Board considers whether sale of refurbished goods satisfies use requirement

Canada

In Sim & McBurney v Parts Now! LLC (2011 TMOB 104), the Canadian Trademarks Opposition Board has provided further guidance as to the type of evidence required in a summary trademark expungement proceeding under the Canadian Trademarks Act where the registered owner deals in refurbished products.

Section 45 of the act provides that the registration of a trademark may be expunged if the registered owner cannot establish that the mark has been in use in Canada, in the normal course of trade, during the relevant three-year period. The three-year period runs backwards from the date of the Trademarks Office notice that a proceeding under Section 45 has been commenced. Although the Trademarks Office may issue such a notice of its own accordance, notices are generally issued only at the behest of a third party. A person seeking expungement under Section 45 need not have an interest in the matter.

'Use' is defined in Section 4 of the act. Use in respect of goods requires that, at the time of the transfer of the property in, or possession of, the goods, in the normal course of trade, the trademark appears on the goods themselves, or on their packaging, “or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred”.

This latter phrase is one which causes some concern in the context of refurbished goods, or other goods where it may be impractical to have the mark appear directly on the good or its packaging.

In the present case, the Trademark Opposition Board considered whether the sale of refurbished products satisfied the requirement that a trademark be in use during the relevant period. The trademark in question was PARTS NOW!, registered for use in Canada in association with new and refurbished components and sub-assemblies for facsimile machines and printers, as well as services related to installation, repair and maintenance of those goods.

Parts Now! LLC filed evidence from the general manager of its Canadian subsidiary which attested to the fact that, given the nature of the goods as refurbished, the PARTS NOW! mark was not attached to the goods themselves. Rather, the trademark appeared on ancillary items which accompanied the product, such as warranties, catalogues and invoices.

The board canvassed the case law as it relates to refurbished products. The board recognised that the nature of use of a trademark on goods when sold by a dealer of refurbished products was somewhat different from that of a vendor of new goods. It also recognised that it was unlikely that the trademark would ever appear on the goods themselves in the context of refurbished products.

Rather, the board considered other manners in which the notice of association of a trademark with goods could be given to a consumer at the time of transfer. Specifically, the board noted that there was no reason for supposing that use in advertising, circulars, pamphlets, invoices and like documents would not constitute use of the trademark within the meaning of Section 4 of the act. In the present case, the board was satisfied that the appearance of the trademark on items such as warranties, publications in the nature of catalogues and invoices sufficed to give the association required.

Although the case originated in the context of refurbished products, the board's reasoning is equally applicable to any case where a trademark does not appear on the goods themselves or their packaging. 

Antonio Turco, Blake Cassels & Graydon LLP, Toronto

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