Federal Court: computer accessible information is 'both here and there'

When Martin Hrdlicka applied to register the mark VRBO based on proposed use in Canada in association with vacation real estate listing services, he was well aware of HomeAway.com and its use of VRBO for the same services on the website www.vrbo.com. After the mark issued to registration in Canada, HomeAway brought an application to expunge the registration and was successful (HomeAway.com Inc v Hrdlicka (2012 FC 1467)).

HomeAway’s application to expunge the registration alleged that:

• Hrdlicka was not the person entitled to register the mark because HomeAway had been using an identical trademark for identical services in Canada for more than six years before Hrdlicka filed his application;
• the VRBO mark was not distinctive of Hrdlicka because, at all relevant times, the VRBO mark was distinctive of HomeAway; and
• the VRBO registration was obtained on the basis of material false or fraudulent statements because Hrdlicka had no bona fide intention to use the VRBO mark when he filed the application, and he filed a false declaration of use so that the application could issue to registration.

HomeAway is a US company operating a business under the VRBO mark offering vacation real estate listing services over the internet. It maintained a database, physically located in the United States, offering vacation property rentals. HomeAway did not have a physical presence in Canada. However, the VRBO mark was displayed on HomeAway’s website, which was visible on the user’s computer screen in Canada and elsewhere when they accessed the VRBO services. The court noted that the resolution of the matter turned on the question of use, specifically 'use' by means of computer screen display.

Noting the scarcity of jurisprudence on this issue, the court considered decisions where information was stored electronically outside of Canada but was available to, and used by, those in Canada. Citing his decision in eBay Canada Limited v Canada (National Revenue), Justice Hughes noted that legislation must be approached in a manner consistent with modern day realities, and that information stored electronically (and accessible by computer) cannot truly be said to ‘reside’ in only one place, but that it is in fact “both here and there”. The court also noted that use of a website may constitute good 'use' of a mark at least in association with services.

The court subsequently held that “a trademark which appears on a computer screen website in Canada, regardless where the information may have originated from or be stored, constitutes for Trademarks Act purposes, use and advertising in Canada”. The court went on to conclude that HomeAway had prior use of its trademark in Canada.

As for HomeAway’s allegation of 'making known' of the trademark VRBO in Canada, the court held that use of a trademark on the internet did not fall within the very narrow definition of ‘making known’ under the Canadian Trademarks Act, which requires that the services be advertised in “any printed publication circulated in Canada” or “radio broadcasts ordinarily received in Canada”. Although it was held that 'use' of the trademark had been established through the internet website, this use could not be considered 'making known' as the internet is not contemplated under the act. In any event, as 'use' had been established, 'making known' was irrelevant. However, the court noted that the 'making known' provisions of the act are, to say the least, “arcane and badly in need of updating”.

As for Hrdlicka, there was no evidence that he had ever used the trademark in Canada. The evidence did not show any actual use of the mark during the material period but only spoke to future or intended use. Further, Hrdlicka admitted that he was aware of HomeAway and its use of VRBO at the time he filed his application and the evidence showed that he tried to sell his registration to HomeAway in return for a large sum of money, employment and/or royalties. The court had no trouble concluding that Hrdlicka had no bona fide intent of using the mark in a legitimate commercial way in Canada. Rather, his intent was to extort money or other consideration from HomeAway and the court concluded that such activity should not be condoned or encouraged. 

In striking the registration of the basis of material false or fraudulent statements going to entitlement to registration, the decision is consistent with previous case law on point and serves as a useful reminder that careful attention must be paid to the veracity of any statements made in a declaration of use.

Robert A MacDonald and Jennifer Galeano, Gowling Lafleur Henderson LLP, Ottawa