Concept of use in relation to intangible goods further extended

In In Re Acer America Corporation ([2003] TMOB 70), the Canadian Trademarks Opposition Board (TMOB) has continued the trend towards expanding the level of trademark protection available to intangible goods and specifically computer software. Following this decision, the concept of use has been further extended to allow greater trademark protection for intangible goods that are not distributed through traditional means.

A third party initiated administrative proceedings to cancel Acer America Corporation's trademark ALTOS, registered for use in association with "computer software recorded on magnetic media", based on non-use pursuant to Section 45 of the Canadian Trademarks Act. Acer's evidence indicated that the software associated with the mark ALTOS was sold only as a package with its computer hardware. Acer's software was not sold or invoiced separately - it was pre-loaded as part of a system. The trademark ALTOS appeared on invoices and on the software manual that accompanied the system.

To maintain a registration that is the subject of an expungement proceeding, a registrant must show that the subject trademark has been used in the three years immediately preceding the request for expungement. A trademark is deemed to have been used in association with goods if, at the time of the transfer of ownership of the goods in the normal course of trade, the trademark is so associated with the goods that notice of the association is given to the purchaser. In the majority of decisions involving registrations associated with computer software distributed through non-traditional means (ie, on diskette, unpackaged or installed by a technician) that have been issued, the successful registrant has shown that the subject mark appeared on users' computer screens while the software was operating.

In Acer, the trademark registration was maintained based on the appearance of the trademark on invoices and computer software manuals. The TMOB held that customers would likely receive notice of the association between the trademark ALTOS and the goods through the invoice at or near the relevant time. The TMOB also held that consumers would likely carefully examine an expensive computer system before entering into a transaction, and be aware that the purchase involves both hardware and software.

Interestingly, the accompanying manual was deemed sufficient to provide the necessary notice of association between the trademark ALTOS and the goods at the time of the transfer of the goods, notwithstanding the fact that the trademark appeared on the manual as ACER ALTOS. The TMOB held that the public could perceive the word ALTOS as a separate trademark from ACER since ACER was used independently elsewhere. The TMOB accepted that a sale of a computer system pre-loaded with software would also amount to a sale of the software and, thus, the registration was maintained.

Acer illustrates that the TMOB is willing to extend traditional concepts, such as 'use in the normal course of trade' and 'notice of association', to cover modern goods (eg, computer software), not contemplated when the legislation was drafted.

Gordon J Zimmerman, Borden Ladner Gervais LLP, Toronto