Luxury Hotel and Time- Share Operation Emboiled in Fight Over “Fairmont” Trade-Mark and Corporate Name

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LUXURYHOTELANDTIME-SHAREOPERATIONEMBOILEDINFIGHTOVER
“FAIRMONT”TRADE-MARKANDCORPORATENAME

AlexandraSteele*
LEGERROBICRICHARD,LLP
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TheFederalCourtofCanadarecentlyruledthat,notwithstandingthreeother
concurrentadministrativeandjudicialproceedingsregardingtheownership
anduseoftheFAIRMONTtrade-marks,theDirectorofCorporationsCanada
didnoterrinrefusingtostayadministrativeproceedingspendingbeforehim
regardingtheregistrationofthecorporatename“Fairmont”.[FairmontHotels
Inc.v.DirectorCorporationsCanada,2007FC95(O’ReillyJ.,January29,
2007)]
TheFacts
FairmontHotelsInc.andFairmontHotels&ResortsInc.(“FairmontHotels”)own
andmanageachainofhotels.FairmontResortPropertiesLtd.(“Fairmont
Properties”),whoownatime-shareoperation,launchedthreedifferent
proceedingsbeforetheFederalCourtofCanadaandtheTrade-Marks
OppositionBoardregardingtheFairmontHotels’ownershipanduseofthe
trade-marksFAIRMONT.Inaddition,FairmontPropertiesinitiatedafourth
proceedingbeforetheDirectorofCorporationsCanadarequestingthat
FairmontHotelschangetheircorporatenametoremovetheword“Fairmont”
onthebasisofanallegedriskofconfusionbetweentheparties’respective
corporatenames.
ItshouldbenotedthatpursuanttoSection25oftheCanadaBusiness
CorporationRegulations2001,SOR/2001-512,theuseofacorporatenameis
prohibitedifitisconfusinghavingregardtoallofthecircumstanceofthe
case.Forexample,indecidingifacorporatenameisconfusingwithatrade-
mark,andthereforeshouldbeprohibited,theDirectorofCorporations
Canadashouldconsider:

©CIPS,2007.*Lawyer,AlexandraSteeleisamemberofLEGERROBICRICHARD,L.L.P.,amultidisciplinaryfirm
oflawyers,andpatentandtrademarkagents.Publication142.198.

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1)thedistinctivenessofthetrade-mark;
2)thelengthoftimethetrade-markhasbeeninuse;
3)thenatureofthebusinessassociatedwiththetrade-mark;
4)theresemblancebetweenthecorporatenameandthetrade-name;
5)theterritoryinwhichthecorporatenameandtrade-markhavebeen
used.
WhentheDirectorofCorporationsCanadarequestedevidenceinresponse
toFairmontProperties’challenge,FairmontHotelsaskedtheDirectorof
CorporationsCanadatostaytheproceedings.FairmontHotelsarguedthat
sinceitwastheregisteredowneroftheFAIRMONTtrade-marksandsincethe
entitlementtoanduseofsuchtrade-markswasalreadyindispute,anearly
decisionfromtheDirectorofCorporationsCanadacouldconflictwiththe
decisionsoftheotherinstances,thuscausingirreparableharmtoFairmont
Hotels.
FairmontHotels’requestforastaywasdeniedandtheythereforeappliedto
theFederalCourtofCanadaforjudicialreview.
TheFederalCourtJudgement
JusticeO’Reillywasseizedoftheapplicationforjudicialreview.
IntheCourt’sview,thedecisionoftheDirectorofCorporationsCanadawas
aninterlocutoryone;generally,interlocutoryrulingsarenotsubjecttoappeal
orreview.However,theCourtnotedthatinsomecases,theremaybespecial
circumstancesthatwouldwarrantaninterventionbytheCourt.
ThespecialcircumstancesarguedbyFairmontHotelswerenamely:
1)theDirectorofCorporationsCanadaintendedtoarriveatadecision
concerningthecorporatename“Fairmont”withouttakingintoaccount
FairmontHotels’ownershipoftheFAIRMONTtrade-marks;
2)iftheDirectorCorporationsCanadadidnotconsiderFairmontHotels’
FAIRMONTtrade-marks,thentheonlyevidencebeforehimwouldbe
thedatesofincorporationoftherespectiveparties,whichwouldfavour
FairmontProperties;
3)theissueofconfusionbetweenthecorporatenamescouldnotbe
resolvedbeforetheDirectorofCorporationsCanadabecausethe
allegedconfusionisaresultoftheuseoftheword“Fairmont”,which
fromatrade-marksperspectiveisownedbyFairmontHotels.The
DirectorCorporationsCanadawouldthereforehavenojurisdictionto
decideFairmontProperties’applicationbecausetheentitlementtothe

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useofatrade-markcanonlyberesolvedwithintrade-mark
proceedings;
4)ifFairmontProperties’applicationtotheDirectorofCorporations
Canadawasgranted,FairmontHotelswouldhavetoremovetheword
“Fairmont”fromitscorporatename,whileotherwisepossiblystillbeing
entitledtousetheword“Fairmont”asatrade-mark.
JusticeO’ReillyconsideredthatFairmontHotels’argumentswerepurely
speculative.TheCourtmustpresumethattheDirectorofCorporations
Canadawilltakeintoaccountalloftherelevantcircumstancesincluding
FairmontHotels’trade-marksanditsexclusiverightstothosemarks.The
FederalCourtofCanadacannotassume,asFairmontHotelshadargued,
thattheDirectorofCorporationsCanadawillnotconsiderthefactorsitis
requiredbylawtoconsiderbeforedeciding.JusticeO’Reillydeemedthat
FairmontHotelshadfailedtodemonstratethattherewerespecial
circumstancesthatwarrantedtheFederalCourt’sintervention.The
applicationforjudicialreviewwasthereforedismissedwithcosts.
Conclusion
Inthiscase,theapplicantforjudicialreviewwasunabletoconvincethe
FederalCourtofCanadaofthenecessityofareviewoftheinterlocutory
decisionoftheDirectorofCorporationsCanadarefusingtostaythe
proceedings.However,theconcernsraisedbyFairmontHotelswerenot
completelyunfounded,astherestillremainsariskthattheDirectorof
CorporationsCanadamaycometoaconclusionontheissueofconfusion
thatisdifferentthanthatoftheFederalCourtofCanadaand/oroftheTrade-
MarksOppositionsBoard.Obviously,FairmontHotels’concernsarebasedon
a“worsecase”scenariooutcomeoftheproceedings…Itwillthereforebe
interestingtoseehowthisfiercebattlebetweenaluxuryhotelchainandwell
establishedtime-shareoperationwillultimatelyberesolved,asitisunlikelythat
thestatusquocanbemaintained.

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