With an increasing number of businesses advertising and conducting business over the Internet, a question that often arises is whether by virtue of its presence online, a business has use of a trademark in a foreign country even without a brick and mortar presence in that country. As recent cases have demonstrated, when it comes to online activities it is often difficult to determine what constitutes proper trademark use under Canadian trademark laws.
The concept of “use” is important to establishing trademark rights. For example, in Canada a prior user of a mark generally has rights that trump those of a subsequent user of a confusingly similar mark. In add
ition, an assertion of use must eventually be made before a trademark can be registered in Canada. A trademark is “used” on goods where the goods are sold in the normal course of trade, and the mark is shown on the goods or on their packaging in the transfer of the goods. A trademark is “used” on services where the services are performed and the mark is displayed in the performance or advertising of those services. However, depending on the context and the particular services in question, recent Canadian cases have taken somewhat different approaches to the general test for use on services as applied to cyberspace.
Prior to about 2011, use of a trademark on the Internet revolved around whether the goods and services were available to persons in Canada. For example, it was generally considered that in order to have trademark use on online retail store services, the products must be shipped to Canada (in addition to the trademark being shown in the advertising or performance of the online retail store services). Online advertising of services only available abroad was not considered use of a trademark in Canada.
However, in 2011 the definition of use was apparently broadened, at least in relation to retail store services, when a registration for the mark THE SPORTS AUTHORITY was upheld even though the mark’s owner was not operating any stores in Canada and there was no evidence of goods having been ordered over the Internet. The Federal Court of Appeal found that there was use of the mark on retail store services since there had been many Canadian visitors to the website which displayed the mark, and such visitors could gather useful information such as product information and US store locations.
By contrast, a registration for the mark BELLAGIO was partially expunged in 2012 for non-use in relation to hotel and casino services because there were no hotels or casinos operating in Canada. Online access by Canadian visitors to the Las Vegas’ hotel website (through which bookings could be made) did not amount to use on hotel or casino services in Canada. The registration was limited to hotel and casino reservation and booking services.
Subsequent to the Bellagio decision, a registration for the mark VRBO was expunged because of prior use of the same mark by HomeAway.com, Inc., a US company that offered vacation rental services through its website at VRBO.com. The Federal Court noted that although the VRBO.com website was hosted in the US, there was evidence of HomeAway.com, Inc.’s vacation rental services being provided in Canada since the business was advertising and contracting with Canadians to list their properties on the website.
Thus, it can be seen from these cases that while it may not be necessary to have a physical presence or website hosted in Canada to have proper use of a trademark on services, trademark use does require that the services are provided to some extent in Canada—although the degree and nature of such use is still a developing question.
By Amy M. Fong and Sampson Z.Y. Pun