September 28, 2021
In Norsteel Building Systems Ltd. v. Toti Holdings Inc., 2021 FC 927, the Federal Court (“FC”) granted an application from Norsteel Building Systems Ltd. (“NBS”) to strike from the register the NORSTEEL trademark registration held by Toti Holdings (“Toti”). The Court determined that the trademark registration should be rendered invalid because the trademark registration is not distinctive of Toti’s goods and services.
In October 2017, NBS filed two trademark applications for the trademarks NORSTEEL and NORSTEEL BUILDINGS SYSTEMS. These applications were objected to, due to Toti’s existing NORSTEEL trademark.
NBS submitted that Toti’s NORSTEEL Registration was invalid because: (1) there was prior use (and making known) of the NORSTEEL BUILDING SYSTEMS trademark and trade names; (2) Toti did not use the NORSTEEL trademark as of the claimed date of use; and (3) the application for the NORSTEEL trademark was made in bad faith.
In its analysis, the Court addressed five issues:
1. Is NBS a person interested in these proceedings?
The FC determined that NBS was a person interested in the proceeding, and thus had standing to bring the application for expungement.
2. Is the application barred by Acquiescence and Delay?
Toti argued that NBS’ acquiescence and delay in bringing the application was a complete defence to the action. The FC rejected this argument, noting that delay alone is insufficient to establish a defence of acquiescence. Moreover, there was no evidence that NBS benefitted from Toti’s advertising of the NORSTEEL name, or that NBS encouraged Toti to continue using the trademark.
3. Is the Trademark Registration Invalid due to prior use by NBS?
The FC found that Toti’s registration was invalid because the NORSTEEL mark was and is not distinctive of Toti’s goods and services from others, and because Toti was not the person who was entitled to secure the registration of the trademark.
The Court noted that the NORSTEEL trademark was not distinctive because it did not meet the third requirement for distinctiveness. That is, the association between the mark and Toti’s wares did not enable Toti to distinguish its wares from others.
In addition, the Court found that NBS established and commenced its use of the word NORSTEEL in its trademark NORSTEEL BUILDING SYSTEMS in 1992 and has continuously used it since then, making its period of prior use greater than that of Toti’s use of NORSTEEL.
Lastly, the FC agreed with NBS’ assertion that the resemblance between Toti’s and NBS’ trademarks is very high, and evidence shows that consumers have previously confused the two.
4. Is the Trademark Registrations Invalid Due to Lack of Use by the Claimed Date of Use?
NBS claimed that Toti’s application for registration of the NORSTEEL trademark contained a false statement regarding the dates that the NORSTEEL trademark was used. However, the Court dismissed this argument, noting that NBS failed to meet its burden of establishing that as a fact on a balance of probabilities.
5. Invalid Due to Application Made in Bad Faith
NBS further submitted that Toti’s NORSTEEL Registration was invalid because the application was made in bad faith. The FC rejected this argument, noting that the evidence presented did not establish that, at the time of the application, Toti was aware of NBS and its use of the word “Norsteel” in its name. While the Court noted that Toti was willfully blind as to whether it had the right to make the trademark application in the face of its competitor NBS, failure to inquire further does not necessarily amount to bad faith.
Authors: Farrah Kudus and Meghan King