No store, no problem: Federal Court’s broad interpretation of “use” an advantage for non-Canadian retail trademark owners
August 7, 2018

by: Mark Evans & Jamie-Lynn Kraft

Non-Canadian retailers can breathe a sigh of relief thanks to the Federal Court of Canada’s decision in Dollar General Corporation v 2900319 Canada Inc, 2018 FC 778 (“Dollar General”). The decision reaffirms the Court’s position that providing “retail store services” does not require a “bricks-and-mortar” establishment or direct delivery of products to Canada to constitute “use” of a trademark in Canada. So long as there is a sufficient level of interactivity with potential Canadian customers such that Canadians receive a benefit, then offering secondary or ancillary services on a website or an internet app equivalent to what one might find in a bricks-and-mortar store can constitute use of the trademark in connection with the provision of retail store services in Canada.

In Dollar General, the Court overturned the Trademark Opposition Board’s decision to expunge a registration for use in association with “retail variety store services” where the owner did not operate a physical location in – nor ship directly to – Canada. The owner operated physical retail stores in the United States as well as an e-commerce website and internet app and used the registered trademark DOLLAR GENERAL in association with those services.

However, the only “service” that Canadians could access without leaving Canada was the ability to browse the owner’s website and app to review product details, pricing, store locations, recipes, and availability. Although Canadians could make purchases online, they were obliged to hire a third-party shipping agent to bring those purchases to Canada. The Registrar found that the owner was not offering the registered services in Canada because a customer in Canada could only obtain his or her purchase by travelling to the United States or through the additional services of a third-party shipping agent.

In finding that the owner’s interactions with Canadians through its website amounted to providing “retail variety store services” in Canada, the Dollar General decision reaffirms the Court’s position on secondary or ancillary retail store services in past cases (see for example, in Saks & Co. v Canada (Registrar of Trade Marks), [1989] FCJ No. 28 (FCTD) and TSA Stores Inc. v The Registrar of Trade-marks and Heenan Blaikie LLP, 2011 FC 273, Federal Court decisions in which Smart & Biggar was successful counsel). The decision also reverses a long-standing trend by the Trademarks Opposition Board of ignoring ancillary services as being sufficient to constitute “use” in Canada.

The Dollar General decision provides some comfort for non-Canadian retailers who do not have a physical presence in Canada and do not ship to Canada, but who nonetheless engage with Canadian customers over the internet. While each case will ultimately turn on its evidence, interactivity with Canadians through a website or an app is a good indication that services are being provided in Canada.

The issues raised in Dollar General overlap with those raised in the recent Trademarks Opposition Board case, Miller Thomson LLP v Hilton Worldwide Holding LLP, 2017 TMOB 19. In that case, the Registrar expunged a registration for the trademark WALDORF-ASTORIA for “hotel services” on the basis that the owner did not have a physical hotel in Canada and the only services which Canadians could access from Canada were hotel reservation services and a hotel loyalty program. The case was appealed and a decision from the Federal Court is expected soon. It will be interesting to see if the Federal Court’s decision in Hilton Worldwide is consistent with the Court’s position in Dollar General, and overturns the Board’s decision.

The preceding is intended as a timely update on Canadian trademark law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly. If you have any questions about the above, please contact a member of our trademark practice group.

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