Intention to Resume Use of a Trade-mark is Insufficient to Establish Special Circumstances for Absence of Use

On April 29, 2002, the Canadian Registrar of Trade-marks gave notice under section 45(1) of the Trade-marks Act to Scott Paper Limited (Scott Paper) to show use of the registered trade-mark VANITY in the preceding three years, or date of last use and reasons for the absence of use. Scott Paper responded with evidence that as of the date of the section 45 notice it had plans to commence use of the mark that year, and it also provided evidence of sales in June 2002. Although Scott Paper had failed to give evidence of the date of previous use, the Senior Hearing Officer (Officer) determined the date of last use as being March 28, 1989, the date of acquisition of the trade-mark. The Officer further determined that non-use of the trade-mark was a deliberate and voluntary decision but she nonetheless concluded that the trade-mark should not be expunged because Scott Paper's serious intention to resume use of the mark prior to the section 45 notice constituted "special circumstances", and indicated her reliance on two earlier cases in the Federal Court of Appeal (FCA), decided in 1985 and 1999, respectively: Canada (Registrar of Trade Marks) v Harris Knitting Mills and Oyen Wiggs Green & Mutala v Pauma Pacific Inc. On appeal to the Federal Court (FC), the FC disagreed with the Officer's application of the test for special circumstances excusing the non-use of a trade-mark. Instead, the FC found that a deliberate 13-year period of non-use of a trade-mark was not excusable by a registrant's intention to resume use in the near future and the FC therefore overturned the Officer's decision. On further appeal to the Federal Court of Appeal (FCA), the FCA reviewed the Harris Knitting Mills decision and set out the following as being the key relevant factors:

1. The general rule is that absence of use is penalized by expungement.
2. There is an exception to the general rule where the absence of use is due to special circumstances.
3. Special circumstances are circumstances not found in most cases of absence of use of the mark.
4. The special circumstances which excuse the absence of use of the mark must be the circumstances to which the absence of use is due. [emphasis added]

The FCA clarified that regarding the fourth factor, the special circumstances must relate to the cause of the non-use. Accordingly, the FCA concluded that the intention to resume use is insufficient to establish special circumstances excusing non-use of the trade-mark and it therefore upheld the FC's decision. Additionally, the FCA reviewed the Oyen Wiggs decision which the Officer relied on to find that intention to resume use was a special circumstance. The FCA found that because the Oyen Wiggs Court had failed to consider the earlier Harris Knitting Mills case, the Oyen Wiggs decision was therefore not good law. For the full-text reasons in Scott Paper Limited v Smart & Biggar et al, 2008 FCA 129, see: http://decisions.fca-caf.gc.ca/en/2008/2008fca129/2008fca129.html Summary by: Lauren Lodenquai