August 29, 2019
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The Federal Court recently weighed in on the issue of “use” of a trademark in Canada by a business without a “bricks and mortar” presence in Canada, in Live! Holdings LLC v Oyen Wiggs Green & Mutala LLP, 2019 FC 1042.
Live! Holdings, LLC [“Live”] unsuccessfully appealed the decision of the Registrar of Trademarks [the “Registrar”] to expunge the registration of its trademark, “LIVE.” The Registrar expunged the registration of “LIVE” due to Live’s failure to demonstrate use of its trademark in Canada.
The issue before the Federal Court was whether Live had established use of the trademark in connection with the approximately 35 services for which it was registered, despite not having any “bricks and mortar” facilities in Canada.
Live is an affiliate of a group of privately-held companies known as the Cordish Companies. The Cordish Companies develop and operate large-scale commercial real estate projects with entertainment, gaming, and hospitality operations in the US. Several of the venues display the trademark as part of their names. Approximately 1000 Canadians, by virtue of being on the Cordish Companies’ mailing list, are members of the “Live! Rewards Program” and can redeem rewards at casinos and hotels in the US.
Establishing Use
To establish use of a trademark, people in Canada must receive “some tangible, meaningful benefit” from services associated with the mark. Live submitted that it used the mark in association with three categories of services: (1) hotel services; (2) entertainment services; and (3) advertising and marketing for others.
Website display and advertising is not enough to show use
The trademark was displayed in promotional material sent to Canada, on the website of several venues, and on booking confirmations.
Nevertheless, the Court stated that advertising in Canada or targeting services to people in Canada was not sufficient to show use in association with services where the services are offered, delivered, or performed elsewhere. The website that displayed the mark and advertised the venues in the US to people in Canada was not a sufficient indicator, on its own, of use of the mark in Canada. The Court held that people in Canada did not receive a tangible and meaningful benefit simply by accessing a website that made them aware of events or hotels in the US or by using online reservation portals that permit them to purchase tickets or book rooms for venues or hotels in the US.
Hotel Services: Simply holding a reservation for a hotel in the US was not a tangible and meaningful benefit enjoyed in Canada, despite that it may ensure that a room will be available upon arrival. The Court stated that the tangible benefit occurs only once the person leaves Canada and travels to the US and fulfills the reservation.
Because the benefit must be received in Canada, the Court distinguished this case from Hilton Worldwide Holding LLP v Miller Thomson, 2018 FC 895. In Hilton, the Court found that hotel reservation services satisfied the requisite use of the “WALDORF-ASTORIA” trademark in Canada despite it not having a physical presence in Canada. The distinguishing element is that, in Hilton, there was a direct benefit in Canada as the rewards points earned by making a reservation at the Waldorf Astoria could be redeemed at other hotels in Canada. The Court in Live! Holdings therefore concluded that “there is no evidence of a tangible, meaningful benefit enjoyed in Canada from making an online reservation.”
Entertainment services: For the same reasons noted with respect to hotel services, the Court held that there is no tangible benefit to a person who buys a ticket until that person actually leaves Canada and attends the event in the US.
Advertising and marketing services for others: There was no evidence of Live offering advertising and marketing services for others to people in Canada.
No special circumstances excusing non-use: The Court found that Live did not demonstrate any special circumstances excusing the non-use of the trademark in Canada.
Conclusion
Although the Federal Court recognized the need to be responsive to the changing realities of e-commerce, it reaffirmed that “the basic principle remains that the use of a trade-mark in Canada requires that the registered services or wares result in a tangible and meaningful benefit to people in Canada.”
Authors: Jaclyn Tilak and Meg King