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The ins and outs of the use it or lose it principle of trademark law

The ins and outs of the use it or lose it principle of trademark law

The ins and outs of the use it or lose it principle of trademark law

11 Nov 2022
In Vass v Leef Inc., the Federal Court recently considered whether the owner of a registered trademark had provided sufficient evidence of use of its trademark to maintain the registration. Shift Law’s Stephen Cooley represented the successful trademark registrant in this appeal from a decision of the Trademarks Opposition Board (“TMOB”), convincing the Court that the registrant’s evidence of use of the registered trademark in association with furniture and custom furniture manufacturing services was sufficient to maintain the registration as the TMOB had also found.

“Use it or lose it” is a core principle of trademark law. A trademark owner who does not maintain use of its trademark risks losing the ability to stop others from using it. This principle is reflected in Section 45 of the Canadian Trademarks Act. Section 45 permits any person to ask the Registrar of Trademarks to require the owner of a registered trademark to file evidence that it has used the trademark in association with its goods or services within the three years preceding the request. If the registrant fails to provide sufficient evidence of use, the Registrar will cancel or “expunge” the owner’s trademark registration or amend the registration to remove any goods or services for which there is no satisfactory evidence of use.

Section 4 of the Trademarks Act defines the kind of “use” that is required to maintain a registration in the face of a Section 45 challenge. According to Section 4, “use” of a trademark with goods means that it is physically marked on the goods or their packaging “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”. “Use” of a trademark with services means that it is displayed in the course of advertising or performing the services. The “use” can be by the owner of the trademark itself or by someone licensed to use it in accordance with Section 50 of the Trademarks Act.

The evidence required to demonstrate use must be more than a bare assertion by the registrant that the trademark has been used. The registrant must provide an affidavit from someone that details how the trademark was used by the registrant or a licensee in the relevant period and it must also “show” use of the trademark (e.g. photos of products bearing the trademark and invoices, etc.). But “evidentiary overkill” is not required and evidence of a single sale in the relevant period may be sufficient.

Once a registrant has submitted its evidence of use, the party who initiated the Section 45 proceeding has an opportunity to file written arguments that the evidence is insufficient and the registrant can then respond with written arguments to the contrary. The parties may then present oral arguments before the Trademarks Opposition Board which will decide the matter. In Vass v Leef Inc., the central issues before the Federal Court were: (i) whether invoices and other materials bearing a variation of the registered trademark shown to purchasers of the registrant’s furniture demonstrated sufficient use of the trademark with the registrant’s goods; and (ii) whether sales brochures bearing the trademark demonstrated sufficient use of the trademark with custom furniture manufacturing services. The Court also considered whether new evidence of the relationship between the registrant and its licensee with respect to sales and advertising of the relevant goods and services that had not been before the TMOB was admissible on the appeal.

The Court ultimately agreed with the registrant that the new evidence was admissible, that it helped the registrant’s case and that the evidentiary record on the whole was sufficient to maintain the registration for goods and services. The Court made four notable findings in reaching this conclusion:
  1. an invoice and quotation bearing a variation of the registered trademark supported the inference that a purchaser of the registrant’s goods had notice of the association between the trademark and the goods “at various stages of the sales process” and therefore demonstrated use of the trademark with those goods;
  1. the registrant’s affidavit did not have to explain the details of when and how notice of this association was given to purchasers of the goods;
  1. the variation of the registered trademark appearing on the invoices was similar enough to the registered trademark to support use of the registered trademark with the goods because it shared the same dominant characteristics; and
  1. the sworn statement in the registrant’s affidavit that it “offers custom furniture design and manufacturing services to meet the particular needs and requirements of its customers”, supported by documentary evidence showing such custom design and manufacturing services were offered to consumers, was sufficient to establish use of the trademark with furniture related services and not only with furniture goods.
This decision will be a useful authority for any owner of a registered trademark who is responding to a Section 45 challenge, particularly where there is minimal evidence to support the registration and where the trademark appearing in the evidence is a variation of the trademark as registered.