Last month we dealt with some of the basic rules about trademark use. This month we are dealing with the specific rules that apply to goods.
Section 4 of the Trademarks Act states that trademark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of such goods in the normal course of trade, it is marked on the goods themselves or on the packages in which they are distributed or it is in any other manner so associated with the goods that notice of the association is then given to the person to whom the property or possession is transferred. These requirements make the definition relatively restrictive.
The first requirement is to show the trademark in issue was in use at the time of the transfer of the property in or possession of goods. The “use” must also be “in the normal course of trade” If any part of the chain of sale from manufacturer to consumer that satisfies the definition takes place in Canada this is sufficient “use” in Canada.
Second, there must be a normal commercial transaction relating to the trademark in issue to show “use”. The transaction must be a bona fide transaction. Token use such as test shipments or sending of samples or the like may not constitute trademark “use”. But the distribution of samples, in the normal course of trade to secure orders that are subsequently received, can demonstrate use.
The section does not require that a transfer of trademarked goods be for actual profit to constitute a transfer in the “normal course of trade.” Such a requirement would mean that such common business practices as selling last year’s trademarked merchandise at a discount would never amount to use sufficient to maintain a registration.
The Act imposes no requirements concerning the length or the extent of use. The transactions in issue must be examined in light of the surrounding circumstances. However, offering goods for sale without a sale is not sufficient to constitute “use”.
Finally, the mark must be associated with the goods such that notice of the association is given to the person to whom the property or possession is transferred. It is sufficient if the trademark is placed on the cover or wrapper in which the goods are sold, or on a label attached to the goods, or associated with the goods on show cards, display units or delivery vans if notice of the association is given at the time of the transfer of the property or possession. Similarly, leaflets, flyers, catalogues, product literature and pricing stickers can provide the required notice of association between a trademark and the goods when used by the purchaser in ordering and purchasing.
If the mark is not physically on the goods or their packaging, satisfying the section may be problematic. For example, using a trademark in news releases, in advertisements, on a letterhead or on envelopes will not constitute use in association with goods. If the mark cannot be seen by the purchaser at the time of transfer of the property in or possession of the goods, the owner will not likely be able to show that mark is in use.
Whether a trademark owner can show use is a common and important issue that arises frequently in oppositions and section 45 proceedings.
If you have questions, please contact me at mckeown@gsnh.com.
John McKeown
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 general in nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.