Federal Court Considers the Effects of Technological Change on Trade-mark Registration for Computer Software

On February 18, 2016, the Canadian Federal Court allowed an appeal from a decision of the Registrar of Trade-marks in Specialty Software Inc v Bewatec Kommunikationstechnik GmbH, 2016 FC 223. The registration at issue was owned by Specialty Software Inc (SSI). SSI’s trade-mark was registered for the goods “software computer programs.” The evidence showed that SSI’s assignee now offered the software computer programs through a website, which the requester argued was use as a “service.”

The issue before the Court was: if a trade-mark registration covers specific goods, but those goods are now offered as a service as the result of a technological change, does a registrant continue to use the trade-mark in association with the goods for which it is registered?

The Court found that, while SSI used to sell its software on disks, it was always really selling a licence to use the software, which is an intangible good. The disks merely represented the means by which the transfer of the goods occurred – the real goods were and are the licences. As a result, the Court found that SSI had demonstrated the transfer of property in goods - the goods are the licences, and the property is the entitlement to use the licence. The transfer occurred through granting access to the software in the form of providing login credentials, and the mark is visible before, during and after the transfer. Therefore “use” had occurred for the goods within the meaning of the Trade-marks Act.