Law Times

PAGE 10 Online activity enough to get protection, Federal Court rules FOCUS U.S. store wins IP battle over web site BY DARYL-LYNN CARLSON For Law Times I n a recent decision, the Federal Court provided clarity on when and why a company can maintain a trademark for its web site even if it isn't doing business out of a bricks-and-mortar operation in Canada. Th e case, TSA Stores Inc. v. Registrar of Trademarks, dealt with a series of registrations that belonged to the Sports Au- thority sporting goods stores, which closed their retail out- lets in Canada 11 years ago but had retained their trademark for a web site for Canadians. Mark Evans, managing partner at Smart & Biggar/ Fetherstonhaugh in Toronto, along with Jayda Sutton of the same fi rm, represented the ap- plicant, TSA Stores Inc. Th e lawsuit arose after a third party challenged TSA Stores' ownership of four re- lated Canadian trademark registrations containing the term Sports Authority in rela- tion to its store and web site. Th e case hinged on whether there was a bona fi de use of the trademark in Canada, which the court asserted there was. Evans notes the Federal Court's decision presents a signifi cant change in regards to web sites that maintain their trademark in Canada even though they don't have a physical presence here. "Tra- ditionally, there had been a series of cases that go back for many decades that essen- tially said that businesses that weren't located in Canada weren't good enough as the services must be performed in Canada to maintain a trade- mark," he says. While the TSA is based in assessment of any sporting goods they're interested in. "Th e interesting point about this case was that this was a very unusual web site," says Evans. "It was very in- formative and, as a result, the court found that this was a legitimate use of the trade- mark in Canada." While the web site didn't allow consumers to buy goods for shipment to Canada, TSA argued it was performing and providing retail services to Canadians through informa- tion on products available at its U.S. stores, which Cana- dians frequently visit. Evans also points to two 'The interesting point about this case was that this was a very unusu- al web site,' says Mark Evans. the United States, its web site is very comprehensive and en- ables users to get an in-depth other cases, Saks & Co. v. Canada (Registrar of Trade- marks) and Société Nationale des Chemins de Fer Français Sncf v. Venic Simplon-Ori- ent-Express Inc., in which the Federal Court upheld the use of a trademark if the related company receives orders from Canadian customers. In the Sncf case, the court upheld the trademark due to the fact that many travel agents had clients who booked through them to ride the train in Europe. Evans says that while the TSA case provides clarity and confi rmation on the use of a registered trademark in Cana- da by a company located out- side the country, he wonders whether subsequent proceed- ings will uphold the Federal Court's decision in both re- lated cases. "It could be a situation where a court could decide that a web site is not necessarily a service being provided but an advertising initiative on behalf of a company," he notes. "So it will be interesting to see where the courts go from here." Mark Hayes of Hayes eLaw LLP agrees that the TSA case provides some degree of cer- tainty for lawyers advising cli- ents from outside the country on their trademark. But he also says that for clients who have a business that spans sev- eral countries and who want to register a trademark in Canada, it's important to do a search of all global trademarks to be certain it's an original mark. "For these types of busi- nesses, as a lawyer you would have to do searches and fi nd out whether the trademark is exclusive if a company is seek- ing to obtain a trademark in Canada," he says. Th ere are also companies based in Canada that seek to register their trademark in oth- er countries, which would also require an extensive search, he notes. "Every country has their UNCOVER THE DETAILS OF A CASE FROM EVERY ANGLE Litigator Powerful Insight for Compelling Arguments Litigator from Westlaw® Canada combines litigation-focused research with practice tools to support your strategic decisions and automate your most laborious tasks. Litigator contains Canada's largest collection of online court documents – more than 100,000 skillfully drafted pleadings, motions and facta from leading Canadian cases. Get Better Results Faster with Westlaw® Canada Call 1-866-609-5811 or visit www.westlawcanada.com own trademark requirements, so again you would have to fi nd out whether there is an is- sue in any jurisdiction [where] they are seeking to obtain a trademark." Hayes adds that for clients who want to obtain trade- marks in other countries, it's important to encourage them to narrow their focus on a limited number of markets at fi rst, such as the United States or perhaps Britain, and make plans to eventually expand their reach down the road. Th at's because companies that have online services or enable customers in other countries to order products through a web site need to become accus- tomed to and knowledgeable about other jurisdictions' In- ternet protocols, practices, and security systems before going ahead, he suggests. "Th ere are a million specifi cs when you're negotiating these types of trademark agreements for a client who has an interna- tional business," he says. 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