Comité Interprofessionnel du Vin de Champagne v. Coors Brewing Company

Comité Interprofessionnel du Vin de Champagne v. Coors Brewing Company
Court (s) Database
Federal Court Decisions
Date
2024-02-28
Neutral citation
2024 FC 169
File numbers
T-1050-21
Decision Content
Date: 20240228
Docket: T-1050-21
Citation: 2024 FC 169
Ottawa, Ontario, February 28, 2024
PRESENT: Mr. Justice Pentney
BETWEEN:
COMITÉ INTERPROFESSIONNEL DU VIN DE CHAMPAGNE
and
INSTITUT NATIONAL DE L’ORIGINE ET DE LA QUALITÉ
Applicants
and
COORS BREWING COMPANY
Respondent
JUDGMENT AND REASONS
I. Overview [1] The Applicants, the Comité Interprofessionnel du Vin de Champagne and the Institut National de l’Origine et de la Qualité, appeal a decision of the Registrar of Trademarks that maintained three trademark registrations owned by Coors Brewing Company (the “Respondent”, or “Coors”).
[2] The Respondent is the registered owner of three trademarks for Miller High Life beer marketed as “The Champagne of Beers”. The three trademark registrations (TMA177,553, TMA319,461 and TMA325,567) correspond to the trademarks: THE CHAMPAGNE OF BEERS, LE CHAMPAGNE DES BIÈRES, and MILLER LABEL & DESIGN (hereafter “the Marks”). The Marks were registered in 1971, 1986 and 1987 respectively.
[3] At the request of the Applicants, the Registrar issued a notice under section 45 of the Trademarks Act, RSC 1985, c T-13 [the Act], requiring the Respondents to demonstrate use of the Marks within the preceding three year period, and if not to show the date when they were last in use and the reason for the absence of use since that date.
[4] The Respondent acquired the Marks in question by way of assignment six months prior to the expiry of the three-year period, in the context of a major corporate acquisition. Because it had no evidence of use of the Marks, the Respondent invoked sub-section 45(3) of the Act and sought to demonstrate the reason for the absence of use during the six-month period after acquisition.
[5] The Registrar accepted the Respondent’s evidence and arguments on this point, and upheld the registrations. The Applicants challenge that decision.
[6] For the reasons that follow, the Applicants’ appeal will be dismissed.
II. Background [7] This case concerns the following registrations:
Registration Nos.
Trademarks
Goods
TMA177,553
THE CHAMPAGNE OF BEERS
Beer
TMA319,461
LE CHAMPAGNE DES BIÈRES
Beer
TMA325,567
MILLER LABEL & DESIGN
Brewed alcoholic beverages
[8] Effective October 13, 2016, Molson Coors Brewing Company acquired all assets of Miller Brewing International, Inc., including ownership of the Marks. This acquisition included many assets, involving dozens of brands and numerous Canadian trademark registrations. The evidence before the Registrar showed that the overall acquisition was valued at $12 billion, and that it doubled the size of Molson Coors Brewing Company. Molson Canada is the Canadian licensee of the owner of the Marks.
[9] At the request of the Applicants, on April 3, 2017, the Registrar issued section 45 notices to the Respondent requiring Coors to show whether the Marks had been used in Canada in association with each of the goods specified in the registration at any time within the three-year period immediately preceding the date of the notice, and, if not, the date when they were last in use and the reason for the absence of use since that date. The relevant period for this case is therefore from April 3, 2014 to April 3, 2017.
[10] The case before the Registrar turned on whether the Respondent had demonstrated special circumstances to excuse the non-use of the Marks during the relevant period. The Registrar cited the governing authorities on this point, summarized the positions of the parties, and determined that the Respondent had met the test under subsection 45(3) of the Act.
[11] The Registrar made two key findings that are the crux of the debate on appeal: (1) since Coors only acquired the Marks six months before the expiry of the three-year period, the acquisition date should be the starting point for the period of non-use; and (2) the non-use was beyond the Respondent’s control, because it needed regulatory approval before it could begin to use the Marks and had to undertake certain preparatory work before submitting its applications for approval. These findings are discussed in more detail below.
III. Issues and Standard of Review [12] There are three issues in this case:
What is the appropriate standard of review?
Did the Registrar err in using the acquisition date as the starting point for the period of non-use?
Did the Registrar apply the wrong test when assessing whether special circumstances excused the non-use of the Marks?
IV. Analysis A. What is the standard of review? [13] This is an appeal under section 56 of the Act. Since the Supreme Court of Canada decision in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, appeals under section 56 of the Act where no new evidence is filed are assessed in accordance with the usual appellate standard of review set out in Housen v Nikolaisen, 2002 SCC 33, [2002] 2 SCR 235 [Housen]; Clorox Company of Canada, Ltd v Chlorotec SEC, 2020 FCA 76 [Clorox] at paras 21-22; Miller Thomson LLP v Hilton Worldwide Holdings LLP, 2020 FCA 134 [Miller Thomson] at paragraph 46.
[14] In this case, although new evidence was filed by the Respondent, it turned out not to be pertinent to the appeal because the additional material related to an issue that was raised by the Applicants in their Notice of Application but not pursued in their written or oral submissions. Therefore, the Housen standard of review applies.
[15] In accordance with Housen, questions of law are assessed on a correctness standard. Findings of fact and inferences of fact are reviewed on the basis of palpable and overriding error, and this is a very deferential standard: Clorox at paragraph 38; Miller Thomson at paragraph 120. Findings of mixed fact and law are assessed on the same deferential standard, unless an extricable legal error can be demonstrated, in which case the error is subject to review on the correctness standard.
[16] The parties disagree on the proper characterization of the issues raised in this case. The Applicants assert that the issues raise questions of law subject to correctness review. As discussed below, the Applicants’ position is that the Registrar’s decision rests on legal errors regarding the period of non-use and the characterization of the rationale for non-use, and therefore the issues raise questions of law. In response, the Respondent characterizes the issues as matters of mixed fact and law. It submits that the determination of the period of non-use and whether the trademark owner has established special circumstances that excuse the period of non-use are questions that are largely fact-driven, and therefore no question of law or extricable legal question arises.
[17] As explained in more detail below, I find that the first issue is a question of mixed fact and law. I do not accept that there is any fixed legal rule that determines precisely when the period of non-use begins in all cases, and the Registrar applied the appropriate legal tests to the facts of the case. The issue raised by the Applicants on this point is a question of mixed fact and law. Similarly, I find that the question of whether the trademark owner has demonstrated special circumstances that excuse the period of non-use is also a question of mixed fact and law.
[18] For these reasons, I will apply the standard of palpable and overriding error. As noted earlier, this is a highly deferential standard of review. In Clorox, the Federal Court of Appeal stated that under this standard the appellant must convince the court that the decision-maker made an error “that is obvious and goes to the very core of the outcome of the case… This is an even more deferential standard of review than the standard of reasonableness applied by the Federal Court” (at paragraph 38).
[19] Before discussing the two key questions raised in this case, it will be useful to describe the legal context, including the nature of a section 45 proceeding, and the law regarding the assessment of non-use under subsection 45(3).
B. Legal context [20] Sub-sections 45(1) and (3) of the Act are relevant to the issues raised in this case:
Registrar may request evidence of use
45 (1) After three years beginning on the day on which a trademark is registered, unless the Registrar sees good reason to the contrary, the Registrar shall, at the written request of any person who pays the prescribed fee — or may, on his or her own initiative — give notice to the registered owner of the trademark requiring the registered owner to furnish within three months an affidavit or a statutory declaration showing, with respect to all the goods or services specified in the registration or to those that may be specified in the notice, whether the trademark was in use in Canada at any time during the three-year period immediately preceding the date of the notice and, if not, the date when it was last so in use and the reason for the absence of such use since that date.
Effect of non-use
(3) Where, by reason of the evidence furnished to the Registrar or the failure to furnish any evidence, it appears to the Registrar that a trademark, either with respect to all of the goods or services specified in the registration or with respect to any of those goods or services, was not used in Canada at any time during the three year period immediately preceding the date of the notice and that the absence of use has not been due to special circumstances that excuse the absence of use, the registration of the trademark is liable to be expunged or amended accordingly.
Le registraire peut exiger une preuve d’emploi
45 (1) Après trois années à compter de la date d’enregistrement d’une marque de commerce, sur demande écrite présentée par une personne qui verse les droits prescrits, le registraire donne au propriétaire inscrit, à moins qu’il ne voie une raison valable à l’effet contraire, un avis lui enjoignant de fournir, dans les trois mois, un affidavit ou une déclaration solennelle indiquant, à l’égard de chacun des produits ou de chacun des services que spécifie l’enregistrement ou que l’avis peut spécifier, si la marque de commerce a été employée au Canada à un moment quelconque au cours des trois ans précédant la date de l’avis et, dans la négative, la date où elle a été ainsi employée en dernier et la raison pour laquelle elle ne l’a pas été depuis cette date. Il peut cependant, après trois années à compter de la date de l’enregistrement, donner l’avis de sa propre initiative.
Effet du non-usage
(3) Lorsqu’il apparaît au registraire, en raison de la preuve qui lui est fournie ou du défaut de fournir une telle preuve, que la marque de commerce, soit à l’égard de la totalité des produits ou services spécifiés dans l’enregistrement, soit à l’égard de l’un de ces produits ou de l’un de ces services, n’a été employée au Canada à aucun moment au cours des trois ans précédant la date de l’avis et que le défaut d’emploi n’a pas été attribuable à des circonstances spéciales qui le justifient, l’enregistrement de cette marque de commerce est susceptible de radiation ou de modification en conséquence.
[21] The section 45 requirement that a trademark owner demonstrate use of the Mark in the past three years flows from the foundational principle of trademark law in Canada, as described by the Supreme Court of Canada in Mattel, Inc v 3894207 Canada Inc, 2006 SCC 22 [Mattel] at paragraph 5:
Unlike other forms of intellectual property, the gravaman of trade-mark entitlement is actual use. By contrast, a Canadian inventor is entitled to his or her patent even if no commercial use of it is made. A playwright retains copyright even if the play remains unperformed. But in trade-marks the watchword is “use it or lose it”. In the absence of use, a registered mark can be expunged (s. 45(3)).
[22] Section 45 proceedings are summary in nature. They are intended to clear the Register of trademarks that are no longer in use, sometimes referred to as “dead wood”, rather than to address contentious issues of trademark ownership or infringement. Evidentiary overkill is not required. An owner need only establish a prima facie case of use, and evidence of a single sale of a good bearing the trademark may be sufficient: see Sport Maska Inc v Bauer Hockey Corp, 2016 FCA 44 [Sport Maska]at paragraph 55.
[23] There is a public interest dimension to section 45 proceedings, as evidenced by the fact that anyone can initiate a notice and can then make representations to the Registrar and launch or participate in an appeal: Sport Maska at paragraph 57. It has long been recognized that section 45 proceedings serve as a summary and expeditious way to clear the Trademarks Register of marks that have fallen into disuse, or were never used following registration. By this means, the monopoly on the use of the marks is not prolonged, and others who may seek to use the words or symbols are not needlessly prevented from doing so.
[24] Although the general rule in trademark law is “use it or lose it”, the Act does not require that a trademark owner demonstrate use at all times. Section 45 merely requires that an owner produce evidence of use at some point during the previous three-year period. In addition, subsection 45(3) provides a limited safety valve for owners, who can avoid expungement by demonstrating why their trademarks have not been in use. The test for assessing non-use of a trademark under subsection 45(3) was initially set out in Canada (Hearing Officer of Trade Marks) v Harris Knitting Mills Ltd, [1985] FCJ No 226, 4 CPR (3d) 488 (FCA), [Harris Knitting Mills]. This decision confirms a number of core principles that guide the “non-use” analysis, including:
1. The general rule is that absence of use is penalized by expungement;
2. The absence of use can be justified by “special circumstances”, meaning “they must be circumstances not found in most cases of absence of use of a mark”; and
3. These special circumstances must be circumstances to which the absence of use is due.
[25] The Court of Appeal found several considerations to be relevant to excuse absence of use, including the duration of the absence of use, the likelihood it will last a long time, and whether the absence of use was “due solely to a deliberate decision on the part of the owner of the mark rather than to obstacles beyond his control.” The criteria were clarified in Scott Paper Limited v Smart & Biggar, 2008 FCA 129 [Scott Paper] at paragraph 22:
The conclusions to be drawn from this analysis are, it seems to me, the following:
1-The general rule is that absence of use is penalized by expungement.
2-There is an exception to the general rule where the absence of use is due to special circumstances.
3-Special circumstances are circumstances not found in most cases of absence of use of the mark.
4-The special circumstances which excuse the absence of use of the mark must be the circumstances to which the absence of use is due.
[26] The Scott Paper decision clarified the elements of the test. Subsequent decisions have found that it increased the focus on the second of the Harris Knitting factors, that is, whether the non-use was beyond the control of the registered owner is to be treated as a mandatory consideration. These decisions have found that if that factor is not met, the non-use will not fall within the exception no matter how strong the other elements may be (See, for example, One Group LLC v Gouverneur Inc, 2016 FCA 109 [One Group FCA] at paragraph 7). Second, Scott Paper underlined that the special circumstances which excuse the absence of use must be the circumstances to which the absence of use is due. The latter point was explained in Scott Paper as follows (para 23): “The point here is not the nature of the special circumstances, but simply that the special circumstances refer to the cause of the absence of use, and not to some other consideration.”
[27] The findings in Scott Paper illustrate how these principles are applied. In that case, the Federal Court of Appeal found that “it is clear that the 13 year absence of use was due to a deliberate decision not to use the mark” (at paragraph 26). The owner’s intention to resume use of the mark and the steps taken towards that goal “cannot amount to special circumstances which excuse the non-use of the trademark.” (Scott Paper at paragraph 28). The fact that the decision was driven by market conditions and the owner clearly intended to resume use of the trademark at some point in the future might explain why the trademark was not in use but did not constitute “special circumstances” which would excuse it, pursuant to subsection 45(3) (Scott Paper at paragraph 31).
[28] The final element of the legal framework worth noting here is that the findings of fact made by the Registrar in assessing non-use under the provision are owed deference, in particular because the statute does not define the term “special circumstances” and thus the Registrar has a “broad discretion” to “consider the evidence specific to each situation.”: One Group FCA at paragraph 14.
[29] With this background, I turn to a discussion of the issues raised in this case.
C. Did the Registrar err in using the acquisition date as the starting point for the period of non-use?
(1)Registrar’s Decision
[30] Coors did not produce any evidence demonstrating use of the Marks by the previous owner during the three-year period. Instead, it relied on subsection 45(3), arguing that its period of non-use commenced on the date it acquired the Marks. The Registrar accepted the acquisition date as the starting point for assessing non-use.
[31] The Registrar found that an assignment or change in title for a Mark does not in itself constitute a special circumstance. However, in light of the evidence about the scope and scale of the acquisition in this case and the fact that it occurred a mere six months before the notices, the Registrar found the following:
I accept that the Owner’s recent sizable acquisition here, a mere six months before the notices, can be considered a special circumstance not found in most cases of absence of use, in particular as there also existed additional circumstances beyond the control of the Owner which, weighed against the length of time without use of the Subject Trademarks, excused such absence of use, as will be further discussed below.
[32] Having noted the divergent positions of the parties on the relevant date for assessing non-use, the Registrar went on to discuss the case-law. On this, the Registrar found that “where a trademark was recently acquired by a new owner, a number of cases have considered the acquisition date as the relevant date when assessing non-use….” The Registrar found that “it would be an overly burdensome and technical approach to require the current owner to justify alleged non-use for a period of several decades when it only acquired the Subject Trademarks six months prior to the date of the notices and is not in a position to attest to the use or absence of use of the marks by the previous owner…”.
[33] Lastly, the Registrar discussed a case relied on by the Applicants, Dentons Canada LLP v CanWhite Sands Corp, 2020 TMOB 95 [CanWhite Sands], where the Trademarks Opposition Board (“TMOB”) refused to consider the acquisition date as the relevant date for assessing non-use. This case is discussed in more detail below. At this stage, it is sufficient to note that the Registrar found that “each case must be assessed on its own facts and as this was acknowledged in Dentons at paragraph 37, it may be appropriate to accept the acquisition date to assess the length of use in some cases. In my view, this is one of those cases.”
(2) Applicants’ Submissions [34] The Applicants submit the Registrar’s use of the acquisition date to assess the period of non-use is an error of law, because: (i) it is contrary to the plain wording of section 45 and the use requirement in trademark law; (ii) it ignores broader common law property principles; and (iii) it runs counter to jurisprudence on section 45 proceedings. The Applicants assert that the approach adopted by the Registrar effectively enables a trademark owner to use an assignment as a re-set button and completely disregards the real length of the non-use of the trademark.
[35] According to the Applicants, the wording of section 45 is clear and unambiguous. It provides that upon receiving a notice, a trademark owner is required without exception to show whether the trademark was in use in Canada at any time during the three-year period immediately preceding the notice and, if not, the date when it was last in use and the reason for the absence of use since that date. The requirement to establish the date when the trademark was last in use is mandatory. Failing that, the Applicants argue that the date of registration must be used as the starting point for assessing the length of non-use. They point out that there is nothing in the Act to suggest that the mandatory requirement to show the date of last use changes or does not apply in the case of an assignment of the trademark.
[36] The Applicants submit that determining the date of last use is essential because the justification of non-use will depend, in part, on whether it was for a short or long period. They cite the following passage from Scott Paper at paragraph 22, which in turn relies on Harris Knitting: “The duration of the absence of use and the likelihood it will last a long time are important factors in this regard, however; circumstances may excuse an absence of use for a brief period of time without excusing a prolonged absence of use…”
[37] The requirement to establish the date of last use is consistent with the purpose of section 45, which is to clear the Register of marks that have fallen into disuse. The Applicants argue the interest that an owner may express in their trademark is not the focus of the section 45 analysis; instead, it is the trademark and whether it is in use that is the central consideration. To benefit from the Canada-wide monopoly granted by trademark law, owners must demonstrate use. This flows from the central purpose of trademark law itself, as expressed in Mattel.
[38] The Applicants’ argument that the Registrar’s approach is contrary to common law property principles begins with the proposition that trademarks are property rights, subject to similar principles as tangible property. They submit that using the date of assignment as the starting point for assessing non-use runs counter to the basic tenet that a buyer acquires no better title to a good than the seller had. Under this approach, a new owner acquires a trademark registration in the state that it was before the transaction.
[39] According to the Applicants, it is implausible for a trademark owner to claim ignorance as to the state of a trademark registration prior to its acquisition. The practical value of a registered trademark depends in large part on whether it is valid, which in turn depends on whether it has been used in association with the goods or services. The Applicants submit that the Registrar therefore erred in concluding that a sophisticated party like the Respondent would not have performed the simplest due diligence on the use of the trademarks, in the course of a transaction worth approximately $12 billion.
[40] A key element of the Applicants’ argument on this point is their claim that the Registrar erred by failing to follow the TMOB’s decision in CanWhite Sands, which they say is more consistent with Harris Knitting and Scott Paper than the other decisions relied on by the Registrar. The Applicants point out that many of these earlier decisions pre-date the Federal Court of Appeal’s decision in Scott Paper, which clarified how the criteria set out in Harris Knitting should be applied. In particular, Scott Paper underlined that undue emphasis should not be placed on the owner’s intention to resume use of the mark, and this undercuts the value of these earlier precedents.
[41] The Registrar also cited other decisions which were issued after Scott Paper; the Applicant relies on the finding in CanWhite Sands that these decisions did not necessarily take into account the clarification provided by Scott Paper.
[42] Finally on this point, the Applicant submits that this entire line of cases is based on a mis-reading of the fountainhead case of Arrowhead Spring Water Ltd v Arrowhead Water Corp, (1992), 44 CPR (3d) 412 (TMOB); aff’d [1993] FCJ No 38, 47 CPR (3d) 217 (FCTD) [Arrowhead Spring Water]. The argument on this line of cases is discussed in more detail below.
(3) Respondent’s submissions [43] The Respondent, Coors, argues that the Applicants’ position cannot be accepted for four reasons. First, they say that the Registrar is not required to follow another TMOB decision. Each section 45 case must be assessed on its own merits, in particular because determining the date of non-use is an intensely fact-driven exercise.
[44] Second, Coors submits that the Applicants’ position is based on a mis-reading of both CanWhite Sands and the Registrar’s decision in the instant case. Coors says that it appears that the Applicants seemingly interpret CanWhite Sands to stand for the proposition that it is always inappropriate to use the date of assignment as the relevant date. But it says no such thing, based on the plain wording of the decision in that case. Instead, according to Coors, CanWhite Sands is based on its own particular facts and circumstances.
[45] In addition, Coors says that the Applicants mis-interpret the Registrar’s decision in the instant case, in that their argument rests on the assertion that the Registrar felt that she was bound, as a matter of law, to use the assignment date as the relevant date. Coors argues that the decision is based on the evidence in the record before her, and the Registrar did not state she was bound to apply an iron-clad rule.
[46] Third, Coors submits that the Registrar did not make any error, let alone one that is palpable and overriding, in deciding to exercise her discretion to choose the assignment date in light of the evidence in this case. On this point, the Respondent notes that a very recent TMOB decision used the acquisition date in a case where the owner acquired the mark seven months before the section 45 notices were issued: PNC IP Group Professional Corp v Mark Anthony Group, 2021 TMOB 268 [Mark Anthony] at paragraph 30. Coors says that the Applicants’ position is paradoxical, insofar as it does not argue that the decision here was inconsistent with the law; rather, the Applicants contend that the decision was consistent with the previous case-law but those decisions are wrong.
[47] Furthermore, Coors says that the Applicants’ reliance on Scott Paper is misplaced, because in that case the hearing officer used the assignment date as the relevant date and this was accepted on appeal. Coors argues that there is no authority for the proposition that it is an error of law to use the date of recent acquisition as the relevant date for the purposes of a special circumstances analysis under subsection 45(3). Instead, the law supports a factual inquiry to support the Registrar’s exercise of discretion as to the appropriate date to use in each specific case. Coors submits that this is precisely the sort of inquiry that the Registrar undertook in this case and it was not an error to do so.
[48] Fourth, Coors challenges the Applicants’ assertion that policy considerations weigh in favour of its position. It says that various prior decisions of the TMOB, and the Registrar in the instant case, found that the approach proposed by the Applicants is overly technical and inconsistent with the summary nature of a section 45 expungement proceeding. Furthermore, Coors submits that requiring new owners to account for long periods of non-use before the purchase date may have a chilling effect on the purchase of unused trademarks, which in turn will delay or hinder their revival and reintroduction into the market.
[49] According to Coors, section 45 was never intended to expunge trademarks that are not in use at the very instant they are acquired. Instead, the provision allows for a three year period, to give a new owner time to take the necessary steps to resume use of the trademark. From a policy perspective, Coors submits that section 45 should not be interpreted to impose onerous and mandatory due diligence requirements on a purchaser to gather evidence and documents to establish a seller’s past use of their trademarks, especially in the context of a large transaction.
[50] As for the property rights argument advanced by the Applicants, Coors submits that using the date of assignment does not give the new owner any better rights than the seller had, but rather gives the owner an asset that is no worse off than what they acquired. Such an approach gives the new owner a legitimate opportunity to make the acquired trademark an asset by putting it into use, and this is consistent with the purposes of the Act as a whole.
(4) Discussion [51] I am not persuaded by the Applicants’ position that the Registrar made an error of law, reviewable on a standard of correctness, in using the acquisition date as the starting point for the period of non-use.
[52] I find the determination of the appropriate date for assessing the period of non-use to involve a question of mixed fact and law. The Registrar did not state that she was bound, as a matter of law, to use the acquisition date as the starting point for the period of non-use. Instead, I find that the Registrar examined the relevant jurisprudence on this point, and applied the tests derived therefrom to the facts of this particular case. This involved an assessment of whether there were “special circumstances” that excused the period of non-use, which in turn required a determination of when the period of non-use began, in the circumstances of this case. These are findings of mixed fact and law.
[53] The Registrar first determined that there were special circumstances. In so finding, the Registrar stated:
I agree that an assignment or change in title in itself does not constitute a special circumstance [Taogosei Co v Servicios Corporativos De Administracion GMZ, SA De CV (1999), 3 CPR (4th) 275 (TMOB)]. There are a number of cases wherein a recent assignment or the acquisition of a trademark during the relevant period was held to excuse non-use for a short period of time, as it was reasonable to assume that the new owner would need some time to make arrangements concerning the use of a newly acquired trademark. However, the reasons for non-use in these cases were not solely due to the recent acquisition of a trademark; there were additional circumstances deemed beyond the control of the owner which reasonably affected the timing of the reintroduction of the goods associated with the trademark at issue. In each case, active steps were also taken to resume use prior to the issuance of the section 45 notice. [Morrison Brown Sosnovitch LLP v Jax and Bones Inc, 2014 TMOB 280 at para 23] (emphasis in original)
[54] On the facts, the Registrar found that the size of the acquisition (approximately $12 billion) and that it occurred a mere six months before the notices, “can be considered a special circumstance not found in most cases of absence of use…” The Registrar also noted that there were additional circumstances beyond the control of the owner, which excuse the absence of use. These additional factors are discussed in the next section.
[55] Turning to the start date for the period of non-use, the Registrar’s decision sets out the parties’ positions, and then notes that “where a trademark was recently acquired by a new owner, a number of cases have considered the acquisition date as the relevant date when assessing non-use… [citations omitted].” The Registrar also noted that “such an approach was even considered appropriate where there had not been use of a trademark since its registration…” citing Cassels Brock & Blackwell LLP v Registrar of Trade-marks, 2004 FC 753 at paragraphs 17 and 25).
[56] Next, the Registrar considered the factual matrix of this particular case. The analysis begins by noting that Coors had submitted that “Molson Canada does not have any records relating to the use of the Subject Trademarks by the previous owner prior to their sale” and found that requiring the current owner to explain why the previous owner may or may not have used the Marks since their dates of registration would place too great an onus on the current owner:
In my view, it would be an overly burdensome and technical approach here to require the Owner to justify alleged non-use for a period of several decades when it only acquired the Subject Trademarks six months prior to the date of the notices and is not in a position to attest to the use or absence of use of the marks by the previous owner [see GPS (UK) v Rainbow Jean Co (1994), 58 CPR (3d) 535 (TMOB) for a similar conclusion in respect of trademark transfer two months before the notice; see also Morrison Brown Sosnovitch LLP v Jax and Bones Inc, 2014 TMOB 280].
[57] In addition, the Registrar discussed CanWhite Sands, an authority relied on by the Applicants, where the Board refused to consider the acquisition date as the relevant date for assessing non-use. Given the emphasis placed by the Applicants on this decision, it is worth quoting the Registrar’s discussion of it in full:
Finally, I am well aware that in Dentons Canada LLP v CanWhite Sands Corp, 2020 TMOB 95, the Board refused to consider the acquisition date as the relevant date to assess the length of non-use. Nevertheless, each case must be assessed on its own facts and as this was acknowledged in Dentons at para 37, it may be appropriate to accept the acquisition date to assess the length of non-use in some cases. In my view, this is one of those cases.
[58] In my view, two points are clear from the foregoing discussion of the Registrar’s analysis. First, it followed the steps set out in the jurisprudence, by assessing whether special circumstances existed and determining when the date of non-use began. Second, it does not indicate that the Registrar felt bound as a matter of law to use the date of acquisition as the starting point for assessing non-use. Instead, the Registrar clearly found that this was a factual inquiry, and that previous decisions had found the date of acquisition to be appropriate, while the recent decision in CanWhite Sands did not. The Registrar’s statement that “each case must be assessed on its own facts” stands in direct contrast to the Applicants’ position that the Registrar erred in automatically applying the acquisition date as the starting point for assessing non-use.
[59] The Applicant submitted that six of the ten cases relied on by the Registrar pre-date the Federal Court of Appeal’s clarification of Harris Knitting in its Scott Paper decision, and that these decisions wrongfully focus on the owner’s intention to resume use of the trademark. The Applicant also argues that the four more recent cases cited by the Registrar should be discounted because, as was found in CanWhite Sands, they are contrary to Scott Paper. In sum, the Applicant argues that the entire line of authority relied on by the Registrar is based on a mis-reading of the fountainhead case, Arrowhead Spring Water.
[60] I am not persuaded that the Registrar erred in choosing to follow a long-established line of authority on the question of the starting point for assessing non-use where the owner recently acquired rights to the trademark in issue. It appears that the parties advanced different lines of authority, because the Registrar cited them. In doing so, the Registrar found it appropriate to follow one line, and declined to follow the reasoning in CanWhite Sands. That is a choice that was open to the Registrar, in light of the state of the jurisprudence. This is not a situation where the Registrar’s approach diverged from a lengthy and consistent line of authority, without explaining why a different approach was warranted. On this point, the Respondent pointed to a recent TMOB decision released several months after the Registrar’s decision in the instant case, where the hearing officer decided not to follow CanWhite Sands, employing reasoning that is very similar to the analysis in the instant case: Mark Anthony Group.
[61] Furthermore, I note that in the more recent cases cited by the Registrar, the hearing officer stated that the date of assignment or acquisition is “generally” used as the starting point for assessing non-use: see Hudson’s Bay Co v Bombay & Co Inc, 2013 TMOB 159 at paragraph 16; Morrison Brown Sosnovitch LLP v Jax and Bones Inc, 2014 TMOB 280 at paragraph 21; Protein 2 O LLC v Inutrition Inc, 2019 TMOB 6 at paragraph 20; Supreme Brands LLC v Joy Group OY, 2019 TMOB 45 at paragraph 47. This wording indicates that the various hearing officers dealing with these cases did not feel bound to apply the assignment or acquisition date, but rather recognized that they could choose to do so in the particular circumstances of each case.
[62] In using the assignment date as the starting point, the Registrar (and the other hearing officers dealing with these other cases) were acting in a manner consistent with Scott Paper itself. As Coors pointed out, in that case the hearing officer had decided to use the date of acquisition as the starting point for assessing non-use (Scott Paper Co v Lander Co Canada (1996), 67 CPR (3d) 274 (TMOB)). In that case, the registrant had purchased the trademark in question three months prior to the section 45 notice, and the hearing officer found that it would be overly technical to require the owner to show the date of last use as a condition precedent to answering a section 45 notice. Instead, the hearing officer found that:
[I]n circumstances where there has been a recent assignment of a trade-mark, the period of non-use has been considered as starting from the date the trade-mark was assigned as it was considered an overly technical approach to require a new owner to justify an absence of use of the mark by its predecessor(s).
It may be that under certain circumstances, such an approach may not be considered reasonable. However, I am not satisfied that this is that type of case…
[63] On appeal, this approach was not challenged, and the finding was not disturbed by the Federal Court of Appeal: Scott Paper at paragraph 7. In the result, the hearing officer’s decision was overturned because it placed undue emphasis on the new owner’s intention to resume use and discounted the significance of the fact that the non-use was the result of a deliberate decision of the owner. However, no question was raised or doubt expressed about the finding that the date of assignment was the starting point for assessing non-use.
[64] The Applicants seek to limit the effect of this, arguing that CanWhite Sands can be reconciled with Scott Paper because the assignment in the latter case occurred thirteen years prior to the section 45 notice, and there was no challenge to the non-use of the trademark in the intervening period. In a case where the assignment long preceded the issuance of the section 45 notice, according to the Applicant, the analysis does not focus on the new owner’s intention to resume use, but rather on the circumstances surrounding the non-use of the trademark during a significant period of time.
[65] I am not persuaded by the Applicants’ argument on this point. The fact that the hearing officer in Scott Paper decided to use the acquisition date as the date of last use, in the absence of any evidence of prior use, is another in a line of authorities where such an approach has