Is Promotional Use Not Use Of A Trademark?

In any judicial system, there are times when the court is faced with unusual cases where the nitty-gritties of existing rules come into question. One such case was the Riches, McKenzie & Herbert LLP v. Cosmetic Warriors Limited where the intellectual property law in Edmonton was challenged. A law firm (McKenzie & Herbert LLP) requested that the Registrar of Trademarks issue a notice that required Cosmetic Warriors (the respondent) to provide evidence of their trademark being in use. A failure to provide sufficient evidence would result in expungement of the trademark from the register.

To simplify the chronology of events and the entities involved in the case, here is a brief of what you should know:

Who were the Parties Involved?

  • Cosmetic Warriors Limited is the Respondent in the case. They own the Registration for the trademark LUSH, which is registered for use in association with “Clothing, namely, t-shirts.”
  • Riches, McKenzie & Herbert LLP is the Requester in this case. As mentioned above, they requested the Registrar of Trademarks to issue a notice to the respondent asking for evidence that was indicative of the use of their registered trademark (LUSH). Why the applicant requested for this course of action is for reasons best known to them.
  • The Registrar of Trademarks is the major governing body for trademarks in Canada. They are a significant body when it comes to intellectual property law in Edmonton. The Registrar of Trademarks issues certificate of ownership for trademark owners in Canada.

What were the Series of Events?

  • In response to the notice, the respondent sent an affidavit to the Registrar. The affidavit provided information regarding the use of the Mark. The Director of Brand Communication for Cosmetic Warriors stated that “Employees of Lush Canada wear t-shirts bearing the Mark as part of their uniform. In addition, clothing bearing the Mark is available to employees for purchase, both for themselves and as gifts for family and friends. The Affidavit provided evidence that demonstrated sales for t-shirts bearing the Mark to Lush Canada employees…”
  • The registrar accepted the versions of the LUSH logo displayed on the T-shirts and considered it to be use of the trademark as indicated by section 4(1) of the Trademarks Act.
  • The requester raised questions regarding the promotional use of the logo. They argued that the sale of t-shirts to employees were made at cost and not at a profit. They argued that this did not constitute use of the trademark on the basis that promotional use of a trademark cannot be considered as a legitimate use of the trademark.
  • The registrar considered the requester’s argument and acknowledged that free distribution of a good to promote one’s brand does not constitute a transfer in the normal course of trade. However, they determined that good faith sales of goods to employees can satisfy the requirements of section 45(1) of the Act.

What does the Law Say?

The clauses of the Trademark Act discussed in the case are stated below:

Section 4(1)

According to the Federal Website, “A trade-mark is deemed to be used in association with goods if, at the time of the transfer of the property in or possession of the goods, in the normal course of trade, it is marked on the goods themselves or on the packages in which they are distributed or it is in any other manner so associated with the goods that notice of the association is then given to the person to whom the property or possession is transferred.”

Section 45(1)

“The Registrar may at any time and, at the written request made after three years from the date of the registration of a trademark by any person who pays the prescribed fee shall, unless the Registrar sees good reason to the contrary, give notice to the registered owner of the trade-mark requiring the registered owner to furnish within three months an affidavit or a statutory declaration showing, with respect to each of the goods or services specified in the registration.”

And if the registrar finds that the trademark was not in use for a period of three years or more, then the registration of the trademark is liable to be expunged.

The Final Judgement

When the case reached the federal court, the judge concluded that the promotional sale of goods could not be considered to be sales in the normal course of trade. The judge determined that the Registrar’s decision to maintain the trademark on the register was unreasonable.

A complex case like this requires the expertise of trademark lawyers or agents who are well-versed with the intellectual property law in Edmonton. Connect with us to gain more insights on the promotional use of trademarks.