A foreign online store need not ship to Canada to maintain a Canadian trademark registration

The Federal Court of Canada ruled that a U.S. chain of retail dollar stores may keep its Canadian trademark registration for use in association with “retail variety store services” notwithstanding that it does not operate a physical store in Canada and the company does not itself deliver the purchased goods to Canadian addresses. Justice Manson of the Federal Court, sitting in an appeal from the Registrar of Trademarks, held that the Registrar was “unreasonable” in requiring a foreign deliver products to Canadians as prerequisite to maintaining its registration.

The Registrar of Trademarks expunged the owner’s DOLLAR GENERAL trademark with reference to the Federal Court’s decision in UNICAST SA. v. South Asian Broadcasting Corporation Inc., 2014 FC 295. The Registrar appeared to be moved to this result by that Court’s statements that:

• “[A]ny foreign trade-mark holder could request and obtain the expungement of a bona fide Canadian trade-mark based on previous use through the Web even if this foreign trade-mark owner had basically nothing to do with Canada and no physical presence in the country. How could it be logical to interpret the applicable legal scheme as putting every single Canadian trade-mark owner at risk of having its trade-mark taken away by another trade-mark that has no nexus to Canada? Should Canadian companies be expected to protect themselves from every company around the world which has a website that is accessible in Canada? Could this even be possible to achieve? It would be illogical and impossible to take this approach."

• “What is more … this situation would be unthinkable should the roles in these proceedings be reversed. Would a Canadian trade-mark owner have the right to request from a foreign trade-mark owner that they stop using their trade-mark if this foreign owner’s presence in Canada is limited to the Internet? …Again, this suggestion is preposterous."

Justice Manson reversed the Registrar's decision, distinguishing the UNICAST decision on its facts. Manson J. noted that Dollar General’s website provided Canadians with a store locator, product information, recipes and coupons. Further, Canadians made purchases from the website and at least one customer received goods in Canada through a third-party trans-shipper. Manson J. concluded that to deny these activities constitute retail services would be to ignore commercial reality, and the Registrar was “clearly wrong and unreasonable” to have come to the opposite decision.

As a cautionary note to this case, the respondent was not represented at the hearing.

Authors: Amalia Berg, Larissa Fulop, Richard Naiberg, and Hassan Rasmi and Samanthea Samuels, 2018/2019 Articling Students-at-law