Miller Thomson LLP v. Hilton Worldwide Holding LLP

Miller Thomson LLP v. Hilton Worldwide Holding LLP
Court (s) Database
Federal Court of Appeal Decisions
Date
2020-09-09
Neutral citation
2020 FCA 134
File numbers
A-325-18, A-369-18
Notes
Reported Decision A correction was made on November 29, 2021
Decision Content
Date: 20200909
Dockets: A-325-18
A-369-18
Citation: 2020 FCA 134
CORAM:
WEBB J.A.
NEAR J.A.
MACTAVISH J.A.
BETWEEN:
MILLER THOMSON LLP
Appellant
and
HILTON WORLDWIDE HOLDING LLP
Respondent
Heard by online video conference hosted by the Registry on June 5, 2020.
Judgment delivered at Ottawa, Ontario, on September 9, 2020.
REASONS FOR JUDGMENT BY:
MACTAVISH J.A.
CONCURRED IN BY:
WEBB J.A.
NEAR J.A.
Date: 20200909
Dockets: A-325-18
A-369-18
Citation: 2020 FCA 134
CORAM:
WEBB J.A.
NEAR J.A.
MACTAVISH J.A.
BETWEEN:
MILLER THOMSON LLP
Appellant
and
HILTON WORLDWIDE HOLDING LLP
Respondent
REASONS FOR JUDGMENT
MACTAVISH J.A.
[1] The Waldorf Astoria is a well-known luxury hotel located in New York City. There are numerous other Waldorf Astoria hotels elsewhere in the United States and in major cities around the world. There has, however, never been a “bricks and mortar” Waldorf Astoria hotel anywhere in Canada.
[2] The respondent Hilton Worldwide Holding LLP is the owner of the WALDORF ASTORIA trademark, which is registered in Canada for use in association with “hotel services”.
[3] The principal issue raised by this appeal is whether Hilton can establish “use” of the WALDORF ASTORIA trademark in Canada for the purposes of section 45 of the Trademarks Act in the absence of a “bricks and mortar” hotel operating under that name in this country.
[4] For the reasons that follow, I have concluded that the Federal Court did not err (in reasons cited as 2018 FC 895) in finding that Hilton had established use of the WALDORF ASTORIA mark in Canada. Consequently, I would dismiss the appeal.
I. Statutory Context
[5] Before considering the facts of this case, it is helpful to start by having regard to the nature of proceedings under section 45 of the Trademarks Act, R.S.C. 1985, c. T-13 (the Act).
[6] Unlike other forms of intellectual property, use of a trademark is essential, and is fundamental to trademark rights: HomeAway.com, Inc. v. Hrdlicka, 2012 FC 1467, [2012] F.C.J. No. 1665 at paras. 11–12. As the Supreme Court of Canada noted in Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22, [2006] 1 S.C.R. 772 at para. 5, “in trade-marks the watchword is ‘use it or lose it’”. Indeed, the statutory definition of “trademark” in section 2 of the Act is “a sign or combination of signs that is used or proposed to be used by a person for the purpose of distinguishing or so as to distinguish their goods or services from those of others […]” [emphasis added].
[7] In accordance with subsection 4(2) of the Act, a trademark will be deemed to be used in association with services “if it is used or displayed in the performance or advertising of those services”. That said, the mere advertising of services in Canada will not constitute use in Canada in association with a service. Some aspect of the services must be performed or delivered in Canada: Porter v. Don the Beachcomber, [1966] Ex.C.R 982, 48 C.P.R. 280 at para. 17; Marineland Inc. v. Marine Wonderland and Animal Park Ltd., [1974] 2 FC 558.
[8] While foreign trademark owners can register their marks in Canada and thereby enjoy the benefits of exclusivity, maintenance of a registration depends on the use of the mark in Canada.
[9] Section 45 of the Act provides a summary procedure for clearing the Register of Trademarks of registrations for marks that have fallen into disuse: Sport Maska Inc. v Bauer Hockey Corp., 2016 FCA 44, [2016] 4 F.C.R. 3 at para. 55. The section 45 process has been described as one for removing “deadwood” from the Register: Boutiques Progolf Inc. v. Canada (Registrar of Trade Marks), 164 N.R. 264, 54 C.P.R. (3d) 451. It is not intended to resolve contentious issues between competing commercial interests. Such issues are resolved through expungement proceedings under section 57 of the Act: Moosehead Breweries Ltd. v. Molson Cos. Ltd. et al. (1985), 11 C.P.R. (3d) 208 at 210, 63 N.R. 140 at 141.
[10] The threshold for establishing “use” in a section 45 proceeding is quite low: Woods Canada Ltd. v. Lang Michener, [1996] F.C.J. No. 1701, 71 C.P.R. (3d) 477 (F.C.T.D.). Evidentiary overkill is, moreover, not required: Union Electric Supply Co. Ltd. v. Registrar of Trade Marks, [1982] 2 F.C. 263 (1982), 63 C.P.R. (2d) 56 (F.C.T.D.). That said, sufficient facts must still be adduced to allow the Registrar of Trademarks (the Registrar) to find use of a trademark in association with each of the registered services during the relevant period.
[11] Subsection 45(1) of the Act authorizes the Registrar, either on her own initiative or in response to a request made by a third party, to issue a notice requiring that the owner of a registered trademark show use of the mark in Canada in the three years immediately preceding the date of the notice (the relevant period). In accordance with subsections 45(3) and (5) of the Act, a trademark registration may be expunged if the owner fails to show use in Canada within the relevant period, or the existence of “special circumstances” justifying the non-use of the mark.
[12] Pursuant to subsection 56(1) of the Act, an appeal lies to the Federal Court from a decision of the Registrar in a section 45 proceeding, and additional evidence may be filed on the appeal in accordance with subsection 56(5) of the Act.
II. Background
[13] The first Waldorf Astoria hotel opened in New York City in the 1930s. The hotel was acquired by Hilton Hotels Corporation in 1949, and it is currently owned by the respondent Hilton Worldwide Holding LLP (Hilton), a successor to Hilton Hotels Corporation.
[14] Hilton claims to have used the WALDORF ASTORIA mark (the Mark) in Canada in association with “hotel services” since at least 1988. It is the owner of the WALDORF ASTORIA trademark (Registration No. TMA 337,529), which is registered for use in association with “hotel services”.
[15] The appellant, Miller Thomson, is a law firm representing a client engaged in the hotel business. This client has outstanding applications to register trademarks for “WALDORF”, “THE WALDORF”, “WALDORF HOTEL” and other, similar names. Hilton has been actively opposing these applications.
[16] At Miller Thomson’s request, the Registrar issued a notice to Hilton pursuant to section 45 of the Act, requiring that it demonstrate use of the Mark in Canada in association with “hotel services” during the relevant period, which, in this case, was between October 23, 2011 and October 23, 2014. If Hilton was unable to demonstrate such use, it was required to identify the date on which the Mark was last in use, as well as the reasons for its subsequent non-use.
III. The Evidence before the Registrar
[17] In response to the section 45 notice, Hilton provided the Registrar with an affidavit from Christian Eriksen. Mr. Eriksen describes himself as Counsel, Brands & Intellectual Property for Hilton Worldwide, Inc. According to Mr. Eriksen, Hilton (or its predecessor in title) has used the WALDORF ASTORIA mark in Canada since at least 1988 in association with “hotel services, specifically hotel reservation, booking and payment services and hotel management and development services”.
[18] Mr. Eriksen stated in his affidavit that the term “hotel services” is understood in the hotel industry to include “reservation services, booking and payment services, and access to hotel rooms”. He observed that hotels “could not operate unless customers were able to reserve, book and pay for rooms in advance of their stay”, that reservation, booking and payment services are “integral to the provision of hotel services”, and that the cost of providing these services and other ancillary services is incorporated into the room rate.
[19] Mr. Eriksen explained that Canadian customers can make hotel reservations at Waldorf Astoria hotels in a number of different ways. This includes through travel agent booking systems such as Expedia and Travelocity, as well as through Hilton’s own centralized online reservation system, where the Mark is displayed at the time of booking and payment and on the email sent to customers confirming their reservations. Mr. Eriksen also provided evidence as to the number of reservations made by customers with Canadian addresses who then stayed at Waldorf Astoria hotels, and the revenue generated by those stays.
[20] According to Mr. Eriksen, customers can secure their hotel reservations by providing a deposit at the time of booking, or they can obtain a discounted rate by making a non-refundable payment at the time of booking. Customers can also join Hilton’s “HILTON HHONORS” loyalty program. Amongst other benefits, program members can earn points at hotels within the Hilton Group’s portfolio, including Waldorf Astoria hotels. These points can be redeemed for stays at hotels in the Hilton Group, including at hotels located in Canada. There were in excess of 400,000 Canadians enrolled in the HILTON HHONORS loyalty program during the relevant period.
[21] Finally, Mr. Eriksen discussed Hilton’s plans for the construction of a Waldorf Astoria hotel in Montreal, and the reasons why that hotel was never built. He also confirmed Hilton’s ongoing interest in developing a Waldorf Astoria hotel in Canada.
IV. The Registrar’s Decision
[22] A delegate of the Registrar concluded that the absence of a “bricks and mortar” Waldorf Astoria hotel in Canada was fatal to Hilton’s claim that it had used the Mark in Canada in association with “hotel services” during the relevant period. The Registrar also found that Hilton had not established that there were “special circumstances” that would excuse its non-use of the Mark in this country during that period. Consequently, the Registrar ordered that the WALDORF ASTORIA Mark be expunged from the Register.
[23] In finding that Hilton had not established use of the Mark in Canada, the Registrar relied on the reasoning in Stikeman Elliott LLP v. Millennium & Copthorne International Limited, 2015 TMOB 231, [2015] T.M.O.B. No. 5231 [M Hotel]. The mark at issue in M Hotel was registered for use in association with “hotel services and hotel reservation services”. The Registrar concluded in that case that the registration for “hotel services” should be expunged, as there was no physical M Hotel located in Canada during the relevant period and the owner of the mark had not established that it performed, or was able to perform, hotel services in Canada during the relevant period. The Registrar did, however, maintain the registration for “hotel reservation services”.
[24] In this case, the Registrar found that in ordinary commercial terms, “‘booking’, ‘planning’ and ‘reservation’ services are not ‘hotel services’”. The Registrar found that if a customer had to leave Canada to enjoy the service, it was not a “hotel service” performed in Canada. Citing the Registrar’s earlier decision in Maillis v. Mirage Resorts Inc., 2012 TMOB 220, 107 C.P.R. (4th) 298, the Registrar stated that it was “contrary to common sense to equate the ability to make hotel reservations or other bookings with the operation of a hotel”. The Registrar further found that even if a loyalty program could be enjoyed in or from Canada, it was not a “hotel service”.
[25] Thus, while customers may be able to book hotel rooms at Waldorf Astoria hotels from within Canada, the Registrar concluded that the performance of Hilton’s “hotel services” could only be completed by customers travelling outside of Canada. As a result, no use of the Mark in Canada in association with “hotel services” had been established.
[26] The Registrar was also not persuaded that there were “special circumstances” that would excuse Hilton’s non-use of the Mark during the relevant period. While Hilton had entered into an agreement to build a Waldorf Astoria hotel in Montreal, this did not materialize due to the economic downturn in 2008. The Registrar found that this did not constitute the type of “special circumstances” required by the case law to excuse non-use of a trademark, and that, in any event, Hilton had not demonstrated why it had not built or operated a Waldorf Astoria hotel in Canada at any time since 1988, when its trademark was registered. This conclusion was upheld by the Federal Court, and Miller Thomson does not challenge the finding with respect to “special circumstances” in this appeal.
V. The Federal Court’s Decision
[27] Hilton appealed the Registrar’s decision to the Federal Court through the statutory appeal mechanism provided for in subsection 56(1) of the Act. As it was entitled to do, Hilton submitted additional evidence in support of the appeal in the form of a further affidavit from Mr. Eriksen, as well as an affidavit from Linda Elford. Ms. Elford is a trademark searcher and her evidence was directed at the state of the “Wares and Services Manual” maintained by the Canadian Intellectual Property Office (the Manual).
[28] The Federal Court observed that, in determining whether an appellant has established use of a trademark, the Court must conduct a de novo review of a Registrar’s decision where additional evidence is adduced on the appeal that would have materially affected that decision: Mattel, above at paras. 35, 37; John Labatt Ltd. v. Molson Breweries, [2000] 3 F.C. 145, 252 N.R. 91 at para. 29 (C.A.), leave to appeal to SCC refused, 27839 (14 September 2000). Where, however, the Registrar’s findings of fact or treatment of issues are not affected by the new evidence, the reasonableness standard of review applies.
[29] The Federal Court next considered whether a hotel owner could establish “use” of a trademark without the presence of a “bricks and mortar” hotel in Canada.
[30] Citing the decision in Kraft Ltd. v. Registrar of Trade Marks (1984), 1 C.P.R. (3d) 457, [1984] 2 FC 874 (T.D.), the Federal Court noted that the concept of “services” is to be liberally interpreted, and that “services” may include those that are “incidental” or “ancillary” to the primary service identified in the registration.
[31] After reviewing the evolving jurisprudence regarding the “use” of trademarks in the era of the internet, the Federal Court observed that it was essential that some aspect of the registered service be offered directly to Canadians or be performed in Canada. People must, moreover, be able to derive a tangible, meaningful benefit from the use of a mark in association with the registered service in Canada in order to establish use of the mark in this country. The Court further noted that determining whether use in Canada had been established required a case-by-case assessment, involving an analysis of the scope of the services referred to in the trademark registration, and of the nature of the benefits that are delivered to people physically present in Canada.
[32] The Federal Court concluded that the Registrar had committed a number of errors in this case. The Court found that she had failed to consider the only evidence that had been submitted with respect to the ordinary commercial understanding of the term “hotel services”, and that she had failed to follow binding authority establishing that the scope of services includes primary, incidental and ancillary services. The Court also found that the Registrar erred in applying the current version of the Manual to interpret the meaning of a registration dating from 1988. Finally, the Court found that the Registrar had erred by failing to consider the actual words used in the registration itself.
[33] Consequently, the Federal Court allowed Hilton’s appeal, set aside the Registrar’s decision and maintained the Mark’s registration on the basis that Hilton established use of the Mark in Canada during the relevant period. The Court also awarded Hilton $9,000 for legal fees and $6,600 for disbursements.
VI. Issues
[34] The Federal Court’s decision on the merits is the subject of this appeal. The Court’s costs award was the subject of a separate appeal by Miller Thomson, and the two appeals have been consolidated by order of this Court.
[35] The consolidated appeal raises a number of issues, including whether the Federal Court erred in:
1. Its application of the standard of review;
Finding that there had been use of the WALDORF ASTORIA mark in Canada during the relevant period; and
Fixing the amount of costs in Hilton’s favour.
[36] Hilton has cross-appealed, submitting that in the event that this Court were to determine that it had not established use of the WALDORF ASTORIA mark in Canada in association with “hotel services”, it should be permitted to amend its trademark registration to cover “hotel services, namely hotel reservation services”, which would more properly reflect the actual activities carried on in Canada. The Federal Court had found that it was unnecessary to address this issue in light of its finding that Hilton had indeed established use of the Mark in this country.
[37] Because I have concluded that the Federal Court did not err in finding that Hilton had established use of the WALDORF ASTORIA mark in Canada, it is not necessary to address Hilton’s cross-appeal.
VII. The Standard of Review to be Applied to the Federal Court’s Decision by this Court
[38] Before considering the issues raised by Miller Thomson, it is first necessary to identify the standards of review that this Court must apply in examining the Federal Court’s decision.
[39] Prior to the Supreme Court of Canada’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 441 D.L.R. (4th) 1, appeals to the Federal Court from decisions of the Registrar of Trademarks were treated as applications for judicial review, notwithstanding the fact that they are described as “appeals” in subsection 56(1) of the Trademarks Act. Consequently, in reviewing decisions of the Federal Court in cases such as this, this Court followed the approach articulated by the Supreme Court in Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, [2013] 2 S.C.R. 559 at paras. 45–47.
[40] That is, this Court would first consider whether the Federal Court had properly identified the standard of review applicable to the questions at issue, and it would then determine whether the Federal Court had correctly applied that standard.
[41] This has changed as a result of the Supreme Court’s decision in Vavilov. There, the Supreme Court held that where Parliament has provided that parties may appeal from an administrative decision to a court, it has subjected the administrative regime to appellate oversight. As a result, regardless of whether there was material new evidence before the Federal Court that could have affected the Registrar’s decision, this Court must now scrutinize the Federal Court’s decision on the appellate basis: The Clorox Company of Canada, Ltd. v. Chloretec S.E.C., 2020 FCA 76, 172 C.P.R. (4th) 351. This requires that the Court apply the standards of review articulated in cases such as Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235; and Vavilov, above at para. 36.
[42] The standard of review to be applied to questions of law is thus correctness. Findings of fact and inferences of fact are to be reviewed on the basis of palpable and overriding error. Findings of mixed fact and law are to be reviewed 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.
[43] This then takes us to Miller Thomson’s first issue, which relates to the standard of review that was applied by the Federal Court in reviewing the Registrar’s decision in this case.
VIII. Did the Federal Court Err in its Application of the Standard of Review in this Case?
[44] Vavilov has also had an impact on the standards of review to be applied by the Federal Court in proceedings under subsection 56(1) of the Act, given that such proceedings are now to be treated as appeals, rather than as applications for judicial review.
[45] Prior to Vavilov, the standards of review identified in cases such as Mattel, above at paras. 35–39, and John Labatt, above at paras. 23–29, were to be applied by the Federal Court in appeals from the Registrar of Trademarks. In accordance with this jurisprudence, the Registrar’s findings of fact and exercise of discretion were subject to review on the reasonableness standard. The Court could, however, engage in a de novo review of a Registrar’s decision if it found that additional evidence presented on the appeal would have materially affected the Registrar’s findings of fact or the exercise of discretion: John Labatt, above at para. 29.
[46] As the Federal Court’s decision in this case pre-dated the Supreme Court’s decision in Vavilov, the Mattel and John Labatt standards were the standards of review that were applied by the Federal Court in considering Hilton’s appeal.
[47] The requirement that the Federal Court conduct a correctness review with respect to issues for which there is material new evidence before it has not changed as a result of the Vavilov decision: Clorox, above at para. 21. In such cases, the Court is still entitled to substitute its opinion for that of the Registrar.
[48] Where the standard of review applicable to Registrar’s decisions has changed as a result of Vavilov is where there is no new evidence before the Federal Court that would materially have affected the decision under appeal: Clorox, above at para. 22. The standards of review to be applied by the Federal Court in such cases are the appellate standards of correctness and palpable and overriding error that were prescribed by the Supreme Court in Housen: Clorox, above at paras. 22–23.
[49] Notwithstanding the change in the law, I do not understand Miller Thomson to take issue with the Federal Court’s identification of the applicable standards of review in this case. I also do not understand it to be arguing that the result would have been different had the Federal Court applied the Vavilov standard of palpable and overriding error rather than the Mattel standard of reasonableness to issues of fact and mixed fact and law. Miller Thomson submits rather that the Federal Court did not apply the deferential standard of review correctly in assessing the materiality of the new evidence adduced by Hilton on the appeal.
[50] Insofar as Mr. Eriksen’s second affidavit is concerned, Miller Thomson submits that it is impossible to determine which standard of review was applied by the Federal Court to which issue. It also contends that, in any event, there was nothing in Mr. Eriksen’s second affidavit that would have materially affected the Registrar’s decision.
[51] Miller Thomson also says that the Federal Court did not address whether Ms. Elford’s affidavit would have materially affected the Registrar’s decision and that, in any event, the Registrar’s comments with respect to the hotel-related services listed in the Manual were made in obiter. Miller Thomson further contends that there was nothing in Ms. Elford’s affidavit that could have affected the Registrar’ decision in any way.
[52] I cannot accept Miller Thomson’s submissions.
[53] Material new evidence is evidence that is “sufficiently substantial and significant” and “of probative value”: Clorox, above at para. 21, citing Vivat Holdings Ltd. v. Levi Strauss & Co., 2005 FC 707, 276 F.T.R. 40 at para. 27, and Tradition Fine Foods Ltd. v. Groupe Tradition'l Inc., 2006 FC 858, 296 F.T.R. 216 (Eng.) at para. 58.
[54] A question as to the materiality of new evidence is a question of mixed fact and law. As a result, findings of this nature will stand in the absence of a palpable and overriding error or an extricable error of law: Clorox, above at para. 19, citing Monster Cable Products, Inc. v. Monster Daddy, LLC, 2013 FCA 137, 445 N.R. 379 at para. 4.
[55] It is clear from paragraphs 10–13 of the Federal Court’s decision that it understood the relevance that new evidence has for the standard of review in an appeal from a section 45 decision. The Federal Court also understood the need for it to address the nature, significance, probative value and reliability of that evidence in identifying the appropriate standard of review to be applied to the Registrar’s decision.
[56] After discussing the new evidence that had been adduced by Hilton the Court concluded at paragraph 27 of its reasons that the standard of review to be applied on this appeal was “correctness in relation to the issues addressed by the new evidence”, and that it would otherwise apply the standard of reasonableness in its review of the Registrar’s decision.
[57] Insofar as Ms. Elford’s evidence is concerned, she is an experienced trademark searcher whose evidence was directed at the state of the Manual at various times. This Manual lists the types of services that will be accepted for inclusion in trademark registrations. Ms. Elford’s affidavit also addressed her understanding of the practice that was followed with respect to additions to and deletions from the Manual.
[58] Ms. Elford stated in her affidavit that she had been asked by Hilton’s counsel to locate the oldest possible copy of the Manual. She was also asked to search for the terms “hotel services”, “hotel reservation services”, “reservation services”, “booking services”, and “management of hotels” in that version of the Manual.
[59] Ms. Elford stated that the earliest version of the Manual that she could locate was one dated January 18, 2006. This Manual listed “hotel services” and “management of hotels” as acceptable services, but it did not contain the terms “hotel reservation services”, “reservation services” or “booking services”.
[60] Ms. Elford further asserted that although she was unable to locate an earlier copy of the Manual, in her 45 years of experience, she did not recall ever seeing a term added to the Manual, that was subsequently removed, and then re-added. Accordingly, she did not believe that the terms “hotel reservation services”, “reservation services” or “booking of hotels” were listed in any edition of the Manual prior to January 18, 2006.
[61] The Registrar had referred to the current version of the Manual in considering whether the term “hotel services” includes services such as “reservation services”. In concluding that this was not the case, the Registrar noted that the Manual “expressly provides for the terms ‘hotel services’ and ‘hotels’ as pre-approved terms, separate from other hotel related services like ‘hotel reservations’, ‘hotel room booking services’, ‘hotel management’, and ‘hotel management for others’”. While the Registrar’s comments with respect to the Manual were prefaced by the phrase “[as] an aside”, the discussion with respect to the state of the Manual clearly formed part of her analysis of the issue of use, and was not merely obiter.
[62] Ms. Elford’s evidence was directed to this issue. While Hilton’s WALDORF ASTORIA mark was registered in Canada in 1988, Ms. Elford’s evidence suggests that the Manual in effect at the time of registration did not include “hotel reservation services, reservation services and booking of hotels”.
[63] The Federal Court found that Ms. Elford’s evidence with respect to the state of the Manual was not expert evidence, but was simply a statement of fact as to matters within her personal knowledge. Insofar as her statement regarding her personal knowledge of the practice of the Trademarks Office with respect to additions to the Manual was concerned, the Court found that this was a statement of fact that was admissible on the appeal, but that it was of limited probative value. To the extent that Ms. Elford purported to provide opinion evidence, or that Hilton sought to rely on her evidence as support for propositions that went beyond these factual statements, the Court found that her evidence was not admissible.
[64] The Federal Court specifically addressed the materiality of Ms. Elford’s evidence at paragraph 24 of its reasons. It found her affidavit to present “evidence which is both admissible and probative” to the extent that it referred to the copy of the Manual that was in Ms. Elford’s possession, and her personal knowledge about additions to the Manual. The Court noted that evidence with respect to earlier versions of the Manual was material as it “could have prevented the Registrar from erring by referring to the current version”.
[65] The Court further observed that Ms. Elford’s evidence was relevant to what the Court identified as being “the key issue in this case”—namely whether use of the Mark had been demonstrated in association with “hotel services”, or whether it was necessary to specify “hotel reservation services” in the trademark registration. At paragraph 73 of its reasons the Federal Court found that the Registrar had erred “in applying the current version of the Manual to interpret the meaning of a registration dating from 1988”.
[66] It is clear from this that the Federal Court understood that the standard of review applicable to the Manual issue depended on whether Ms. Elford’s evidence was admissible and probative, and whether it could have affected the Registrar’s decision. The Federal Court clearly accepted that this was the case with respect to certain identified portions of her evidence, and that the Registrar had erred in relying on terms that were added to the Manual after the Mark had been registered to interpret the meaning of the services in question. Miller Thomson has not established that the Court erred in this regard insofar as the application of the standard of review is concerned.
[67] The Federal Court’s reasons are less clear with respect to the impact of the evidence contained in Mr. Eriksen’s second affidavit. The Court noted that this affidavit provided better copies of certain exhibits that had been attached to Mr. Eriksen’s original affidavit, specifically screen shots of various pages from the Hilton website. The Court found that nothing turned on the quality of the copies of the original exhibits, and that this portion of Mr. Eriksen’s second affidavit was repetitive and thus would not affect the standard of review.
[68] The Court then observed that Mr. Eriksen’s second affidavit also provided information regarding the relationship between the various corporate entities within the Hilton group of companies, as well as additional information with respect to the operation of Hilton’s hotel reservation systems in Canada. The Court stated that “[t]his information supplements that which was contained in his original affidavit and is of some probative value, as will be explained below”.
[69] The Federal Court returned to Mr. Eriksen’s second affidavit at paragraph 94 of its reasons. There it stated that this affidavit “clarified [that] the reservations system is operated by Hilton Reservations Worldwide on behalf of the Hilton chain of companies, including the Waldorf Astoria”, and that “[t]he Waldorf Astoria trademark appears on the web site at the time of making the booking and payment, as well as on e-mail confirmations sent to customers”.
[70] While it would have been helpful, there is no express discussion in the Federal Court’s reasons as to the significance that the evidence in Mr. Eriksen’s second affidavit (apart from the screen shots) had for the standard of review, beyond its statement at paragraph 94 and its comment that this evidence was of “some probative value”. In contrast to the Court’s finding that Ms. Elford’s evidence was relevant as it “could have prevented the Registrar from erring by referring to the current version”, there is no similar suggestion in the Federal Court’s reasons that the evidence contained in Mr. Eriksen’s second affidavit could have affected the Registrar’s decision.
[71] This, coupled with the fact that the Federal Court clearly understood the implications that new evidence can have for the standard of review in a section 45 appeal, leads to the inference that the Court did not find Mr. Eriksen’s new evidence to have been sufficiently probative as to permit a de novo consideration of the issue. Indeed, as will be seen later, the Federal Court expressly found certain aspects of the Registrar’s decision to have been unreasonable, not incorrect. No error has thus been demonstrated in this regard.
[72] This then takes us to the central issue in this appeal, which is whether the Federal Court erred in finding that there had been use of the WALDORF ASTORIA mark in Canada during the relevant period.
IX. Did the Federal Court Err in Finding that there had been Use of the WALDORF ASTORIA Mark in Canada?
[73] Miller Thomson asserts that the Federal Court made several errors in finding that there had been use of the WALDORF ASTORIA mark in Canada during the relevant period, including misstating the relevant statutory test, and misinterpreting the term “hotel services”. The Federal Court further erred, Miller Thomson says, in finding that use of a mark with respect to services that are ancillary to the registered services is sufficient to establish use of a mark in Canada for the purposes of section 45 of the Trademarks Act.
a) Did the Federal Court Misstate the Applicable Statutory Test?
[74] As noted, Miller Thomson submits that the Federal Court misstated the test for “use” of a mark in association with services under subsection 4(2) of the Act. This provision deems a mark to be “used in association with services if it is used or displayed in the performance or advertising of those services”.
[75] According to Miller Thomson, the Federal Court improperly conflated the question of whether Hilton had demonstrated use of the WALDORF ASTORIA mark in Canada with the question of whether the WALDORF ASTORIA mark enjoyed a reputation in Canada. It submits that whether or not the WALDORF ASTORIA mark distinguished any Hilton hotel services from hotel or other services of others was not in issue in this case. However, Miller Thomson contends that the Federal Court stated that an analysis based on distinctiveness was “the approach [it would] apply in considering the scope of use in the context of hotel services”.
[76] I do not accept this submission. When the comments at paragraph 72 of the Federal Court’s reasons are read in context, it appears that what the Court was referring to was the need to consider the question of use from both the perspective of the owner of the trademark and of the consumer, and not whether the Mark was distinctive.
[77] Miller Thomson also asserts that the Federal Court found that an ordinary customer making a binding contract for the reservation of a hotel room and receiving a discounted room rate as well as loyalty points for the booking would conclude that they were receiving an aspect of “hotel services” in Canada, or services that were ancillary to their hotel stay. However, the statutory test is not whether someone received an aspect of the registered services; it is whether the registered services were performed in Canada.
[78] Miller Thomson further submits that the question is whether the registered services were performed in Canada “as those registered services would be understood in ordinary commercial terms”. Rather than applying this test, Miller Thomson submits that the Federal Court asked whether “hotel services” included booking services, and whether persons in Canada benefit from those services.
[79] In support of this contention, Miller Thomson notes that the Federal Court identified the issues before it as being whether Hilton had established:
(a) that the scope of the term ‘hotel services’ in ordinary commercial use at the relevant time (per s. 30 of the Act) encompassed reservation and booking services; and
(b) that persons in Canada benefitted from these services during the relevant period.
[80] Miller Thomson submits that the correct question that the Federal Court was required to ask was “[d]id any of the activities at issue constitute the performance of ‘hotel services’ in Canada as that term would be understood in ordinary commercial terms?”.
[81] Findings by the Registrar as to the meaning of the term “use” for the purposes of section 45 of the Act are subject to review on the correctness standard: Cosmetic Warriors Limited. v. Riches, McKenzie & Herbert LLP, 2019 FCA 48, [2019] 3 F.C.R. 125 at paras. 16–17. The Federal Court was thus entitled to determine whether the Registrar’s decision with respect to the meaning of “use” was correct. This Court is also entitled to apply the correctness standard to the Federal Court’s findings on this issue.
[82] It is evident from paragraph 35 of the Federal Court’s reasons that it was aware that the issue was whether Hilton had established that some aspect of “hotel services” were performed or delivered in Canada. There, the Court observed that subsection 4(2) of the Act deems a mark to be used in association with “services” if it is used or displayed in the performance or advertising of those services. The Court went on in the same paragraph to expressly state that use will not be established where no aspect of the services themselves are performed or delivered in Canada: citing Don the Beachcomber, above, and Marineland, above.
[83] Similarly, after reviewing the relevant authorities on the question of “use”, the Federal Court observed at paragraph 56 of its reasons that “the concept of performing or delivering services to Canadians underlies all of these authorities”. The Court went on in that paragraph to note that “the concept of performing services is key”. At paragraph 76 of its reasons, the Federal Court concluded that reservation or booking services “would commonly be understood to be included in the scope of the term ‘hotel services’, as part of the ordinary expectation of what is involved in the performance of hotel services”.
[84] It is apparent from these statements that the Federal Court correctly understood the test for “use” for the purposes of the section 45 analysis, and no error has been established by Miller Thomson in this regard.
b) The Ordinary Commercial Understanding of the Term “Hotel
Services”
[85] Before it can be determined whether a particular service is performed in Canada, however, it must first be determined which activities are encompassed within the service in question, in light of the ordinary commercial meaning of the term. It is only once the scope of the services identified in the registration has been identified that the analysis can shift to whether these services have been performed in this country.
[86] Miller Thomson notes that, in accordance with section 30 of the Act, the test for “use” of a mark in association with services is whether the registered services were performed in Canada “as those registered services would be understood in ordinary commercial terms”. It takes issue with the Federal Court’s finding that the term “hotel services” “naturally includes a series of related things, some of which can only be delivered at the physical hotel, but some of which are naturally now able to be ‘performed’ (from the owner’s perspective), or ‘enjoyed’ (from the customer’s perspective) in Canada”.
[87] Miller Thomson contends that there was no evidence before the Registrar or before the Federal Court that making a hotel reservation was considered by anyone to be the performance of hotel services. Consequently, it submits that the Federal Court erred by substituting its view for that of the Registrar on this point. I cannot accept Miller Thomson’s argument.
[88] The Registrar concluded that the average consumer would expect there to be a physical hotel where “hotel services” are offered in Canada. Based upon what she called a “common sense” understanding of the term “hotel services”, the Registrar found that