Use and registration abroad: Federal Court revisits Thymes Decision

In February 2013, a ground-breaking decision of the Federal Court ended the debate on whether marks must be in use abroad at the time of filing where such use is claimed as a basis for a Canadian application (Thymes LLC v. Reitmans Canada Limited (2013 FC 127, February 6 2013)). However, this ruling, in the context of an opposition to an application, led to uncertainty and concern with respect to the validity of prior registrations which issued from applications based on use and registration outside of Canada where the use did not precede the Canadian filing date. The Federal Court has put those concerns to rest in Coors Brewing Company v Anheuser-Busch LLC (2014 FC 716, July 18 2014).

The current Canadian law requires that an application for registration disclose a basis for the application. The basis can be one or more of the following:

1. use in Canada (in which case, a date of first use must be disclosed);
2. proposed use in Canada (in which case, a declaration of use must be filed prior to registration); and/or
3. use and registration in another jurisdiction.

With respect to the third basis, whether or not the use in another jurisdiction must predate the Canadian application date was a question for debate. While the Thymes decision confirmed that, for a valid application, all of the elements (use and the foreign registration or at least a pending application) must exist as of the Canadian filing date, the Coors case held that an existing registration may not be challenged on the same basis.

On August 16 2010 Anheuser-Busch filed a US application to register GRAB SOME BUDS based on intention to use in the United States. It filed a corresponding Canadian application on September 14 2010 based on proposed use in Canada. Use commenced in the United States on September 24 2010 and the US application issued to registration on March 8 2011. Anheuser-Busch then amended its Canadian application on February 9 2011 to drop the proposed use claim and claim a different basis for the application, namely use and registration in the United States. The application went forward to registration on that basis.

Coors applied to expunge the Canadian registration, relying on the Thymes decision and arguing that the registration was invalid because use of the challenged mark did not commence in the United States until after the Canadian filing date. Ultimately the court disagreed with Coors, dismissed the expungement proceeding and upheld the registration. In doing so, the court was careful not to disagree with the Thymes decision - rather, it took the view that Thymes applied only to opposition proceedings and not to expungement proceedings.

The only basis for invalidating the registration raised by Coors was the alleged improper claim to registration based on foreign registration and use. However, the grounds upon which a registration may be expunged are set forth in Section 18 of the Trademarks Act  and the court, after carefully reviewing Section 18, confirmed that non-compliance with procedural filing requirements under Section 30 does not constitute grounds for expungement. Section 18 provides that a registration is invalid if:

a) the mark was not registrable at the date of registration;

b) the mark is not distinctive at the time proceedings are commenced;

c) the mark has been abandoned; or

d) the applicant was not the person entitled to registration.

The court noted that “these provisions have been collectively interpreted as providing that there are fewer issues that may give rise to a successful expungement claim as opposed to a successful opposition claim” (Paragraph 24). The court found that none of the four statutory bases upon which to invalidate a registration were satisfied.

The court went on to note that the case law recognises one non-statutory ground for expungement, namely a misstatement - either a fraudulent misstatement or an innocent but material misstatement. However, the court was satisfied that there was no misstatement - when Anheuser Busch amended its application to claim use and registration in the United States, its statement that there was use of the mark in the United States was true.

In sum, this decision confirms that a lack of foreign use at the Canadian filing date is not fatal to registered trademarks that issued based on a claim of use and registration in another country, provided that the claim was true at the time it was made.

While the decision gives some certainty with respect to Canadian registrations based on use and registration in another jurisdiction, applicants must still be sensitive to the need to state a proper basis for a Canadian application - at least for the moment. Extensive amendments to the Trademarks Act were passed in June 2014. When such amendments come into force, there will no longer be a requirement to state a basis for a Canadian application. This will simplify the Canadian registration process and will eliminate any need for applicants to specify a date or first use of the mark in Canada or to offer details or use and registration of the mark in other jurisdictions. These provisions are anticipated to be effective in 2015.

Robert A MacDonald, Gowlings, Ottawa, and Alexandra Mierins, a summer intern with Gowlings