It is becoming increasingly important to consider whether trade-mark rights are acquired in Canada as a result of web-based advertising on foreign-based websites. 

Under section 4(2) of the Trade-Marks Act, a trade-mark is used in association with services if it is “used or displayed in the performance or advertising of those services” in Canada.  What does this mean for a foreign business owner whose business does not operate from Canada but who offers wares and services online in association with a trade-mark such that a Canadian consumer can easily access it?  Can such a business claim that it has used its mark in Canada such that Canadians must contend with its rights and perhaps avoid using the mark?

The following case summaries reflect the evolving stance of Canadian courts on this vital issue for trade-mark owners. 

The fact that a website that ends with the letters “.ca” does not in and of itself establish ‘use’ of a mark in association wares or services in Canada, as demonstrated in the case of Poltev v. MMI-GOC LLC.

In the 2012 case of Homeaway.com Inc. v. Hrdlicka, the Federal Court dealt squarely with the issue of use of a trade-mark on foreign-based websites. Homeaway.com operates the website vrbo.com, which stands for ‘vacation rentals by owner’. The respondent, an individual named Hrdlicka, had applied to register the trade-mark VRBO in September of 2009 in association with vacation real estate listing services.  Homeaway.com challenged Hrdlicka’s application by arguing that they had previously used the trade-mark in Canada on their website frequented by Canadian clients, even though the site itself was based in the United States.  The Court applied section 4(2) of the Trade-marks Act and seized on the fact that Homeaway.com was advertising to and contracting with Canadians to display rental properties on their website.  As a result, the court decided that Homeaway.com had used their trade-mark in Canada.

The Court in Homeaway.com Inc. v. Hrdlicka stated in very broad terms that a trade-mark appearing on a website frequented in Canada, regardless of where the information originated or is stored, constitutes use and advertising in Canada, under the Canadian Trade-marks Act.  

However, the following case law appears to indicate that this statement is an over-generalization. The case law is unclear about whether or not ‘use’ in Canada is satisfied by an online presence if the company does not provides services in Canada to Canadians, rather there is merely an interaction in Canada or with Canadian clients.  The uncertainty relates to level of interaction with Canadians that must occur for ‘use’ to be found.  It is clear from the following decisions of the court that this area of law is in a state of flux as some of these decisions appear to be inconsistent on their face.

In the 2011 case of TSA Stores Inc. v. Registrar of Trade-marks, the court  held that a store that advertised clothing online in association with the mark SPORTS AUTHORITY, but had no evidence that Canadians purchased goods from their website, could still be considered as having used their mark in Canada.  This decision was based on evidence that a significant number of Canadians accessed the website and that the website provided services and information similar to the experience of entering a retail store and speaking with a salesperson.  Here, there was a definite indicator of a relationship with potential Canadian clients and this was sufficient to amount to ‘use’ of the trade-mark.

In the 2012 case Bellagio Limousines v. Mirage Resorts Inc., the court held that even though advertising was conducted in Canada and directed to Canadians, their promotions were for the use of “hotel services”, but they did not actually operate a hotel in Canada.  The court found that they could not claim ‘use’ of BELLAGIO with hotel services in Canada as there were no hotel services offered in Canada, it was merely a well-advertised American hotel.  

However, in contrast to this case, in the 2006 case of Borden Ladner Gervais LLP v. WestCoast Hotels, Inc., the court held that online reservation services in Canada and a loyalty program in Canada were sufficient to find that hotel services were offered in Canada.  The loyalty program directed specifically towards Canadians was a significant factor in this finding.  

Notably, in the case of Venice Simplon Orient Express Inc. v. Societe Nationale des Chemins de fer Francais SNCF, the court found that a trade-mark for travel services was registrable even though Venice Simplon only operated and had a physical presence in Europe.  However, there were promotions and seminars directed towards Canadian travel agents and easy access to the services was provided to these travel agents.  The court held that the “travel services” for which the mark was registered were sufficiently linked to Canada even though the ticketing and reservation services were conducted through a third party Canadian travel agency.  This level of interaction with Canadians was sufficient.

As the law is rapidly evolving to address the realities of e-commerce, it will be important to monitor, on a case by case basis, whether a Canadian court has demonstrated a predisposition to give recognition to specific activities and services in association with a trade-mark, as trade-mark ‘uses’ giving rise to Canadian trade-mark rights.