The recent case of The Thymes, LLC v. Reitmans (Canada) Limited 2013 FC 127 is the first decision at Federal Court level to uphold a ground of opposition based on section 30(d) of the Trade-marks Act, for failure to use the applied-for mark in a foreign country prior to filing an application in Canada, where the Canadian application relies on use and registration abroad as a basis for registration.

The decision confirms the long standing view among many trade-mark practitioners in Canada that use of the mark applied for must have taken place in another country of the Union prior to filing a Canadian application based on use and registration of that mark abroad. Maintaining the kind of sensible planning that many applicants have previously adopted will help to lessen any impact of the Court’s decision, which now leaves no place to hide for applicants that file based on insufficient dates of use who are subsequently faced with a s.30(d) opposition.

The Federal Court’s decision has highlighted the dichotomy between continuing to attract trade-mark applicants to Canada claiming prior use and registration abroad on the one hand, and paying heed to a fundamental tenet of Canadian trade-mark law on the other, and may eventually lead Parliament to address that dichotomy. In the meantime, it underlines the need for applicants to adopt a clear filing strategy that coordinates between Canada and any other jurisdictions in which corresponding trade-mark applications are being filed.

The applicant, The Thymes, LLC (“Thymes”), applied to register the mark THYMES & Design in Canada on March 30, 2005, on the basis of use and registration of the mark in the United States and proposed use in Canada. Thymes claimed priority to an earlier US application with a filing date of March 7, 2005. Reitmans (Canada) Limited (“Reitmans”) opposed the application on various grounds, including failure to comply with section 30(d) and non-entitlement under section 16(2) of the Trade-marks Act.

Section 30(d) of the Act requires that:

30. An applicant for the registration of a trade-mark shall file with the Registrar an application containing

(d) in the case of a trade-mark that is the subject in or for another country of the Union of a registration or an application for registration by the applicant ... on which the applicant bases the applicant’s right to registration, particulars of the application or registration and, if the trade-mark has neither been used in Canada nor made known in Canada, the name of a country in which the trade-mark has been used by the applicant ...(emphasis added)

The Opposition Board upheld an opposition based on the section 30(d) ground relied on by Reitmans. The applicant, Thymes, had included in evidence details of its corresponding US application from which it claimed priority. Those details noted first use in the United States of July 2005, several months after the Canadian filing date. Reitmans sought to rely on this evidence and submitted that the noted date of first use in the United States (July 2005) contradicted the claim by Thymes that it had used its mark in the US prior to filing in Canada. The Hearing Officer agreed and the basis for registration relying on use and registration of the mark in the US was defeated.

In addressing the section 16(2) ground of opposition, the Hearing Officer determined that a likelihood of confusion arose between the opposed mark and the opponent’s trade names, without discussing the need for use abroad prior to filing in Canada.

Thymes appealed the decision to the Federal Court, but Justice Manson upheld the Registrar’s decision. The appeal by Thymes as to reliance on use and registration abroad was couched only in terms of section 16(2) of the Act, alleging that the Registrar had erred in finding that use of the mark in the United States was required as of the Canadian filing date in order to make a valid claim under that sub-section.

The Court dismissed this ground of appeal in four succinct paragraphs, holding that “it is clear that section 16(2) of the Act emphasizes that use of the mark in the country of origin of the applicant is a requirement for registration in Canada” and that the wording of section 16(2) “supports the view that both section 16 and section 30 requirements must exist and be reviewed as at the date of filing the application”.

The relevant wording of section 16(2) of the Act reads

16(2) Any applicant who has filed an application in accordance with section 30 for registration of a trade-mark that is registrable and that the applicant ... has duly registered in or for the country of origin of the applicant and has used in association with wares or services is entitled, subject to section 38, to secure its registration in respect of the wares or services in association with which it is registered in that country and has been used ...(emphasis added)

The Court’s decision confirms that an applicant in Canada relying on use and registration of its mark abroad must be able to show use of its mark in a country of the Union prior to its Canadian filing date in order to overcome any opposition based on failure to comply with section 30(d).

Some trade-mark prosecutors in Canada may view the Thymes v. Reitmans decision as creating a further procedural roadblock to applicants from the US (or other jurisdictions) that seek subsequent protection of their trade-marks in Canada. The Canadian opposition system dictates that claiming an incorrect date of first use or incorrectly filing on the basis of proposed use can be fatal to an application, contrary to many other jurisdictions that allow applicants to switch between proposed and claimed use filing bases after an application has been filed. The Thymes v. Reitmans decision has now confirmed that a Canadian application claiming reliance on an intent-to-use application previously filed in a foreign jurisdiction can also give rise to potentially fatal opposition grounds, unless the mark applied for been used in that jurisdiction before the Canadian application is filed.

Nonetheless, it is a fundamental principle of Canadian trade-mark law that it is the adoption and use of a trade-mark that gives rise to the right to register that mark, as opposed to registration of a mark giving rise to the right to use it. It follows that if a Canadian application is based on prior rights abroad, then those prior rights should include use of the subject trade-mark in that jurisdiction before the Canadian registration can issue. However, the current Canadian Trade-marks Act requires use to take place before the Canadian application claiming use abroad can be filed, rather than prior to the registration issuing.

In addition to being aware of and complying with the requirements of s.16(2), there are procedural and tactical steps that trade-mark applicants in Canada relying on use and registration abroad should continue to take in order to lessen any impact of the Thymes v. Reitmans decision. Relying on any other available filing bases, beyond simply use and registration abroad, should be adopted as a matter of course to provide a safety net. Amending applications to include reliance on use and registration abroad between filing and advertisement, allowing more time to confirm that the use abroad requirement has been met without delaying a Canadian filing date, should also be adopted. Failing to do so could leave a registered mark vulnerable to revocation if the claimed use basis subsequently turns out to be unsupported.

Applicants should also coordinate their filing strategy for Canada with the United States or other relevant jurisdictions, including with respect to any opposition or other evidence that may be placed on record. In the Thymes case, the applicant placed on record evidence that suggested (albeit unintentionally and in the applicant’s view incorrectly) that the mark may not have been used in the US until after the subsequent Canadian application had been filed. Even though the applicant argued that the evidence was neither accurate nor determinative (claiming that the recorded dates of use actually pointed to when evidence of use was filed with the USPTO, not when use was actually commenced), ultimately it led to the section 30(d) ground of opposition being upheld.

Applicants should be careful to avoid filing evidence or materials from international jurisdictions that could be construed as pointing to a date of first use in that jurisdiction that falls after the Canadian filing date. Information as to use abroad by an applicant of its trade-mark may not be readily available to an opponent, with the result that an opponent often may not be able to meet its initial evidentiary burden, absent relying on materials filed by the applicant. Fatally and unnecessarily undermining a “use abroad” filing basis when that basis could and should otherwise succeed should be avoided by Canadian applicants at all costs.

Historically, the proposed use filing basis did not exist in most jurisdictions when the current version of the Canadian Trade-marks Act was drafted and the issue highlighted by the Thymes v. Reitmans decision could not have arisen. Parliament may now move to amend the current Act to catch up to the realities of international filing in the face of the Court’s recent decision. Otherwise, applicants who have filed in the United States or elsewhere on the basis of intent to use may be reluctant to file in Canada in reliance on those prior foreign applications.