Hotel services are proving to be an interesting battleground regarding cross-border use of trademarks. The key question is whether there can be “use” of a hotel trademark in Canada if no bricks and mortar establishment actually exists in this country. In a recent decision of the Trademark Opposition Board in Miller Thomson LLP v. Hilton Worldwide Holding LLP. (2017 TMOB 19) the WALDORF-ASTORIA trademark registration was cancelled for non-use because “hotel services” (the only services described in the registration) entail that consumers should be able to rent a hotel room located in Canada, which has not been possible for a number of years for this particular chain of high-end hotels.
Hilton Worldwide argued that Canadians could, from their home, make reservations online or by telephone in WALDORF-ASTORIA hotels located in other countries. Thousands of Canadians had actually booked stays online during the relevant three year period. It was also argued that the branded hotel loyalty program enrolled over 400,000 Canadian members during this same period, and that these could reap some of the benefits of this program (such as obtaining free stays) from Canada. The Board held that even if these services are ancillary to the operation of a hotel, they are not “hotel services” per se. it also refused to draw a distinction with services described as “hotels” or “operation of a hotel”, which would arguably have a narrower meaning. The Board followed earlier case law in the field of hotels and it further gave some weight to the fact that the Canadian Goods and Services Manual does have distinct entries for “hotel services”, “hotel reservations”, “hotel room booking services” and “hotel management”. The Board perceived that a consumer told that he or she will receive “hotel services” in Canada would expect, using common sense, the presence of a bricks and mortar hotel.
Applicants that do not expressly include ancillary services such as reservation services and loyalty programs in their Canadian trademark application may find themselves incapable of showing use, which may lead to a loss of registered trademark rights. This does not necessarily mean that owners of hotel trademarks may not invoke trademark rights acquired through use. Since there are clear advantages to holding a trademark registration, including in the context of litigation, it is worth adding additional language in your Canadian application. If a convention priority application does not expressly include services ancillary to the operation of a hotel, these can be added on a non-priority basis at the time of filing of the Canadian application. It may prove to be easier to prove use through the Internet of these ancillary services.
The Board’s decision has been appealed before the Federal Court of Canada and a decision is expected later in 2018.