Federal Court expands what may constitute 'use' of a 'service'

Canada
In TSA Stores Inc v Registrar of Trademarks (2011 FC 273, March 9 2011), the Federal Court has overturned a decision of the registrar of trademarks, and held that a series of SPORTS AUTHORITY trademark registrations for the well-known retail sporting goods stores were in use in Canada, and were to be maintained, based solely upon information accessible by Canadians on a website based in the United States.
 
TSA Stores Inc, the owner of the trademark SPORTS AUTHORITY, is the second largest sporting goods retailer in the world and operates approximately 400 stores in the United States. For some time, there were six Sports Authority stores in Canada, but these were closed in 2000. TSA Stores owns four related Canadian trademark registrations containing the element 'Sports Authority' in relation to retail sporting goods store services.
 
Section 45 cancellation proceedings were commenced in 2006 by a third party seeking to expunge the registrations on the basis that they had not been used in Canada during the three-year period prior to the commencement of the proceedings. TSA Stores defended the cancellation proceedings, even though it did not operate any bricks and mortar stores in Canada during the relevant period. Furthermore, while it operated a US-based website that was accessed by hundreds of thousands of Canadians, the website did not permit goods to be purchased and shipped to Canada.
 
Instead, TSA Stores argued that retail store services were being performed and provided to Canadians as the Sports Authority website provided a vast range of product information, as well the location of its stores in the United States, which are frequently visited by Canadians.

In a decision dated January 12 2010, the registrar of trademarks did not decide whether the mere operation of the website was sufficient to constitute 'use' in Canada. Rather, the registrar ordered that all of the registrations be expunged on the basis that there was no clear evidence that the website was being operated by a licensee under the control of TSA Stores.
 
On appeal to the Federal Court, additional evidence was filed, and the court was satisfied that the website was being operated by a licensee that was under the control of TSA Stores.
 
As for the primary issue of whether the provision of website information was sufficient to constitute 'use' of retail department store services in Canada, the court recognised that the word 'services' is not defined within the Canadian Trademarks Act, and is to be given a liberal interpretation.
 
Furthermore, the court recognised that the act does not make a distinction between primary, incidental and ancillary services. As long as some members of the public, consumers or purchasers, receive a benefit from the activity, it qualifies as a service. The court held that the vast range and depth of information available on the Sports Authority website was “akin to visiting a bricks and mortar store and benefitting from speaking with a knowledgeable salesperson”.
 
The court also noted that the website’s store locator function, whereby individuals could locate a store in the United States by inputting their location, including by means of their Canadian postal code, was also of benefit to Canadians. Consequently, the court found that all of the marks were in use in Canada, in connection with retail department store services, as ancilliary store services were being provided by means of the website itself.
 
While the court has previously recognised that the operation of a bricks and mortar store in Canada is not required to establish 'use' of store services in the country, this is believed to be the first case in which this finding has been made in the absence of any purchases (whether online, by mail order or through a booking agent) while located in Canada. This decision thus represents an important continuation of the Federal Court’s expansive view as to what may constitute 'use' of a 'service' in Canada.
 
Mark Evans, Smart & Biggar/Fetherstonhaugh, Toronto

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