Patagonia, Inc. caused the Registrar to issue a notice under section 45 of the Trademarks Act, requiring the Labatt Brewing Company Limited (“Labatt” or “the Owner”) to show use of the trademark PATIGONIA (the Mark) during the three-year period before the issuance of the notice. Patagonia, Inc. v. Labatt Brewing Company Limited 2024 FC 920
The Facts
Labatt Breweries of Canada LP (Labatt LP) acquired the Mark from the original registrant. On October 30, 2015, Labatt LP was dissolved and all of its assets, including its rights to the Mark, were assigned to Labatt. Since that date, the Labatt has been the owner of the Mark. About nine months after the assignment, the Registrar issued the section 45 Notice.
One of the affidavits stated that 188 cases each containing six 750ml bottles of PATAGONIA beer were sold by Labatt LP to the Alberta Liquor and Gaming Corporation (ALGC) and confirmed this beer was then sold to end consumers by Labatt LP distributors during the relevant period.
Labatt included in its evidence a cropped photograph of the label of its beer as shown below
The Decision the Registrar of Trademarks
The Hearing Officer maintained the registration. She found that when viewed as a whole the evidence made it clear that Labatt controlled the manufacture of the beer in issue as it was described as their product. The evidence also showed the sale of the product in the relevant period by Labat’s distributors. Finally, the PATAGONIA word Mark could be easily identified within the stylized logo, and the additions (for example, the mountains and the green background) did not cause it to lose its identity or become unrecognizable. The argument that the full label may have shown some other relevant identifying information was speculative.
The Appeal
Patagonia, Inc., the requesting party, appealed from the decision to the Federal Court. The court referred to the procedural constraints in a proceeding under section 45. The proceedings are a summary in nature and allows trademarks which have fallen into disuse to be removed from the Register. A section 45 notice requires an owner to produce evidence showing “use” of the mark within the relevant three-year period. Only the owner can file evidence and there is no cross-examination on affidavits. The procedure is not meant to resolve contentious issues of ownership or validity, which are best dealt with under expungement proceedings under section 57 of the Act. Finally, the onus rests with the owner to provide the necessary evidence and while the threshold may be a low one, the evidence must be sufficient to demonstrate use.
The Applicant argued that the Hearing officer erred by failing to require evidence from Labatt it was the first link in the chain of distribution during the relevant period. The use of a trademark can be shown either through direct sales of the goods or sales by intermediaries along a chain of distribution. If an owner is relying on sales by intermediaries, it must show it was the first link in the chain of distribution of goods associated with its trademark. Here the initial sale of the PATAGONIA beer from Labatt LP, Labatt’s predecessor, to the ALGC showed the first link in the usual chain of distribution and this was sufficient to show use.
The Applicant argued that the Hearing Officer erred in finding that the public would perceive the word PATAGONIA as a trademark displayed on the beer bottles without ever having seen the full label. The Judge disagreed. The finding was supported by the fact that the customer receipts in evidence showed that the beer was sold under the PATAGONIA brand.
Comment
While the Court emphasizes the summary nature of the section 45 proceedings the fact remains that they can become technical and detailed. It is important that Brand owners realize this when gathering the evidence to support trademark use in the relevant period.
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 Email: mckeown@gsnh.com
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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