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Checks and Balances in the Section 45 Regime

Shaoguan Risen Trading Corporation Ltd., (the “Applicant”) owns a trademark registration for the trademark DOUBLE SWALLOW BRAND & DESIGN which was the subject of section 45 proceedings. Shaoguan Risen Trading Corporation Ltd. v. Dong Phuong Group Partnership 2023 FC 748.


The Section 45 Proceedings

The Respondent caused the Registrar of Trademarks to issue a notice under section 45 of the Trademark Act, requiring the Applicant to furnish within three months an affidavit or statutory declaration showing the mark was used in connection with each of the registered goods during the three-year period immediately preceding the date of the notice.

The applicant filed an affidavit showing use of the mark in association with rice vermicelli. However, the supporting documents referred to “Shaoguan Ruisheng Trading Corporation Ltd.”, a spelling different from the name of the registered owner of the mark.


The Decision of the Hearing Officer

The Hearing Officer referred to the misspelling of the Applicant’s name and the absence of any evidence to explain the difference in spelling or confirm that the two spellings referred to the same entity. In addition, the affidavit did not identify the Applicant as beginning the “chain of distribution of the rice vermicelli”, nor did the attached photograph of the product’s packaging refer to the Applicant’s name. Since the evidence failed to establish prima facie use of the mark in connection with the registered goods and there was no explanation for the lack of use the Hearing Officer ordered the registration of the mark be expunged.

The Appeal to the Federal Court

On an appeal of this type, it is open to the Applicant to file new evidence as of right. If the additional evidence has a material impact on the Hearing Officer’s decision, the Court may step into the shoes of the Hearing Officer, reassess the evidence, and apply the standard of correctness.


The new evidence explained there were two legitimate translations of the Applicant’s name and that both translations referred to the same entity. In addition, new evidence was presented relating to the distribution of the goods through an authorized distributor.


The Judge was satisfied that the new evidence was sufficient to support the registration of the Mark in association with rice vermicelli in Canada. The new evidence dealt with the Registrar's concern that the entities referred to were not the same entity and showed the Applicant's place in the chain of distribution. The Court could logically infer from the new evidence that the two names refer to the same entity and that the Applicant is responsible for manufacturing and packaging the rice vermicelli in China and ensuring its quality and character before its arrival in Canada.


The Respondent unsuccessfully attacked the new evidence. The Judge observed that section 45 proceedings are summary in nature and designed to remove “deadwood” from the Register. They are not suitable for resolving contentious issues between competing commercial interests. The threshold for establishing the use of a trademark in this context is low. An applicant must establish “use” only on a prima facie basis. The application was allowed, and the registration maintained.


Comment

The availability of proceedings under section 45 are an important part of the Canadian Trademark system and help the register from being clogged with deadwood. The ability to file additional evidence on appeal provides an important balancing feature particularly for relatively unsophisticated trademark owners.


If you have questions, please contact me at mckeown@gsnh.com.


Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1600

Toronto, Ontario M5G 1V2

Direct Line: (416) 597-3371

Fax: (416) 597-3370


These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.


A version of this article originally appeared in the Law360 Canada published by LexisNexis Canada Inc.

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