organization _Agreement on Trade-Related Aspects of Intellectual Property Rights_ and any other applicable information. The fee for making such an application is $450.

The application is evaluated by Agriculture and Agri-Food Canada and a recommendation is made to the Minister of Industry. If the Minister of Industry concludes that the application meets the criteria, the geographical indication of origin will be published in the _Canada Gazette_. Once published, any person interested may pay a fee of $1,000 and file an objection to the applications that the geographical indication is not a geographical indication pursuant to section 2 of the Act.[5] The Registrar of Trade-marks manages the opposition process.

G. NEWFOUNDLAND AND LABRADOR REGISTRATIONS

1. Historical Background

Prior to Confederation, some of the territories that would later become the provinces of Canada had existing trade-mark legislation. The _Trade Marks and Registration Act_ (C.S.N. 1916) was in force when Newfoundland joined Confederation on April 1, 1949. The legislation respecting trade-marks in Canada was the _Unfair Competition Act, 1932_. That Act was amended prior to Newfoundland joining Confederation to ensure that trade-marks registered in Newfoundland prior to the date of Confederation would remain in effect as though the province had not become part of Canada.

2. Current Legislation

When the current Act replaced the _Unfair Competition Act_ , the provisions concerning trade-marks registered in Newfoundland prior to April 1, 1949 were incorporated into the Act at section 67.

67(1) The registration of a trade-mark under the laws of Newfoundland before April 1, 1949 has the same force and effect in the Province of Newfoundland as if Newfoundland had not become part of Canada, and all rights and privileges acquired under or by virtue of those laws may continue to be exercised or enjoyed in the Province of Newfoundland as if Newfoundland had not become part of Canada.

(2) The laws of Newfoundland as they existed immediately before April 1, 1949 continue to apply in respect of applications for the registration of trade-marks under the laws of Newfoundland pending at that time and any trade-marks registered under those applications shall, for the purposes of this section, be deemed to have been registered under the laws of Newfoundland before April 1, 1949.

3. Scope of Rights

Trade-marks registered in Canada are protected in Newfoundland and Labrador; however, the right to the exclusive use of a registered trade-mark in Canada is limited by section 19 of the Act.

19. Subject to sections 21, 32 and 67, the registration of a trade-mark in respect of any wares or services, unless shown to be invalid, gives to the owner of the trade-mark the exclusive right to the use throughout Canada of the trade-mark in respect of those wares or services.

Therefore, if there is an existing trade-mark registered in Newfoundland and Labrador, the owner of a Canadian trade-mark that is the same as a trade-mark registered in Newfoundland and Labrador will not have the exclusive right to use the mark in Newfoundland and Labrador. In practical terms, marks registered under the Act that are the same as marks registered in Newfoundland and Labrador will show on the Trade-marks Register as being limited to all provinces, other than Newfoundland and Labrador.

Marks registered in Newfoundland before April 1, 1949 also have limited rights in the rest of Canada pursuant to section 68 of the Act:

68. For the purposes of this Act, the use or making known of a trade-mark or the use of a trade-name in Newfoundland before April 1, 1949 shall not be deemed to be a use or making known of such trade-mark or a use of such trade-name in Canada before that date.

**4. Effect of Newfoundland Trade-marks on Trade-marks Registered Under the** _Trade-marks Act_

It is possible given the overlap of rights granted to trade-mark owners whose marks were registered in Newfoundland prior to 1949 and the rights of trade-mark owners whose marks were registered under the Act and its precursor legislations, for two identical trade-marks to be registered and owned by two different parties. Such was the situation in the most notable case concerning a Newfoundland trade-mark _Labatt Brewing Co. v. Carling O'Keefe Breweries of Canada_.[6]

In that case, Labatt Brewing Co. ("Labatt") held the registration for BLACK LABEL in Newfoundland and Carling O'Keefe Breweries of Canada ("Carling") held the registration for BLACK LABEL pursuant to the Act, and both parties used the trade-mark in association with beer. Labatt temporarily stopped using the trade-mark in Newfoundland for a period of approximately ten years. During that time, Carling launched the sale of its BLACK LABEL product in Newfoundland. Labatt sought an injunction against Carling and was successful at trial and on appeal.

This case clearly indicates that the rights of both owners of identical trade-marks registered under the two regimes will be protected. Commentary on this case typically raises the question as to what steps Carling may have taken in advance of using its mark in Newfoundland to have the Labatt mark expunged, and the general consensus seems to be that section 45 of the _Trade-marks Act_ will not apply to Newfoundland marks and that expungement proceedings will have to be undertaken pursuant to the Newfoundland _Trade Marks and Registration Act_ (C.S.N. 1916).[7]

[1] _Trade-marks Act_ , R.S.C. 1985, c. T-13 ["the Act"].

[2] _Ontario Association of Architects v. Association of Architectural Technologists of Ontario_ (2002), 19 C.P.R. (4th) 417 (F.C.A.), rev'g (2000), 19 C.P.R. (4th) 417 (F.C.T.D.) [ _Ontario Association of Architects_ ].

[3] _See You In — Canadian Athletes Fund Corporation v. Canadian Olympic Committee_ , 2007 FC 406.

[4] _Parke Davis v. Empire Laboratories_ (1963), 41 C.P.R. 121 (Ex. Ct.).

[5] Press release of Agriculture and Agri-Food Canada, July 31, 1996.

[6] _Labatt Brewing Co. v. Carling O'Keefe Breweries of Canada_ , [1985] N.J. No. 130 (S.C.), aff'd [1985] N.J. No. 48 (C.A.).

[7] L.A. Kelly Gill and R. Scott Jolliffe, _Fox on Trade-marks and Unfair Competition_ , 4th ed. (Toronto: Thomson Carswell, 2008).

**CHAPTER 5**

OPPOSITION PROCEEDINGS

Once an application successfully passes the examination stage, it will be approved for advertisement in the _Trade-marks Journal_. Pursuant to rule 17 of the _Trade-marks Regulations_ ,[1] the _Trade-marks Journal_ is published every Wednesday. The _Trade-marks Journal_ is no longer available in print but is available on the CIPO website at www.cipo.ic.gc.ca. The electronic form of the _Journal_ is the official version.

When a trade-mark is published in the _Trade-marks Journal_ , any interested third party has an opportunity to oppose the trade-mark application. If no opposition is initiated within two months from the date of publication, or if no extension of the time to oppose is requested, the application will be allowed and will issue to registration after the applicant responds to the Notice of Allowance.

A. WHAT IS AN OPPOSITION?

Proceedings before the Opposition Board of the Trade-marks Office (TMO) are initiated to prevent the registration of a trade-mark and do not deal with stopping or restraining the use of that mark. An appeal of a decision of the Registrar of Trade-marks ("the Registrar") is made to the Federal Court of Canada. An appeal of a Federal Court decision can be made to the Federal Court of Appeal. An appeal of a Federal Court of Appeal decision can be initiated in the Supreme Court of Canada but, other than in exceptional cases, leave to appeal is not generally granted.

From time to time, the TMO issues updates or Practice Notices, which provide guidelines for current practice. There were significant changes to opposition proceedings in the past two years in Canada. A review of these changes can be found on the TMO's website at www.cipo.ic.gc.ca under the tab "Trade-marks."

Practice Notices are not binding on courts. In the event of a conflict, the _Trade-marks Act_ [2] or the Regulations must be followed.

B. TIME LIMIT TO OPPOSE[3]

Under section 38(1) of the Act, any person may, on payment of the prescribed fee,[4] file a Statement of Opposition with the Registrar within two months of the publication of the trade-mark in the _Trade-marks Journal_. An extension of time[5] (past the initial two-month period) in which to file a Statement of Opposition is granted by the Opposition Board to the opponent upon request (assuming that a substantive reason is provided). The opponent does not require consent from the applicant for this first extension. The prescribed fee[6] must accompany any request for an extension of time.

The Opposition Board will now grant each party one extension of time up to a maximum benchmark of nine months. Consent is required from the other side. The opponent may request this maximum benchmark of nine months (referred to as a "cooling-off period") either before filing its Statement of Opposition _or_ before filing its rule 41(1) evidence.

It is possible to request a retroactive extension of time to oppose.[7] However, the opponent should be able to demonstrate that it had an intention to oppose the trade-mark application within the two-month period and to give reasons why the extension of time was not requested on a timely basis, as well as any prejudice that the applicant may face. Furthermore, the TMO may rescind a Notice of Allowance only if the potential opponent can show that it had requested its extension or filed its Statement of Opposition within the two-month period with the TMO, but the TMO did not note the request or Statement of Opposition on the file prior to issuing the Notice of Allowance.

The deadlines with which to comply with each stage in the opposition are set out in the Practice Notice, along with the length of time of any extension that may be granted. Under section 47 of the Act, the granting of any extension of time is discretionary. The Registrar must be satisfied that the facts justify the need for an extension of time. The Registrar will consider exceptional circumstances beyond the maximum "benchmark" guidelines currently set out in the March 2009 Practice Notice.

A further extension of time should clearly set out "Exceptional Circumstances/Extension Request." "Exceptional circumstances" may include:

(1) co-pending opposition proceedings in Canada between the same parties for related trade-marks;

(2) a recent change in a party's instructing principal or trade-mark agent;

(3) circumstances beyond the control of the person concerned, such as illness, accident, death, bankruptcy, or other serious and unforeseen circumstances;

(4) an assignment of the trade-mark that is either the subject of the application being opposed or being relied upon in the opposition proceeding; or

(5) revisions to the application filed at the TMO.

Furthermore, for any extension of time that requires consent, if the Requesting Party does not indicate in its letter that it has obtained the consent from the other party, the TMO may refuse the request for extension. Often the TMO will inquire whether consent had been obtained. The TMO will no longer grant multiple extensions of time at each stage of the opposition proceedings.

C. PRELIMINARY CONSIDERATIONS

Before initiating an opposition, the opponent should carefully review its legal position. The opponent should ensure that its trade-marks on which it may rely in the opposition are in good order and not subject to possible challenge. For example, the opponent should ensure that such trade-marks are properly licensed (if applicable) and being used as registered. If such a review is not undertaken, the applicant may have an opportunity to initiate proceedings in either the Trade-marks Office (i.e., by way of a section 45 proceeding) or the Federal Court to expunge the registration (i.e., by way of section 17 or 18 of the Act) upon which the opponent is relying.

As well, the opponent must be satisfied that there are no earlier agreements that may have been executed by the respective parties that deal with adversarial legal proceedings and the trade-marks at issue.

The opponent and applicant may be able to settle their differences, thereby bringing an end to the opposition. Settlement should be explored as a preliminary matter.

D. STATEMENT OF OPPOSITION

Rule 38 of the Regulations specifies that all Statements of Opposition must be filed in duplicate with the Opposition Board. If the Registrar is satisfied that the grounds of opposition raise a substantial issue for decision, the Registrar will forward one copy of the Statement of Opposition to the applicant or the applicant's trade-mark agent. The opponent must set out the grounds of opposition in sufficient detail to enable the applicant to reply (section 38(3)(a)). The opponent must also provide the name and address of its principal place of business in Canada. If the opponent has no address in Canada, it must provide the address of its principal place of business abroad, together with the name and address of an agent for service in Canada (section 38(3)(b)). A Statement of Opposition may name any number of persons[8] jointly as opponents. Even if the extension of time is granted in the name of one person, the Statement of Opposition may name that person along with other persons jointly as the opponents.

It may happen during the preparation of the opponent's evidence that it becomes apparent that additional grounds of opposition should have been included. Under rule 40 of the Regulations, the opponent should request leave to file a revised Statement of Opposition.[9] A copy of the revised Statement of Opposition must be included in the opponent's request for leave. Furthermore, the amendments to the Statement of Opposition should be clearly stated. The applicant should be given a copy of the opponent's request for leave along with a copy of the revised Statement of Opposition. Generally, if the applicant does not object to the opponent's request, leave will be granted and the applicant will be given an opportunity to file a revised Counter Statement. In general, the granting of leave will have no effect on any outstanding deadlines.

E. GROUNDS

Any member of the public may file an opposition to an application. In order to proceed, the opponent must establish one or more grounds to oppose the registration of the trade-mark. If the grounds of opposition are not properly pleaded, they may not be considered by the Hearing Officer.

The grounds on which an opposition may be based are found in section 38(2) of the Act. There are four grounds of opposition:

(a) the application does not conform to the requirements of section 30 (i.e., deficiencies in the trade-mark application);

(b) the trade-mark is not registrable pursuant to section 12 (i.e., on the basis that the trade-mark is a surname; is clearly descriptive; is confusing with a prior registered mark; or is confusing with an official mark);

(c) the applicant is not the person entitled to registration of the trade-mark pursuant to section 16 (e.g., because of the prior adoption, use, or making known of a confusingly similar mark or trade name by the opponent); or

(d) the trade-mark is not distinctive.

If the Statement of Opposition does not raise a substantial issue, the Registrar gives notice to the opponent that the opposition is rejected, and allows the opponent the opportunity to amend the Statement of Opposition within a specified time (section 38(4)). The Registrar may also request an amendment for technical reasons — for example, if neither copy of the Statement of Opposition was signed. If and when a substantial issue has been raised in the Statement of Opposition, the Registrar will serve a copy of the Statement of Opposition on the applicant or its trade-mark agent.

A substantial issue is one that raises an arguable case on the merits — that is, if the allegations raised by the opponent were proved, there is a possibility that the opposition might succeed. See _Canadian Tampax Corp. Ltd. v. Registrar of Trade-marks_ ,[10] _Pepsico Inc. and Pepsi-Cola Canada Ltd. v. Registrar of Trade-marks_ ,[11] and _Koffler Stores Ltd. v. Registrar of Trade-marks_.[12]

In the _Tampax_ case, the Court held that a substantial issue in an opposition was one that is not frivolous and the Registrar must allow the opponent to be heard.

In _Pepsico_ , the opponent had only to show that it had an arguable case and did not have to meet the higher test of demonstrating the probability or likelihood of success.

In _Koffler_ , Addy J. pointed out that evidence was not to be considered in determining if the issue was substantial or frivolous. Consideration by the Registrar was to be limited to the application itself and to the statements contained in the Statement of Opposition.

The practical result of these cases is that if the Statement of Opposition is properly drafted, it is nearly impossible for the Registrar to find a situation in which the Statement of Opposition has no substance. However, the Opposition Board does frown upon "boilerplate" statements of opposition that list every possible ground of opposition, which may not be applicable, especially once the evidence is drafted. (See the discussion in section K, below.)

The following deals with the possible grounds of opposition.

F. GROUNDS OF OPPOSITION: SECTION 38(2)(A)

The opponent may allege that the application does not conform to the requirements of section 30 of the Act. One or more grounds of opposition may fall within the provisions of section 30, namely:

(a) the application does not define the wares and/or services in ordinary commercial terms;

(b) the application (if based on use) or making known does not contain a proper date of first use or making known;

(c) the application is relying on a foreign registration that is not valid in that foreign country;[13]

(d) the applicant did not intend to use the trade-mark in Canada; or

(e) the applicant could not have been satisfied of its entitlement to use the trade-mark in Canada.

G. GROUNDS OF OPPOSITION: SECTION 38(2)(B)

Section 38(2)(b) of the Act provides the basis for alleging in an opposition that the trade-mark is not registrable. To determine whether a trade-mark is registrable, the opponent must refer to section 12 of the Act. One or more grounds of opposition may fall within the provisions of section 12, namely:

(a) The trade-mark is primarily merely the name or surname of an individual who is living or has died within the preceding 30 years.

(b) The trade-mark is clearly descriptive or deceptively misdescriptive.

(c) The trade-mark is the name of the wares or services in any language.

(d) The trade-mark is confusing with a registered trade-mark.[14]

(e) The trade-mark is a mark the adoption of which is prohibited by section 9 or section 10 of the Act.[15]

(f) The trade-mark is a denomination the adoption of which is prohibited by section 10.1.

(g) The trade-mark in whole or in part is a protected geographical indication, where the trade-mark is to be registered in association with a wine not originating in a territory indicated by the geographical indication (see section 11.14 of the Act).

(h) The trade-mark in whole or in part is a protected geographical indication, where the trade-mark is to be registered in association with a spirit not originating in a territory indicated by the geographical indication (see section 11.15 of the Act).

H. GROUNDS OF OPPOSITION: SECTION 38(2)(C)

The opponent may allege that the applicant is not entitled to registration of the trade-mark. Under section 16 of the Act, the opponent can allege that the applicant is not entitled to registration of a mark on the basis of confusion with:

(a) a trade-mark that had been previously used[16]in Canada or made known in Canada by any other person;

(b) a trade-mark in respect of which an application for registration had been previously filed in Canada by any other person; or

(c) a trade-name that had been previously used in Canada by any other person.

I. GROUNDS OF OPPOSITION: SECTION 38(2)(D)

A further ground of opposition that an opponent can rely on is that the applicant's trade-mark is not distinctive. "Distinctive," as defined in section 2 of the Act, means a trade-mark that actually distinguishes the wares or services in association with which it is used by its owner from the wares or services of others or is adapted so as to distinguish them.

To succeed in an opposition, the opponent need be successful on only one ground of opposition. To increase the chances of success, an opponent should rely on as many grounds as possible. However, one must be cautious in drafting a Statement of Opposition. In _Compagnie Montreal Trust/Montreal Trust Co. v. Raeal Corp. Canada Inc._ ,[17] the Opposition Board frowned upon the opponent's "standard form of opposition" and stated that the "shotgun approach adopted by the opponent in its Statement of Opposition should be discouraged as it created needless work for all the parties involved." To be successful, the opponent should file evidence supporting the grounds in its Statement of Opposition. While it may be difficult to file evidence supporting some grounds (e.g., the applicant does not intend to use the trade-mark in Canada), investigations may reveal information that the opponent can submit in support of its grounds of opposition. Furthermore, cross-examination on evidence filed by the applicant may reveal information that can be used to form part of a request for leave to file an amended Statement of Opposition or in written and/or oral arguments.

K. COUNTERSTATEMENT

Upon receipt of the Statement of Opposition, the applicant will be given an opportunity to file a Counterstatement, essentially denying the allegations contained in the Statement of Opposition. Under section 38(7.2) of the Act, the application will be considered abandoned if the applicant does not file a Counterstatement within the time period. It is possible to obtain a two-month extension of time (without consent from the opponent) for filing a Counterstatement. Sufficient reasons must be provided to satisfy the Registrar that the circumstances justify the extension.

As indicated earlier, pursuant to the March 2009 Practice Notice, the TMO will grant each party one extension of time, up to a maximum benchmark of nine months. Consent is required from the other side. The applicant may also request this maximum benchmark of nine months (referred to as a "cooling-off period") either before filing its Counterstatement _or_ before filing its rule 42(1) evidence.

If the applicant elects to defend its application and file a Counterstatement, in addition to filing one copy of the Counterstatement with the TMO, one copy must be served[18] on the opponent or on the agent representing the opponent.

Before filing and serving a Counterstatement, the applicant may request an interlocutory ruling to strike all or any portion of the opponent's pleadings. The opponent will be given an opportunity to reply or to request leave to amend its Statement of Opposition. Generally, a request for an interlocutory ruling has no effect on any outstanding deadlines. Once the opponent has filed its rule 41(1) evidence, issues concerning striking all or any portion of the opponent's pleadings will only be considered at the decision stage.

L. EVIDENCE

Each party is given an opportunity to file affidavit evidence. If either party fails to file evidence, the opposition/application will be deemed to have been abandoned unless that party advises the TMO that it does not intend to file evidence. The rules of evidence that are applicable in Federal Court proceedings are applicable in opposition proceedings.

It is important that the affiant be knowledgeable about the subject matter in his or her affidavit because he or she can be cross-examined on its contents. The potential affiant should be a qualified and knowledgeable person who will be available for cross-examination.

If opinion evidence is given in any affidavit evidence filed, the affiant's qualifications must be provided so that these opinions can be given weight. Hearsay is inadmissible. In _Labatt Brewing Company Limited v. Molson Breweries, a Partnership_ ,[19] the opinion of Heald D.J. was based on 1990 and 1992 Supreme Court decisions and a 1993 Federal Court of Appeal decision. Heald D.J. stated:

An affidavit may contain statements of the deponent that are based on information and belief, if this _prima facie_ inadmissible hearsay evidence falls within the common law exceptions to the hearsay rule. The question to be asked is whether the evidence sought to be admitted meets the common law exceptions to hearsay, which are now governed by the criteria of necessity and reliability.

The transcript of the cross-examinations as well as the answers to all undertakings, or the affiant's refusals to any questions, are filed with the TMO and are considered by the Registrar when rendering a decision. The Registrar will not make any decision during the course of an opposition as to whether certain questions should be answered, or whether any answers given were adequate. However, failure to answer proper questions or to fulfil undertakings may result in negative inferences being drawn during the decision stage.[20]

The party requesting the cross-examination pays all expenses necessary with respect to the cross-examination procedure, including the hiring of a court reporter and the preparation and filing of the cross-examination transcript and any undertakings.

The affiant must be made available in Canada for the cross-examination, and the party whose affiant is being cross-examined must bear the cost of all expenses involved in making the affiant available.

On an exceptional basis, the Registrar will consider requests for an order that a cross-examination be conducted other than by personal attendance (e.g., by video conferencing or other electronic means).

If the affiant does not appear for the cross-examination, his or her affidavit will not be considered as part of the opponent's/applicant's evidence.

Reference should be made to the March 2009 Practice Notice with respect to guidelines for the time frame in which to conduct a cross-examination and to file the cross-examination transcript, and any subsequent evidence.

If any evidence filed is technically deficient (e.g., if exhibits were not properly notarized), there is a risk that the evidence will be rejected in its entirety. The Opposition Board does not reject any evidence filed until the Registrar is ready to make a decision based on all the documents filed with the Opposition Board/TMO. If an affidavit is deemed to be inadmissible by the Registrar due to a technical deficiency, the party submitting the affidavit is not given an opportunity to correct the deficiency in the opposition proceedings.

Pursuant to rule 44(1) of the Regulations, no further evidence may be filed by either party except with leave of the Registrar. A request for leave must be accompanied by at least a draft (if it is not possible to file a final version of the affidavit).

M. BURDEN

There is an evidentiary burden on an opponent to support the allegations contained in its Statement of Opposition.

There is also a legal burden on an applicant for the registration of a trade-mark to establish its right, and that onus is constant. As discussed in _Massimo de Berardinis et al. trading as De Berardinis v. Decaria Hair Studio Ltd._ :[21]

The reasons for this onus or legal burden reside in the nature of the proceedings, i.e. that the Applicant is a petitioner seeking the grant of a monopoly right. There is, however, often a burden of proof or an evidential burden on an opponent to establish certain facts. In general, whenever a party makes an allegation of fact, whether positive or negative, there is an evidential burden on that party to prove that fact. For example, when an opponent opposes an application on the basis that the trade-mark is not distinctive because it is confusing with a trade-mark of another which is already in use, there is an evidential burden on the opponent to prove such use. Once this evidential burden is satisfied by the opponent, the Applicant has the legal burden of establishing that, despite the use of such confusing trade-mark, its trade-mark is distinctive.

N. SERVICE

Service on the other party in an opposition may be made by personal service, registered mail, courier, or in any other manner with the consent of the other party or its trade-mark agent. Correspondence filed with the TMO must indicate (1) the manner of service that has been employed and (2) the effective date of service as prescribed in rule 37 of the Regulations.

O. MATERIAL DATES

The material dates for determining the issue raised in opposition proceedings are shown in Appendix B to this chapter. For example, section 16 of the Act sets out the material dates for determining whether an applicant is entitled to registration. However, the material dates for determining whether a trade-mark is registrable or distinctive are not set out in the Act, but rather in decisions made by the Registrar or the Court. For example, the date for determining whether two trade-marks are confusing under section 12(1)(d) is the date of the decision.[22] Similarly, the date for determining whether a trade-mark is clearly descriptive under section 12(1)(b) is the date of filing of the application.[23] On the other hand, the date for determining the issue of distinctiveness is the date of the filing of the Statement of Opposition.[24]

Therefore, it is important that any evidence filed, such as advertising and sales figures, fall within the relevant material dates, and a reference to anticipated advertising and sales figures should be provided, considering that it may be several years before a decision is rendered.

P. WRITTEN ARGUMENT

The written argument is filed in duplicate with the TMO. The Registrar forwards one copy of each party's written argument to the other side after the term in which to file such written argument expires. The written argument includes the history of the opposition, an analysis of the evidence filed by both parties, the legal arguments, relevant case law, and references to pertinent sections of the _Trade-marks Act_ and _Trade-marks Regulations_.

Q. ORAL HEARING

If requested by either party, the TMO will set the date for an oral hearing.[25] Generally, the Registrar will notify each party no less than 90 days before the date of the oral hearing. Within one month of such notice, each party must confirm its attendance at the scheduling hearing. If necessary, and upon consent, the hearing can be rescheduled.

Attendance at an oral hearing can be made in person or by telephone conference call. As set out in the March 2009 Practice Notice, the party attending the oral hearing must indicate whether representations will be in English or in French and whether simultaneous translation will be required if the other party makes representations in the other official language (the Registrar will arrange for French and English interpreters). If either party believes it will require more than 2 1/2 hours for the hearing, it must advise the Registrar. The opponent presents its oral argument, followed by the applicant. The opponent is given an opportunity to reply to the applicant's argument.

Each party is required to provide the other party and the Registrar (by facsimile), at least five working days prior to the hearing date, with its list of case law and copies of any unreported decisions that it intends to rely on at the hearing.

A scheduled oral hearing cannot be postponed, even with consent between the parties on the basis of settlement negotiations. However, after the hearing has been scheduled and each party agrees that they no longer wish to be heard, the Registrar must be notified by telephone and by writing of the request for such cancellation. Upon notice that the hearing is to be cancelled, the Registrar will proceed, in due course, to issue the final decision, unless the application has been abandoned or the opposition has been withdrawn.

R. DECISION AND APPEAL

The Opposition Board, on behalf of the Registrar of Trade-marks, will render a decision[26] based on all the documents filed, beginning with the Statement of Opposition and ending with the written submissions (or oral hearing, if one was held). If the decision is made in favour of the applicant, the application may be approved for allowance. If the decision is made in favour of the opponent, the application is refused. The Registrar may also grant a partial decision for each side (i.e., so that registration is permitted for some of the wares or services and not others).[27] Pursuant to section 56(1) of the Act, an appeal can be made in the Federal Court two months after the date of the Registrar's decision.

It is possible to file new evidence on appeal, based on section 56(5) of the Act, which states:

On an appeal under subsection (1), evidence in addition to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar.

The wording of section 56(5) has been considered in a number of decisions. In _Primax Computer Corp. v. Primax Electronic (U.S.A.) Inc._ ,[28] neither party filed evidence in the opposition proceedings. The Court interpreted the phrase "in addition to that adduced before the Registrar" to mean that, in order to file evidence on appeal, evidence must have been filed in the opposition proceedings. The Court ruled that the appellant was precluded from filing evidence. The _Primax_ decision was seen as clear authority that if no evidence was filed by either party during the opposition proceedings, no evidence may be filed during the appeal. The _Brain Tumor Foundation of Canada v. The Starlight Foundation et al._ [29] decision supported the _Primax_ case[30] at the trial level, but it was overturned on appeal.[31] In the appeal decision, it was held that the words "in addition to" in section 56(5) do not imply that there had to be prior evidence to which further evidence could be added. This represents a change from the _Primax_ decision.

If an appeal is launched, the _Federal Court Rules_ will apply to the proceedings. The party appealing must arrange to have the Trade-marks Office file transferred to the Federal Court. Generally, the Registrar will not participate in any appeal and will be removed from the proceedings.

[1] _Trade-marks Regulations_ , SOR/96-195 ["the Regulations"].

[2] _Trade-marks Act_ , R.S.C. 1985, c. T-13 ["the Act"].

[3] This chapter deals with "benchmark" time limits set out in the _Practice in Trade-mark Opposition Proceedings_ , in effect as of March 31, 2009 ["the March 2009 Practice Notice"] for those trade-marks that were advertised in the _Trade-marks Journal_ after October 1, 2007. Appendix A to this chapter shows the stages of opposition and deadlines for trade-marks advertised after October 1, 2007.

[4] _Trade-marks Regulations_ , _supra_ note 1, rule 12, and _Schedule Tariff of Fees_.

[5] _Trade-marks Act_ , _supra_ note 2, s. 47(1).

[6] _Trade-marks Regulations_ , _supra_ note 1, rule 12, and _Schedule Tariff of Fees_.

[7] _Fjord Pacific Marine Industries Ltd. v. Registrar of Trade-marks et al._ (1975), 20 C.P.R. (2d) 108, [1975] F.C. 536 (T.D.).

[8] Section 2 of the Act defines "person" to include "any lawful trade union and any lawful association engaged in trade or business or the promotion thereof, and the administrative authority of any country, state, province, municipality or other organized administrative area."

[9] Rule 40 states: "No amendment to a statement of opposition or counter statement shall be allowed except with leave of the Registrar and on such terms as the Registrar determines to be appropriate."

[10] _Canadian Tampax Corp. Ltd. v. Registrar of Trade-marks_ (1975), 24 C.P.R. (2d) 187 (F.C.T.D.).

[11] _Pepsico Inc. and Pepsi-Cola Canada Ltd. v. Registrar of Trade-marks_ (1975), 22 C.P.R. (2d) 62 (F.C.T.D.).

[12] _Koffler Stores Ltd. v. Registrar of Trade-marks_ (1976), 28 C.P.R. (2d) 113 (F.C.T.D.).

[13] _Allergan Inc. v. Lancôme Parfums & Beauté & Cie, société en nom, collectif_ (2007), 64 C.P.R. (4th) 147 (T.M.O.B.).

[14] The Federal Court of Appeal dealt with this ground in the context of famous marks. See _United Artists Corp. v. Pink Panther Beauty Corp._ (1998), 80 C.P.R. (3d) 247.

[15] In _Canadian Council of Professional Engineers v. Tekla Oyj_ (2008), 68 C.P.R. (4th) 228 at 240, the Hearing Officer referred to an unreported decision that stated: "[I]t is unclear from the evidence whether the Opponent was/is a public authority. I find that such issue was not sufficiently pleaded by the Applicant. If it had been, then the issue might have become whether or not it is appropriate for the Opposition Board to look behind public notices given under s. 9 of the Act and possibly not allow the Opponent to rely upon its s. 9 notices."

[16] The Federal Court held that an opponent, in claiming prior use, must show use of its trade-mark "as a trade-mark" and also show the impact of its prior use. See _Merrill Lynch & Co. Inc. v. Bank of Montreal_ (1996), 66 C.P.R. (3d) 150 (F.C.T.D.).

[17] _Compagnie Montreal Trust/Montreal Trust Co. v. Raeal Corp. Canada Inc._ (1995), 62 C.P.R. (3d) 411 (T.M.O.B.).

[18] _Trade-marks Regulations_ , _supra_ note 1, s. 37(1).

[19] _Labatt Brewing Company Limited v. Molson Breweries, a Partnership_ (1996), 68 C.P.R. (3d) 216 (F.C.T.D.), referring to _R. v. Khan_ , [1990] 2 S.C.R. 531; _R. v. Smith_ , [1992] 2 S.C.R. 915; and _Ethier v. Canada (R.C.M.P. Commissioner)_ , [1993] 2 F.C. 659 (F.C.A.).

[20] _Joseph E. Seagram & Sons Ltd. et al. v. Seagram Real Estate Ltd._ (1984), 3 C.P.R. (3d) 325 at 332 (T.M.O.B.).

[21] _Massimo de Berardinis et al. Trading as De Berardinis v. Decaria Hair Studio Ltd._ (1984), 2 C.P.R. (3d) 319 at 326 (T.M.O.B.).

[22] _Park Avenue Furniture Corporation v. Wickes/Simmons Bedding Ltd._ (1991), 37 C.P.R. (3d) 413 (F.C.A.) [ _Park Avenue_ ].

[23] _Havana Club Holdings S.A. v. Bacardi & Co._ (2004), 35 C.P.R. (4th) 541 (T.M.O.B.). At one time, the material date with respect to s. 12(1)(b) was the date of the decision. As explained in _Toronto Dominion Bank v. e-Funds Ltd._ (2008), 71 C.P.R. (4th) 22 (T.M.O.B.) with respect to the proposed trade-mark EFUNDS, it was possible that at the date of filing the application the average Canadian did not understand the prefix "e" to be descriptive of an electronic or online application.

[24] _Re Andres Wines Ltd. and E. & J. Gallo Winery_ (1975), 25 C.P.R. (2d) 126 (F.C.A.) [ _Andres Wines_ ] and _Bridgestone/Firestone, Inc. v. Automobile Club de l'Ouest de la France (A.C.O.)_ (1994), 62 C.P.R. (3d) 292 (F.C.T.D.). See also _Clarco Communications Ltd. v. Sassy Publishers Inc._ (1994), 54 C.P.R. (3d) 418 (F.C.T.D.) [ _Clarco Communications_ ].

[25] _Trade-marks Regulations_ , _supra_ note 1, s. 46(4).

[26] _Trade-marks Act_ , _supra_ note 2, s. 38(8).

[27] See _SkyDome Corporation v. Toronto Heart Industries Ltd. et al._ (1997), 72 C.P.R. (3d) 546 (F.C.T.D.) (an appeal from an Opposition Board decision in which the trade-mark was held registrable for only certain wares/services).

[28] _Primax Computer Corp. v. Primax Electronic (U.S.A.) Inc._ (1995), 62 C.P.R. (3d) 75, (F.C.T.D.).

[29] _Brain Tumor Foundation of Canada v. The Starlight Foundation et al._ (1999), 4 C.P.R. (4th) 192 (F.C.T.D.).

[30] Contrast the _Primax_ and _Brain Tumor_ cases with the Federal Court of Appeal decision in _Austin Nichols & Co. v. Cinnabon Inc._ (1998), 82 C.P.R. (3d) 513, which held in the context of section 45 expungement proceedings that evidence was allowed on appeal even where none was proffered earlier.

[31] _Brain Tumor Foundation of Canada v. The Starlight Foundation et al._ (2001), 11 C.P.R. (4th) 172, 2001 FCA 36.

**CHAPTER 6**

SUMMARY CANCELLATION PROCEEDINGS

A. OVERVIEW

**1. Purpose of Section 45 of the** _Trade-marks Act_

Section 45 of the _Trade-marks Act_ [1] sets out the code of procedure vesting jurisdiction in the Registrar of Trade-marks ("Registrar") to expunge from the Canadian Trade-mark Register ("Register") those trade-marks that are not in use or to restrict the wares and services for which the trade-mark is not being used. Section 45 provides a "summary and expeditious"[2] procedure to clear the Register of marks that have fallen into disuse. In particular, section 45 grants the Registrar the discretion to cancel a trade-mark registration in respect of some or all of the wares or services if the trade-mark owner cannot show use of the registered trade-mark within three years from the date that the Registrar issues the Notice pursuant to section 45 ("section 45 notice"), or special circumstances excusing non-use. It should be noted that proceedings initiated under section 45 ("section 45 proceedings") are made by "any person who pays the prescribed fee" requesting that the Registrar give notice to the registered owner of the trade-mark requiring the registered owner to furnish evidence that shows use of the trade-mark in Canada in association with each of the wares/services set out in the registration. Failure of the registered owner to file sufficient evidence may result in either the partial or complete expungement of the registration from the Register.

Although section 45 proceedings are intended to provide a quick and expeditious method of clearing "deadwood" from the Register,[3] because a request made for the initiation of section 45 proceedings can be made by "any person who pays the prescribed fee," such requests can be made anonymously (typically in the name of a law firm representing the interested party). The request is often initiated for the purpose of seeking to remove an objection made by the Registrar in respect of a pending application or employed in the context of trade-mark opposition proceedings or litigation.

It should be noted that section 45 proceedings are not intended to provide an alternative to the usual _inter partes_ attack on a trade-mark envisaged by section 57 of the Act ("Expungement Proceedings"), which provides for the initiation of full Expungement Proceedings before the Federal Court. Notwithstanding the foregoing, the Federal Court of Appeal has noted that "the fact that an applicant under section 45 is not even required to have an interest in the matter speaks eloquently to the _public_ nature of the concerns the section is designed to protect."[4]

2. Use of the Registered Trade-mark

a. "Use" Within the Meaning of the Trade-marks Act

As noted above, the purpose of section 45 is to provide a summary procedure to clear the Register of trade-marks that are no longer in use. The "use" that is contemplated under section 45 is the "use" provided for in sections 2 and 4 of the Act.

Section 2 provides that "'use,' in relation to a trade-mark, means any use that by section 4 is deemed to be a use in association with wares or services." Accordingly, the use that must be established in section 45 proceedings must be "use" within the meaning of section 4. In this regard, section 4(1) provides that "[a] trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any manner so associated with the wares that the notice of the association is then given to the person to whom the property or possession is transferred."

In order to comply with section 4(1) only, advertisement and promotional material given at the time of transfer of the property in or possession of the wares will be deemed acceptable.[5]

In accordance with section 4(2), "a trade-mark is deemed to be used in association with the services if it is used or displayed in the performance or advertising of those services." For there to be use of a trade-mark in association with services under section 4(2), the services to be performed in Canada must be advertised in association with the trade-mark.[6]

b. Permitted Deviations in Use

Use of the trade-mark as registered must be shown by the registrant in section 45 proceedings. Some deviations are acceptable, if the dominant features of the registered trade-mark are maintained and the differences are sufficiently unimportant as not to mislead an unaware consumer.[7] However, other deviations may lead to expungement of the mark. As noted by the Federal Court of Appeal in _Promafil Canada Ltée v. Munsingwear Inc._ , "with every variation the owner of a trade-mark is playing with fire."

c. Special Circumstances of Non-Use

If the registered owner is unable to establish use of the trade-mark in the normal course of trade for the relevant three-year period preceding the date of the notice, the registered owner must provide an explanation as to the absence of use to justify the maintenance of the registration. In this regard, section 45 specifically provides "and, if not, the date when it was last so in use and the reason for the absence of such use since that date." In this regard, factual situations excusing non-use are referred to as "special circumstances" and the Hearing Officer must expunge the registration "unless the absence of use has not been due to _special circumstances_ that excuse the absence of use [emphasis added]."

The Federal Court of Appeal in _Scott Paper Limited v. Smart & Biggar_ has summarized the situation in the following terms: (a) the general rule is that the absence of use is penalized by expungement, (b) there is an exception to the general rule where the absence of use is due to special circumstances, (c) special circumstances are circumstances not found in most cases of absence of use of the mark, and (d) the special circumstances that excuse the absence of use of the mark must be the circumstances to which the absence of use is due.[8]

Special circumstances have been held to mean "circumstances that are unusual, uncommon or exceptional."[9] The Federal Court of Appeal has made it clear that the "relevant inquiry as to whether special circumstances exist is an inquiry into the reasons for non-use."[10] In this regard, four criteria appear material to this inquiry: (a) the length of time during which the trade-mark has not been in use, (b) whether the reasons given are circumstances beyond the registrant's control, (c) whether the excuses lead to the conclusion that the absence of use should not be punished by expungement, and (d) whether there is a serious intention to resume use.[11]

B. INITIATION OF SUMMARY CANCELLATION PROCEEDINGS

1. Filing a Request to Issue a Section 45 Notice

Section 45 permits the Registrar, on the Registrar's own initiative,[12] to issue a section 45 notice to a registered owner of a trade-mark at any time,[13] or in response to a request from another party. In the latter case, upon notice in writing, the Registrar may require proof of use from the registered owner. Such a request must be made after three years from the date of the registration of the trade-mark ("material time period") by any person who pays the prescribed fee. In such instances, the Registrar is required to give notice to the registered owner of the trade-mark, unless the Registrar sees good reason to the contrary. Factors that the Registrar considers good reasons for not issuing a section 45 notice include (a) the trade-mark registration is already the subject of a section 45 proceeding pending before the Registrar or on appeal before the Federal Court, (b) the request is _within_ three years of the date of issuance of a previous section 45 notice, and (c) the Registrar considers that the request is frivolous or vexatious.[14]

The Registrar's basis for not issuing a section 45 notice where the request is made within three years of the date of issuance of a previous section 45 notice in which the proceedings led to a final decision under section 45 appears to be based on the Registrar's assessment of the application of article 19 of the _Agreement on Trade-Related Aspects of Intellectual Property Rights_ (TRIPS). However, it appears that if a case can be made, the Registrar may accept a request under section 45 and issue a notice whether there are sufficient facts to warrant the issuance of a section 45 notice notwithstanding that three years have not elapsed since the date of registration.

The person making the request for the issuance of the section 45 notice ("Requesting Party"), who may be a law firm acting on behalf of the interested party, is not required to send a copy of its request to the registered owner of the trade-mark.[15] The Registrar is without authority to accept a request for the issuance of a section 45 notice if the request is not accompanied by payment in full of the prescribed fee.[16] It should be noted that requests for issuance of a section 45 notice made in cases where the Requesting Party is a law firm, provide the requesting law firm, who is acting as a trade-mark agent, with both the status to request a section 45 notice and to appeal any decisions from the Registrar.[17]

That the Registrar may issue a notice under section 45 of the _Trade-marks Act_ at the request of a law firm acting as a trade-mark agent for any interested party has resulted in a level of anonymity for the interested parties in section 45 proceedings. However, such anonymity cannot always be safeguarded in instances where responses to Office Actions are filed with the Trade-marks Office by such law firm. However, absent such instances, the anonymity of section 45 proceedings can often be preserved, particularly in cases where competing trade-marks have not been filed. Using section 45 proceedings as a strategic tool may occur prior to the launch of a brand whose name may be anticipated as being in competition with an older trade-mark registration. In these cases, the initiation of proceedings under section 45 forces the registered owner to evidence use of its registered trade-mark or make a determination on the importance of this trade-mark if it is no longer in use.

C. RESPONSES TO A SECTION 45 NOTICE

1. Default: Failure to File Evidence

If the Registrar does not receive any evidence in response to a section 45 notice, the mark is liable to be expunged or the scope of listed wares and services reduced. In the event that the Registrar determines that the trade-mark is liable to be expunged on the basis that the registered owner did not file any evidence in response to a section 45 notice, the Registrar will issue a final decision expunging the trade-mark registration in accordance with section 45(3) of the _Trade-marks Act_.[18]

2. Affidavit Evidence

a. Substance of Affidavit

Section 45(2) of the _Trade-marks Act_ states that the proof of use required under section 45(1) of the _Trade-marks Act_ is established by way of affidavit or statutory declaration. Although the burden is on the registered owner to establish use of its trade-mark, the affidavit or statutory declaration need not be that of the registered owner. It may be filed by a third party familiar with the registrant's operations, including an unrecorded assignee[19] or the owner of a certification mark and licensor of the mark under attack.[20] However, the relevant use must be by the registered owner, an assignee, or licensee pursuant to section 50.[21]

The affidavit or statutory declaration should demonstrate use of the registered trade-mark in Canada at any time during the material time period with respect to _each_ of the wares or services specified in the registration, and/or the date when the registered trade-mark was last used in Canada, and the reasons for the absence of use since that date.[22]

In this regard, bald assertions of use as a matter of law are inadequate, whereas assertions of facts showing use are sufficient to maintain a registration in section 45 proceedings.[23] Importantly, an affiant must establish facts from which the conclusions of use can be made.[24]

It is important to note that evidence of a _single sale_ may suffice to establish use in the normal course of trade, depending on the circumstances surrounding the transactions, provided the evidence was not manufactured for the sole and deliberate purpose of protecting the trade-mark registration.[25] In this regard, the Trade-marks Opposition Board (TMOB) has held that where a sale occurs before the notice period and appears to be a genuine sale made in the registrant's normal course of trade, that will normally be sufficient to maintain the registration. In this regard, the Registrar will generally have regard to whether the transactions appear to have been deliberately manufactured, how long prior to the requesting parties' request for the issuance of the section 45 notice that the transaction took place, and whether the transaction is similar to transactions that had occurred previously.[26]

The evidence filed by the registrant must be clear and unambiguous. Although the allegations in an affidavit or statutory declaration should always be precise, they must be especially so in section 45 proceedings because no other evidence will be received and there is no opportunity for cross-examination. Accordingly, any ambiguity in the evidence will be resolved against the affiant.[27] In order to avoid any ambiguity, the affidavit or statutory declaration should identify the following:

• the proceedings,

• the affiant/declarant,

• the affiant/declarant's relationship to the registered owner,

• the nature and description of the registered owner's business,[28] and

• knowledge by the affiant of the registered owner's business.

The affiant must also set out:

• some evidence of use in the normal course of trade,[29] including the method and description of use of the trade-mark in association with each of the relevant wares or services;[30]

• the period of ordinary commercial sales of the relevant wares or services and the accompanying exhibits in support thereof (i.e., labels, tags, packaging, advertisements, price lists, and/or invoices); and

• estimated sales of the relevant wares or services and a description of the most recent sales within the material time period.

As noted above, section 45(1) provides that use must be shown in respect of "each of the wares specified in the registration." In this regard, the Federal Court of Appeal has noted that section 45 "contemplates that a registered owner may not be making use of a trade mark with respect to _all_ of the wares specified in the registration.... If he shows that the mark is in use in Canada with respect to all of the wares specified then, clearly, the registration is not to be touched. If, on the other hand, he shows that the mark is in use in Canada with respect to some but not all of the wares, the registration is liable to be amended."[31] However, where the registration contains several categories of wares or services and each category contains several items of wares or services, the Registrar may accept a general statement of use in relation to each item of wares or each service listed in the registration together with a description of the use made of the trade-mark in association with each item of wares and each service and examples of use in relation to a few items of wares or services in each category.[32]

Use of the Registered Trade-mark

For the purpose of establishing use under section 4, if the mark is varied or such that it may not be perceived to be the same mark registered, the test is whether the deviation from the identity of the mark still maintains its recognizability (commercial impression) or causes confusion on the part of unaware purchasers.[33]

In accordance with section 4(2), a trade-mark is deemed to be used with the services if it is used or displayed in the performance or advertising of those services. For there to be use of services under section 4(2), the services must be advertised in association with the mark and be available to be performed in Canada.[34] It should be noted that it is sufficient that the services are offered and the owner prepared to perform the services in Canada, although the services may not have been actually performed in Canada.[35] Services may be incidental or ancillary to the wares offered and do not necessarily need to be offered independently of the wares to the public.[36]

b. Cross-examination

Procedurally, no cross-examination is permitted on affidavits filed before the Registrar in section 45 proceedings.[37] As such, the Registrar has taken the position that it is without authority to order cross-examination on an affidavit or statutory declaration filed as evidence in section 45 proceedings.[38] However, a Requesting Party may be permitted to cross-examine on affidavits filed by or on behalf of the registrant on appeal.[39] Subject to this exception, the Requesting Party is not allowed to cross-examine on the evidence furnished by the trade-mark owner,[40] nor is the Requesting Party allowed to file any evidence on its own, even on appeal.[41] However, the Requesting Party is given the opportunity to submit written and oral submissions pursuant to section 45(2). However, because cross-examination is not an option for the Requesting Party, the implication is that ambiguity in an affidavit or statutory declaration filed under section 45(2) by the registered owner will be interpreted against the registered owner.[42]

3. Withdrawing from Section 45 Proceedings

The Registrar _may_ discontinue section 45 proceedings upon receipt of a request signed by or on behalf of the Registrant and Requesting Party. If the Requesting Party does not file written representations or request to be heard at a hearing, the Registrar may issue a notice requesting that the parties confirm whether they wish to discontinue the proceedings on consent. In this regard, and prior to the issuance of the current Practice Notice, the Registrar may have refused to grant a request to discontinue the proceedings if the Registrar was not satisfied, for example, that the registered owner's evidence demonstrated use within the relevant period. It is not clear whether the previous practice will be employed under the current Practice Notice.

D. WRITTEN ARGUMENTS AND ORAL HEARINGS BEFORE THE TRADE-MARKS OPPOSITION BOARD

1. Written Arguments

Section 45(2) provides that the Registrar may hear representations made by or on behalf of the registered owner of the trade-mark or by or on behalf of the Requesting Party. Once the Registrar receives evidence of use from the registered owner, it will issue a notice advising the Requesting Party that it may file written arguments or advise the Registrar that it requests an extension of time or does not intend to file written arguments.[43] The current Practice Notice also provides that written representations are not required in section 45 proceedings and that if neither party files written representations within the allotted deadlines, the Registrar will proceed on its own accord to issue a final decision _unless_ one or both of the parties request to be heard at the hearing.[44]

The same rules governing requests for extensions of time for filing written representations by the Requesting Party apply equally to the registered owner. However, it should be noted that unless the Registrar invites the registrant to file supplementary evidence, any new evidence introduced by way of the written argument will be disregarded.[45]

2. Oral Hearings Before the Trade-marks Opposition Board

Section 45(2) also provides for representations to be made by the registered owner and the Requesting Party by way of an oral hearing. However, it should be noted that the new Practice Notice has substantially changed the rules governing oral hearings in this regard.

If either the registered owner or the Requesting Party wishes to be heard and participate at a hearing, that party must give the Registrar written notice of its request to be heard within one month following the final deadline for the submission of the registered owner's written submissions. Each party's letter requesting to be heard at the oral hearing must specify whether (a) the party will make representations in person or by telephone, (b) the party will make representations in English or French, or (c) simultaneous translation will be required if the other party makes representations in the other official language.

Under the new Practice Notice, the Registrar will _not_ grant requests to extend the administrative deadline for requesting to be heard and participating at the hearing.[46] The rationale under the new Practice Notice with regard to the above is that hearings are not required in section 45 proceedings. Accordingly, if neither party files a request to be heard, the Registrar will proceed in due course and, as soon as administratively possible, will issue a final decision.[47]

The new Practice Notice also provides that once the file is ready to be scheduled for a hearing, the Registrar will issue a notice to the parties setting up the time, date, location of the hearing, official languages in which representations will be made, and whether simultaneous translation will be provided. The Registrar will then schedule the hearing to be heard by both parties in person (unless the parties have requested that representations be made by telephone), with representations to be made by the registered owner in the official language in which the evidence was written and representations to be made by the Requesting Party in the official language with which the request for issuance of the section 45 notice was written, with no arrangement for simultaneous translation. The Registrar will generally issue notices advising parties of the scheduled hearing dates on a quarterly basis with no less than 90 days notice of the hearing dates. The parties will have one month from the date of the Registrar's notice in which to confirm their attendance at the scheduled hearing. In cases where the party or parties who had requested to be heard are not available on the specific scheduled hearing date _and_ the parties consent to having the hearing rescheduled, the Registrar will make arrangements to reschedule the hearing date as soon as administratively possible. However, the Practice Notice provides that cases will generally only be scheduled once.[48]

The new Practice Notice also provides that if there are any changes to the scheduled hearing, the party requesting the change is required to make such a request no less than three weeks prior to the scheduled hearing date by telephoning the Registrar and advising the Registrar of the changes and sending written confirmation of the changes by facsimile.[49] The new Practice Notice provides that the Registrar will not grant postponements of scheduled hearings for any reason, including consent between the parties and/or the settlement of negotiations. If the parties agree that they no longer wish to be heard after the section 45 proceedings have been scheduled, the Registrar will proceed, in due course, to issue the final decision. The new Practice Notice also provides that the Registrar will not hold decisions in abeyance or agree not to issue a decision on the basis of consent of the parties or pending settlement negotiations.[50] Similarly, if a scheduled hearing is cancelled, which may occur only if the Registrar is advised by telephone with confirmation in writing or on consent, where applicable, the Registrar will still proceed to issue a decision in due course, except in cases where the section 45 proceeding has been discontinued on consent or the registration has been voluntarily cancelled.[51]

3. Decision of the Trade-marks Opposition Board

Under section 45(3), the Registrar's jurisdiction is limited to determining whether a registered owner's trade-mark is being used with regard to the wares or services in a general class. Therefore, whether the wording of a registration accurately expresses or defines an owner's rights is not an issue to be decided under section 45.[52] The Registrar only has the power to amend a registration in whole or in part, by cancelling wares or services for which use has not been shown. This power does not extend to redefining a statement of wares or services to narrow a broad term.[53] The new Practice Notice provides that the Registrar will render a final decision in writing in accordance with section 45(3) to maintain, amend, or expunge the registration. Such a decision will be sent to both the registered owner and the Requesting Party in accordance with section 45(4). The new Practice Notice also provides that, pursuant to section 45(5), the Registrar shall act in accordance with the decision as soon as administratively possible if no appeal is initiated under section 56.

If an appeal is initiated, the Registrar will act in accordance with the final judgment given in appeal. In this regard, the decision of the Registrar to maintain, expunge, or amend the registration made pursuant to section 45(3) may be appealed to the Federal Court pursuant to section 56. In this regard, appeals must be filed in accordance with the _Federal Courts Act_ [54] and the _Federal Courts Rules_ [55] and filed with the Registrar in accordance with section 56(2).[56] Both the registered owner and the Requesting Party, but not the third party, may appeal the decision of the Registrar to the Federal Court within two months of the Registrar's decision, the time limit for which is provided for under section 56(1). Thereafter, the appeal is governed by the _Federal Courts Act_ and the _Federal Courts Rules_. Where the proceedings were initiated by the Registrar at the behest of a third party in the case of a registration that is less than three years old, the third party may not appeal the decision of the Registrar.[57]

E. STATUTORY APPEALS AND JUDICIAL REVIEWS TO THE FEDERAL COURT

1. Statutory Appeal Versus Judicial Review

Pursuant to section 56(1), an appeal from any final decision of the Registrar under the Act lies to the Federal Court, and a Notice of Appeal must be filed with the Registrar and the Federal Court within two months from the date on which the Registrar dispatched notice of decision, or within such time as the Court may allow.

It should be noted that the Federal Court will not hear any appeal from an interlocutory decision of the Registrar of Trade-marks. Only final decisions are appealable.[58]

**2. Procedure for Statutory Appeals Made Pursuant to Section 56 of the** _Trade-marks Act_ **Before the Federal Court**

a. Notice of Application

Although section 56(2) provides that an appeal to the Federal Court from a decision of the Registrar shall be made by way of Notice of Appeal filed with the Registrar and in the Federal Court, the commencement of a statutory appeal under section 56 is actually made by way of Notice of Application pursuant to rule 300(d) of the _Federal Courts Rules_.[59] In such instances, the Notice of Application is the originating document for the commencement of the statutory appeal made pursuant to section 56 of the Act.[60]

3. Evidence on Appeal

Section 56(5) provides that in an appeal from the decision of the Registrar made pursuant to section 56(1), " _evidence in addition_ to that adduced before the Registrar may be adduced and the Federal Court may exercise any discretion vested in the Registrar [emphasis added]." The application of section 56(5) has been held to apply even if the party chose not to file any evidence before the Registrar.[61] However, it should be noted that only the trade-mark owner is entitled to file additional evidence on appeal.[62] Any additional evidence filed by the registrant on appeal, however, is subject to cross-examination.[63] Section 56(5) therefore provides the registered owner "a second chance to save his mark from expungement or amendment" by allowing additional evidence to be adduced.[64]

Although the _Federal Courts Rules_ clearly permit additional evidence to be filed on appeal and cross-examination to be conducted on that fresh evidence, these factors do not derogate from the summary nature of the section 45 procedure. In section 45(2), it is clear that the Registrar may only receive evidence tendered by or on behalf of the registered owner. An appeal to the Federal Court under section 56 does not enlarge the scope of the section 45 inquiry or, consequently, the relevant evidence.[65] Similarly, section 56(5) does not extend to authorizing evidence on issues that were not before the Court on appeal.[66] In the same way, evidence submitted by the party at whose instance a section 45 notice was sent is not receivable on the appeal from the Registrar any more than it would have been receivable before the Registrar.[67]

It should also be noted that the right of appeal under section 56 is limited to the person making the request to the Registrar. Persons interested in the Registrar's decision because their interest may be adversely affected can only challenge the decision by way of judicial review proceedings and not by way of the same statutory appeal made pursuant to section 56.[68]

It should also be noted that section 60(1) provides that the evidentiary record before the Registrar will form part of the record on appeal before the Federal Court.

4. Standard of Review

Section 56(5) of the Act specifically provides that the Federal Court may exercise any discretion vested in the Registrar.[69] In this regard, where new evidence is filed on appeal and that evidence would have "materially effected the Registrar's findings of fact or the exercise of his discretion," the Federal Court must come to its "own conclusion as to the correctness of the Registrar's decision."[70] However, where the additional evidence adduced before the Court would not have materially affected the Registrar's findings of fact or exercise a discretion, the standard remains one of reasonableness.[71] Thus, fresh evidence may not go to fresh issues.[72] Where no new evidence is filed on appeal, the standard of review to be applied by Federal Court in reviewing the decision of the Registrar is that of reasonableness, whether of fact, law, or discretion within the Registrar's area of expertise.[73] Ultimately, the opportunity for a trial _de novo_ [74] provides a registered owner with a basis to correct insufficient or deficient evidence filed before the Registrar.

The standard of review to be applied on appeal from decisions of the Registrar has not changed in light of the Supreme Court of Canada's decision in _Dunsmuir v. New Brunswick_.[75] The Federal Court has since held that the appropriate standard of review remains reasonableness,[76] as previously articulated by the Supreme Court of Canada in _Mattel U.S.A. Inc. v. 3894207 Canada Inc._ [77]

5. Appeals from Decisions of the Federal Court

Decisions from the Federal Court are appealable to the Federal Court of Appeal[78] and are governed by Part 6 of the _Federal Courts Rules_.

6. Costs

Although costs from a section 45 proceeding before the Trade-marks Opposition Board are not available to the parties because the Registrar has no authority to grant an award of costs under the Act, on appeals of decisions of the Registrar before the Federal Court, costs are available as provided for by Part 11 of the _Federal Courts Rules_. However, although a party may recover its costs before the Federal Court, parties are typically not able to recover costs before both the Federal Court _and_ the Registrar.[79]

F. NEW PRACTICE NOTICE GOVERNING CANCELLATION PROCEEDINGS

On September 14, 2009, the Practice Notice published on August 13, 2009 came into effect and replaced the previous Practice Notice published in the _Trade-marks Journal_ on December 21, 2005. The new Practice Notice took effect as of September 14, 2009.

In addition to the matters discussed earlier in this chapter, the new Practice Notice also included substantive revisions regarding extensions of time for filing evidence. The changes affecting written representations, hearings, discontinuances, discussions, and appeals were previously discussed.

1. Extensions of Time to File Evidence

One of the key changes in the new Practice Notice governs extensions of time for filing evidence. Under the new Practice Notice, the Registrar generally only considers one request for an extension of time up to a maximum of four months, with sufficient reasons, for the registered owner to file evidence in response to a section 45 notice. In filing a request for an extension of time to file its evidence, the registered owner must pay the prescribed fee and provide sufficient reasons to satisfy the Registrar that circumstances justify the extension of time. The rationale for the change is that while section 47 of the Act is discretionary and allows the Registrar to grant an extension of time for the registered owner to file evidence in response to a section 45 notice, section 45 proceedings are intended to be efficient at summary procedures aimed at removing the trade-marks that are clearly not in use in Canada.[80] Accordingly, the new Practice Notice provides that the Registrar will not generally grant an extension of time beyond the maximum benchmark of four months for a registered owner to file its evidence in response to a section 45 notice. However, the Registrar will consider requests for extensions of time beyond the maximum benchmark on a case-by-case basis and only if the Registrar determines, on the facts of the particular case, that the circumstances justify a further extension of time. However, it is noted that the Registrar will not grant an extension of time beyond the maximum benchmark on the basis of the parties' consent or that the parties are pursuing settlement negotiations.

The basis for determining whether to grant a further extension of time beyond the maximum benchmark will be made by the Registrar in regard to the Federal Court of Appeal's decision in _Anheuser-Busch Inc. v. Carling O'Keefe Breweries of Canada Ltd._ [81] The new Practice Notice provides that examples that the Registrar may consider as circumstances justifying a further extension of time include (a) a very recent change in the parties' instructing principal or trade-mark agent; (b) circumstances beyond the control of the person concerned — for example, illness, accident, death, bankruptcy, or other serious and unforeseen circumstances; (c) recent assignment of the registration that is the subject of the cancellation proceedings; (d) voluntary cancellation of the registration that is the subject of the cancellation proceedings; and (e) amendment to the statement of wares or services of the registration that is the subject of the cancellation proceedings.

The new Practice Notice also provides that the Registrar will generally not grant a request for a retroactive extension of time pursuant to section 47(2) of the Act for filing additional evidence after the Requesting Party has filed its written representations.

G. COMPARISON WITH EXPUNGEMENT PROCEEDINGS BEFORE THE FEDERAL COURT

1. Basis and Grounds for Expungement Proceedings Before the Federal Court

Section 57(1) of the Act gives the Federal Court exclusive original jurisdiction to strike out or amend any entry on the Register on the ground that, at the date of the application, the entry as it appears on the Register, does not accurately express, or define, the existing rights of the person appearing to be the registered owner of the trade-mark.[82] Unlike section 45 proceedings, Expungement Proceedings before the Federal Court are made by filing an originating notice of motion, by counterclaim in an action for infringement of the trade-mark, or by Statement of Claim in an action claiming additional relief under the Act.[83] It should be noted that Expungement Proceedings before the Federal Court may not be brought by Statement of Claim unless some other ground of relief is claimed.[84] Expungement Proceedings are brought either by the Registrar or by "any person interested." In this regard, section 2 defines "a person interested" as including "any person who is affected or reasonably apprehends that he may be affected by any entry on the register, or by any act or omission under or contemplated act or omission or contrary to this Act, and includes the Attorney General of Canada." It should also be noted that a "person" is defined in section 2 as including trade unions, lawful business associations, and government authorities.

Expungement Proceedings made pursuant to section 57(1) are barred by the restrictions contained in section 57(2), which provides that no person is entitled to institute a proceeding that calls into question any decision given by the Registrar, of which express notice has been given, and from which there lies a right of appeal.[85] Other restrictions exist for bringing an action under section 57(1) for trade-marks that are not entries on the Register, such as those trade-marks at common law and marks granted to public authorities under section 9 of the Act.

Generally, the grounds advanced under Expungement Proceedings are made pursuant to section 18 of the Act, which offers four possible grounds for invalidating a registered trade-mark: (a) the trade-mark was not registrable as of the date of registration; (b) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into question are commenced; or (c) the trade-mark has been abandoned; and (d) subject to section 17 of the Act, the trade-mark is invalid if the applicant for registration was not the person entitled to secure registration.

The section 18(1)(a) ground of invalidity implicitly references sections 9 to 15 of the Act, which define a limit to registrable trade-marks. An allegation made under section 18(1)(b) is that the registered trade-mark no longer distinguishes the owner's goods or services with which the trade-mark is used from those of others. The section 18(1)(c) ground for expungement is a different inquiry from that of non-use under section 45 and is much broader in approach.[86] Non-entitlement to registration as a ground of invalidity under section 18 is primarily directed to competing claims of ownership and implicitly references section 16, which defines entitlement to registration in different circumstances under the Act.

In addition to the grounds of invalidity permitted under section 18, other non-statutory grounds have been recognized, including (a) duty of principal not to misappropriate and register the principal's trade-mark in the agent's own name;[87] (b) fraudulent or material representation made for the purposes of registration;[88] and (c) marks that are primarily functional.[89]

2. Relief and Expungement Proceedings Before the Federal Court

Section 57(1) permits the Federal Court to strike out or amend any registration if it does not accurately express or define the existing rights of the person appearing as the registered owner. The courts have interpreted this power to mean that if the registration as a whole is invalid, it will be struck out. If the registration is invalid only in respect of certain wares, the registration will be amended accordingly. The Court, however, does not have jurisdiction to substitute one registered owner for another.[90]

It should be noted that proceedings initiated pursuant to section 45 do not prohibit a party from later instituting Expungement Proceedings.[91] Accordingly, Expungement Proceedings before the Federal Court may be used as an additional tool to Cancellation Proceedings made pursuant to section 45 of the Act.

As is the case with decisions of the Federal Court on appeal from the decision of a Registrar in section 45 proceedings, an appeal of the decision of the Federal Court in Expungement Proceedings made pursuant to section 57(1) are governed by section 27(1) of the _Federal Courts Act_ and Part 6 of the _Federal Courts Rules_.

[1] R.S.C. 1985, c. T-13 ["the Act"].

[2] _Anheuser-Busch, Inc. v. Carling O'Keefe Breweries of Canada Ltd._ (1982), 69 C.P.R. (2d) 136 at 141 (F.C.A.) [ _Anheuser-Busch_ ].

[3] _Aerosol Filters Inc. v. Plough (Canada) Ltd._ (1979), 45 C.P.R. (2d) 194, [1980] 2 F.C. 338 (T.D.), aff'd [1981] 1 F.C. 679, (1980) 53 C.P.R. (2d) 62 (C.A.).

[4] _Berg Equipment Co. (Canada) Ltd. v. Meredith & Finlayson_ (1991), 40 C.P.R. (3d) 409 at 412-13 (F.C.A.) [ _Meredith & Finlayson_].

[5] _BMW Canada Inc. v. Nissan Canada Inc._ , 2007 CAF 255, 60 C.P.R. (4th) 181 at para. 25 (F.C.A.).

[6] _Express File Inc. v. HRB Royalty Inc._ , 2005 FC 542, 39 C.P.R. (4th) 59 at paras. 22 and 35.

[7] _Nightingale Interloc Ltd. v. Prodesign Ltd._ (1984), 2 C.P.R. (3d) 535 (T.M.O.B.); _Cie internationale pour l'informatique CII Honeywell Bull, S.A._ (1985), 4 C.P.R. (3d) 523 at 525 (F.C.A.) [ _CII Honeywell Bull_ ]; _Promafil Canada Ltée v. Munsingwear Inc._ (1992), 44 C.P.R. (3d) 59 at 71-72 (F.C.A.), leave to appeal to S.C.C. refused (1993), 47 C.P.R. (3d) v (note) [ _Promafil_ ].

[8] _Scott Paper Limited v. Smart & Biggar_, 2008 FCA 129 at para. 22 [ _Scott Paper_ ].

[9] _John Labatt Ltd. v. Cotton Club Bottling Co._ (1976), 25 C.P.R. (2d) 115 at 123 (F.C.T.D.).

[10] _Scott Paper_ , _supra_ note 8 at para. 25.

[11] _Registrar of Trade Marks v. Harris Knitting Mills Ltd._ (1985), 4 C.P.R. (3d) 488 on _Scott Paper_ , _supra_ note 8.

[12] _McCain Foods Ltd. v. Chef America Inc._ (1996), 71 C.P.R. (3d) 103 (T.M.O.B.).

[13] _Broderick & Bascom Rope Co. v. Canada (Registrar of Trade Marks)_ (1977), 65 C.P.R. 209 at 214 (Ex. Ct.) [ _Broderick_ ].

[14] Canadian Intellectual Property Office, Trade-marks Opposition Board Practice Notice: Practice in Section 45 Proceedings, August 13, 2009, section II.1.3 ["Practice Notice"].

[15] _Ibid._ , section II.1.

[16] _Ibid._ , section II.1.1.

[17] _Rogers, Bereskin & Parr v. Canada (Registrar of Trade Marks)_ (1986), 9 C.P.R. (3d) 260 (F.C.T.D.); _Mayborn Products Ltd. v. Canada (Registrar of Trade Marks)_ (1983), 70 C.P.R. (2d) 1 (F.C.T.D.); _Rentokil Group Ltd. v. Barrigar & Oyen_ (1983), 75 C.P.R. (2d) 10 (F.C.T.D.).

[18] Practice Notice, _supra_ note 14, section III.1.

[19] _Roebuck v. Canada (Registrar of Trade Marks)_ (1987), 15 C.P.R. (3d) 113 (F.C.T.D.).

[20] _Provigo Distribution Inc. c. Metro Richelieu Inc._ , 2006 CarswellNat 4970 (T.M.O.B.).

[21] _Star-Kist Foods Inc. v. Canada (Registrar of Trade Marks)_ (1988), 20 C.P.R. (3d) 46 (F.C.A.); _Manufacturier de Bas de Nylon Doris Ltée/Doris Hosiery Mills Ltd. v. Canadian Sportfishing Productions_ (2001), 16 C.P.R. (4th) 410 at 414. (T.M.O.B.); _Brouillette Kosie Prince v. Orange Cove-Sanger Citrus Association_ , 2007 FC 308 at paras. 13-16.

[22] Practice Notice, _supra_ note 14, section III.

[23] _Central Transport Inc. v. Mantha & Associates_ (1995), 64 C.P.R. (3d) 354 (F.C.A.), rev'g (1995), 59 C.P.R. (3d) 213 (F.C.T.D.); _Guido Berlucchi & C.S.r.l. v. Brouillette Kosie Prince_ (2007), 56 C.P.R. (4th) 401 (F.C.) [ _Guido Berlucchi_ ].

[24] _Plough (Canada) Ltd. v. Aerosol Fillers Inc._ (1980), 53 C.P.R. (2d) 62 (F.C.A.) [ _Plough_ ]; _Guido Berlucchi_ , _supra_ note 23; _Union Electric Supply Co. v. Canada (Registrar of Trade Marks)_ (1982), 63 C.P.R. (2d) 56 (F.C.T.D.); _Baume & Mercier S.A. v. Brown_ (1985), 4 C.P.R. (3d) 96 (F.C.T.D.) [ _Baume & Mercier_]; _Barrigar & Oyen v. Canada (Registrar of Trade Marks)_ (1994), 54 C.P.R. (3d) 509 (F.C.T.D.); _Meredith & Finlayson_, _supra_ note 4; _Spirits International N.V. v. Registrar of Trade-marks and SC Prodal 94 SRL_ , 2006 FC 520, aff'd 2007 FCA 162.

[25] _Philip Morris Inc. v. Imperial Tobacco Ltd._ (1987), 13 C.P.R. (3d) 289 (F.C.T.D.); _Guido Berlucchi_ , _supra_ note 23.

[26] _Rogers & Milne c. Sherwood-Drolet Ltée_ (2001), 16 C.P.R. (4th) 109 at 110-11 (T.M.O.B.).

[27] _Plough_ , _supra_ note 24.

[28] _S.C. Johnson & Son Inc. v. Canada (Registrar of Trade Marks)_ (1981), 55 C.P.R. (2d) 34 at 37 (F.C.T.D.).

[29] _Opus Building Corp. v. Opus Corp._ (1995), 60 C.P.R. (3d) 100 at 106 (F.C.T.D.).

[30] _Plough_ , _supra_ note 24.

[31] _John Labatt Ltd. v. Rainier Brewing Co._ (1984), 80 C.P.R. (2d) 228 at 236 (F.C.A.); _Guido Berlucchi_ , _supra_ note 23.

[32] _Saks & Co. v. Canada (Registrar of Trade Marks)_ (1989), 24 C.P.R. (3d) 49 (F.C.T.D.); _Union Electric Supply Co. v. Canada (Registrar of Trade Marks)_ (1982), 63 C.P.R. (2d) 56 (F.C.T.D.).

[33] _Promafil_ , _supra_ note 7.

[34] _Express File Inc. v. HRB Royalty Inc._ , 2005 FC 542 at paras. 22 and 35.

[35] _Smith Lyons v. Vertrag Investments Ltd._ (2000), 7 C.P.R. (4th) 557 (T.M.O.B.).

[36] _Gesco Industries Inc. v. Sim & McBurney_ (2000), 262 N.R. 132 (F.C.A.), aff'g (1997), 76 C.P.R. (3d) 289 (F.C.T.D.).

[37] _Lewis Thomson & Son Ltd. v. Rogers, Bereskin & Parr_ (1988), 21 C.P.R. (3d) 483 (F.C.T.D.).

[38] Practice Notice, _supra_ note 14, section V.

[39] _Borden Ladner Gervais LLP v. House of Kwong Sang Hong International Ltd._ (2001), 16 C.P.R. (4th) 51 (F.C.A.) [ _House of Kwong Sang Hong International Ltd._ ].

[40] _Burke-Robertson v. Carhartt Canada Ltd._ (1994), 56 C.P.R. (3d) 353 (F.C.T.D.).

[41] _Meredith & Finlayson_, _supra_ note 4; _Novopharm Ltd. v. Searle Canada Inc._ (1993), 50 C.P.R. (3d) 159 (F.C.T.D.); _Riches, McKenzie & Herbert v. Pepper King Ltd._ (2000), 8 C.P.R. (4th) 471 (F.C.T.D.).

[42] _Plough_ , _supra_ note 24.

[43] Practice Notice, _supra_ note 14, section VI.

[44] _Ibid._ , section VI.3.

[45] _Ford Motor Co. of Canada v. SportsMark Inc._ (2006), 58 C.P.R. (4th) 87 (T.M.O.B.).

[46] Practice Notice, _supra_ note 14, section VII.1.

[47] _Ibid._ , section VIII.

[48] _Ibid._ , section VIII.2.

[49] _Ibid._ , sections VIII.3 and VIII.4.

[50] _Ibid._ , section VIII.5.

[51] _Ibid._ , section VIII.6.

[52] _Rideout & Maybee s.r.l. c. Omega SA_ (2005), 43 C.P.R. (4th) 18 at paras. 2-4 (F.C.A.).

[53] _Marks & Clerk v. Coppley Apparel Group Ltd._ (2003), 27 C.P.R. (4th) 347 (T.M.O.B.).

[54] _Federal Courts Act_ , R.S.C. 1985, c. F-7.

[55] _Federal Courts Rules_ , SOR/96-106, as am.; SOR/202-417, s. 18; SOR/204-283, s. 37(b).

[56] Practice Notice, _supra_ note 14, sections IX and X.

[57] _Broderick_ , _supra_ note 13 at 214; _Renaud Cointreau & Cie v. Cordon Bleu International Ltd._ (1992), 45 C.P.R. (3d) 374 at 376 and 379 [ _Renaud Cointreau_ ].

[58] _G.H. Mumm & Cie v. Canada (Registrar of Trade Marks)_ (1982), 64 C.P.R. (2d) 223 (F.C.T.D.); _Anheuser-Busch_ , _supra_ note 2.

[59] _Federal Courts Rules_ , _supra_ note 55.

[60] _Ibid._ , r. 63(1)(d). The content for the Notice of Application is provided for by r. 301, the format for which is provided for in rr. 67, 68, and 301. The relevant forms are Forms 66 and 301.

[61] _Austin Nichols & Co. v. Cinnabon Inc._ (1998), 82 C.P.R. (3d) 513 (F.C.A.) [ _Austin Nichols_ ].

[62] _Meredith & Finlayson_, _supra_ note 4.

[63] _House of Kwong Sang Hong International Ltd._ , _supra_ note 39 at 52.

[64] _Austin Nichols_ , _supra_ note 61.

[65] _Meredith & Finlayson_, _supra_ note 4.

[66] _Ibid._

[67] _Plough_ , _supra_ note 24; _Broderick_ , _supra_ note 13; _Fairweather Ltd. v. Registrar of Trade-marks_ , 2006 FC 1248, aff'd 2007 FCA 376.

[68] _Association of Architects v. Association of Architectural Technologists_ , [2003] 1 F.C. 331 (F.C.A.), leave to appeal to S.C.C. refused (2003), 23 C.P.R. (4th) vii.

[69] _Spirits International N.V. v. Canada (Registrar of Trade Marks)_ (2007), 60 C.P.R. (4th) 31, 2007 FCA 162, aff'g (2006), 49 C.P.R. (4th) 196, 2006 FC 520.

[70] _John Labatt Ltd. v. Molson Breweries, A Partnership_ (2000), 5 C.P.R. (4th) 180 at 196 (F.C.A.) [ _John Labatt Ltd. v. Molson Breweries_ ].

[71] _Sim & McBurney v. Anchor Brewing Co._ (2004), 30 C.P.R. (4th) 331 (F.C.), aff'd (2005), 40 C.P.R. (4th) 120 (F.C.A.).

[72] _Broderick_ , _supra_ note 13; _Meredith & Finlayson_, _supra_ note 4.

[73] _John Labatt Ltd. v. Molson Breweries_ , _supra_ note 70; _Société nationale des chemins de fer français v. Venice Simplon-Orient-Express Inc._ (2000), 9 C.P.R. (4th) 443 (F.C.T.D.); _Sim & McBurney v. Anchor Brewing Co._, _supra_ note 71.

[74] Note that the Federal Court of Appeal has held that an appeal under section 56 of the Act is not a "trial _de novo_ " in the strictest sense of the term, because the record created before the Registrar forms the basis of the evidence before the Federal Court judge hearing the appeal, although the evidence may be added to by the parties: _John Labatt Ltd. v. Molson Breweries_ , _supra_ note 70.

[75] [2008] 1 S.C.R. 190.

[76] _Grapha-Holdings AG v. Tool Works Inc._ , 2008 FC 959 at paras. 13-14.

[77] [2006] 1 S.C.R. 772 at paras. 40-41.

[78] _Federal Courts Act_ , _supra_ note 54, s. 27(1).

[79] _Insurance Corporation of British Columbia v. Registrar of Trade-marks_ , [1979] 44 C.P.R. (2d) 1 (F.C.T.D.).

[80] Practice Notice, _supra_ note 14, section IV.1.

[81] _Anheuser-Busch_ , _supra_ note 2 at 143.

[82] _Federal Courts Act_ , _supra_ note 54, s. 20(1).

[83] _Trade-marks Act_ , _supra_ note 1, s. 58.

[84] _Canadian Olympic Assn. v. USA Hockey Inc._ (1997), 74 C.P.R. (3d) 348 (F.C.T.D.); _Baume & Mercier S.A. v. Importations Cercle Ltée_ (1994), 58 C.P.R. (3d) 232 (F.C.T.D.).

[85] _Canadian Olympic Assn. v. USA Hockey Inc._ , _supra_ note 84.

[86] _John Labatt Ltd. v. Cotton Club Bottling Co._ , _supra_ note 9 at 124.

[87] _Ling Chi Medicine Co. (H.K.) Ltd. v. Persaud_ (1998), 81 C.P.R. (3d) 369 (F.C.A.), rev'g (1997), 72 C.P.R. (3d) 201 (F.C.T.D.); _Citrus Growers Assn. Ltd. v. William D. Branson Ltd._ (1990), 36 C.P.R. (3d) 434 (F.C.T.D.).

[88] _Andres Wines Ltd. v. E. & J. Gallo Winery_ (1975), 25 C.P.R. (2d) 126 (F.C.A.), citing with approval _Williamson Candy Co. v. W.J. Crothers Co._ , [1924] Ex. C.R. 183 (Can. Ex. Ct.), aff'd [1925] S.C.R. 377.

[89] _Remington Rand Corp. v. Philips Electronics N.V._ (1995), 64 C.P.R. (3d) 467 (F.C.A.); leave to appeal to S.C.C. refused (1996), 67 C.P.R. (3d) vi (note).

[90] _Citrus Growers Assn. Ltd. v. William D. Branson Ltd._ , _supra_ note 87 at 436; _Friendly Ice Cream Corp. v. Friendly Ice Cream Shops Ltd._ , [1972] F.C. 712 (T.D.).

[91] _Baume & Mercier S.A. v. Importations Cercle Ltée_, _supra_ note 84.

**CHAPTER 7**

TRADE-MARK INFRINGEMENT AND PASSING OFF

A. INTRODUCTION

"[T]he purpose of trade-marks is to function as a symbol of the source and quality of wares and services, to distinguish those of the merchant from those of another, and thereby to prevent 'confusion' in the marketplace."[1] Confusion under the _Trade-marks Act_ [2] occurs if the use of two similar trade-marks is likely to lead to the inference that the wares or services associated with the trade-marks are manufactured, sold or performed by the same person.

1. Statutory Causes of Action Affecting Trade-mark Registrations

a. Expungement Under Section 57

Pursuant to sections 57 and 18 of the Act, a trade-mark registration may be expunged on various grounds, including:

(1) the trade-mark was not registrable at the date of registration;

(2) the trade-mark is not distinctive at the time proceedings bringing the validity of the registration into questions are commenced;

(3) the trade-mark has been abandoned; or

(4) the applicant was not the person entitled to secure the registration.[3]

Expungement proceedings, unlike summary cancellation proceedings under section 45 of the Act, are intended to determine the substantive rights of a registered owner. An application to expunge a trade-mark registration may only be made to the Federal Court, and may be made by:

(a) an originating notice of motion,

(b) a counterclaim in a trade-mark infringement action, or

(c) a statement of claim in an action claiming additional relief under the Act.[4]

In expungement proceedings, the trade-mark registration is presumed to be valid and the onus is on the party seeking to expunge the registration to prove, on a balance of probabilities, that the registration should be expunged.[5]

The trade-mark was not registrable at the date of registration

Section 18(1)(a) of the Act provides that a trade-mark registration is invalid if the trade-mark was not registrable as of the date of registration. The evidence must establish that the trade-mark should not have been registered, and in particular, that it contravenes one or more of the absolute bars to registration enumerated in section 12(1) of the Act.[6]

The trade-mark is not distinctive

Section 18(1)(b) of the Act provides that the registration of a trade-mark is invalid if the trade-mark is not distinctive at the time the proceedings bringing the validity of the registration into question are commenced. Non-distinctiveness is a question of fact[7] and may result from the descriptiveness or misdescriptiveness of the mark,[8] common use of the trade-mark by the public,[9] prior use of a confusing trade-mark or trade-name by the party seeking expungement,[10] or by an improper assignment[11] or licence.[12]

The trade-mark has been abandoned

Section 18(1)(c) of the Act provides that the registration of a trade-mark is invalid if the trade-mark has been abandoned. Abandonment is a question of fact and is considered in view of the circumstances of each individual case.[13] In order to succeed on this ground, the party asserting abandonment must demonstrate both (1) actual non-use of the mark in Canada and (2) an intent by the registered owner to abandon the mark.[14] Mere non-use of the trade-mark is not sufficient to establish abandonment, though an intention to abandon can be inferred from a long period of non-use.[15]

The applicant was not the person entitled to secure the registration

Section 18(1) of the Act provides that, conditional upon section 17,[16] the registration of a trade-mark is invalid if the applicant for the registration was not the person entitled to secure its registration, at the time the application for registration was filed. Entitlement in this provision indirectly refers to section 16 of the Act, which relates to the entitlement of an applicant to register a trade-mark. Accordingly, a registration may also be held invalid if, for example, (1) the registrant was not the first person to _file_ an application for a trade-mark or _use_ a confusingly similar trade-mark,[17] or to make such trade-mark known in Canada;[18] (2) the applicant did not use the trade-mark registered based on use in Canada before it was registered;[19] or (3) the registration was obtained on the basis of a misrepresentation of fact, material misstatement,[20] or fraud.[21]

This ground for expunging a registration is subject to the five-year limitation period set out in section 17(2) of the Act, which essentially denies the right to an expungement when the proceedings are commenced five years from the date of the registration of the trade-mark. The five-year limitation period applies unless it is established that the person who adopted the registered trade-mark knew of the previous use.[22]

b. Infringement: Sections 19 and 20

The remedies available for trade-mark infringement are found in section 53.2 of the Act. Notably, section 53.2 does not limit the remedies available to those enumerated in the section, and should be read broadly to permit a court to create appropriate relief in consideration of the facts of a particular case.

Section 19 Infringement

Section 19 of the Act gives the owner of a registered trade-mark the right to its exclusive use throughout Canada in respect of the wares and services listed in the registration. Since infringement under section 19 relates to the unauthorized use of an identical trade-mark registered by a plaintiff, if the trade-mark used by the defendant is different from the plaintiff's registered trade-mark, or if it is used in association with wares or services that are not covered by the registration, a plaintiff may not succeed under this section.[23] Moreover, section 19 cannot be used to attack a mark that incorporates the entirety of a plaintiff's registered trade-mark but which also includes other additional elements.[24]

Section 20 Infringement

The use by a defendant of a trade-mark or trade name that is confusing (within the meaning of section 6 of the Act) with a trade-mark registered by a plaintiff will be deemed to be an infringement pursuant to section 20 of the Act, regardless of the wares, services, or business in association with which the defendant is using the trade-mark. A plaintiff must therefore establish that a sale, distribution, or advertisement of wares or services has taken place in association with a confusing trade-mark or trade-name by a person not entitled under the Act to the use of the registered trade-mark. The material date for determining a likelihood of confusion for the purpose of section 20 has been considered to be the date of the hearing.[25]

Under section 20, infringement of a registered trade-mark occurs when a person other than the registered owner sells, distributes, advertises, exports, or imports wares or services in association with a confusing trade-mark or trade-name. However, section 20 does not prevent individuals from making (a) a _bona fide_ use of the name of the person as a trade-name, or (b) a _bona fide_ use, other than as a trade-mark, of the geographical name of a place of business, or of any accurate description of the character or quality of the relevant wares or services,[26] in such a manner as is not likely to have the effect of depreciating the value of the goodwill attaching to the registered plaintiff's trade-mark.[27]

In the case of both section 19 and section 20, the impugned trade-mark must be "used" within the meaning of section 4 in association with wares or services, and for the purpose of indicating the source of origin of the wares or services, as required by section 2, in order to be challenged.[28]

Possible Defences

Possible defences to an action in trade-mark infringement under sections 19 and 20 of the Act include (1) a challenge to the validity of the plaintiff's trade-mark registration pursuant to section 18 of the Act (subject to the provisions of section 17(2) of the Act); (2) fraud; (3) prior concurrent use of a trade-mark by the defendant in good faith as ordered by the court pursuant to section 21 of the Act;[29] (4) _bona fide_ use of defendant's personal name as a trade-name pursuant to section 20(1)(a) of the Act; (5) a _bona fide_ right to use, other than as a trade-mark, the geographical name of the defendant's place of business pursuant to section 20(1)(b)(i); (6) a _bona fide_ right to use, other than as a trade-mark, any accurate description of the character or quality of the defendant's wares and services; (7) and acquiescence, which often accompanies "delay" and essentially consists of a behaviour on the part of a plaintiff that leads the defendant to believe that the plaintiff will not enforce its legal right against the defendant.[30]

c. Depreciation of Goodwill: Section 22

Section 22 of the Act provides that "no person shall use a trade-mark registered by another person in a manner likely to have the effect of depreciating the value of the goodwill attaching thereto." The Supreme Court of Canada recently set out four factors that must be established for an action to be successful in claiming depreciation of goodwill.[31] In particular: (1) the registered trade-mark should be used by the defendant in connection with wares or services; (2) the registered trade-mark should be sufficiently well known to have goodwill attached to it; (3) the trade-mark should have been used by the defendant in a manner that was _likely_ to have an effect upon the goodwill (that is, linkage); and (4) the _likely_ effect would be to depreciate the value of the registered owner's goodwill (that is, damage).

Use of the Registered Mark

Similar to infringement actions under sections 19 and 20, an action for depreciation of goodwill is limited to the use by the defendant of a registered trade-mark. There is no cause of action under section 22 for the use by a defendant of an _unregistered_ trade-mark or a registered trade-mark that has been found invalid.[32] While the defendant must _use_ the trade-mark within the meaning of section 4 of the Act, unlike under section 20, the defendant need not use the trade-mark "as a trade-mark" (to indicate the source of the wares or services). It is also not required for the plaintiff to demonstrate confusion between the marks in order to satisfy the test for the depreciation of goodwill;[33] rather, the marks should be similar to such a degree that a "link, connection or mental association in the consumer's mind" is created between the plaintiff's trade-mark and the defendant's mark.[34] Moreover, since goodwill depreciation does not necessarily flow from confusion, it can arise without confusion being present at all.[35]

Goodwill Attaching to the Mark

While fame of the plaintiff's mark is not a requirement of section 22, there must be sufficient goodwill capable of depreciation by a "non-confusing" use. In determining whether the plaintiff's mark has acquired sufficient goodwill, the Court will consider all of the circumstances, including the strength of the mark, the nature and extent of use and advertising, the geographic reach of the mark, the degree of distinctiveness of the mark or the degree of recognition of the mark within the relevant universe, the nature of the wares or services, whether the products or services associated with the mark are confined to a narrow or specialized channel of trade or move in multiple channels, and the quality of the wares and services.[36]

Depreciation of Goodwill

It has been suggested that "goodwill has value only to the extent that the reputation and connection confer an advantage that the owner enjoys; whatever reduces that advantage reduces the value of the goodwill."[37] Depreciation of goodwill will result when the esteem in which the goods or services are held or the prestige the mark enjoys is reduced, or through the direct persuasion and enticing of customers who would otherwise be expected to buy or continue to buy goods bearing the trade-mark.[38] Depreciation can also result from disparagement or tarnishment resulting from a negative association for the mark as well as from uncontrolled, excessive use by different users (blurring the brand image or whittling away its power to distinguish products and attract consumers).[39]

Depreciation or the likelihood of depreciation is not presumed — it is a matter of evidence and must be proved. The onus of proof is on the party alleging depreciation of goodwill.[40] The mere possibility of depreciation is not sufficient.

2. Statutory Passing Off

The action for passing off which seeks to protect the goodwill associated with a distinguishing feature of a plaintiff's goods or services differs significantly from the action for infringement. While infringement is limited by a defendant's use of a trade-mark or trade-name that offends a trade-mark that is _registered_ , an action in passing off considers the use of a variety of distinguishing features identifying the origin of the plaintiff's goods or services.[41] Further, since a trade-mark registration confers upon the owner an exclusive right to use that trade-mark across Canada,[42] the owner of a registration may commence an infringement action against a confusing trade-mark regardless of the geographic scope of the offending party's use.[43] In contrast, the plaintiff in a passing-off action can only prevent the use of a confusing mark or distinguishing feature in the geographic area in which the plaintiff has established a protectable reputation.[44]

Section 7 of the Act, and more particularly section 7(b), is generally considered the statutory expression of the common law tort of passing off. Unlike sections 19, 20, and 22, section 7 applies to both registered and unregistered trade-marks.[45] The classical form of passing off, set out in section 7(b), states that no person shall "direct public attention to his wares, services or business in such a way as to cause or be likely to cause confusion in Canada, at the time he commenced so to direct attention to them, between his wares, services or business and the wares, services or business of another."

To successfully establish passing off under section 7(b) of the Act, the plaintiff must establish that its trade-name, trade-mark, get-up, or other distinguishing features purporting to identify the origin of the plaintiff's goods or services is identified in the mind of the public with the plaintiff's wares and services (the existence of goodwill or reputation). In addition, the plaintiff must show that the public has been deceived as a result of a misrepresentation, and that the plaintiff has suffered damages or that there exists the potential for or likelihood of damages as a result of the misrepresentation.[46]

Reputation or Goodwill

A plaintiff must establish the existence of a reputation or goodwill in respect of the distinguishing feature of its goods or services (a trade-mark, service mark, trade-name, get-up, etc.)[47] and that the distinguishing feature is generally attributed by consumers to the plaintiff as the single source of the goods or services bearing the distinguishing feature. If the feature of a plaintiff's goods or services is used by unrelated third parties, then the feature in question may not be distinctive of the plaintiff as the source of the plaintiff's goods or services and the plaintiff may not be able to establish that the feature has a protectable reputation (or may only be able to show limited protectable reputation to a particular market and/or to a particular geographic area).

A plaintiff in a passing-off action may enforce its rights in a trade-mark only in those geographic areas in which the mark or distinguishing feature enjoys goodwill or reputation. Accordingly, a plaintiff must establish prior goodwill in the very area where the defendant is operating. A plaintiff may have protectable goodwill or a reputation in a geographic area even though the plaintiff is not carrying on business or using its mark in that area.[48] If the plaintiff's trade-mark has a reputation in the geographic area, the defendant's use of a confusing mark means that the plaintiff has lost control over the reputation, image, or goodwill associated with its trade-mark, or has lost the right to exploit that reputation within the geographic area or into an unrelated field of endeavour. This may constitute sufficient damage to found a passing-off claim, whether or not the plaintiff has any current intention of venturing into that field or geographic area.[49]

Misrepresentation

Once the plaintiff has established that the distinguishing feature of the goods or services are known in the market and have acquired a reputation in the market by reason of that distinguishing feature, the plaintiff must then establish that a misrepresentation creating confusion in the public — whether wilful or negligent[50] — has occurred.[51] To be actionable, the misrepresentation must create confusion as to the source of the goods or services bearing the distinguishing feature.[52]

Confusion will be assessed based on the statutory test for confusion set out in section 6(5) of the Act. The statutory test for confusion is likelihood of confusion and is based on the determination of whether it is likely, in all of the surrounding circumstances, that a prospective purchaser will be led to the mistaken inference that the wares or services associated with the trade-marks were made or sold by the same person.[53] Actual confusion need not be proved if it can be shown that there is a likelihood of confusion occurring in the normal course of trade.[54]

Damages or Likelihood of Damages

Actual or potential damage is a necessary element in finding liability under section 7(b) of the Act. In the absence of evidence in this regard, the Court cannot conclude that there is liability:[55] a plaintiff must "demonstrate that he suffers or... is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."[56]

Possible Defences

Possible defences to an action in passing off include (1) loss of distinctiveness of the distinguishing feature relied upon by the plaintiff (through, for example, improper licensing, improper assignment, or common use of the distinguishing feature by unrelated third parties); (2) fraud; (3) _bona fide_ use of defendant's personal name as a trade-name so long as such use is not made in such a way as to represent the business of the defendant as the business of another; (4) a _bona fide_ right to use the geographical name of the defendant's place of business or of any accurate description of the character or quality of the defendant's wares and services, provided that there is no resulting misrepresentation as to source between the plaintiff's goods or services and those of the defendant; (5) distinguishing matter sufficient to distinguish the wares or services of the defendant from those of the plaintiff; and (6) acquiescence.[57] While the invalidity of a trade-mark registration may be a full defence to actions for infringement and depreciation of goodwill, it will not necessarily defeat a passing-off action.[58]

3. Appeals

The Federal Court's jurisdiction respecting intellectual property matters is in part exclusive and in part concurrent, depending on the nature of the matter at issue. Section 20(1) of the _Federal Courts Act_ confers on the Trial Division exclusive original jurisdiction in all cases relating to the registration of any trade-mark, including, for example, any appeal from a decision of the Registrar under the _Trade-marks Act_.[59] Section 20(1) of the _Federal Courts Act_ also confers on the Trial Division exclusive original jurisdiction in all cases that seek to have any entry in the Trade-marks Register expunged, varied, or rectified. The exclusive jurisdiction of the Federal Court regarding an application to strike or amend an entry on the Trade-marks Register on the ground that the entry does not accurately express or define the existing rights of the person appearing to be the registered owner of the mark is also expressed in section 57(1) of the _Trade-marks Act_.

The Court's concurrent jurisdiction with provincial courts in intellectual property matters is set out in section 20(2) of the _Federal Courts Act_ , which provides that the Federal Court may try any matter in which a remedy is sought under an act of Parliament or at law or in equity respecting, _inter alia_ , any trade-mark.[60]

The net practical effect of this framework is that actions putting in issue the statutory grant or registration of an intellectual property right fall within the exclusive jurisdiction of the Federal Court. Where the issue is the enforcement of a registration, rather than its validity, or for a declaration of invalidity _in personam_ , it is within the concurrent jurisdiction of the federal and provincial superior courts.

4. Remedies

In _Trade-marks Act_ proceedings, the Court may make any order that it considers appropriate in the circumstances, including an order providing for relief by way of injunction (discussed further below) and the recovery of damages or profits, and for the destruction, exportation, or other disposition of any offending wares, packages, labels, and advertising material and of any dies used in connection therewith.[61]

A successful plaintiff in a common law passing-off action is generally entitled, at his or her option, to compensation for damage and loss suffered as a result of the defendant's actions or an accounting of the defendant's profits resulting from the infringing conduct.[62]

Where trade-mark rights have been violated, a plaintiff may apply to the appropriate court for a pre-trial interlocutory injunction (discussed below) restraining the impugned conduct. Violation of an injunction is punishable by sanctions for contempt of court.[63] Recent jurisprudence makes it considerably more difficult than in the past to obtain an interlocutory injunction in trade-mark matters. More than ever, one must consider whether or not the resources required for an interlocutory injunction application are best directed to an application for summary judgment, summary trial, or speedy trial.

B. INTERIM RELIEF

The following section outlines the various forms of interim relief available in Canada applicable to trade-mark litigation. Each subsection defines the particular relief, sets out the requirements to obtain it, and various exemplary or strategic uses of the relief.

1. Interlocutory Injunctions

a. Definition and Procedure

Interlocutory injunctions are orders by the Court that do not result in a determination of a final issue of the rights of a litigant. The injunctions are intended to prevent irreparable damage to a plaintiff that would be suffered over the course of litigation. It follows that interlocutory injunctions are granted only in exceptional cases. Rule 373(1) of the _Federal Court Rules_ [64] gives the Federal Court the power to grant interlocutory injunctions on motion. Injunctions are also available from provincial courts; in the Ontario courts, for example, a litigant may move for an interlocutory injunction under rule 40.01 of the Ontario _Rules of Civil Procedure_.[65] Different procedural requirements and timing considerations will be applicable depending on the jurisdiction selected.

Interlocutory injunctions must be distinguished from interim injunctions. Interim injunctions refer to an injunction granted by a judge pending a decision on a motion for an interlocutory injunction. In a sense, an interim injunction is a "pre-injunction injunction." Motions for interim injunctions may be brought on an _ex parte_ basis where the moving party establishes that (a) it is a case of urgency and no notice is possible, or (b) providing notice to the other party would defeat the purposes of the injunction. The federal rules limit such injunctions to a maximum duration of 14 days,[66] although this period may be extended by bringing a further motion to the Court, with notice to all affected parties.[67] Extensions are limited to 14 days if the motion for extension is brought _ex parte_.[68]

b. Test

The Supreme Court of Canada in _RJR — MacDonald Inc. v. Canada (Attorney General)_ [69] set out the tripartite test for an interlocutory injunction as follows: the moving party (1) "must demonstrate a serious question to be tried. Whether the test has been satisfied should be determined by a motions judge on the basis of common sense and an extremely limited review of the case on the merits"; (2) "must convince the court that it will suffer irreparable harm if the relief is not granted"; and (3) must show that the "balance of inconvenience" favours the granting of the injunction.[70] Irreparable harm "either cannot be quantified in monetary terms or... cannot be cured, usually because one party cannot collect damages from the other."[71]

To date, trade-mark jurisprudence shows that interlocutory injunctions are rarely granted by federal courts. While the threshold for a "serious question to be tried" is relatively easily met (and is, in some cases, uncontested),[72] a trade-mark owner usually fails at the second leg of the test. This is because the damages in trade-mark cases are largely monetary, and cannot in that sense be said to be "irreparable." In _Centre Ice Ltd. v. National Hockey League_ ,[73] the Federal Court of Appeal held that the mere existence of confusion does not necessarily lead to a loss of a mark's goodwill that cannot be remedied in damages.[74] Even proving a loss of goodwill does not automatically lead to a finding that the moving party has suffered irreparable harm.[75] To that end, an interlocutory injunction in trade-mark cases requires the moving party to lead evidence linking confusion between two competing products to a loss that cannot be compensated by damages.[76]

c. Strategic Considerations

Excessive delays in bringing a motion for an interlocutory injunction may harm the moving party's case. In _Hyundai Auto Canada v. Cross Canada Auto Body Supply (West) Limited_ ,[77] the Federal Court dismissed the plaintiff's motion for an interlocutory injunction because, _inter alia_ , the plaintiff delayed for two years in seeking an injunction after having learned of the defendant's allegedly confusing sales.[78] The court took the plaintiff's delay into account at the balance of convenience arm of the _RJR — MacDonald_ test.

In the event that an interlocutory injunction is granted but later reversed at trial, the moving party may be held accountable for any damages suffered by the respondent during the period of the injunction. The moving party has a statutory obligation to provide an undertaking to abide by any court order concerning damages that result from the granting or extension of an injunction.[79]

2. Orders for Interim Custody

a. Definition and Procedure

Section 53 of the _Trade-marks Act_ [80] provides for a statutory type of interlocutory injunction under special circumstances. Under section 53, an interested party can make an application for interim custody of offending wares imported into, or about to be distributed in, Canada. To grant such an order, the Court must be satisfied that a registered trade-mark or any trade-name has been applied to wares that have been imported or are about to be distributed in Canada in a manner that would be contrary to the Act, or that an indication of origin has been unlawfully placed on any wares. An application for such an order can be brought either as part of an action or otherwise and can be brought _ex parte_.[81] However, the Court may require a plaintiff to furnish security to answer for any damages that may be sustained by the owner of the detained goods while the goods are in custody.[82]

b. Application

The same principles applicable to an interlocutory injunction apply in proceedings for interim custody under section 53 of the Act.[83] The order is granted only in extraordinary circumstances, and there have been very few cases in Canada where the section has been invoked. In _Cartier Inc. v. John Doe_ ,[84] the Court noted that section 52(1) (now section 53(1)) "deals merely with wares that have been imported into Canada or that are already in Canada."[85] Accordingly, the section can be used as a statutory basis for an _Anton Piller_ order (discussed below).[86]

Section 53 also provides that the Court may include in an order made under this section a prohibition of any future importation of offending wares;[87] however, the order requires a final determination as to the legality of the importation, which the courts have construed to mean, "an adjudication of the issue on the merits at trial."[88] Neither consent nor a default judgment satisfies this requirement.[89] Furthermore, an order under section 53(4) imparts no obligation on customs officials to detain or seize any future shipments.[90] Accordingly, this section has not proven an effective means of preventing counterfeit and infringing products from being imported into Canada by others. In an attempt to remedy this shortcoming, Parliament amended the Act in 1994 to add section 53.1, which makes it possible to apply for an order for detention of offending goods by the Minister of National Revenue.[91] This is discussed further below.

**3.** _Anton Piller_ **Orders**

a. Definition and Procedure

Named for the case in which one was first granted,[92] an _Anton Piller_ order is a pre-trial remedy that requires a defendant to allow a plaintiff access to its property to search for, retrieve, and preserve evidence for later use at trial. The goal behind this type of order is to facilitate court processes by ensuring that critical evidence is not destroyed. "An _Anton Piller_ order bears an uncomfortable resemblance to a private search warrant,"[93] in that it grants search and seizure powers to a private litigant in a civil action. Such powers are granted only in exceptional cases, and are typically carried out with the aid of local law enforcement officers. A defendant's failure to comply with an _Anton Piller_ order can have severe consequences because such failure constitutes contempt of court, punishable by imprisonment, fines, or both.

_Anton Piller_ orders are obtained by bringing a motion _ex parte_.[94] In the Federal Court, they fall under motions for an order in respect of property under rule 377 of the _Federal Court Rules_.[95] The equivalent rule in the Ontario courts is rule 45.01 of the _Rules of Civil Procedure_.[96] _Anton Piller_ orders are also available under article 733 of the Quebec _Code of Civil Procedure_.[97]

Because _Anton Piller_ orders are obtained _ex parte_ , the moving party is under an obligation of full and frank disclosure to the Court, which means that it must provide all points that both support and undermine its case for the order.

b. Test

There are four requirements for the issuance of an _Anton Piller_ order: (1) the plaintiff must show that it has a strong _prima facie_ case against the defendant; (2) the damage to the plaintiff caused by the defendant's alleged actions must be very serious; examples of "very serious" harm include the plaintiff's inability to prove its case without the evidence possessed by the defendant, or a particularly adverse financial impact; (3) the plaintiff must establish that the defendant has the necessary evidence in its possession; and (4) there must be a real possibility that the defendant may destroy the evidence.[98] The courts recently noted that there are two additional criteria required in order to meet the test for an _Anton Piller_ order: (5) would the inspection do no harm to the defendant or its case, and (6) would the interests of justice be brought into disrepute by the issuance of the order.[99]

c. Strategic Considerations

_Anton Piller_ orders have clear uses in trade-mark infringement, passing off, or depreciation of goodwill cases where physical evidence of the defendant's allegedly counterfeit products would be necessary in proving the plaintiff's case. They may also be used in order to preserve important documentary evidence such as invoices, purchase orders, or advertising paraphernalia that may be at risk of destruction before they can be adduced through discovery.

Because of the preliminary nature of the orders, a plaintiff may not always have much information concerning the identity of the defendant. In such cases, a "John Doe" order (or "rolling _Anton Piller_ order") may be obtained, which can be executed against, for example, street vendors whose identity cannot be ascertained in advance.[100] The obligation of full and frank disclosure is greater when the plaintiff is applying for a rolling order.[101] A party must carefully consider the existence of any significant points that may harm the case for an order and that should be disclosed prior to bringing a motion. The fact that a defendant may be engaging in conduct that is, as yet, unknown to the plaintiff does not itself create a presumption that the potential harm is "very serious."[102]

An _Anton Piller_ order is extremely powerful; the Supreme Court of Canada compared it to a private search warrant, which could be seen as granting "police powers" to a civil litigant. As a result, the orders come with three caveats to safeguard the defendant's rights: (1) the orders are carefully drawn, identifying the material to be seized and providing mechanisms to deal with privileged documents of the defendant to which the plaintiff may be exposed through the order; (2) a court-appointed, independent supervising solicitor oversees execution of the order and reports back to the court after the order has been executed; and (3) a sense of responsible self-restraint is expected on the part of those executing the order.[103] Courts are also mindful of the potential for abuse inherent in the execution of these orders and impose stern sanctions in any cases of abuse.[104]

_Anton Piller_ orders are also subject to court review even after having been executed. Such a review is conducted _de novo_ , and therefore the Court may consider evidence beyond that which was considered by the judge granting the original order.[105] In _Vinod Chopra Films Private Limited v. John Doe_ ,[106] the Federal Court conducted a review of a rolling _Anton Piller_ order issued against the defendants for allegedly infringing the plaintiffs' copyright in certain cinematographic works. From the outset, the Court noted that the _Anton Piller_ order itself is an "extraordinary remedy, to be used only when it is _'essential'_ and there is _'grave danger'_ that the evidence might be destroyed such that the _'ends of justice be defeated'_ and, from the defendant's point of view, no real harm would be done."[107] While Hughes J. did not change the test or apply a new standard with respect to _Anton Piller_ orders, he did emphasize that they are _extraordinary_ remedies only to be granted when necessary. He also noted that the conduct of the defendant after the issuance of an _Anton Piller_ order may be taken into account during a review, although the Court should examine such conduct with "extreme caution." This decision may have implications for even a successful plaintiff who obtains an _Anton Piller_ order, particularly in "grey area" cases where the evidence relied upon does not _clearly_ meet all aspects of the _Anton Piller_ test. A plaintiff should therefore carefully consider whether it is able to establish the necessary elements of the test, especially in cases where _Anton Piller_ orders are applied for on an _ex parte_ basis. Failing to do so or providing inadequate evidence may, on review, has significant cost consequences.[108]

**4.** _Mareva_ **Injunctions**

a. Definition and Procedure

A _Mareva_ injunction is an exceptional type of interlocutory injunction that allows a moving party to freeze another party's assets located within the jurisdiction of the Court, regardless of where the party itself is located. The _Mareva_ injunction serves to prevent a party from disposing of its assets or removing them from the court's jurisdiction. The _Mareva_ injunction can be distinguished from an _Anton Piller_ order by its purpose: while an _Anton Piller_ order seeks to preserve _evidence_ for use at trial, a _Mareva_ injunction seeks to preserve a plaintiff's access to a defendant's _assets_ in the event that the plaintiff is successful at trial. _Mareva_ injunctions are typically brought on an _ex parte_ basis.[109]

b. Test

Obtaining a _Mareva_ injunction requires that there be a genuine risk of disappearance of assets. The injunction requires: "(1) full and frank disclosure by the plaintiff; (2) full and fair particulars of the plaintiff's claim; (3) assets of the defendant within the jurisdiction; (4) a risk of removal of those assets by the defendant before judgment; (5) an undertaking by the plaintiff as to damages."[110] A _Mareva_ injunction will rarely be granted unless the plaintiff has a strong _prima facie_ case against the defendant.[111]

Even where a plaintiff establishes the five elements of the test, courts have held that a _Mareva_ injunction will not issue where it would restrain the defendant from carrying on the ordinary course of its business.[112] Furthermore, financial difficulty does not, on its own, create a risk of disappearance of assets sufficient to support an injunction.[113]

c. Strategic Considerations

A plaintiff may consider using a _Mareva_ injunction in combination with other forms of injunctive remedies. For example, a party may seek an _Anton Piller_ order in conjunction with a _Mareva_ injunction to protect both crucial evidence and assets in the defendant's possession that may suddenly become unavailable once the defendant learns that it is facing legal action. In this manner, the two injunctions complement one another: the _Anton Piller_ order protects the plaintiff's case, while the _Mareva_ injunction ensures that the plaintiff can receive compensation should it be successful at trial.

C. ENFORCEMENT OF TRADE-MARK RIGHTS BY CUSTOMS

1. Current Situation in Canada

In April 2009, the Office of the United States Trade Representative (USTR) released a special report on the international state of intellectual property rights.[114] The report contains lists of countries that have certain problems pertaining to the enforcement of intellectual property rights. The USTR placed Canada on a "priority watch list," which identifies countries that are "the focus of increased bilateral attention" concerning problematic areas of their protection and/or enforcement of intellectual property rights.[115] Among the reasons cited for Canada's inclusion on the list is a weak border enforcement system addressing intellectual property rights.

Under the current Canadian system, the Canada Border Services Agency (CBSA) does not have any authority in its governing legislation to detain suspected counterfeit goods on an _ex officio_ basis. Neither of the two statutes that govern the CBSA — namely, the _Immigration and Refugee Act_ [116] and the _Customs Act_ [117] — refers in any way to intellectual property rights. Under the _Customs Tariff_ ,[118] the only goods infringing trade-mark rights that may be detained by the CBSA are those subject to a specific court order.[119] The only court order that appears to apply for such purposes is that available under section 53.1 of the _Trade-marks Act_ (discussed above).[120] Under section 53.1, an owner of a registered trade-mark may apply for an order directed to the Minister of National Revenue for detainment of offending goods that have not yet been imported or released into Canada. Only when such an order is delivered to customs officials will customs agents be able to detain allegedly counterfeit goods; no other court order, including one for any kind of injunctive relief, will suffice.[121]

Although they may be obtained _ex parte_ , orders under section 53.1 are expensive and difficult to obtain. The biggest obstacle to a section 53.1 order is the onus on the trade-mark owner to obtain and provide information related to the specific incoming shipment to be detained. Such information would typically not be within the knowledge of the trade-mark owner. The CBSA Memorandum on Copyright and Trade-marks, which outlines the role of the CBSA in dealing with counterfeit trade-mark or pirated copyright goods, includes a long list of information that customs authorities could require in order to detain goods. The list includes the quantity and value of goods, the identity of the importer, and the approximate date of arrival to Canada.[122] In granting an order under section 53.1 of the _Federal Court Rules_ , the Court may also require a mark owner to furnish security to answer for any damages that may be sustained by the owner of the detained goods while the goods are in custody.[123] Once the goods have been detained, the trade-mark owner or the importer may be given the opportunity to inspect the shipment.[124] Within two weeks of having been notified of the detention of the goods, either the trade-mark owner must commence legal action or the goods will be released.[125]

Unlike the CBSA, the Royal Canadian Mounted Police (RCMP) has the authority to seize counterfeit goods by virtue of the trade-mark offences contained in the _Criminal Code_.[126] The RCMP does not, however, possess the prosecutorial resources necessary to be an effective enforcer of intellectual property rights,[127] nor are its officers in the same position as customs agents who can inspect shipments crossing the border into Canada. Nevertheless, it provides an important mechanism: a trade-mark owner who is aware of an incoming shipment of counterfeit goods can contact the local RCMP division and request the seizure of the shipment.[128] RCMP officers will also act to detain goods as part of ongoing criminal investigations. In this way, a trade-mark owner does have some limited means of having goods detained or seized at the border without first obtaining a court order.

2. Initiatives

In recent years, various government agencies have initiated partnerships with one another in order to address the gaps in Canada's border enforcement regime. The most notable is a partnership between the CBSA (formerly part of the Canada Customs and Revenue Agency) and the RCMP under which the two communicate with one another in an effort to address each other's shortcomings in enforcing intellectual property rights.[129] Under this protocol, the RCMP stations officers at each major border crossing in Canada. Once the CBSA discovers counterfeit goods in an inbound shipment, it will temporarily detain the shipment and consult the RCMP to see if it will institute an investigation.[130] Unfortunately, if the RCMP does not provide a clear indication that it is both able and willing to seize the goods and begin an investigation, the CBSA will simply allow the goods into Canada.[131]

As a result of the current limitations in border enforcement of intellectual property rights in Canada, both the private and public sectors are calling for legislative action. Suggested reforms include granting the CBSA the authority to detain shipments of goods bearing infringing trade-marks[132] and/or according greater resources to the RCMP for border enforcement.[133] A further suggestion includes creating an "IP rights registry," whereby rights holders can register their marks with the CBSA and train customs officers to recognize authentic shipments of a particular product and, on discovery of a shipment of apparently counterfeit goods, to contact trade-mark owners to alert them.[134] This would allow trade-mark owners to seek civil remedies against infringers in the event that the RCMP declines to act,[135] in a manner similar to the regime in the European Union under Council Regulation (EC) No 1383/2003 of 22 July 2003 "concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights."

[1] _Veuve Cliquot Ponsardin v. Boutiques Cliquot Ltée_ , 2006 SCC 23 at para. 18.

[2] R.S.C. 1985, c. T-13 ["the Act"].

[3] Sections 57 and 18 of the Act.

[4] Section 58 of the Act.

[5] _Compulife Software Inc. v. CompuOffice Software Inc._ (2001), 13 C.P.R. (4th) 117 (F.C.T.D.); _J.C. Penny Co. v. Gaberdine Clothing Co._ (2001), 16 C.P.R. (4th) 151 (F.C.T.D.); _Andres Wines Ltd. v. Vina Concha y Toro S.A._ (2001), 13 C.P.R. (4th) 110 (F.C.T.D.); _Fairmont Resort Properties Ltd. v. Fairmont Hotel Management, L.P._ (2008), 67 C.P.R. (4th) 404 (F.C.T.D.).

[6] As listed in s. 12(1), a trade-mark is not registrable if it is not: (a) a word that is primarily merely the name or surname of an individual who is living or has died within the preceding 30 years; (b) whether depicted, written, or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used, or proposed to be used, or of the conditions of, or the persons employed in, their production, or of their place of origin; (c) the name in any language of any of the wares or services in connection with which it is used or proposed to be used; (d) confusing with a registered trade-mark; (e) a mark of which the adoption is prohibited by s. 9 or 10; and (f) a denomination the adoption of which is prohibited by s. 10.1.

[7] _Tommy Hilfiger Licensing Inc. v. Produits de Qualité I.M.D. Inc._ (2005), 37 C.P.R. (4th) 1 (F.C.).

[8] _Candrug Health Solutions Inc. v. Thorkelson_ (2007), 60 C.P.R. (4th) 35 (F.C.T.D.).

[9] _Aladdin Industries Inc. v. Canadian Thermos Products Ltd._ (1969), 57 C.P.R. 230 (Can. Ex. Ct.), aff'd [1974] S.C.R. 845.

[10] _Opus Building Corp. v. Opus Corp._ (1995), 60 C.P.R. (3d) 100 at 106 (F.C.T.D.).

[11] _Heintzman v. 751056 Ontario Ltd._ (1990), 34 C.P.R. (3d) 1 (F.C. T.D.).

[12] _Unitel Communications Inc. v. Bell Canada_ (1995), 61 C.P.R. (3d) 12 (F.C.T.D.); _Steinberg Inc. v. J.L. Duval Ltée_ (1992), 44 C.P.R. (3d) 417 (F.C.T.D.).

[13] _J.A. & M. Coté Ltée v. B.F. Goodrich Co._ (1949), 14 C.P.R. 33 at 64 (Can. Ex. Ct.).

[14] _Promafil Canada Ltée v. Munsingwear Inc._ (1992), 44 C.P.R. (3d) 59 at 64 (F.C.A.).

[15] _Tommy Hilfiger Licensing Inc. v. Produits de Qualité I.M.D. Inc._ , _supra_ note 7; _Omega Engineering Inc. v. Omega S.A._ (2006), 56 C.P.R. (4th) 210 (F.C.T.D.); _Cross Canada Auto Body Supply (Windsor) Ltd. v. Hyundai Auto Canada_ (2007), 60 C.P.R. (4th) 406 at 418, aff'd 65 C.P.R. (4th) 121 (F.C.T.D.).

[16] Section 17 of the Act states: "No application for registration of a trade-mark that has been advertised in accordance with section 37 shall be refused and no registration of a trade-mark shall be expunged or amended or held invalid on the ground of any previous use or making known of a confusing trade-mark or trade-name by a person other than the applicant for that registration or his predecessor in title, except at the instance of that other person or his successor in title, and the burden lies on that other person or his successor to establish that he had not abandoned the confusing trade-mark or trade-name at the date of advertisement of the applicant's application."

[17] _Alibi Roadhouse Inc. v. Grandma Lee's International Holdings Ltd._ (1997), 76 C.P.R. (3d) 327 (F.C.T.D.). A person seeking to expunge a registration on this ground must satisfy the burden of proving that the trade-mark has not been abandoned at the date of the defendant's application.

[18] _Eurofase Inc. v. Industrias Fase S.A._ (1999), 2 C.P.R. (4th) 70 (F.C.T.D ).

[19] _King Features Syndicate Inc. v. Lechter_ (1950), 12 C.P.R. 60 (Can. Ex. Ct.). The onus of proving non-use is on the party attacking the registration.

[20] _Ibid._ The applicant's intent is not considered.

[21] _Bonus Foods Ltd. v. Essex Packers Ltd._ (1965), 43 C.P.R. 165 (Ex. C.R.). In this case, some element of actual deception is required on the part of applicant.

[22] _Remo Imports Ltd. v. Jaguar Cars Ltd._ (2007), 60 C.P.R. (4th) 130 (F.C.A.), aff'g in part 47 C.P.R. (4th) 1 (F.C.T.D.).

[23] _Clairol International Corp. v. Thomas Supply & Equipment Co. Ltd._ (1968), 55 C.P.R. 176 (Ex. Ct.); _Mr. Submarine Ltd. v. Amandista Investments Ltd._ (1988), 19 C.P.R. (3d) 3 (F.C.A.); _Cie Générale des Établissements Micheline-Michelin & Cie v. C.A.W. — Canada_ (1996), 71 C.P.R. (3d) 348 (F.C.T.D.); _A &W Food Services of Canada Inc. v. McDonald's Restaurants of Canada Limited_ (2005), 40 C.P.R. (4th) 126 (F.C.T.D.); _Tradition Fine Foods Ltd. v. Oshawa Group Ltd._ , 2004 FC 1011 (F.C.), aff'd (2005), 44 C.P.R. (4th) 81 (F.C.A.); _Tommy Hilfiger Licensing Inc. v. Produits de Qualité I.M.D. Inc._ , _supra_ note 7; _Pro-C Ltd. v. Computer City Inc._ (2001), 14 C.P.R. (4th) 441 (Ont. C.A.), rev'g (2000), 7 C.P.R. (4th) 193 (Ont. S.C.).

[24] _A &W Food Services of Canada Inc. v. McDonald's Restaurants of Canada Ltd._, _supra_ note 23.

[25] _Cartier Inc. v. Cartier Optical Ltd._ (1988), 20 C.P.R. (3d) 68 (F.C.T.D.).

[26] _National Hockey League v. Pepsi-Cola Canada Ltd._ (1995), 59 C.P.R. (3d) 216 (B.C.C.A.); _Meubles Domani's v. Guccio Gucci S.p.A._ (1992), 43 C.P.R. (3d) 372, aff'g 39 C.P.R. (3d) 119.

[27] _Kun Shoulder Rest Inc. v. Joseph Kun Violin and Bow Maker Inc._ (1998), 83 C.P.R. (3d) 331 (F.C.T.D.).

[28] _Clairol International Corp. v. Thomas Supply & Equipment Co. Ltd._, _supra_ note 23; _Cie Générale des Établissements Micheline-Michelin & Cie v. C.A.W. — Canada_, _supra_ note 23.

[29] _Edward Chapman Ladies' Shop Ltd. v. Edward Chapman Ltd._ (2006), 45 C.P.R. (4th) 321 (B.C.S.C.).

[30] _Ibid._ ; _White Consolidated Industries Inc. v. Beam of Canada Inc._ (1991), 39 C.P.R. (3d) 94 (F.C.T.D.).

[31] _Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée_ , _supra_ note 1.

[32] _Madger v. Breck's Sporting Goods Co._ (1975), 10 C.P.R. (2d) 28 (F.C.A.), aff'd [1980] 1 S.C.R. 99.

[33] _S.C. Johnson & Son Ltd. v. Marketing International Ltd._ (1977), 32 C.P.R. (2d) (F.C.T.D.).

[34] _Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée_ , _supra_ note 1.

[35] _Ibid._

[36] _Ibid._

[37] L.A. Kelly Gill & R. Scott Jolliffe, _Fox on Canadian Law of Trade-Marks and Unfair Competition_ , 4th ed. (Toronto: Thomson Carswell, 2002) at chapter 7.8(d).

[38] _Clairol International Corp. v. Thomas Supply & Equipment Co. Ltd._, _supra_ note 23; _Future Shop Ltd. v. A. & B. Sound Ltd._ (1994), 93 B.C.L.R. (2d) 40 (S.C.).

[39] _A &W Food Services of Canada Inc. v. McDonald's Restaurants of Canada Limited_, _supra_ note 23; _Tommy Hilfiger Licensing Inc. v. Produits de Qualité I.M.D. Inc._ , _supra_ note 7.

[40] _Veuve Clicquot Ponsardin v. Boutiques Cliquot Ltée_ , _supra_ note 1.

[41] _Kirkbi AG v. Ritvik Holdings Inc._ , 2005 SCC 65 at paras. 25-26 [ _Kirkbi AG_ ].

[42] The Act, _supra_ note 2, ss. 19 and 20.

[43] _Ibid._

[44] _Kirkbi AG_ , _supra_ note 41.

[45] _Remo Imports Ltd. v. Jaguar Cars Limited_ , _supra_ note 22; _Enterprise Rent-A-Car Co. v. Singer_ (1996), 66 C.P.R. (3d) 454 (F.C.T.D.), aff'd (1998), 79 C.P.R. (3d) 45 (F.C.A.).

[46] _Remo Imports Ltd. v. Jaguar Cars Limited_ , _supra_ note 22; _Ciba-Geigy Canada Ltd. v. Apotex Inc._ , [1992] 3 S.C.R. 120; _Dairy Bureau of Canada v. Annable Foods Ltd._ (1993), 46 C.P.R. (3d) 289 (B.C.S.C.); _Greystone Capital Management Inc. v. Greystone Properties Ltd._ (1999), 87 C.P.R. (3d) 43 (B.C.S.C.); _British Columbia Automobile Association v. Office and Professional Employees' International Union, Local 378_ (2001), 10 C.P.R. (4th) 123 (B.C.S.C.); _Kirkbi AG_ , _supra_ note 41, aff'g (2003) 26 C.P.R. (4th) 1 (F.C.A.).

[47] _BMW Canada Inc. v. Nissan Canada Inc._ (2007), 60 C.P.R. (4th) 181 (F.C.A.).

[48] _Coin Stars Ltd. v. K.K. Court Chili & Pepper Restaurant Ltd._ (1990), 33 C.P.R. (3d) 186 (B.C.S.C.); _Orkin Exterminating Co. Inc. v. Pestco Co. of Canada Ltd._ (1985), 5 C.P.R. (3d) 433 (Ont. C.A.); _Enterprise Rent-A-Car Co. v. Singer_ , _supra_ note 45; _Stink Inc. v. Venditti_ (1994), 53 C.P.R. (3d) 24 (B.C.S.C.).

[49] _Walt Disney Productions v. Triple Five Corp._ (1994), 53 C.P.R. (3d) 129 (Alta. C.A.); _Orkin Exterminating Co. Inc. v. Pestco Co. of Canada Ltd._ , _supra_ note 48.

[50] _Consumers Distributing Co. v. Seiko Time Canada Ltd._ , [1984] 1 S.C.R. 583; _Greystone Capital Management Inc. v. Greystone Properties Ltd._ , _supra_ note 46; _Walt Disney Productions v. Triple Five Corp._ , _supra_ note 49; _Coin Stars Ltd. v. K.K. Court Chili & Pepper Restaurant Ltd._, _supra_ note 48. _Contra_ , see _Remo Imports Ltd. v. Jaguar Cars Limited_ , _supra_ note 22; _Molson Canada v. Oland Breweries Ltd._ (2002), 59 O.R. (3d) 607 (C.A.), rev'g (2001), 11 C.P.R. (4th) 199 (Ont. S.C.).

[51] _Kirkbi AG_ , _supra_ note 41; _Ciba-Geigy Canada Ltd. v. Apotex Inc._ , _supra_ note 46.

[52] _T-Rx Vehicles v. 6155234 Canada Inc._ (2008), 67 C.P.R. (4th) 444 (Que. C.A.).

[53] _Mattel U.S.A. Inc. v. 3894207 Canada Inc._ (2006), 49 C.P.R. (4th) 321 at paras. 55 and 89 (S.C.C.), as cited in _Kamsut, Inc. v. Jaymei Enterprises Inc._ (2009), 75 C.P.R. (4th) 247 at 265-266 (F.C.T.D.).

[54] _Eli Lilly and Co. v. Novopharm Ltd._ (1999), 73 C.P.R. (3d) 371 (F.C.T.D.), aff'd in part (2000), 10 C.P.R. (4th) 10 (F.C.A.), application for leave to appeal dismissed [2001] S.C.C.A. No. 100.

[55] _BMW Canada Inc. v. Nissan Canada Inc._ , _supra_ note 47; _Tommy Hilfiger Licensing Inc. v. Produits de Qualité I.M.D. Inc._ , _supra_ note 7.

[56] _Ciba-Geigy Canada Ltd. v. Apotex Inc._ , _supra_ note 46 at para. 32, citing _Reckitt & Colman Product Ltd. v. Borden Inc._, [1990] 1 All E.R. 873 at 880 (H.L.).

[57] _Ciba-Geigy Canada Ltd. v. Apotex Inc._ , _supra_ note 46 at para. 32.

[58] _Edward Chapman Ladies' Shop Ltd. v. Edward Chapman Ltd._ , _supra_ note 29.

[59] _Federal Courts Act_ , R.S.C. 1985, c. F-7; see also s. 56 of the Act.

[60] _Federal Courts Act_ , _supra_ note 59, s. 20(2).

[61] _Trade-marks Act_ , _supra_ note 2, s. 53.2.

[62] _Dubiner v. Cheerio Toys & Games_ (1966), 55 D.L.R. (2d) 420 (Ex. Ct.); _Anheuser Busch Brewery Assn. v. Edmonton Brewing & Malting Co._ (1911), 16 W.L.R. 574 (Alta. Q.B.); _Draper v. Trist_ , [1939] 3 All E.R. 513 (C.A.).

[63] _Desnoes & Geddes Ltd. v. Hart Breweries Ltd._, 2002 FCT 118; _Coca-Cola Ltd. v. Pardham_ (1999), 85 C.P.R. (3d) 489 (F.C.A.), aff'g (1997), 77 C.P.R. (3d) 501.

[64] S.O.R./98-106 [ _Federal Court Rules_ ].

[65] R.R.O. 1990, Reg. 194 [ _Rules of Civil Procedure_ ].

[66] _Supra_ note 64, r. 374(1).

[67] _Ibid._ , r. 374(2).

[68] _Ibid._ , r. 374(3).

[69] [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385.

[70] _Ibid._ at paras. 83-85.

[71] _Ibid._ at para. 64. See also _Edgar v. Kitasoo Band Council_ , [2003] 228 F.T.R. 161 at para. 32 (F.C.T.D.).

[72] See, for example, _Hyundai Auto Canada v. Cross Canada Auto Body Supply (West) Limited_ , 2006 FC 1510 at para. 8, 56 C.P.R. (4th) 201.

[73] (1994), 53 C.P.R. (3d) 34, 166 N.R. 44 (F.C.A.).

[74] _Ibid._ at para. 9.

[75] _Ibid._

[76] _Voltige Inc. v. Cirque X Inc._ , 2006 FC 700 at para. 29, 51 C.P.R. (4th) 266 (F.C.).

[77] _Supra_ note 72, aff'd 2008 FCA 12, 65 C.P.R. (4th) 1.

[78] _Ibid._ at paras. 18-22.

[79] _Federal Court Rules_ , _supra_ note 64, r. 373(2); _Rules of Civil Procedure_ , _supra_ note 65, r. 40.03.

[80] Supra note 2, s. 53(1): "Where a court is satisfied, on application of any interested person, that any registered trade-mark or any trade-name has been applied to any wares that have been imported into Canada or are about to be distributed in Canada in such a manner that the distribution of the wares would be contrary to this Act, or that any indication of a place of origin has been unlawfully applied to any wares, the court may make an order for the interim custody of the wares, pending a final determination of the legality of their importation or distribution in an action commenced within such time as is prescribed by the order."

[81] _Ibid._ , s. 53(5).

[82] _Ibid._ , s. 53(2).

[83] Hugues G. Richard, ed., _Canadian Trade-marks Act, Annotated_ , rev. ed. (Toronto: Thomson Carswell, 2004) at ss. 53(1)-(5).

[84] [1990] 2 F.C. 234, 29 C.P.R. (3d) 533 (F.C.T.D.).

[85] _Ibid._ at para. 9.

[86] Richard, _supra_ note 83 at ss. 53(1)-(5).

[87] _Supra_ note 17, s. 53(4): "Where in any action under this section the court finds that the importation is or the distribution would be contrary to this Act, it may make an order prohibiting the future importation of wares to which the trade-mark, trade-name or indication of origin has been applied."

[88] _Montres Rolex S.A. v. Minister of National Revenue_ , [1988] 2 F.C. 39 (T.D.), cited in Gill & Jolliffe, _supra_ note 37 at 13.4.

[89] _Montres Rolex S.A. v. Balshin_ (1992), 45 C.P.R. (3d) 174 at 190 (F.C.A.).

[90] See _ibid._

[91] Gill & Jolliffe, _supra_ note 37 at 13.4; Richard, _supra_ note 83 at ss. 53.1-53.3.

[92] _Anton Piller KG v. Manufacturing Processes Ltd._ , [1976] All E.R. 779 (C.A.).

[93] _Celanese Canada Inc. v. Murray Demolition Corp._ , 2006 SCC 36 at para. 1, [2006] 2 S.C.R. 189 [ _Celanese_ ].

[94] _Ibid._

[95] _Federal Court Rules_ , _supra_ note 64, r. 377(1): "On motion, the Court may make an order for the custody or preservation of property that is, or will be, the subject-matter of a proceeding or as to which a question may arise therein."

[96] _Rules of Civil Procedure_ , _supra_ note 65, r. 45.01(1): "The court may make an interim order for the custody or preservation of any property in question in a proceeding or relevant to an issue in a proceeding, and for that purpose may authorize entry on or into any property in the possession of a party or of a person not a party."

[97] R.S.Q. c. C-25, art. 733: "The plaintiff may, with the authorization of a judge, seize before judgment the property of the defendant, when there is reason to fear that without this remedy the recovery of his debt may be put in jeopardy."

[98] _Celanese_ , _supra_ note 93 at para. 35.

[99] See _Netbored Inc. v. Avery Holdings_ , 2005 FC 1405 at para. 6, cited in _Vinod_ , _infra_ note 102 at para. 24.

[100] _Ragdoll Productions (UK) Ltd. v. Jane Doe_ , 2002 FCT 918 at para. 14, 21 C.P.R. (4th) 213 (F.C.T.D.).

[101] _Club Monaco Inc. v. Woody World Discount_ (1999), 2 C.P.R. (4th) 436 at para. 7, 45 C.P.C. (4th) 222 (F.C.T.D.).

[102] See _Vinod Chopra Films Private Limited v. John Doe_ , 2010 FC 387 at para. 33 [ _Vinod_ ].

[103] _Celanese_ , _supra_ note 93 at para. 1.

[104] _Grenzservice Speditions Ges.m.b.h. v. Jans_ (1995), 129 D.L.R. (4th) 733, 64 C.P.R. (3d) 129 (B.C.S.C.).

[105] See, for example, _Adobe Systems Inc. v. KLJ Computer Solutions Inc._ , [1999] 3 F.C. 621 (T.D.), cited in _Vinod_ , _supra_ note 102 at para. 18.

[106] _Supra_ note 102.

[107] _Ibid._ at para. 8 [emphasis in original].

[108] _Ibid._ at para. 50.

[109] _Grenzservice Speditions Ges.m.b.h. v. Jans_ , _supra_ note 104 at para. 43.

[110] _Canadian Pacific Airlines Ltd. v. Hind_ (1981), 32 O.R. (2d) 591 at para. 9, 22 C.P.C. 179 (Ont. H.C.J.).

[111] _Aetna Financial Services Ltd. v. Feigelman et al._ (1985), 4 C.P.R. 145 at para. 30 (S.C.C.). See also _Yonge Street Shopping Centre General Partner Ltd. v. Nimo's Lighting World Inc._ (1992), 9 C.P.C. (3d) 350 at para. 6 (Ont. Gen. Div.).

[112] _Marine Atlantic Inc. v. Blyth_ (1993), 113 D.L.R. (4th) 501 at para. 11 (F.C.A.).

[113] _Ibid._ at para. 8; _Julea v. Burlington Shopping Centre Ltd._ (1996), 4 O.T.C. 239 at para. 2 (Ont. Gen. Div.).

114] United States, Office of the United States Trade Representative, _2009 Special 301 Report_ (30 April 2009), online: USTR: <[http://www.ustr.gov/sites/default/files/Full Version of the 2009 SPECIAL 301 REPORT.pdf>.

[115] _Ibid._ at 39.

[116] S.C. 2001, c. 27.

[117] R.S.C. 1985, c. 1 (2d Supp.).

[118] S.C. 1997, c. 36.

[119] _Ibid._ , Sch., 9897.00.00.

[120] _Supra_ note 2, s. 53.1(1): "Where a court is satisfied, on application by the owner of a registered trade-mark, that any wares to which the trade-mark has been applied are about to be imported into Canada or have been imported into Canada but have not yet been released, and that the distribution of the wares in Canada would be contrary to this Act, the court may make an order..."

[121] Canada Border Services Agency, Memorandum D9-1-9, "False Description of Geographical Origin of Goods and Goods with Trade-marks — Tariff Item No. 9897.00.00" (1 January 1998) at para. 6.

[122] Canada Border Services Agency, Memorandum D19-4-3, "Copyright and Trademarks" (17 June 2008), online: CBSA <<http://www.cbsa-asfc.gc.ca/publications/dm-md/d19/d19-4-3-eng.pdf>> at para. 18.

[123] _Trade-marks Act_ , _supra_ note 2, s. 53.1(3).

[124] _Ibid._ , s. 53.1(5).

[125] _Ibid._ , s. 53.1(6).

[126] R.S.C. 1985, c. C-46, ss. 406-414.

[127] Canadian Anti-Counterfeiting Network, _Report on Counterfeiting and Privacy in Canada: A Road Map for Change_ (March 2007), online: CACN <<http://www.cacn.ca/publications/Roadmap_for_Change.pdf>> at 11 [ _Report on Counterfeiting_ ].

[128] See, for example, Royal Canadian Mounted Police, "Division C — Federal Investigation Section: Intellectual Property," online: RCMP <<http://www.rcmp-grc.gc.ca/qc/services/sef-fis/prop_intel-eng.htm>>.

129] Brian Isaac & Carol Osmond, "The Need for Legal Reform in Canada to Address Intellectual Property Crime" (January 2006), online CACN <[http://www.cacn.ca/publications/ CACN Position Paper January 2006 Clean.pdf> at 31.

[130] Canada, House of Commons, Standing Committee on Industry, Science and Technology, "Counterfeiting and Piracy are Theft" in _Official Report of Debates (Hansard)_ , No. 175 (20 June 2007), online: House of Commons <<http://www2.parl.gc.ca/content/hoc/Committee/391/INDU/Reports/RP3060548/391_INDU_Rpt08/391_INDU_Rpt08-e.pdf>> at 14 [Standing Committee Report].

[131] _Ibid._ at 31-32.

[132] _Report on Counterfeiting_ , _supra_ note 127 at 24.

[133] _Ibid._ at 14; Standing Committee Report, _supra_ note 130 at 17.

[134] Standing Committee Report, _supra_ note 130 at 21.

[135] _Ibid._ at 20.

**CHAPTER 8**

DUE DILIGENCE PROCESS

When transactions involving the purchase and sale of a business include the transfer of trade-marks, a thorough due diligence analysis of the trade-mark portfolio being acquired is imperative.

Due diligence is the process of investigating, analyzing, and reporting on the status, ownership, validity, enforceability, and value of the trade-mark portfolio being acquired. The due diligence report provides the purchaser with a clear understanding of the intellectual property assets being acquired and any associated risks or deficiencies. It provides the purchaser with information about the relative strengths and weaknesses in the trade-mark portfolio, and it allows the purchaser to make an informed decision whether to proceed with the acquisition of the business.

This chapter focuses on the due diligence process in respect of trade-marks in Canada.

A. REVIEW OF THE TRADE-MARK PORTFOLIO

1. Identify the Trade-marks Being Acquired

The first step in the due diligence process is to identify the trade-marks owned by the vendor. Trade-marks can typically be separated into two categories: those registered with the Canadian Intellectual Property Office (CIPO), and common law trade-marks.

Trade-marks for which protection is sought under the _Trade-marks Act_ are easily discoverable by the purchaser through a search of the CIPO database in the name of the vendor. It may also be relevant to search for trade-marks owned by parent corporations, subsidiaries, or companies affiliated with the vendor. However, only trade-marks owned by the vendor form part of the acquisition.

Typically, the vendor will provide the purchaser with a schedule of its trade-marks. This schedule usually identifies trade-marks for which protection has been sought and should mirror the results of a CIPO database search. However, the vendor may not identify any common law trade-marks to which it has ownership rights. To discover such marks, the purchaser can conduct reviews of the vendor's website and advertising and marketing materials. The purchaser should also seek specific assurances from the vendor that common law marks have been identified. Overall, the purchaser should be confident that the marks it is interested in acquiring are identified as trade-marks owned by the vendor.

Where relevant, information relating to any foreign trade-marks similar or identical to the marks identified in the schedule should also be made available. If the purchaser intends the business acquisition to be global in nature, these marks should form part of the acquisition. If the purchaser is limiting its acquisition to Canada or other specific jurisdictions, then notice of any foreign trade-marks will provide the purchaser with a clear understanding of its ability or inability to expand its scope of business to other jurisdictions.

2. Verify the Status of Trade-marks

Having identified the trade-marks owned by the vendor, the due diligence report should next identify the status of the trade-marks and any existing deadlines that may affect their validity. Registered trade-marks should be accompanied by renewal and expiration information, while pending applications should include information relating to any deadlines, including foreign priority, office actions, Declarations of Use, and oppositions that have been issued or commenced against any trade-mark. Separately, the purchaser should also obtain a representation and warranty from the vendor that the trade-marks being acquired are valid and subsisting.

In respect of common law trade-marks, it is important that these be identified as such, so that the purchaser can consider what steps it may want to take to protect them. If possible, the purchaser should try to obtain information that specifies when and how these common law trade-marks have been used.

3. Verify Ownership for Transfer of Title

Having established the trade-marks included in the acquisition, it will be imperative that these be verified as being owned by the vendor. The ownership information may need to be updated or reviewed.

An assignment transferring ownership of trade-marks from the vendor to the purchaser will not be recognized by the Trade-marks Office unless the name of the assignor matches the current owner on record. The purchaser should review the chain of title to the trade-marks being acquired. Where the record shows that a predecessor in title continues to hold the trade-marks, the purchaser must ensure that the vendor will take the necessary steps to correct the title on record. It will be to the purchaser's advantage if steps to update ownership information are commenced prior to the close of the business acquisition and at the vendor's expense.

It will also be important for the purchaser to be assigned an entire family of associated trade-marks. Related or associated trade-marks cannot be owned by different entities, and the Trade-marks Office will prohibit the transfer of an associated mark separately from the other associated marks. Where associated marks exist, care should be taken to ensure that all the associated trade-marks are being acquired as part of the business acquisition.

Any licence agreements should also be reviewed to determine whether there are any restrictions affecting the scope of use of any transferred trade-mark. Will the transfer of the trade-mark and/or assignment of the trade-mark licence agreement require the consent of the licensee? Is the licence agreement exclusive, sole, or non-exclusive in scope? Are there restrictions in terms of the licensed geography, duration of the agreement, field of use, or sublicensing capabilities? Where exclusivity is granted by the licensor to a licensee, the purchaser's rights to use the trade-marks will likely be subject to the terms of the licence agreement.

The purchaser should review any .licences governing the vendor's use of these trade-marks to determine whether they are assignable and on what conditions. If any trade-marks are not assignable, the purchaser will need to approach the licensor to be legally entitled to use or license the trade-marks. It may also be beneficial for the purchaser to request or demand the vendor's assistance. Because the _Trade-marks Act_ no longer requires the recordal of a registered user licence, a licence can be difficult to determine absent specific requests to the vendor.

If a licence exists, how do the terms of the licence agreement affect the purchaser's ability to use the trade-marks? If the vendor has granted an exclusive trade-mark licence agreement to a licensee, the purchaser, despite having acquired ownership in the mark, may have no ability to use it.

4. Identify Interests of Third Parties and Adverse Claims

A proper due diligence report should reveal whether interests in the trade-marks to be acquired have been granted to others. Depending on the nature of the interest granted, this information may not be discoverable without asking the vendor directly, and there will be no assurance of the truth of the information unless warranties are requested from the vendor.

Among the interests in its trade-marks that the vendor may have granted to another party is security in the trade-marks. Security interest holders can request the Trade-marks Office to record their security interest. However, there is no obligation to do so. Searches of personal property registries may also reveal information about third-party interests in the trade-marks. If registrations have been filed against all personal property owned by the vendor, the purchaser may need to require amendments to specifically exclude trade-marks from the registration prior to proceeding with the acquisition.

Of particular importance will be the identification of any known, existing, or threatened litigation affecting the trade-marks. Do these actions challenge the validity of the trade-marks, or are they defensive in nature? Are pending applications subject to any opposition proceedings? Because this information can be difficult to determine and verify, the purchaser should make specific inquiries of the vendor in this regard and demand the appropriate representations, warranties, and indemnities.

Where any dispute concerning a trade-mark has been settled, it will also be important for the purchaser to be aware of the terms of the settlement agreement. Do the terms of the agreement restrict the use of the trade-marks with respect to territory, the nature of wares and services, or the transfer of the trade-marks themselves? Is there an obligation in the terms of the settlement agreement that it be assigned and assumed by any future purchaser of the trade-marks? The terms of any settlement agreement affecting the trade-marks will be particularly relevant where the purchaser is acquiring the shares of a business rather than just its assets. However, even where the acquisition is an asset deal, this information will be relevant for the purchaser.

5. Assess the Validity of Trade-marks

A due diligence report can include an assessment of the validity of the trade-marks being acquired. Reviews of the trade-mark record of any pending application or registration can be conducted to determine whether the trade-mark was properly filed and registered.

Reviews of search reports and opinions prepared prior to the filing of the trade-mark, and prosecution histories during the examination stage of the trade-mark by the Trade-marks Office, may all assist in determining the validity of a trade-mark.

Further assessments of validity include whether any licensed use has been properly monitored such that the vendor has maintained control over the character and quality of the wares and services associated with the trade-mark pursuant to section 50 of the _Trade-marks Act_ , and whether use of the trade-mark by others has gone unchecked such that the trade-mark has lost its distinctiveness.

While opinions on the validity of trade-marks can provide reassurance that the trade-marks being acquired are, in fact, valid and have value, the costs of validity opinions can be substantial. If the purchaser cannot obtain validity opinions from the vendor's counsel, it should ensure that it has the appropriate indemnities from the vendor.

6. Assess the Value of the Trade-marks

Various methodologies can be applied to value a trade-mark portfolio. The primary factor affecting the value of a trade-mark is its distinctiveness. If a trade-mark comprises ordinary, everyday words commonly used by others to refer to similar wares and services, then the trade-mark is not considered highly distinctive. In such circumstances, the trade-mark will be afforded a narrower scope of protection in the marketplace, and will be harder to enforce against others. Generally, the value of such a trade-mark is low.

In contrast, an inherently distinctive or unique trade-mark is considered highly protectable. Furthermore, if a trade-mark has become well recognized and has acquired a well-known reputation, and if the vendor has taken active steps to protect its trade-marks from dilution or infringement, then such a trade-mark is of significant value.

Also affecting the value of a trade-mark will be the actual scope of the rights conferred on the mark by virtue of registration. A trade-mark registration gives the trade-mark owner the exclusive right to use the mark, but only with the wares and services specifically identified in the registration.

While the vendor's business may have grown to encompass additional product lines or services, the vendor may not have sought further trade-mark protection. It may therefore be important to the purchaser that these expanded business lines be protected by registration. If the original business is no longer relevant, the existing trade-mark registrations may be of little value. The purchaser should carefully review the scope of protection offered by the existing registrations to determine whether they continue to provide sufficient protection for its intended use of the trade-marks.

Overall, valuation of a trade-mark portfolio involves the assessment of various factors. Where necessary, independent commercial valuators can also be retained.

B. TAX ISSUES

In any business transaction involving trade-marks, it is important to remember that trade-marks, although intangible, are assets of the vendor. As assets, they are subject to tax consequences on their sale. A comprehensive guide to tax issues involving the purchase and sale of trade-marks is beyond the scope of this chapter. However, a due diligence review of the tax consequences of the anticipated transaction will be important to consider.

1. Vendor's Concerns

The sale by the vendor of its trade-marks can trigger capital gains tax or recapture of depreciation. When determining the manner in which a business transaction involving trade-marks should be structured — for example, as a share deal or an asset purchase — it is important to consider the tax consequences of the transaction so that the vendor is not faced with unanticipated tax liabilities.

If tax consequences are considered prior to the transfer of trade-marks, the vendor is in a better position to evaluate whether it should proceed with the sale, renegotiate terms of the sale (particularly the purchase price), or structure the sale differently. The vendor can also prepare itself to take advantage of any options, deferrals, or elections that may be available under the _Income Tax Act_.

2. Purchaser's Concerns

Trade-marks, like other assets of the vendor, are subject to liens by the Canada Revenue Agency for tax liabilities. If the purchaser has any concerns that the vendor is facing tax liabilities, it should request information from the Canada Revenue Agency as to whether it has placed any liens on the vendor's assets, because these may include the vendor's trade-marks.

In planning the acquisition of trade-marks from the vendor, the purchaser will also want to consider the most tax-efficient method of owning the trade-marks. How does the purchaser intend to commercialize the trade-marks? Will it use the trade-marks itself, or will it license the trade-marks to other operating companies, which will in turn pay royalties and licence fees? Should the purchaser consider setting up companies in tax-efficient regimes?

The manner in which the purchaser intends to commercialize its assets will influence the manner in which it structures its acquisition of the trade-marks. The important factor is to consider these issues in advance of the transaction.

C. CONCLUSION

With the due diligence report in hand, the purchaser will be able to consider the overall value of the trade-marks, decide whether to complete the acquisition, and consider what additional steps need to be taken or concessions requested of the vendor.

Prior to closing the business acquisition, the purchaser may require the vendor to correct any chain of title, obtain consents from licensors, and remove security interests. As with almost every business acquisition, the appropriate representations, warranties, and indemnities also need to be provided.

After closing, the purchaser should ensure that it has taken the necessary steps to register any assignments, and require the vendor to stop using the trade-marks, trade names, or related intellectual property included in the acquisition.

At the close of the transaction, the purchaser should have a clear picture of the trade-mark portfolio it has acquired and have all the necessary documentation to vest, register, perfect, and enforce its new assets.

Due diligence is an important primary step in any business transaction involving the sale of trade-marks. Although the due diligence report cannot absolutely guarantee the value and validity of the trade-marks being acquired, it can alert the purchaser to deficiencies, provide important assurances as to the nature of the trade-marks being acquired, and highlight areas that the purchaser should pay particular attention to before finalizing the terms of the transaction.

**CHAPTER 9**

DOMAIN NAMES

A. INTRODUCTION

1. What Is a Domain Name?

Domain names are the alphanumeric addresses of Internet websites. Domain names are the simplest way to locate websites. Although each website has a numeric Internet address, each is also given a unique domain name for the convenience of users. Indeed, it is common for Internet users who do not know a desired website domain name to guess the domain name by using the website owner's trade-mark and a domain suffix, in the form _www.[trade-mark].com_. Domain names often incorporate key trade-marks and may themselves be valuable assets bearing considerable goodwill.

2. What Are the Components of a Domain Name?

A domain name comprises a series of alphanumeric fields or "domains" separated by periods or "dots." There are two basic components: the domain and the host. The "top-level domain" (TLD) appears at the end of the domain name. It may be a generic TLD (gTLD) such as _.com_ , _.net_ , _.org_ , _.biz_ , or _.info_ , or a country code TLD (ccTLD) such as _.ca_ for Canada, _.uk_ for the United Kingdom, and _.us_ for the United States. The host appears to the left of the TLD, and is the part of the domain name that may incorporate business names or trade-marks. For example, in the domain name _www.google.com_ , the host is " _google_ " and the gTLD is ". _com_."

3. How Is a Domain Name Registered?

Domain name registries are administered by various approved domain name registration authorities. Domain names are generally registered on a first-come, first-served basis on payment of a modest registration fee. Domain name authorities must ensure that a requested domain name is unique, but they generally will not make any determination regarding the legality of a proposed domain name, whether it is confusing with other domain names, or whether its registration or use might infringe the trade-marks of other persons.

4. Who Can Register a Domain Name?

Some domain name registries, such as those for the _.com_ , _.net_ , _.org_ , and _.info_ domains, are unrestricted and allow anyone to register a domain name. Other registries are restricted, and proposed registrants must meet certain criteria before being permitted to register a domain name. Restricted domain name registries include _.ca_ (Canadian presence requirements), _.biz_ (business or commercial use), _.aero_ (air transport industry), _.coop_ (cooperatives), _.museum_ (museums), _.name_ (individuals), and _.pro_ (accountants, lawyers, and physicians).

B. .CA DOMAIN NAMES

1. Who Administers the .ca Domain Name Registry?

The Canadian Internet Registration Authority (CIRA) is the domain name authority responsible for administering the _.ca_ domain name registry. CIRA establishes the rules for registering _.ca_ domain names, certifies _.ca_ registrars, maintains the WHOIS service for _.ca_ domain names, and establishes the policy for the resolution of disputes regarding _.ca_ domain names.

2. Who Can Register a .ca Domain Name?

A person must meet the _Canadian Presence Requirements_ established by CIRA in order to register a _.ca_ domain name. The _Canadian Presence Requirements_ effectively restrict the registration of _.ca_ domain names to persons or organizations with legitimate links to Canada, including Canadian citizens or permanent residents, Canadian corporations, and owners of registered Canadian trade-marks.

3. How Are .ca Domain Names Registered and Renewed?

_.ca_ domain names are registered and renewed through an online process offered by various registrars certified by CIRA. Registration requests are processed on a first-come, first-served basis. Domain names may be registered for periods of one to ten years.

As part of the registration/renewal process, a registrant is required to agree to the _Registrant Agreement_ and _Domain Name Dispute Resolution Policy_ prescribed by CIRA.

4. What Are a Registrant's Obligations?

A _.ca_ domain name registrant is responsible for ensuring that it has the right to use the domain name, and that the registration and use of the domain name do not violate third-party rights, do not defame any person, and do not contravene any Canadian law.

The _Registrant Agreement_ requires a registrant to comply with various ongoing obligations, including promptly notifying CIRA of any change to any registrant information or any pending or threatened claim, demand, action, proceeding, or lawsuit in relation to a domain name.

5. What Information Is Disclosed About a Registrant?

CIRA has adopted a privacy policy concerning the management and disclosure of domain name registrants' personal information. The policy is intended to comply with Canadian personal information protection laws and strike a balance between registrants' privacy rights and CIRA's public responsibilities in the administration of the _.ca_ domain. Under the current policy, personal information of an individual registrant is not disclosed on the CIRA WHOIS without the registrant's consent, but may be disclosed by CIRA in various circumstances, including in response to requests relating to domain name disputes and when disclosure is required by law.

C. DOMAIN NAME DISPUTES: ARBITRATION

1. What Rules Govern the Arbitration of Domain Name Disputes?

Domain name registration authorities have established rules and procedures for the resolution of disputes involving the alleged bad-faith registration and use of domain names that conflict with pre-existing trade-marks, conduct that is commonly known as "cybersquatting." Those rules and procedures are intended to provide a fair and relatively quick and inexpensive procedure for resolving cybersquatting disputes. In most cases, hearings rely on written submissions and documentary evidence filed by the parties.

Cybersquatting disputes involving _.com_ , _.net_ , _.org_ , _.biz_ , and _.info_ domain names may be resolved by arbitration pursuant to the _Uniform Domain Name Dispute Resolution Policy_ (UDRP), established by the Internet Corporation for Assigned Names and Numbers. The UDRP provides a set of substantive rules for the resolution of certain kinds of domain name disputes and establishes a single, international system for the arbitration of those disputes.

Cybersquatting disputes involving _.ca_ domain names may be resolved by arbitration pursuant to the _CIRA Domain Name Dispute Resolution Policy_ (CDRP) prescribed by CIRA. The CDRP is modelled on the UDRP, but contains certain provisions intended to reflect Canadian trade-mark law and improve upon the UDRP in light of its interpretation and practical application.

Cybersquatting disputes involving other kinds of domain names may be subject to arbitration under other policies established by the responsible registration authorities.

2. What Must a Complainant Prove in a UDRP Proceeding?

To succeed in a UDRP proceeding, the complainant must prove that (a) the registrant's domain name is identical or confusingly similar to the complainant's mark; (b) the registrant has no rights or legitimate interests in the domain name; and (c) the domain name was registered and is being used in bad faith.

The UDRP does not provide precise definitions of the concepts "legitimate interest" in a domain name and "bad faith" registration. Instead, the UDRP provides non-exhaustive lists of indicia, but findings of no legitimate interest or bad faith can be made on the basis of other circumstances.

3. What Must a Complainant Prove in a CDRP Proceeding?

To succeed in a CDRP proceeding, the complainant must prove that the challenged domain name is confusingly similar to a mark in which the complainant had rights _prior_ to the date of registration of the domain name and continues to have such rights, and the registrant registered the challenged domain name in bad faith. The complainant must also adduce some evidence that the registrant has no legitimate interests in the challenged domain name. If the complainant satisfies those requirements, the burden shifts to the registrant to prove that it has a legitimate interest in the challenged domain name, in which case the complaint will be dismissed.

The CDRP provides that a registrant has a legitimate interest in a challenged domain name if, before notice of the complaint

• the domain name was a mark used by the registrant in good faith and in which the registrant had rights;

• the registrant used the domain name in Canada in good faith in association with any wares, services, or business, and the domain name was clearly descriptive in Canada, in English or French, of the character or quality of the wares, services, or business; the conditions of or the persons employed in the production of the wares, performance of the services, or operation of the business; and the place of origin of the wares, services, or business;

• the registrant used the domain name in Canada in good faith in association with any wares, services, or business, and the domain name was understood in Canada to be the generic name thereof in any language;

• the registrant used the domain name in Canada in good faith in association with a non-commercial activity including, without limitation, criticism, review, or news reporting;

• the domain name comprised the legal name of the registrant or was a name, surname, or other reference by which the registrant was commonly identified; or

• the domain name was the geographical name of the location of the registrant's non-commercial activity or place of business.

The CDRP provides that a challenged domain name will be considered to have been registered in bad faith if:

• the registrant registered or acquired the domain name primarily for the purpose of selling, renting, licensing, or otherwise transferring the domain name to the complainant, the complainant's licensor or licensee of the conflicting mark, or a competitor of the complainant or its licensee or licensor for valuable consideration in excess of the registrant's actual costs in registering or acquiring the domain name;

• the registrant registered or acquired the domain name in order to prevent the complainant or the complainant's licensor or licensee of the conflicting mark from registering the mark as a domain name, provided that the registrant, alone or in concert with one or more additional persons, has engaged in a pattern of registering domain names in order to prevent persons who have rights in marks from registering the marks as domain names; or

• the registrant registered or acquired the domain name primarily for the purpose of disrupting the business of the complainant, or the complainant's licensor or licensee of the mark, who is a competitor of the registrant.

4. Is Arbitration Under the UDRP or CDRP Mandatory?

Arbitration under the UDRP or CDRP may be invoked by a complainant at its option. If a complainant commences proceedings under the UDRP or CDRP, then the domain name registrant is required to participate or face the risk of an adverse decision.

Both the UDRP and CDRP expressly provide that domain name registrants and complainants may submit disputes to courts of competent jurisdiction for independent resolution at any time before, during, or after the arbitration proceedings.

5. What Are the Benefits and Limitations of Arbitration Under the UDRP and the CDRP?

The UDRP and CDRP provide efficient and cost-effective procedures for resolving cybersquatting disputes relatively quickly. However, the UDRP and CDRP are limited to disputes involving alleged cybersquatting (bad faith registration and use of domain names) and cannot be used for other types of domain name disputes.

Under the UDRP and CDRP, the arbitration panel's authority is generally limited to ordering that a domain name registration be cancelled or transferred to the complainant. The arbitration panel does not have authority to grant monetary awards or injunctions prohibiting future misconduct.

The UDRP and CDRP can be particularly useful to a complainant where the domain name registrant cannot be easily sued in the complainant's local courts; particularly if the registrant cannot be identified or resides in a foreign country.

D. RESOLVING DOMAIN NAME DISPUTES: LITIGATION

1. What Disputes Can Be Resolved Through Litigation?

There are no restrictions regarding kinds of domain name disputes that can be resolved through litigation.

The most well-known domain name disputes have involved cybersquatting. Courts have generally found that cybersquatting constitutes unlawful trade-mark use because it constitutes a misrepresentation regarding the approval, authorization, or endorsement of the trade-mark owner and is likely to confuse or mislead Internet users.

Currently, there is no Canadian legislation that deals specifically with cybersquatting. The US _Anticybersquatting Consumer Protection Act_ (ACPA) was enacted to specifically address cybersquatting. The ACPA protects owners of famous or distinctive trade-marks by providing a civil cause of action against any person who, in bad faith, registers, traffics in, or uses a domain name that is identical or confusingly similar to, or dilutive of, a distinctive or famous mark.

Not all conflicts between domain names and trade-marks constitute unlawful trade-mark use. In particular, conflicts may arise between two legitimate trade-mark owners, both wishing to use their marks or names on the Internet. Trade-mark law is ill-suited to resolving those conflicts.

2. What Are the Benefits and Limitations of Resolving Domain Name Disputes Through Litigation?

Litigation can be an effective means of resolving all kinds of disputes relating to the registration and use of domain names. Courts are able to provide various remedies to a successful plaintiff, including monetary awards of damages, injunctions prohibiting future misconduct, and awards of costs.

Litigation is often costly and can take considerable time. In addition, it can be difficult to enforce a court order against a defendant that cannot be identified or that resides in a foreign country.

E. GUIDELINES FOR PROTECTING TRADE-MARKS ON THE INTERNET

The following are some guidelines and recommendations for protecting trade-marks on the Internet and avoiding Internet-related trade-mark disputes:

• _Mark selection strategies:_ Conduct appropriate trade-mark searches and other due diligence before commencing to use trade-marks on the Internet and before registering and using domain names.

• _Register and use domain names as trade-marks:_ To the extent possible, use and register domain names as trade-marks. To satisfy Canadian trade-mark law requirements, domain names should be used as source identifiers for wares and services and should be marked on wares and their packaging and used in advertisements for services on the website and elsewhere.

• _Register and use trade-marks as domain names:_ To the extent possible, trade-marks should be registered and used as domain names. Registrations should be made in all available top level generic domains and important country domains. Registrations should also be made for reasonable variations of the marks (including common incorrect spellings). Consideration should also be given to the registration of criticism domain names, such as _[trade-mark]sucks.com_.

• _Declare trade-mark rights:_ All trade-mark uses should include an appropriate trade-mark designation — for example the symbols "TM" (for an unregistered trade-mark) or "®" (for a registered trade-mark). Trade-mark owners should declare their trade-mark rights on their websites and in enforceable website use agreements.

• _Trade-mark use licences:_ Trade-mark owners should not allow their marks to be used by other persons without appropriate licence agreements and trade-mark notices. Unauthorized or uncontrolled trade-mark use by other persons may impair the distinctiveness of the mark and result in the loss of trade-mark rights.

• _Website jurisdiction measures:_ Measures should be taken to reduce the risk of foreign courts and regulators asserting jurisdiction over website conduct and the risk of liability for infringing foreign trade-marks. Domain names should be registered with local domain name registrars. Websites should have appropriate jurisdiction disclaimers and, where appropriate, website gate pages that restrict website access to users who reside in particular jurisdictions. Website use agreements should contain provisions stipulating the permissible users of the website, the laws that apply to the website and its use, and the courts that have jurisdiction over disputes regarding the website and related matters.

• _Monitor Internet trade-mark use:_ On a regular basis, searches should be conducted to detect unauthorized trade-mark use. Commercial trade-mark search services may be engaged to provide this service.

• _Trade-mark rights enforcement:_ Trade-mark rights should be enforced in a reasonable and practical manner. Not every similar domain name or trade-mark use will be infringing. Inappropriately heavy-handed tactics can be counterproductive and result in detrimental adverse publicity. When dealing with cybersquatters, Canadian website owners should consider commencing US litigation to invoke helpful US laws. Canadians accused of Internet trade-mark misuse by foreign trade-mark owners should consider commencing proceedings in Canada for a declaration that their activities are lawful.

• _Cooperative use:_ Competing legitimate users of the same trade-mark may consider establishing a joint website portal that uses the shared trade-mark and allows users to select the website they wish to access. For example, see _www.scrabble.com_.
