The ongoing COVID-19 pandemic has forced many businesses in Canada and abroad to shut down temporarily or to transition into new product offerings. In circumstances such as these, it is important for trademark owners to understand how business interruptions or closures can affect their trademarks rights and to take steps to maintain those rights.
Importance of “Use”
In both Canada and the US, trademark rights are tied to “use” of a trademark. Generally speaking, “use” means creating an association between a trademark and specific goods or services such that consumers recognize the trademark as identifying the source of those goods or services – i.e. the manufacturer, retailer, service-provider, etc. “Use” in association with goods usually means applying the trademark to the goods themselves or their packaging so that the mark is displayed when the goods are transferred or sold to the end consumer. “Use” in association with services usually means displaying the trademark when or where the services are performed, or else advertising the services in association with the mark.
If a business is forced to close or its day-to-day operations are disrupted because of COVID-19, it may be difficult for the business to continue using its trademark(s) since it may not be selling the same goods or providing the same services that the trademark is associated with. This can be problematic, for in both Canada and the US non-use of a registered trademark can result in the mark being “expunged” or cancelled or otherwise being deemed abandoned.
With that in mind, below are some steps that Canadian and US trademark owners can take to ensure business disruptions due to COVID-19 do not affect their trademark rights.
In Canada, “use” of trademark is no longer required in order to secure its registration. This means that if you filed a trademark application prior to COVID-19 and the application has been allowed, but your plans to launch your goods or services in Canada have stalled, you should still be able to obtain a registration. However, for the reasons discussed below, it will still be necessary to begin using the trademark as soon as possible.
For Canadian trademark owners, COVID-19’s implications relate primarily to Section 45 of the Canadian Trademarks Act, which allows a registered trademark to be “expunged” (i.e. cancelled) if it has not been used during the last three years.
If you own a Canadian registered trademark and you were actively using the mark in association with your goods or services prior to COVID-19, it is unlikely that your registration will be vulnerable to expungement under Section 45 of the Act. This is because non-use of a trademark due to “special circumstances” is excusable, provided the trademark owner intends to (and does) resume using the mark. For trademark owners who are not currently using their trademark(s) because they are not offering goods or services during the pandemic, resuming use as soon as possible is important.
For trademark owners who were not using their trademarks for one reason or another prior to COVID-19, and who have been unable to resume use because of the pandemic, the risk of expungement under Section 45 is greater. This is because the period of non-use may simply overlap with, instead of flow from, “special circumstances.” Therefore, to avoid expungement, a trademark owner will likely need to demonstrate they had a bona fide intention to resume use but could not do so because of COVID-19. In this regard, resuming use as soon as possible will also be critical.
Similar considerations to those discussed above apply to US trademark owners. But when it comes to trademark applicants, there are some additional things to keep in mind.
If you filed a US trademark application on an “intent-to-use” basis, you must begin using the mark in the US before it can register. If you have been unable to launch your goods or services in the US due to COVID-19, then the best course of action is to seek a 6-month extension of time to file a statement of use. Thankfully, the US Patent and Trademark Office will grant trademark applicants up to five extension requests – hopefully, more than enough time to ride out the coronavirus disruptions.
If you already own a US trademark registration and your business has closed or ceased operating in the US temporarily, then your main concern will be showing that you have not abandoned your trademark. Under Section 45 of the US Trademark Act, a registered trademark may be deemed “abandoned” if the owner discontinues use of the mark and has no intent to resume its use. And in the US, three years of continuous non-use is prima facie evidence of an intent not to resume use.
Therefore, like in Canada, the prime concern for US trademark owners should be resuming use of their trademark(s) as soon as possible. If you own a US trademark that had already fallen into disuse prior to COVID-19, then resuming use at the earliest possible date is critical. In this regard, keeping documentary evidence of any use of your mark is prudent. If you sell goods online, take a photo of the packaging showing your trademark. If you provide services through online videos, display your trademark in the background as well as on your website and in social media posts advertising your online-offerings.
Lastly, if you own a US trademark registration and will soon have to file a six-year or ten-year Declaration of Use or Excusable Non-Use under Section 8 of the US Trademark Act, then you may have concerns. These deadlines exist to clear “deadwood” from the register and extended periods of non-use can put your registration at risk. Therefore, finding a way to provide your goods or services in some capacity, and in association with your trademark, is the best course of action. That said, if your mark has fallen into disuse, you may still fall within the scope of “excusable non-use” allowed under Section 8. To do so, you will need to demonstrate that you always intended to resume use but could not because of “special circumstances.” As in Canada, it will likely be insufficient to simply assert that COVID-19 constitutes special circumstances. Rather, you should be prepared to demonstrate how, specifically, COVD-19 caused or contributed to an inability to use your trademark.
Given all of the above, it is clear that the best course of action for Canadian and US trademark owners is to resume use of their marks as soon as possible. But how is this possible, particularly when there is no immediate end in sight to the various lock-down measures imposed across North America?
One option is for business to use their trademark in the interim for products other than those it has been registered for. The risk there is that this may not constitute use of the trademark as registered which might still expose it to a non-use challenge, depending on how different the products are and how long the trademark is used with these different products instead of those it was registered for.
Be creative and remember that, ultimately, the focus for many trademark owners will simply be to show that they did not abandon their trademarks in spite of COVID-19 related business disruptions.
If you have any questions or concerns about how COVID-19 could affect your trademark or other intellectual property rights, feel free to contact a member of the Shift Law team.