Section 45 and use of a trademark with software

A recent decision in a proceeding under section 45 of the Trademarks Act (the “Act”) shows the difficulties inherent in proving use of trademark in association with computer software. The proceeding, Ridout & Maybe LLP v Apple Inc.[1], concerned Apple’s registration for the trademark SHERLOCK (the “Mark”) in association with software for file and web searching (the “Goods”). The Mark was invalidated or “expunged” because Apple did not show it had used the Mark, within the meaning of section 4 of the Act during the period from April 18, 2014 to April 18, 2017 (the “Relevant Period”). The decision highlights two key issues. First, if a trademark is used as the name for a piece of software, then additional evidence of how the mark is associated with the software will be necessary. Second, because section 4 contemplates a transfer in normal course of trade, the software must be subject to a commercial transaction. This can be difficult to show if the software can be downloaded for free online. Section 45: An Overview Section 45 of the Act creates a summary procedure for clearing “dead wood” from the Register. In a section 45 proceeding, the owner of a registered trademark must show that they have used the mark, within the meaning of section 4 of the Act, during the three-year period preceding the issuance of the section 45 notice. If the owner cannot show use of the mark, or demonstrate special circumstances excusing non-use, then the registration is expunged. Because section 45 proceedings are summary in nature, the evidentiary standard is lower than that in adversarial proceedings. The trademark owner must provide sufficient facts for the Registrar to determine whether the mark has been used. “[E]videntiary overkill” is not required, but “mere assertions of use are not sufficient to demonstrate use in the context of section 45 proceedings.”[2] Apple’s Evidence Did Not Show Use of the Mark Apple’s evidence was in the form of an affidavit from the Director of its Legal Department. He explained that from 1998 to 2005, Apple included a web and file searching tool called SHERLOCK with each version of its Mac operating system (“OS”). Versions of Mac OS released during the Relevant Period did not include the SHERLOCK software, but the last version to include it was available for download from Apple’s Canadian website during the Relevant Period. This evidence was insufficient to show use of the Mark. First, the evidence did not demonstrate that the Mark was associated with the Goods. The Mark did not appear anywhere on the website where the Mac OS including the Goods could be downloaded. Nor was there any other evidence that the Mark was associated with the Goods – for example, the Mark did not appear in an End User Licence Agreement for the software, or on-screen when the software was loading. Second, the evidence did not show any transfer in the normal course of trade, as required by section 4 of the Act. Apple alleged the Mac OS including the Goods had been downloaded in Canada during the Relevant Period. But there was no evidence that the downloads were commercial transactions. Quoting from precedent, the Board explained that the word “trade” in section 4(1) of the Act “contemplates some payment or exchange for the wares supplied or at least that the transfer of the wares be part of a dealing in the wares for the purpose of acquiring goodwill and profits from the marked goods.”[3] The Goods were not distributed for the purpose of generating profit, since they were available free of charge. And there was no evidence that Apple acquired any goodwill from making the Goods available for download. In summary, Apple’s evidence did not show that the Mark was associated with the Goods when they were transferred to consumers in the normal course of trade. Therefore, the Mark was expunged. Take-aways In a section 45 proceeding involving a trademark registered for use in association with software, there are evidentiary issues to bear in mind. To show use of a trademark in association with software, the evidence must establish:

• An association between the mark and the software – for example, by prominently displaying the mark on the software’s loading screen or in an End-User Licence Agreement;
• That the software is transferred to users in the normal course of trade – for example, if the software can be downloaded free of charge, then the owner must show that it acquires goodwill from making the software available.