You don’t need to build it for them to come: Federal Court affirms trademark “use” for services does not require bricks and mortar business in Canada
September 13, 2018

by: Mark Evans and Nora Labbancz

Non-Canadian hoteliers have reason for celebration following the release of the Federal Court of Canada’s anticipated decision in Hilton Worldwide Holding LLP v Miller Thomson LLP, 2018 FC 895 (Hilton Worldwide).

Remaining consistent with its previous decision in Dollar General Corporation v 2900319 Canada Inc., 2018 FC 778, the Federal Court of Canada in Hilton Worldwide affirmed that providing “hotel services” does not require a physical hotel in Canada to constitute “use” of a trademark in Canada. Provided that Canadians can receive a meaningful benefit from the provision of the owner’s “hotel services”, offering incidental or ancillary services without the presence of a physical hotel in Canada may be sufficient to constitute use of the trademark in connection with the provision of hotel services in Canada.

In Hilton Worldwide, the Court overturned the Registrar’s decision to expunge Hilton’s registration for the trademark WALDORF-ASTORIA in association with “hotel services” where the owner did not have a “bricks-and-mortar” hotel in Canada. The owner operated an interactive website, a worldwide registration service, discounts offered to customers who pre-paid for rooms and loyalty programs, all of which services were accessible to Canadians and were associated with the registered trademark WALDORF-ASTORIA. However, the Registrar found that “if someone says they offer ‘hotel services’ in Canada, the average consumer is expecting a hotel,” not merely access to hotel reservations services or a hotel loyalty program.”

In finding that the owner’s hotel registration and loyalty programs constituted providing “hotel services” in Canada, the Court reaffirmed its position that the term “services” should be liberally construed, and can include primary, incidental or ancillary services (see for example, TSA Stores Inc. v The Registrar of Trade-marks, 2011 FC 273, a Federal Court decision in which Smart & Biggar was successful counsel). Further, the Court noted that the scope of a trademark registration must be considered in light of the ordinary meaning of the words in the registration itself and should be viewed from the perspective of the trademark owner and customer.

Accordingly, in Hilton Worldwide, the Court took into consideration that the scope of “hotel services” has expanded greatly since the time of the original registration, particularly in light of the developments in on-line commerce. Indeed, the Court stated that “the meaning of ‘hotel services’ must adapt to reflect the fact that an ordinary customer would expect to be able to book a hotel room on-line today, either directly or through the intermediary of a service dedicated to travel arrangements.” Further, the Court established that in interpreting the scope of a service, the Registrar should consider the evidence submitted in the case, rather than relying on common sense or the current version of the CIPO Goods and Services Manual.

The Hilton Worldwide and Dollar General decisions also reverse a long-standing trend by the Trademarks Opposition Board of ignoring ancillary services as being sufficient to constitute “use” in Canada.

While each case will ultimately depend on its facts, the recent Dollar General and Hilton Worldwide decisions signal that the court is maintaining consistency in its broad interpretation of “use” of a trademark in connection with services and provides comfort for non-Canadian businesses that do not have a physical presence in Canada.

If you have any questions about the above, please do not hesitate to contact a member of our firm’s Trademark Group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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