Federal Court Of Appeal Broadens Special Circumstances Excusing Non-Use Of Recently Acquired Trademarks

On September 9, 2025, the Federal Court of Appeal (FCA) issued its decision in Centric Brands Holding LLC v Stikeman Elliott LLP, 2025 FCA 161, overturning a Federal Court (FC) decision to expunge Centric Brands Holding LLC’s (Centric) AVIREX trademark registration (the Mark).

The Registrar issued a notice on October 12, 2018 under section 45 of the Trademarks Act (the Notice), requiring the then-owner of the Mark to demonstrate either: (1) use of the Mark during the three-year period immediately preceding the issuance of the Notice; or (2) special circumstances excusing non-use. Centric responded with an affidavit indicating that it had acquired the Mark shortly after the date of the Notice (on October 29, 2018) by means of a Purchase and Sale Agreement dated June 27, 2018, and argued that it was unable to provide evidence of use prior to its acquisition of the Mark. The Trademarks Opposition Board (TMOB) expunged the Mark, finding the evidence insufficient to establish use of the Mark during the relevant period or special circumstances.

Centric appealed to the FC, which upheld the TMOB’s finding. In reaching its decision, the FC recognized that, where there has been a recent assignment of a trademark, the period of non-use for the purposes of determining special circumstances will generally be considered starting from the date the trademark was assigned. In this case, however, because Centric was fully aware of the Notice before the change in ownership of the Mark (i.e., when the transaction closed), the FC found the relevant period for assessing special circumstances to include the time during which the previous owner of the Mark had title. The FC considered the evidence concerning non-use by the previous owner but found that it did not amount to special circumstances.

On further appeal, the FCA overturned the FC’s decision. Following a discussion of the jurisprudence involving circumstances where a change of ownership of the trademark occurred around the time of issuance of a section 45 notice, the FCA found the FC’s approach to be “unduly harsh and technical” as it turned on the “chance issue” of the date the parties chose to close a transaction that had been arranged months before the Notice was issued. The FCA therefore limited the relevant period for considering special circumstances to the period from the date of the Agreement to the date of the Notice. The FCA then held that the recent acquisition of the Mark, together with the short time until the end of the relevant period, constituted special circumstances excusing the absence of use. The FCA was also convinced that the shortness of the time from the date of the agreement to the Notice (about three months) was the reason for Centric’s non-use of the Mark, noting that evidence of Centric’s activities after the closing of the transaction suggested that there would have been use of the Mark if that period had not been so short.

The FCA accordingly allowed the appeal, setting aside the Mark’s expungement.

Summary By: Claire Bettio