Federal Court takes narrow approach to definition of 'broadcasting services'

In Unicast SA v South Asian Broadcasting Corporation Inc, on an application for expungement, the Federal Court has taken the view that the display of a trademark on the website of a radio station based in Switzerland, but accessed by Canadians in Canada over the Internet, did not constitute use of a trademark in association with “radio communications” and “the broadcasting of radio programming” in Canada.

The applicant operated the radio station ROUGE FM in Switzerland, which streamed programming to French-speaking listeners around the world, including in Canada. When the applicant attempted to register the mark ROUGE FM in Canada for "radio communications; broadcasting of radio programming; transmission of sound, information and messages by computer terminals, namely the broadcast of music and radio programming by computer", its application was blocked by the respondent’s registration for RED FM for the operation of a radio station and radio broadcasting. RED FM was a radio station operated by the respondent out of Surrey, British Columbia, offering programming targeted to local South-Asian audiences.

The applicant sought to expunge the registration for RED FM, alleging that the respondent was not the person entitled to registration of RED FM because the applicant was the prior user of a confusingly similar mark. To be successful, the applicant had to satisfy the court that it had used ROUGE FM in Canada before the respondent had used RED FM and that the two trademarks were confusing.

The applicant relied on the decision in HomeAway.com Inc v Hrdlicka, where Justice Hughes stated:

"I find, therefore, 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." (2012 FC 1467 at para 22)

However, the court in Unicast noted that, in HomeAway, the trademark was used in association with services that were actually offered to Canadians over the web. Thus, the crux of the matter was whether the ROUGE FM services were “actually provided to Canadians or performed in Canada” (Unicast at Paragraph 50). As the court noted, to hold otherwise would be to put every Canadian trademark owner at risk “from every company around the world which has a website that is accessible to Canada”(Unicast at Paragraph 47).

The first question addressed by the court was whether the applicant’s online services constituted radio broadcasting services in Canada. To help answer the question, the court turned to the definition of radio 'broadcasting' in Canada as set forth in the Broadcasting Act (SC 1991, c 11), which only applies to “broadcasting undertakings carried on in whole or in part within Canada” (Broadcasting Act, Section 4(2)). After reviewing the authorities relating to what “carried on in whole or in part within Canada” means, the court concluded that there was insufficient nexus between the applicant’s undertakings and Canada. It relied on the following factors:

1. The content offered by the website was not stored on servers located in Canada;
2. The applicant does not have a physical presence in Canada;
3. The applicant does not solicit or actually have advertisers in Canada; and
4. There is no indication that the applicant actively targets Canadian audiences with its programming.

As such, the court held that the applicant did not offer the services “radio communications” and “the broadcasting of radio programming” in Canada and, consequently, did not use the trademark ROUGE FM in Canada in association with those services.

This was not the end of the analysis; the court also considered whether the applicant had used the mark in association with "transmission of sound, information and messages by computer terminals". The court conceded that the applicant’s radio station services in Canada would constitute the transmission of sound, information and messages by computer terminals; however, the applicant had failed to prove that such use had pre-dated the respondent’s use.

Although it was unnecessary to perform the confusion analysis in light of the 'use' findings, the court proceeded to do so. Given that the services that the applicant actually performed did not include 'broadcasting' within the meaning of the Broadcasting Act, there was little overlap between the nature of the services and the channels of trade of the two marks. The court found this factor outweighed any degree of similarity in the ideas suggested by the marks. They were held to be not confusing.

In an interesting twist, the court went on to note that ROUGE FM was likely misdesriptive of the services offered since 'FM' stands for 'frequency modulation' and is associated with typical broadcasting services, as opposed to services provided over the Internet.

While the decision gives some comfort to Canadian trademark owners that they are not at risk from every website that might be accessible in Canada, the narrow approach to the definition of 'broadcasting services', based on a statute other than the Trademarks Act, is of concern especially when the registrar for trademarks and the Federal Court have previously held that it is beyond the registrar’s scope to consider compliance with statutes other than the Trademarks Act when determining use in a cancellation proceeding (Star Island Entertainment LLC v Provent Holdings Ltd (2013 TMOB 84 at Paragraph 33, citing Lewis Thomson & Sons Ltd v Rogers ((1988) 21 CPR (3d) 483 (FCTD))). Although the context and type of proceeding were different, the same principles should apply: such a determination is “not immediately germane to the question of use, as that defined in the [Trademarks Act]”(Lewis Thomson at 487).