Display of a trademark on a non-Canadian website may be use of the trademark in Canada
August 13, 2013

by Daniel M. Anthony

A fundamental principle of Canadian trademark law is that a trademark must be used in order for rights to be secured and maintained. Given the modern reality of a global Internet, a frequent question that arises is whether a trademark displayed to Canadians via a website based outside Canada is sufficient to establish use of the trademark in Canada.

Trademark use is important because it can give rise to common law rights, provide a basis for trademark registration and may establish a date of entitlement with respect to competing applications for confusing marks. On the other hand, failure to use a trademark can lead to a loss of rights. In the case of a registered trademark, non-use over a period of time can render a trademark registration vulnerable to cancellation through summary expungement or abandonment proceedings.

There has been surprisingly little jurisprudence to date on the issue of what constitutes proper “use” of a trademark in association with services via websites based outside Canada. The recent decision of Homeaway.com Inc v Hrdlicka (“Homeaway.com”), 2012 FC 1467 helps clarify this issue by confirming that a trademark which is displayed on a website available in Canada in association with services provided in Canada, regardless of where the information originates or is stored, constitutes use and advertising of the trademark in Canada.

In Homeaway.com, the applicant Homeaway.com, Inc. applied to expunge a trademark registration for the mark VRBO for use in association with vacation real estate listing services. The respondent, Mr. Hrdlicka, had applied for the mark VRBO based on proposed use in 2009 and the mark was registered in 2010. The applicant argued that the respondent was not the person entitled to the mark VRBO, since the applicant had used the trademark VRBO in Canada since 2003 with the identical services by displaying the mark on its website and providing the services in Canada.

Section 4(2) of the Trademarks Act (the “Act”) defines use in association with services as follows:

A trademark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.

The evidence established that the applicant had advertised to and contracted with Canadians to market their vacation rentals on the VRBO website, and that the website displayed the trademark VRBO to Canadians. Given these facts, the court focused on whether a U.S. company displaying a trademark on a website stored on servers in the U.S. constitutes “use” of the trademark in Canada. The Court concluded that legislation must be interpreted in a manner consistent with modern day realities and that computer information stored in one country (e.g. the U.S.) can be said to exist in another, namely, Canada. As a result of the Homeaway.com decision, it is now confirmed that the display of a trademark on a non-Canadian website viewed from Canada in association with services provided in Canada constitutes use and advertising of the mark in Canada under the Act.

The Homeaway.com decision highlights that almost any non-Canadian website available in Canada that advertises a trademark in association with services can potentially support a Canadian trademark registration. In this regard, previous jurisprudence has established that the mere advertising of services is not sufficient to support a trademark registration, and that the services must also be performed, or at least offered, in Canada to constitute use. For companies offering their full range of services in Canada, this is not an issue. However, for non-Canadian companies offering only certain services in Canada, it is important to consider what services can be supported in a registration. A few recent cases have addressed this issue where the services were claimed to be provided through a website.

In another recent decision, TSA Stores Inc v The Registrar of Trademarks, 2011 FC 273, a trademark owner was required to prove that it had used its trademark in Canada in association with “retail store services featuring sporting equipment and clothing.” The trademark owner operated brick and mortar stores in the U.S., but not in Canada. Further, there was no clear evidence of online sales to Canada. However, there was evidence that certain retail store services were offered through the website, including a “Shoe Finder” service and a “Help Me Choose Gear” service, which provided significant guidance on a vast array of products. There was also evidence that the website had received hundreds of thousands of visits annually from Canadians. In reaching its conclusion, the Court confirmed the jurisprudence that since the word “services” is not defined in the Act, it should be given a liberal interpretation based on the facts of each case. In addition, the court noted that the Act makes no distinction between primary, incidental or ancillary services and that as long as some members of the public receive a benefit from the activity, it is a service. In view of the above, the Court concluded that the website information services were ancillary to retail stores services and were sufficient to support the registration.

In another decision, Maillis v Mirage Resorts Inc (2012), 107 CPR (4th) 298 (TMOB), a Las Vegas casino and hotel operator was required to prove that it had used its trademark in Canada in association with various services, including “hotel and casino reservation and booking services” and “casino and live entertainment services, hotels and spas.” The only evidence of use of the mark in Canada was through its website, which provided booking services to Canadians. In these circumstances, the Opposition Board held that the website supported the registration with respect to booking services. However, these ancillary booking services were insufficient to support the registration with respect to casinos, hotels and spas. This case was distinguished from the earlier decision of Borden Ladner Gervais LLP v WestCoast Hotels Inc (2006), 53 CPR (4th) 361 (TMOB), in which “hotel services” were found to be performed in Canada through a website that provided reservation services through an agent in Canada, as well as loyalty program services.

Brand owners whose trademarks are displayed via a website accessible from Canada, and who actually provide services through the Internet to Canadians, are able to obtain and maintain a trademark registration in Canada.

For further information, please contact Daniel Anthony or another member of our Trademarks team.

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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