Law Times

Law Times • OcTOber 15, 2018 Page 11 www.lawtimesnews.com Foreign businesses can keep their marks BY MICHAEL MCKIERNAN For Law Times I ntellectual property lawyers say Canada's trademark law is catching up with the modern world after a pair of federal court decisions allowing foreign businesses to keep their marks despite having no physical pres- ence in the country. Earlier this summer, in Dol- lar General Corporation v. 2900319 Canada Inc., Federal Court Justice Michael Manson ruled the U.S. dollar store had demonstrated use of its trade- mark in this country via its website, even though Canadians would need to travel south of the border or hire a third-party shipper to collect their shopping. And a couple of months later, Justice William Pentney ruled in Hilton Worldwide Holding LLP v. Miller Thomson that the hotel company's Waldorf-Astoria mark should be restored to the Canadian register of trademarks, despite its abandonment of plans for a bricks-and-mortar hotel un- der the name in Montreal. Jamie-Lynn Kraft, a lawyer in the Ottawa office of intellectual property law boutique Smart & Biggar, says the decisions are good news for non-Canadian businesses looking to protect their brands in this country. "Online is where the econo- my is going," she says. "This is an indirect acknowledgement from the court that this is how we do business now." "Our Trade-Marks Act was drafted in the 1950s, so inter- net and electronic commerce were not exactly in anybody's thoughts at that time," says Kelly Gill, a partner in the Toronto of- fice of Gowling WLG, who acted for Dollar General in its success- ful appeal. "There have been a few cases in the context of trademark use, but the law probably needs more development to get around the old view of what constitutes commerce," Gill says. According to Manson's de- cision, Dollar General, which operates a large chain of stores in the U.S. but has no physical stores in this country, was ini- tially granted a Canadian trade- mark back in 2010 for use in con- nection with "retail variety store services." However, the mark was expunged from the register in 2017 after a rival challenged the company to show use in Canada. Although it operated a web- site and mobile app aimed at and downloaded by Canadians, the registrar of trademarks decided that Dollar General had fallen short on demonstrating use of the mark in Canada because it failed to make its own cross-border deliveries. Instead, the only way Canadian customers could get their goods was to either travel to a store in the U.S. or have them delivered by a third-party shipper. In its appeal to the Federal Court, Dollar General high- lighted the similarities between its online store and a bricks- and-mortar one by submitting screenshots showing how shop- pers can browse products, check availability and add them to a virtual shopping basket. The company was also able to show that customers with Canadian billing addresses had completed purchases on the site and that at least one Canadian customer had her goods deliv- ered to a trans-shipper, which accepts goods at a U.S. address before forwarding them on to anywhere else in the world. "The Registrar's decision was clearly wrong and unreasonable," Manson's July 19 decision reads. "Viewing the evidence as a whole, I find it is sufficient to show that the Applicant used the Mark in Canada in association with the Services during the Relevant Pe- riod. The logical inference from the facts is that Canadians bene- fitted from use of the Applicant's website by using it as a substitute for visiting a brick-and-mortar store, as well as either purchas- ing products for delivery to a US address for pick-up or to a trans- shipper for delivery in Canada." Jonathan Colombo, a partner with Bereskin and Parr LLP, says he was encouraged by the Dol- lar General decision while wait- ing for Pentney's verdict on the case involving his client, Hilton Worldwide. He says case law on trade- mark use has been heading to- ward a more liberal interpreta- tion of the word "services" in the context of an online presence since the 2011 Federal Court judgment in TSA Stores, Inc. v. Registrar of Trade-Marks. In that case, the judge ruled that a U.S. shoe store's extensive "shoe finder" and "store finder" features on its website were enough to demonstrate use in connection with "retail store services" without a bricks-and- mortar presence in Canada, be- cause they were "of benefit to Ca- nadians," even without evidence of sales north of the border. Despite that, Colombo says, there remained a long list of cases involving "hotel services" in which the registrar of trade- marks sided against non-Cana- dian hoteliers without an actual building in the country. "When TSA came out, I think a lot of people were scratching their heads," says Toronto-based Colombo, who co-leads the in- tellectual property boutique's trademarks practice group. "If retail stores can demonstrate use without brick-and-mortar presence, and the test is that the services are 'of benefit to Cana- dians,' why is it different when you're looking at hotels?" However, he says, Pentney's decision brings the jurisprudence on trademark use for hotel servic- es back in line with retail stores. "Our client is very pleased with the result," Colombo says. "In an internet world, the law is slowly catching up." According to Pentney's deci- sion, Hilton Worldwide registered its trademark for Waldorf-Astoria in 1988. Although it had plans to FOCUS See Meaning, page 12 Jamie-Lynn Kraft says a pair of recent deci- sions is good news for non-Canadian busi- nesses looking to protect their brands in this country. • Introduction: An Overview of Activist Short Selling • What to Expect When Activist Shorts Attack • Strategies for Fighting an Activist Short Attack COURSE HIGHLIGHTS: COURSE LEADERS: WALIED SOLIMAN, CHAIR, NORTON ROSE FULBRIGHT ORESTES PASPARAKIS, PARTNER, NORTON ROSE FULBRIGHT *Discount applies to in-class only REGISTER BEFORE OCTOBER 26 AND SAVE 25%* Toronto & Webinar | November 21 Register online at www.lexpert.ca/legal-programs For questions and group rates, please contact: Toll-Free: 1-877-298-5868 • Direct: 416-609-5868 Fax: 416-609-5841 • • Email: cpd.centre@thomsonreuters.com ACTIVIST SHORT SELLING IN CANADA: KEY TRENDS AND DEFENSIVE STRATEGIES Untitled-4 1 2018-10-10 2:34 PM

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