CIRA decision accepts broad interpretation of what constitutes prior trademark rights

The recent decision of Guitar Center Inc v Piperni (CIRA Decision No 0254) has confirmed that a broad definition of 'rights' should apply to brand owners seeking to prove prior trademark rights in Canada. This definition includes a trademark reputation in Canada (even without trademark use), the advertising of services in Canada, and a non-Canadian website displaying the trademark to internet users in Canada that provides a benefit to Canadians. This decision may be of assistance to many non-Canadian brand owners seeking to recover '.ca' domain names registered in bad faith.

Canada’s '.ca' domain name registry is restricted to registrants who meet the Canadian presence requirements, which generally requires the registrant to own a relevant Canadian trademark registration or be a Canadian legal entity. This can leave non-Canadian brand owners that do not own a Canadian trademark registration vulnerable to cybersquatting.

To address bad-faith domain name registrations, the '.ca' registry provides for a relatively quick and inexpensive domain name dispute resolution process under the CIRA Domain Name Dispute Resolution Policy (CDRP). The CDRP is modelled after the Uniform Domain Name Dispute Resolution Policy (UDRP), and they both require a complainant to establish three basis elements:

1. the domain name is confusingly similar to a trademark in which the complainant has rights;
2. the domain name was registered in bad faith; and
3. the registrant has no legitimate interest in the domain name.

However, there are several important differences between the CDRP and UDRP. One key difference is that only persons who meet the Canadian presence requirements have standing to file a complaint. A second key difference is that the CDRP requires that the complainant has rights in Canada prior to registration of the domain name at issue.

Up until 2011, the CDRP contained a narrow definition of trademark 'rights', requiring sales of goods or provision of services in Canada in association with the asserted trademark. This created a loophole that permitted cybersquatting of well-known non-Canadian trademarks not yet used in Canada (see Toyota Canada v Sproul). This issue was addressed in revisions made to the CDRP in 2011, which included deleting the narrow definition of 'rights' to allow for a broader interpretation of the term in CDRP jurisprudence. Since that time, only one CDRP decision has addressed this issue, but it is restricted to rights flowing from the application filing date for a Canadian trademark registration (see Twenga v Doe). The Guitar Center decision more fully addresses what activities might establish 'rights' under the CDRP.

The complainant, Guitar Center Inc, is the world’s largest retailer of musical instruments, with a significant reputation spanning more than 50 years. The registrant was associated with a competing Canadian musical instrument retailer who had engaged in a long pattern of bad-faith registration of domain names corresponding to third-party trademarks in the same field. The main issue arose from the fact that the domain name at issue was registered in 2002, which was several years before the complainant commenced direct sales of musical instruments in Canada, and a decade before the complainant obtained its Canadian trademark registration. The panellist had to determine whether the complainant had proven rights in its mark GUITAR CENTER in Canada prior to 2002.

The evidence showed that prior to 2002, the complainant had:

1. a US website displaying the mark that was accessible to Canadians and providing detailed product advice and information;
2. advertisements for the mark on a Canadian radio station near the US border to encourage cross-border shopping; and
3. a reputation in Canada through spill-over advertising from US media, cross-border shopping to the United States, and references in Canadian newspaper media.

In considering the issue of prior 'rights', the panellist acknowledged the complainant’s argument that rights under the CDRP can be demonstrated not only by showing use of a trademark in Canada prior to registration of the disputed domain name, but also through any other basis for 'rights' in a trademark supported by the Trademarks Act or Canadian jurisprudence, provided those 'rights' pre-date the registration of the domain name.

The panellist appears to have accepted the following principles, each of which may give rise to trademark 'rights' under the CDRP:

1. a website that is accessible to Canadians, displays the trademark and provides some benefit to Canadians (ie, detailed product advice and information) constitutes use of the trademark in Canada;
2. trademark advertising in Canada to promote a service accessible to Canadians constitutes use of the mark in Canada; and
3. a mere reputation for the trademark in Canada can establish trademark rights sufficient to succeed in a passing-off action or trademark opposition proceeding.

The Guitar Center decision signals to non-Canadian brand owners that panellists are prepared to take a broad view of the requirement to prove trademark rights in Canada prior to registration of the confusing domain name.

Daniel M Anthony, Smart & Biggar/Fetherstonhaugh, Ottawa 

Guitar Center was represented by Daniel Anthony and Elliott Simcoe of Smart & Biggar