Use it or lose it: Special circumstances?

Canadian trademark owners must be vigilant to ensure that they use their registered trademarks in Canada, failing which the registrations may be expunged as “deadwood.” That said, there is a saving provision in s. 45 of Canada’s Trademarks Act, the section under which registrations for marks not in use get cancelled. The owner must prove that the absence of use is excusable due to “special circumstances.” But what constitutes special circumstances?

In s. 45 proceedings, which anyone may initiate against a registered trademark by making a request and paying a fee to the Registrar of Trademarks, the owner of a registration must file evidence in support of use of a mark or, alternatively, evidence explaining why the mark was not is use.  In the latter case,  the case law from the Federal Court tells us that to determine whether special circumstances have been established by the mark’s owner, the Registrar must first determine, in light of the evidence, why the trademark was not used during the relevant period. Second, the Registrar must determine whether the reasons for non-use constitute special circumstances. In this context, special circumstances mean reasons that are “unusual, uncommon, or exceptional”.

It is not enough for the owner to establish that there were reasons for non‑use that constitute special circumstances.  The Registrar must still decide whether the special circumstances excuse the period of non-use. To do so, the Registrar must consider: (i) the length of time during which the trademark has not been in use; (ii) whether the reasons for non-use were beyond the control of the registered owner; and (iii) whether the owner had a serious intention to shortly resume use.

The first and third criteria are fairly straightforward.  Reasons that may excuse a short period of non-use may not be sufficient to excuse a longer period.  The intention to shortly resume use must be substantiated by the owner’s evidence, which must be based on facts.  It is the second criterion that is often the hardest hurdle for owners to overcome.

In a recent decision of the Trademark Opposition Board (it decides these cases on behalf of the Registrar), the hearing officer noted the following regarding whether the reasons for non-use were beyond the control of the registered owner:

1. the reasons for non-use must account for the entirety of the relevant period;
2. unfavourable market conditions are not the sort of unusual, uncommon, or exceptional circumstances that constitute special circumstances excusing non-use of a trademark;
3. special circumstances must be unique to the owner (and not common to the industry) in order to considered unusual, uncommon or exceptional; and
4. a voluntary strategic decision of the owner to not use a mark cannot amount to special circumstances.

As the owner was found to have failed to meet the requirement to prove special circumstances, the mark was expunged for non-use.

The lesson for owners of Canadian trademark registrations is that, although there is a provision in the legislation that will save a mark not in use, the owner must be able to prove that the non-use was due to special circumstances, which can be a tall order indeed. Care must be taken to continue to use a mark in Canada or the registration of mark may be deemed to be deadwood and be cancelled.