Definition of 'use' expanded to cover market testing

Canada

In ConAgra Foods Inc v Fetherstonaugh & Co, the Federal Court of Canada has reversed the trademark registrar's decision to cancel for non-use ConAgra's KID CUISINE mark. The court ruled that ConAgra's transfer of trademarked sample goods to be used for market testing in Canada prior to the launch of its products constituted 'use' for the purposes of the Canadian Trademarks Act.

In 1993 ConAgra registered its KID CUISINE trademark in Canada based on the use of a registered mark in the United States and on a proposed use in Canada in association with frozen prepared meals. The mark has been widely used in the United States since 1991 but ConAgra did not make its first sales in Canada until February 1999. Prior to these initial sales, Fetherstonhaugh requested cancellation of the mark on the grounds of non-use. The trademark registrar issued to ConAgra a notice requesting that it provide (i) evidence of use within the three years preceding the date of the notice, or (ii) an explanation as to why it had not used the mark.

The senior hearing officer at the trademark registry cancelled the KID CUISINE mark, stating that ConAgra's evidence did not establish use within the relevant period or reasons for lack of use in Canada. ConAgra appealed and, pursuant to Section 56 of the Trademarks Act, submitted additional evidence to the Federal Court. The new evidence, detailing the launch of the product and first orders in January 1999, demonstrated that, prior to launch, samples of KID CUISINE marked products were tested on the Canadian market. Upon review of the additional evidence, Fetherstonhaugh withdrew its objection to registration of the mark and did not appear at the appeal hearing.

The Federal Court reversed the trademark registrar's decision to cancel the mark. It held that there was evidence of use within the relevant period. It noted that 'use', under Section 4 of the Trademarks Act, requires the "transfer of property or possession in the normal course of trade". According to the court, the acceptance of the first orders and the distribution of samples constituted use of the mark in Canada.

This decision is important because the distribution of samples to test the market has not usually been seen as sufficient to evidence use. However, the Federal Court's ruling seems to indicate that, pursuant to Section 4 (i) transfer of samples for market testing can qualify as a transfer of property, and (ii) use of such samples may fall within the definition of 'normal course of trade'.

Jean-François Nadon, Léger Robic Richard, Montreal

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