The world “Services” in Canada’s Trade-marks Act should be given a liberal interpretation, rules Federal Court in expungement case

2011-01-01

THEWORD“SERVICES”INCANADA’S
TRADE-MARKSACTSHOULDBE
GIVENALIBERALINTERPRETATION,RULESFEDERALCOURTIN
EXPUNGEMENTCASE

BARRYGAMACHE*
ROBIC,
LLP
L
AWYERS,PATENT&TRADEMARKAGENTS

ArecentdecisionbytheFederalCourtofCanadaexaminedthenotionof“services”
furthertoanappealagainstadecisionbytheRegistrarofTrade-marksinasummary
expungementcasebroughtagainstvarioustrade-marksregisteredforretailstore
services(TSAStores,Inc.v.TheRegistrarofTrade-marksandHeenanBlaikieLLP,
2011FC273(F.C.),SimpsonJ.,March9,2011).
Theapplicantinthiscase,TSAStores,Inc.(hereafter:“TSAStores”),isaretailerthat
operatesapproximately400storesacrosstheUnitedStates.Alongwithits
predecessor,ithasbeeninvolvedinthesaleofsportingandfitnessequipment.Prior
to2000,afewofitsstoreswereoperatedinCanadabutwereclosedthatyear.
However,despitethesechangesontheCanadianretailmarket,TSAStores(andits
predecessor)continuedtooperatefromthattimeawebsitewhichisaccessiblein
Canadabypersonswithinitsborder.
OnJuly19,2006,followingarequestbyHeenanBlaikieLLP(hereafter:“Heenan
Blaikie”),theRegistrarofTrade-marksissuednoticespursuanttosection45of
Canada’sTrade-marksAct,R.S.C.1985,c.T-13(hereafter:the“Act”)requestingthat
TSAStores’predecessorintitleevidenceuseofsixregisteredtrade-marksstanding
inthenameofsaidpredecessor.Eachregistrationprotectedvariationsofthetrade-
markSPORTSAUTHORITY.Anoticeundersection45oftheActrequiresthata
registrantestablishuseofitstrade-markfailingwhichitwillbeexpunged;inother
words,section45isCanada’s“useitorloseit”provisionasitrelatestoregistered
trade-marks.
Inresponsetothenotices,TSAStoresfiledevidenceinrelationtofourofthesix
registrationstosupporttheusebyitspredecessorofitstrade-marksinassociation
withtheretailstoreservicesmentionedinthosefourregistrations.

©CIPS,2011.*BarryGamacheisamemberofROBIC,LLPamultidisciplinaryfirmoflawyers,patentandtrademark
agents.PublishedintheMay2011issueofWorldIntellectualPropertyReport.Publication142.248.

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Afterreviewingtheevidence,theRegistrarexpungedfromtheregisterthosetwo
trade-marksforwhichnoevidenceofrelevantusehadbeensubmitted.Regarding
thefourotherregistrations,theRegistrarconsideredwhethertheretailstoreservices
protectedbyeachofthefourremainingregistrationscouldbemaintaineddespitethe
factthatTSAStoreshadnoretailestablishmentsinCanada.Initsreasons,the
Registrarnotedtheabsenceofdefinitionfortheterm“services”intheAct.Inthe
Registrar’sview,thisabsenceofalegislativedefinitionhasleadthecourtstoadopta
broadinterpretationoftheword“services”(asopposedtoanarrowandrestricted
one).
TheRegistrarconcludedthatuseinCanadaofTSAStores’fourregisteredtrade-
marksinassociationwithretailstoreservicesdidnotrequiretheoperationofphysical
retailstoresinCanada.Rather,retailstoreservicescouldbecarriedoutviaawebsite
asTSAStoreshadestablishedinitsevidence.Ontheotherhand,aportionofTSA
Stores’evidencewasfoundunsatisfactorysincetheevidencedidnotrevealwhowas
usingthefourregisteredtrade-marksinCanada:whatistheregistrantitself(orits
predecessor),acontrolledlicenseeorathirdparty?Onlyusebytheregistrant(orits
predecessor)oralicensee(providedtheregistrantcontrolstheusecarriedoutbythe
licenseeasrequiredundersection50oftheAct)wouldqualifyasusebytheowner
undersection45oftheAct.Becauseoftheseomissionsintheevidence,the
Registrarorderedtheexpungementofthefourregistrations.

TSAStoresappealedtheRegistrar’sdecisionbeforetheFederalCourtand,as
allowedbysection56oftheAct,itfiledadditionalevidenceinordertoattemptto
correcttheperceiveddeficienciesmentionedbytheRegistrarinitsreasons.Inits
additionalevidence,TSAStoresconfirmedthatitswebsitewasbeingoperatedby
GSICommerceSolutions,Inc.whowasalsousingitsSPORTSAUTHORITYmarks.
Furthermore,accordingtotheevidence,GSICommerceSolutions,Inc.’soperationof
TheSportsAuthoritywebsite,andtheuseofallSPORTSAUTHORITYmarks,was
strictlycontrolledbytheregisteredownerofthosemarkspursuanttoalicense
agreement.TheadditionalevidencefurtherrevealedthatTheSportsAuthority
websiteandonlineretailstoreprovidedretailcustomerservicetoconsumersassisted
bymeansofthe“HelpMeChooseGear”service.Additionally,TheSportsAuthority
websiteandonlineretailstorewasvisitedbyhundredsofthousandsofCanadians
duringtherelevantperiodpriortotheissuanceofeachsection45notice.

TheCourtallowedTSAStores’appealandnotedthattheadditionalevidence
providedrelevantfactualinformationconfirmingthatuseoftheSPORTS
AUTHORITYtrade-markswascarriedoutbyalicenseeinaccordancewithsection
50oftheAct.
Initsreasons,theCourtalsorevisitedtheissueoftheservicesrenderedbyTSA
StoresinCanada.Couldtheseservicesbedescribedasretailstoreservices?Like
theRegistrar,theCourtnotedthattheword“services”isnotdefinedintheActand
thatithasbeenheldthat“services”shouldbegivenaliberalinterpretation(seefor
exampleKraftLtd.v.RegistrarofTrade-marks,[1984]2F.C.874).Moreover,theAct

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doesnotmakeanydistinctionbetweenprimary,incidentalorancillaryservices.As
longassomemembersoftheconsumingpubliccanclaimtoreceiveabenefitfrom
anygivenactivity,itcanqualifyasaservice.Thisiswhy,forexample,inRenaud
Cointreau&Ciev.CordonBleuInternationalLtd.(2000),193F.T.R.182(F.C.T.D.),
theFederalCourtconcludedthatrecipesandsuggestionsprintedonfoodproduct
labelswerea“service”despitebeingancillarytoafoodproductwhoselabel
presentedsuchrecipesandsuggestions.IntheRenaudCointreaucase,a
suggestionassimpleas“servewithourdeliciousbonelesschickenandothermeat
dishes”wasfoundtoqualifyasaserviceancillarytothesaleoffoodproducts.

ReturningtotheuseoftheSPORTSAUTHORITYmarksinCanada,theCourt
concludedthattheservicesfoundonthewebsitewereofbenefittoCanadian
consumers.TheSPORTSAUTHORITYmarkswereaccordinglyusedsincethey
appearedinassociationwiththeancillaryretailstoreservicesfoundonthewebsite.

TheCourtthereforerestoredthefourregistrationsinasmuchastheydealtwiththe
operationofretailstoreservicesinCanada.
TheCourt’sdecisionoffersatimelyreminderoftheflexibilityfoundintheActasit
relatestothenotionof“services”.AslongasanactivityoffersabenefittoCanadian
consumers,evenifsuchactivityisdeemedancillarytoaproduct,forexample,itwill
stillqualifyasaservice.

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