Fairmont Resort held not to be 'person interested' in FAIRMONT Case

In Fairmont Resort Properties Ltd v Fairmont Hotel Management LP (2008 FC 876, July 21 2008), the Federal Court of Canada has adopted a practical approach to determining whether the applicant was a 'person interested' within the meaning of Subsection 57(1) of the Trademarks Act.

Fairmont Resort Properties Ltd is the owner and manager of a time-share operation in the region known as Fairmont or Fairmont Hot Springs in British Columbia. Fairmont Hotel Management LP owns and manages a chain of luxury hotels in numerous countries throughout the world, including several locations in Canada. It registered three FAIRMONT marks in 2000.

In 2005 Fairmont Resort commenced proceedings in the Federal Court seeking to strike the three trademark registrations from the register. Among other things, Fairmont Resort claimed that:

the marks were not registrable at the date of registration;
the marks were not distinctive when the instant proceeding was commenced; and
Fairmont Hotel was not the person entitled to secure the registrations.

All of these grounds were roundly rejected by the court. However, more interesting than the court’s decision with regard to Fairmont Resort’s grounds for expunging the marks was its preliminary determination of Fairmont Resort’s entitlement to bring the application in the first place.

Fairmont Resort brought its application pursuant to Subsection 57(1) of the act, which provides that a person interested may apply to the court to expunge the registration of a trademark on the grounds that, at the date of the application, the entry as it appears on the register did not accurately express or define the existing rights of the owner of the registration.

Section 2 of the act provides that a corporation is a person interested if it:

may be affected by any entry on the register; or
reasonably apprehends that it may be affected by any act or omission or contemplated act or omission under or contrary to the act.

The court turned to the Canadian jurisprudence for a deeper understanding of the definition of a 'person interested'. The court generally favoured the interpretation set forth in John Labatt Ltd v Carling Breweries Ltd ((1974) 18 CPR (2d) 15 FCTD), in which it was held that:

"to be a person interested, there must be a reasonable apprehension that the person will be affected by the registered trademark. The entry must be shown to stand in the way of the person seeking to expunge it."

Upon reviewing the evidence proffered by both parties, the court took a strict view of Fairmont Resort’s right to bring its application. The court determined that Fairmont Resort did not use the word 'Fairmont' in association with its business in a trademark sense, but rather as a geographical descriptor. The court took notice of the fact that Fairmont Resort:

did not oppose the registration of the FAIRMONT marks by Fairmont Hotel; and
had not, until 2005, otherwise taken issue with Fairmont Hotel (or other businesses operating in the Fairmont region) for use of the word 'Fairmont' as a trademark.

The court thus determined that:

"[Fairmont Resort had] simply not acted as if it perceive[d] itself to be a person affected, or who reasonably apprehends that it may be affected, by the entry of the marks on the register."

Consequently, the court concluded that Fairmont Resort was not a 'person interested' within the meaning of Subsection 57(1) and dismissed the application.

The court’s stringent approach toward determining Fairmont Resort's status as a person interested is surprising, particularly considering the settled principle that an applicant under Subsection 57(1) need only satisfy a de minimis threshold.

Gordon J Zimmerman and David Blais, Borden Ladner Gervais LLP, Toronto

Fairmont Resort held not to be 'person interested' in FAIRMONT Case

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