Lack of Foreign Use at Canadian Filing Date Not Fatal to Registered Trade-Marks

Published July 29th, 2014

Coors Brewing Company v. Anheuser-Busch LLC, 2014 FC 716 (Gleason J.)

Summary

On July 18, 2014, the Federal Court of Canada dismissed an application under section 57 of the Trade-marks Act (the “Act”) by Coors Brewing Company and Molson Canada 2005 (“Coors”) to expunge the registered trade-mark GRAB SOME BUDS (TMA818398) owned by Anheuser-Busch, LLC (“Anheuser”) since February 24, 2012.

Coors sought expungement of the trade-mark on the basis that Anheuser was not permitted to rely on foreign registration and use of the trade-mark as a basis of filing because the trade-mark had not been used abroad at the time the Canadian application was filed. Coors relied on the decision in The Thymes, LLC v Reitmans Canada Limited, 2013 FC 127 (“Thymes”).

In dismissing Coors’ application, the Court ruled that failure to use a trade-mark in a foreign jurisdiction at the filing date of the Canadian application does not constitute a basis to expunge a registered trade-mark where no misstatement was made in the underlying application.

Facts

Anheuser filed a proposed use application for the mark GRAB SOME BUDS on September 14, 2010. On February 9, 2011, Anheuser substituted the proposed use basis of filing with registration and use of the trade-mark in the United States as the basis for registration. The application was advertised and subsequently registered on February 24, 2010. While the United States registration relied upon in the Canadian application had issued prior to the Canadian filing date, use of the trade-mark in the U.S. did not commence until September 24, 2010, ten days after the Canadian application was filed.

Analysis

Coors’ relied primarily on the decision in the Thymes case where Manson J. upheld the decision of the Trade-marks Opposition Board refusing a trade-mark application, which included an incomplete foreign registration and use basis of filing at the Canadian filing date. The applicant in the Thymes case did not state that it was using the trade-mark abroad but rather that it intended to use the mark in another country in the future. Nonetheless, the application was refused for lack of actual foreign use of the trade-mark as at the Canadian filing date and failure to comply with the requirements of section 30(d) of the Act.

Accordingly, Coors argued that Anheuser’s registration was invalid and warranted expungement because Anheuser had misstated information regarding foreign use of the trade-mark at the Canadian filing date and, therefore, the underlying application did not conform to section 30(d) of the Act.

Anheuser argued that:

1. the decision in Thymes did not apply in this case and that the material date for assessing compliance with section 30 of the Act may, in some cases (as in the present), be the date the application is amended to include the foreign registration and use as a basis of filing; and

2. even if the relevant date to determine compliance with section 30(d) of the Act was the Canadian filing date, the grounds for expungement were more limited than those available in an opposition, and an expungement action could only succeed if there was a false misstatement made in meeting the requirements of section 30(d).

The Court held that section 18 of the Act provided four statutory grounds for the expungement of a trade-mark, including entitlement to register the mark. It also identified non-statutory grounds of expungement, namely fraudulent misrepresentations or innocent misrepresentations that are fundamental to issuance of a registration. Section 30(d) of the Act sets out the information that the applicant must provide when relying on foreign registration and use as a basis of filing and would provide guidance on whether misrepresentations were made that could result in expungement.

Both parties agreed that neither of the statutory grounds of expungement applied in this case. Therefore, the Court was limited to non-statutory grounds.

Finding that it was not necessary to deal with Anheuser’s first argument and noting that such a determination “might well involve disagreeing with the reasoning in Thymes”, the Court agreed with Anheuser that there were limited grounds on which an expungement proceeding can succeed.

The Court held that there was no misstatement by Anheuser in this case that could invalidate the registration. At the Canadian filing date, the application was filed based on proposed use and there was no misstatement about use of the trade-mark in the United States. When the application was amended to replace the proposed use filing basis with the foreign registration and use basis, the statement that the trade-mark had been used in the United States was true. The Court dismissed Coors’ application for expungement.

Practice Points

The holding in Thymes that an application based on foreign registration and use requires foreign use in the country of origin at the Canadian filing date is controversial because it appears to be at odds with the language in the Act and the Trade-mark Regulations. It also contradicts the long-standing and common practice within the intellectual property community in Canada, which the Court acknowledged in this case, of filing applications in Canada based on foreign registration and use of the trade-mark where foreign use has not yet commenced by the filing date.

The Coors decision states that where a Canadian application does not include foreign registration and use as a basis of filing until such time as foreign use of the trade-mark has actually commenced, there will be no basis to expunge the resulting registration for a misstatement in the underlying trade-mark application.

In practical terms, this means that rather than including an incomplete foreign registration and use basis of filing at the date of filing the Canadian application and amending the application to complete the claim once foreign use commenced (as was the case in Thymes), it may be preferable to file a Canadian proposed use application and subsequently amend that application to include a completed foreign registration and use basis of filing.

The adoption of this strategy, however, only increases the chances of successfully defending against an expungement proceeding (i.e., once the registration issues). It may not defeat an opposition in a similar factual scenario given the Court’s reluctance to address the findings in the Thymes decision. Therefore, it may be possible for an application to be successfully opposed for lack of foreign use as at the Canadian filing date even where the foreign registration and use basis of filing was added by way of a subsequent amendment.

It would be interesting to see how the application in Thymes, had it issued to registration, would be treated in an expungement proceeding. It is difficult to see how a statement regarding an applicant’s intention to use a trade-mark in a foreign jurisdiction in the future (and not of actual use) made at the date of filing of the Canadian application would qualify as a misstatement sufficient to invalidate the registration.

Lastly, in Thymes, Manson J. stated that foreign use of a trade-mark had to occur at the Canadian date of filing in the country of origin. It is noted that the term “country of origin” has a very specific meaning under the Act and, in reference to foreign use, section 30(d) specifically states that all the applicant has to provide is “the name of a country in which the trade-mark has been used”. Interestingly, the Court in this case did not resolve this discrepancy in Thymes, instead, stating that foreign use had to occur in the country in which the foreign registration issued and was relied upon in the Canadian application. It remains to be seen how the Court’s interpretation of section 30(d) will affect success on an opposition or expungement proceeding.