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Canadian Trademark Law and “Use” in the Computer and Internet Age* David Bowden and Junyi Chen**

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Canadian Trademark Law and “Use” in the Computer and Internet Age* David Bowden and Junyi Chen** CANADIAN TRADEMARK LAW AND “USE” iN THE COMPutER AND INTERNET AGE* David Bowden and Junyi Chen** ABSTRACT Technological advancements have radically changed the manner in which goods are sold and services are offered to the public. However, Parliament has made no substantive changes to the definition of “use” under the Canadian Trade-marks Act since 1953. Those who operate in the field of computer technology and who offer goods and services primarily through the Internet face particular challenges when protecting or asserting their trademarks. This article examines recent decisions that illustrate attempts by the courts and the Trade-marks Opposition Board to address these challenges—in particular, recent decisions that address the effect of changing delivery methods for software on trademark use, whether use occurs in website metatags and advertising keywords, and the geographical location in which use occurs for a trademark displayed on a website. Although the law remains unsettled in some areas (such as metatags and advertising keywords), courts have flexibly applied the law to allow for non-traditional delivery of goods and services while preserving the fundamental importance of the concept of “use” under the Act. RÉSUMÉ Les avancées technologiques ont radicalement modifié la manière de vendre des produits et d’offrir des services à la population. Cependant, les parlementaires n’ont apporté aucun changement significatif à la définition du mot « emploi » énoncée depuis 1953 dans la Loi sur les marques de commerce. Ceux et celles qui exploitent dans le domaine de la technologie informatique et qui offrent leurs produits et services principalement sur Internet sont confrontés à des enjeux particuliers en termes de protection ou de valorisation de leurs marques de commerce. Le présent article examine les récentes décisions qui illustrent les efforts déployés par les tribunaux et la Commission des oppositions des marques de commerce pour traiter plus particulièrement de ces enjeux, ainsi que les récentes décisions qui concernent les répercussions des changements apportés aux méthodes de livraison des logiciels sur l’emploi des marques de commerce, peu importe si l’emploi survient ou non dans les métabalises des sites Internet et les mots-clés de publicité, et l’emplacement géographique dans lequel l’emploi survient pour une marque de commerce affichée * Submission to the Editor, January 20, 2017. ** © 2017 David Bowden, Deeth Williams Wall LLP, and Junyi Chen, Deeth Williams Wall LLP. 49 50 CANADIAN INTELLECTUAL PROPERTY REVIEW 33 CIPR sur un site Internet. Même si les dispositions de la loi n’ont toujours pas été définies pour certains éléments (par exemple les métabalises et les mots-clés de publicité), les tribunaux ont appliqué avec souplesse les dispositions de la loi pour permettre la fourniture non conventionnelle des produits et services, tout en préservant l’importance fondamentale du concept du mot « emploi » tel que défini dans la loi. CONTENTS 1.0 Introduction ...................................................... 50 2.0 “Use” Is a Fundamental Concept Under the Trade-marks Act ................ 50 3.0 Computer Software Companies Can Face Unique Difficulties in Proving Trademark Use .................................................... 52 4.0 Changing Delivery Methods and the Difference Between Goods and Services ... 54 5.0 The Unsettled Law on Website Metatags, Advertising Keywords, and Trademark Use .................................................... 55 6.0 Whether Display of a Trademark on a Website Constitutes Use “in Canada” .... 58 7.0 Conclusion ....................................................... 60 1.0 INTRODuctION Technological advancements have radically changed the manner in which goods are sold and services are offered to the public. However, the Parliament has made no substantive changes to the definition of “use” under the Canadian Trade-marks Act1 since 1953. Those who operate in the field of computer technology and who offer goods and services primarily through the Internet face particular challenges when protecting or asserting their trademarks. In response, Canadian courts and tribunals have adopted a flexible interpretation of the Act in order to provide fair outcomes for those who operate in these industries. This article examines recent decisions that illustrate attempts by the courts and the Trade-marks Opposition Board to address these challenges—in particular, recent decisions that address the effect of changing delivery methods for software on trademark use, whether use occurs in website metatags, and the geographical location in which use occurs for a trademark dis- played on a website. 2.0 “USE” IS A FUNDAMENTAL CONCEPT UNDER THE TRADE-MARKS Act At common law, use of a trademark confers exclusive rights. This common law principle has been supplemented (but not replaced) by the Act. This principle has also been affirmed by the Supreme Court, which held that while the Act provides additional rights to an owner of a registered trademark, registration is only available 1 Trade-marks Act, RSC 1985, c T-13 [“the Act”]. 33 RCPI REVUE CANADIENNE DE PROPRIÉTÉ INTELLECTUELLE 51 once the right to the trademark has been established by use.2 Therefore, Canadian trademark law retains “use” as a concept of fundamental importance. Use of a trademark forms an essential element of many of the activities governed by the Trade-marks Act—for example, entitlement to registration,3 infringement and depreciation,4 information that must be provided as a condition of obtaining a registration,5 and cancellation of registrations on the basis of non-use.6 Yet, in Canada, only certain displays of a trademark qualify as “use” under the Act. The Act sets out the requirements for use in section 4, which separates use into three categories: (1) use in association with goods, (2) use in association with ser- vices, and (3) use in association with the export of goods. Section 4 reads as follows: 4(1) A trade-mark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of the goods, in the normal course of trade, it is marked on the goods themselves or on the packages in which they are dis- tributed or it is in any other manner so associated with the goods that notice of the asso- ciation is then given to the person to whom the property or possession is transferred. (2) A trade-mark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services. (3) A trade-mark that is marked in Canada on goods or on the packages in which they are contained is, when the goods are exported from Canada, deemed to be used in Canada in association with those goods. Parliament has not changed section 4 in any substantive way since its enactment of the provisions in 1953.7 At the time it was enacted, section 4 expanded the defin- ition of “use” contained in the previous legislation, the Unfair Competition Act, 1932,8 which provided for use in association with goods only. 2 Masterpiece Inc v Alavida Lifestyles Inc, 2011 SCC 27 at paras 35 and 36, [2011] 2 SCR 387 [Masterpiece], citing Partlo v Todd (1888), 17 SCR 196 at 200. 3 See ss 16(1), 16(2)(c), and 16(3)(c) of the Act. 4 See ss 19 and 22 of the Act. 5 See ss 30(b), 30(e), and 40(2) of the Act. Amendments to the Trade-marks Act that remove use as a precondition to registration have led to frustration and condemnation by Canadian trademark prac- titioners, precisely because use is so fundamental to Canadian trademark law. See e.g. Daniel R Bereskin, “Canada’s Ill-Conceived New ‘Trademark’ Law: A Venture into Constitutional Quick- sand” (2014) 104:5 TMR 1112. 6 See s 45 of the Act. 7 Trade Marks Act, SC 1953, c 49. 8 Unfair Competition Act, 1932, SC 1932, c 38 [“the 1932 Act”]. 52 CANADIAN INTELLECTUAL PROPERTY REVIEW 33 CIPR Furthermore, section 4(1) in particular remains substantially similar to the provi- sions of the 1932 Act. For example, the 1932 Act included the language that requires a transfer of property in or possession of a good associated with a trademark: For the purposes of this Act a trade mark shall be deemed to have been or to be used in association with wares if, by its being marked on the wares themselves or on the packages in which they are distributed, or by its being in any other manner so associ- ated with the wares at the time of the transfer of the property therein, or of the posses- sion thereof, in the ordinary course of trade and commerce, notice of the association is then given to the persons to whom the property or possession is transferred.9 In other words, current legal requirements for establishing trademark “use” have remained unchanged for close to 65 years. For goods in particular, the essential requirement for a transfer of property in or possession of goods has remained the same for close to 85 years. While this definition of use can ensure that nominal or non-commercial displays of a mark do not qualify as “use,” commercial trade in emerging technologies does not always fit easily within the language of this section. 3.0 COMPutER SOftWARE COMPANIES CAN FACE UNIQUE DIffIcultIES IN PROVING TRADEMARK USE Historically, computer software companies have faced some difficulties in showing use under section 4 in disputes before the Federal Court or the Trade-marks Oppo- sition Board (TMOB).10 Courts and the TMOB have reacted to this problem by adopting a flexible interpretation of section 4. Almost three decades ago, the Federal Court Trial Division in BMB Compu- science Canada Ltd v Bramalea Ltd11 drew attention to the unique difficulties experienced by software companies that attempt to prove trademark use under the Act.
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