Federal Court Of Appeal Stays Determination of Trademark Registration Until Resolution of Contractual Dispute

On May 16, 2019, the Federal Court of Appeal (FCA), in Hutchingame Growth Capital Corporation v Dayton Boot Co Enterprise Ltd (2019 FCA 152), ruled in favor of Hutchingame Growth Capital Corporation (Hutchingame), setting aside a previous Federal Court of Canada (FCC) decision (2018 FC 316) that returned the registered trademark “DAYTON” to Dayton Boot Co Enterprises Ltd. (Dayton Enterprises), as previously reported by E-TIPS® here.

In 2016, Red Cat Ltd. recorded a redacted version of an agreement to transfer the trademark from Dayton Enterprises to Red Cat Ltd., and thus had itself recorded as owner of the registration. The trademark was then assigned from Red Cat Ltd. to Hutchingame. However, Dayton Enterprises objected to the recordal made by Red Cat, claiming that the agreement was never completed, and thus Dayton Enterprises remained owner of the registration. Therefore, Dayton Enterprises claimed that the subsequent title transfer from Red Cat Ltd. to Hutchingame would be void. On March 20, 2018, Dayton Enterprises brought the issue before the FCC, which decided in its favor, and Hutchingame appealed the decision to the FCA.

At the FCA, Hutchingame argued that the FCC erred by weighing new evidence in deciding the issue. The FCA disagreed, stating that section 57 of the Trademarks Act permits new evidence to be submitted during the FCC’s assessment. However, the FCA allowed Hutchingame's appeal on the grounds that the FCC was not in a position to determine the trademark’s ownership.

Since the ownership issue is primarily based in a contractual dispute that is currently before the Supreme Court of British Columbia, the FCA stayed any determination on the trademark’s registration until that dispute is resolved.

Summary By: Imtiaz Karamat