Bad Faith Trade-Mark Filings

Published July 24th, 2013

Bad faith filings in the trade-mark world are not uncommon and can happen anywhere.  Hence, some jurisdictions, for example, the United States, Singapore and the European Union have taken some measures to discourage this practise.  Canada however, has not specifically done so.

Examples of bad faith could be:

(a)  when an individual or company files an application to register a trade-mark that is identical or confusingly similar to a trade-mark that is well known perhaps in another jurisdiction.  This might be done to prevent the foreign trade-mark owner from entering the Canadian market, or with the intention of selling the application to the non-Canadian trade-mark owner upon its attempt to enter the Canadian market;

(b)  when an applicant files a trade-mark with no intention of ever using it, for the sole purpose of preventing another from using that mark; and

(c)  when an applicant simply wishes to profit from the reputation of someone else’s trade-mark.

From time to time in Canada, situations arise that make a casual observer question whether an applicant had a bona fide intention to use the marks applied for and/or if such applicant was acting in good faith by filing.

In that connection, many proposed use based Canadian trade-mark applications have been recently filed, for example on the marks, ABSOLUT; BAYER; BUDWEISER; CANADIAN CLUB; CHANEL; COORS; CORONA; DOM PERIGNON; EVIAN; FINLANDIA; HEINEKEN; JACK DANIEL’S; LOREAL PARIS; NESTLÉ; SOUTHERN COMFORT and TIM HORTONS.  In some cases the applications were voluntarily abandoned.  However in many cases, the owners of marks such as EVIAN; HEINEKEN, JACK DANIELS and L’OREAL PARIS found the filings unwelcome and opposed.  Years later, these owners were vindicated by application refusals from an Opposition Hearing Officer.

The above examples are filings for “well-known marks” in fields unrelated to the one the well-known marks occupy, so as to avoid an automatic refusal for likelihood of confusion by a Trade-marks Office Examiner.  When one studies each of the applied for marks, one has to question whether the applicant had a bona fides intention to use the mark.

The problem under the Canadian practice is that an Examiner cannot issue a refusal based upon non-distinctiveness; that is a matter left to the Opposition Board.  The Examiner’s power to refuse is based upon:

6. (1) For the purposes of this Act, a trade-mark … is confusing with another trade-mark… if the use of the first mentioned trade-mark… would cause confusion with the last mentioned trade-mark… in the manner and circumstances described in this section.

(2) The use of a trade-mark causes confusion with another trade-mark if the use of both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class…

(3) In determining whether trade-marks … are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including

(a)  the inherent distinctiveness of the trade-marks … and the extent to which they have become known;

(b)  the length of time the trade-marks … have been in use;

(c)  the nature of the wares, services or busi­ness;

(d)  the nature of the trade; and

(e)  the degree of resemblance between the trade-marks … in appearance or sound or in the ideas suggested by them.

Furthermore, Examiners do not conduct an inquiry into an applicant’s bona fides intent to use a mark.  The Examiner has no way of knowing whether an applicant can, either directly or through an authorized licensee, actually sell the goods or perform the services set forth in an application.  Such could require a fact-intensive inquiry, which the Trade-marks Office likely would be reluctant to undertake.

Furthermore, unlike the U.S. situation where it is possible to file a Letter of Protest in an informal procedure, Canadian Examiners are not permitted to accept correspondence from anyone except the applicant and its authorized trade-mark agent.

Currently, there is no legislative proposal that would make the proposed use requirement more stringent so as to discourage the filing of applications where the applicant appears to lack a bona fides intent to use the mark in Canada, for example where there is evidence that an applicant has no connection to the line of business in which he/she/it claims to propose to use certain marks.  Perhaps this is an area the profession should canvass with a view to developing a resolution recommending amendment to the Trade-marks Act or Regulations.

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