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| John McKeown |
Facts
Labatt Breweries of Canada LP acquired the mark from the original registrant. On Oct. 30, 2015, Labatt LP was dissolved and all of its assets, including its rights to the mark, were assigned to Labatt. Since that date, Labatt has been the owner of the mark. About nine months after the assignment, the registrar issued the s. 45 Notice.
One of the affidavits stated that 188 cases each containing six 750-millilitre bottles of PATAGONIA beer were sold by Labatt LP to the Alberta Liquor and Gaming Corporation (ALGC) and confirmed this beer was then sold to end consumers by Labatt LP distributors during the relevant period.
Labatt included in its evidence a cropped photograph of the label of its beer as shown here.
Label photo courtesy of the author
Decision the registrar of trademarks
The hearing officer maintained the registration. She found that, when viewed as a whole, the evidence made it clear that Labatt controlled the manufacture of the beer in issue as it was described as their product. The evidence also showed the sale of the product in the relevant period by Labatt’s distributors. Finally, the PATAGONIA word mark could be easily identified within the stylized logo, and the additions (for example, the mountains and the green background) did not cause it to lose its identity or become unrecognizable. The argument that the full label may have shown some other relevant identifying information was speculative.
The appeal
Patagonia, Inc., the requesting party, appealed the decision to the Federal Court. The court referred to the procedural constraints in a proceeding under s. 45. The proceedings are a summary in nature and allow trademarks that have fallen into disuse to be removed from the register. A s. 45 notice requires an owner to produce evidence showing “use” of the mark within the relevant three-year period. Only the owner can file evidence and there is no cross-examination on affidavits. The procedure is not meant to resolve contentious issues of ownership or validity, which are best dealt with under expungement proceedings under s. 57 of the Act. Finally, the onus rests with the owner to provide the necessary evidence, and while the threshold may be a low one, the evidence must be sufficient to demonstrate use.
The applicant argued that the hearing officer erred by failing to require evidence from Labatt it was the first link in the chain of distribution during the relevant period. The use of a trademark can be shown either through direct sales of the goods or sales by intermediaries along a chain of distribution. If an owner is relying on sales by intermediaries, it must show it was the first link in the chain of distribution of goods associated with its trademark. Here the initial sale of the PATAGONIA beer from Labatt LP, Labatt’s predecessor, to the ALGC showed the first link in the usual chain of distribution, and this was sufficient to show use.
The applicant argued that the hearing officer erred in finding that the public would perceive the word PATAGONIA as a trademark displayed on the beer bottles without ever having seen the full label. The judge disagreed. The finding was supported by the fact that the customer receipts in evidence showed that the beer was sold under the PATAGONIA brand.
Comment
While the court emphasizes the summary nature of the s. 45 proceedings, the fact remains that they can become technical and detailed. It is important that brand owners realize this when gathering evidence to support trademark use in the relevant period.
John McKeown, counsel at Goldman Sloan Nash & Haber LLP, is certified by the Law Society of Ontario as a specialist in intellectual property law (trademarks/copyright). He is the author of Canadian Intellectual Property Law and Strategy: Trademarks, Copyright and Industrial Designs. He can be reached at mckeown@gsnh.com.
The opinions expressed are those of the author and do not reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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