Federal Court Of Canada Grants Expungement of NORSTEEL Trademark

On September 8, 2021, the Federal Court of Canada (the Court) issued its decision in Norsteel Building Systems Ltd. v Toti Holdings Inc., 2021 FC 927, in which it granted an application by Norsteel Building Systems Ltd. (NBS) to expunge the trademark NORSTEEL from the register.

On March 20, 2017, the trademark NORSTEEL was issued to Toti Holdings Inc. (Toti).  The registration claimed use since at least January 1, 2001.  NBS subsequently filed two trademark applications for NORSTEEL and NORSTEEL BUILDING SYSTEMS.  The Trademarks Office Examiner objected to the registration, citing Toti’s NORSTEEL registration.

NBS sought to invalidate Toti’s NORSTEEL registration on the basis that Toti had not used the trademark NORSTEEL as of the claimed date of first use; that Toti was not entitled to secure the registration because of NBS’ prior use and making known of the NORSTEEL BUILDING SYSTEMS trademarks and trade names; and that the application was filed in bad faith.

First, the Court held that NBS had used the trademark in Canada prior to the registration of NORSTEEL, and therefore had standing, as a “person interested” to bring this application.

Toti argued that NBS’ acquiescence and delay in bringing the application was a full and complete defence to the expungement action.  The Court dismissed this argument, finding that, upon learning of the registration, NBS informed Toti of its prior use and that it would pursue expungement of the trademark.

On the question of invalidity, the Court held that the NORSTEEL registration was invalid because the mark was not distinctive of Toti’s goods and services, and because Toti was not the person entitled to secure registration of the trademark.  The Court determined that NBS’s use was greater than that of Toti, since NBS had commenced use of the trademark NORSTEEL BUILDING SYSTEMS in 1992 and had used it continuously since then. 

On the issue of bad faith, the Court noted that “where an applicant has knowledge that another entity in the same line of business is using the very word it wishes to register as a trademark, one would expect the applicant to conduct its due diligence regarding that other business before making the required statement.”  The Court held that Toti was, “at best, wilfully blind as to whether it had the right to make the application in the face of its competitor [NBS]”, but the Court concluded that a failure to make the obvious inquiries did not amount to bad faith. 

Summary By: Michelle Noonan