Trademarks On Promotional Products – Profit Is Not A Requirement For Use

Canada's trademark system recognizes both unregistered and registered rights, but there are many well-recognized benefits to registration, such as statutory exclusivity in the mark for the registered goods/services across the country, a defence to allegations from others of infringement and passing off, and deemed proof of ownership. There are also more subjective advantages, such as easier enforcement, searchable rights on the public Register, and the added vigilance of the Trademarks Branch, which conducts confusion searches during examination. All of these should combine to make registration a priority for all brand owners.

It is now possible to register a mark without any use. However, all registrations become vulnerable to cancellation for non-use three years after registration. Specifically, section 45 of the Trademarks Act permits any person to request the Registrar issue a notice commencing a non-use cancellation proceeding. Upon issuance of such notice, the owner is required to provide evidence of use in Canada of a registered mark, failing which the mark will be cancelled, unless there are special reasons to excuse non-use. This section was designed to be an expeditious way to clear "deadwood" from the Register.

In practice, section 45 non-use cancellation proceedings are lengthy, often taking more than three years. This is problematic if they are commenced to deal with risk analysis before adoption of a new brand, or to address confusion citations in examination. As a result, many non-use proceedings are started merely as a tactic, for example to encourage a registrant to voluntarily remove overlapping goods or services, agree to assign the mark, and/or provide a consent in exchange for avoiding the time, costs and uncertainty of seeing a non-use proceeding through to its conclusion. They are also widely used in litigation. Any brand owner hoping to rely on a registration in infringement proceedings needs to prepare, in advance, to defend such registration against a non-use cancellation proceeding and/or a counterclaim that the trademark has been abandoned.

The volume of disputes before the Registrar and the Courts in which trademark "use" is at issue suggests that it can be both uncertain and contentious. Cases have analysed a variety of issues ranging from differences between the mark as used as compared to registered, use by entities other than the registrant, the necessary volume of use, and whether the use was "in the ordinary course of trade".

That last issue was before the Registrar, the Federal Court and the Federal Court of Appeal in Cosmetic Warriors Limited v...