Canada: Who´s on First? First Use of a Trade-mark in Canada – How Much is Necessary?

In a recent decision, the Federal Court of Canada has had an opportunity to consider and clarify the important issue of what level of prior use is required to invalidate a confusing trade-mark registration.

In J.C. Penney Company, Inc. v. Gaberdine Clothing Co. Inc., J.C. Penney (represented by Glen Tremblay of our Ottawa office) successfully expunged Gaberdine’s registration for the trade-mark ARIZONA BLUES JEANSWEAR CO. based upon J.C. Penney’s prior use of the trade-mark THE ORIGINAL ARIZONA JEAN COMPANY in Canada.

Although J.C. Penney had established two individual sales of its garments in Canada under the confusing trade-mark prior to the date of filing of Gaberdine’s proposed use trade-mark application, it was also necessary to overcome a prior decision of the Federal Court which held that a single use of a trade-name prior to filing a proposed use application was not sufficient to expunge a registration.

In this case, Mr. Justice Nadon was satisfied that the prior decision was incorrect, and that J.C. Penney should prevail, as prior use of a trade-mark is not synonymous with commercial success: "use of a trade-mark cannot be measured by the number of sales or the quantity of wares sold in association with the trade-mark. The sale or sales must be examined in the light of all of the surrounding circumstances."

Aside from clarifying the law on this point, this case also serves to emphasize two practical matters.

First, if it is necessary to seek to expunge a trade-mark registration on the basis of prior use or making known in Canada, any action should be taken within five years of registration. Once more than five years have passed, mere prior use is not sufficient. Rather, it is also necessary to establish that the owner of the trade-mark registration adopted the mark with actual knowledge that the mark had been previously used or made known in Canada.

Second, to avoid the risk of brand appropriation, serious consideration should always be given to filing an application in Canada for any corresponding trade-mark application being filed in the United States or elsewhere. Not only is Canada the United States’ largest trading partner, but the relatively small added cost involved in filing in Canada underscores the desirability of prompt protection.