Opposition Board Confirms Proper Approach to Showing Use through Licensee

In Johnston Law v 2341375 Ontario Inc, (2016 TMOB 169) the Trademarks Opposition Board addressed the requirements for demonstrating use of a trademark through a licensee in the context of summary non-use cancellation proceedings. The decision contains an overview of the methods through which a registered owner can show use.

In response to a notice under Section 45 of the Trade-marks Act, 2341375 Ontario Inc, the registrant, submitted an affidavit sworn by the owner of a licensee which showed sales of the registrant’s products under the trademark at issue. The evidence was sufficient to preserve the registration for the registered goods, which were shown to be transferred during the relevant period.

The hearing officer summarized the three main methods by which a trademark owner can demonstrate the requisite control over a licensee (citing Empresa Cubana Del Tabaco Trading v Shapiro Cohen, 2011 FC 102 at paragraph 84):

1. clearly attesting the to the fact that it exerts the requisite control;
2. providing evidence demonstrating that it exerts the requisite control; or
3. providing a copy of the licence agreement that provides for the requisite control.

These requirements are disjunctive. For instance, the evidence provided by 2341375 Ontario Inc’s licensee fell entirely within the first method of proof, as set out above. Nevertheless, the evidence still demonstrated the requisite control required over a licensee.

Further, the decision holds that the “‘normal course of trade’ recognizes a continuity of actions that commence with the trademark owner through intervening transactions by agents or distributors to the ultimate consumer” (citing Manhattan Industries Inc v Princeton Manufacturing Ltd (1971), 4 CPR (2d) 6 (FCTD)). This means that evidence of the sale of goods bearing the trademark by another entity can satisfy the requirements of section 4(1), including the requirement that a transfer be made in the normal course of trade.