Federal Court Expunges Trademark Due to Lack of Distinctiveness

On May 18, 2019, the Federal Court of Canada (FCC) ruled in favor of 8073902 Canada Inc. and Ice Cold Distributions Inc. (Ice Cold) and expunged the trademark for “DIAL-A-BOTTLE” in 8073902 Canada Inc. v Vardy (2019 FC 743).

In 2018, 8073902 Canada Inc. and Ice Cold applied to invalidate the DIAL-A-BOTTLE trademark on the grounds that: (1) it was not originally eligible for registration; and (2) it lacked distinctiveness at the time of their application. The FCC disagreed with the applicants’ first point, but ruled in favor of their second claim.

To be distinctive, a trademark must enable its owner to distinguish their goods or services from others. However, this was not the case with DIAL-A-BOTTLE, with the widespread use of the mark by unlicensed businesses confusing customers regarding the source of DIAL-A-BOTTLE services.

Despite being aware of the other businesses, the trademark’s owner did not effectively enforce his rights. The trademark's owner sent cease-and-desist letters in 2016 and commenced enforcement actions in 2017, but discontinued these proceedings before obtaining any results. Instead, the trademark's owner justified the situation by attributing the widespread use of the mark to formal and informal licensing agreements under section 50 of the Trademarks Act.

The Court disagreed with this reasoning, stating that by not controlling the character and quality of the other businesses’ services, he failed to meet the provision’s requirements. Without a valid justification for its extensive use by other parties, the FCC expunged the mark.

Summary By: Imtiaz Karamat