Is Use Of A Mark For Services Also Use On Goods Sold?

Litigation results are never fully predictable. That point is brought home clearly by a recent decision of the Federal Court in Heather Ruth McDowell v Laverana GmbH KG (2016 FC 1276, per Fothergill J.) involving an uncontested appeal of a decision of the Registrar of Trade-marks in a non-use cancellation proceeding pursuant to section 45 of the Trade-marks Act. If followed, this decision could have far-reaching implications for trademark owners, and especially those involved in retail activities, in terms of the Court's characterization of non-use cancellation proceedings, the type of evidence required to support use in a retail environment, and the issue of "ambiguity" in evidence and its impact on the findings of use.

Laverana, a German cosmetics manufacturer, requested the Registrar to issue a non-use cancellation proceedings notice to McDowell, the owner of registrations for HONEY in word and design format for retail store services, namely "the operation of a clothing, footwear, headwear, fashion accessory and giftware outlet", as well as for a long list of goods ranging from clothing and shoes, to hair accessories, makeup, giftware and household ornaments. Based on evidence filed by McDowell, the Hearing Officer in the Opposition Board, acting for the Registrar, found use of the marks for services, but was not satisfied that the evidence showed sales of each of the registered goods during the relevant period, and ordered that the registrations be amended to delete the goods.

The language of s. 45 is clear - upon receipt of a notice from the Registrar to show use, a registrant has an obligation to show, for each of the registered goods and services, use in Canada in the three year period prior to the Registrar's notice. The definition of "use" in the Trade-marks Act for "goods" requires a commercial transaction in the normal course of trade, where the mark appears on the goods, labels or packages, or is associated with the goods in a way that notice of such association is made to the consumer. The usual evidence of "use" on goods such as clothing, for example, which makes up a large part of the items in the HONEY registrations, would include labels applied to the goods themselves, such as cloth labels sewn into the goods, or manufacturer labels attached to the goods when they are displayed in stores, followed by proof that such goods were sold in Canada by the owner of the goods or some licensed or related party. Generally, advertisements or other promotional materials are not, on their own, considered to be acceptable evidence of use on goods (as opposed to services).

The Registrar had found the evidence of use of the HONEY marks on goods to be insufficient - it covered proof of sales of only two clothing items, there was nothing to show volume of sales, or to support...