Coors Brewing Company v. Anheuser-Busch LLC, 2014 FC 716, July 18, 2014
Canada currently requires that a trademark application specify a basis, which can be one or more of the following:
- Use in Canada (a date of first use must be specified upon filing);
- Proposed use in Canada (a declaration of use must be filed prior to registration); and/or
- Use and registration of the mark abroad.
With respect to the third basis, there was an open and hotly debated question as to whether the use outside of Canada must precede the Canadian application’s filing date. In February 2013, the Federal Court in Thymes LLC v. Reitmans Canada Limited (2013 FC 127, February 6, 2013) confirmed that the use abroad and the foreign registration (or at least a pending foreign application) must exist at the time of filing in Canada in order for the basis to be valid. This decision created uncertainty, however, for parties that owned pre-Thymes registrations which issued from applications based on use and registration abroad where the use did not precede the filing date. The concern was that such registrations could now be challenged on the ground that the basis was invalid.
In July 2014, the Canadian Federal Court in Coors Brewing Company v. Anheuser-Busch LLC settled this question by holding that an existing registration may not be challenged on this ground. On August 16, 2010, Anheuser-Busch filed a U.S. application to register the mark GRAB SOME BUDS, based on intent to use. One month later, the company filed a Canadian application for the same mark, basing the application on proposed use in Canada. The company could not have claimed use in Canada or use and registration abroad, because these bases did not apply as of the filing date. Just ten days after filing its Canadian application, Anheuser-Busch commenced use in the U.S., and the U.S. registration for GRAB SOME BUDS was granted on March 8, 2011. On February 9, 2011, Anheuser-Busch amended its Canadian application to delete the proposed-use-in-Canada basis and to claim use and registration in the U.S. instead. The Canadian registration then issued on the latter basis. Coors subsequently applied to expunge Anheuser-Busch’s Canadian registration. Relying on the Thymes decision, Coors argued that the GRAB SOME BUDS registration was invalid because use of the mark had not commenced in the U.S. at the time the Canadian application was filed. The Federal Court upheld Anheuser-Busch’s registration, holding that Thymes applies only to opposition proceedings and not to expungement proceedings. Therefore, the Federal Court dismissed Coors’ expungement action.
The Federal Court based its decision on the fact that the grounds upon which a Canadian trademark registration may be expunged are set forth in Section 18 of the Trademarks Act. Failure to comply with procedural filing requirements is not listed among these grounds. Also, while Canadian case law provides that a fraudulent, or innocent but material, misstatement could give rise to expungement, the Federal Court stated that Anheuser-Busch did not misstate the facts when it amended its Canadian application to claim use and registration in the U.S. Indeed, at the time of amendment, Anheuser-Busch had commenced use of GRAB SOME BUDS in the U.S. and owned a pending application in the U.S.
This decision reassures brand owners that their existing Canadian trademark registrations cannot be expunged due to lack of use abroad as of the Canadian filing date, as long as the claim of use and registration abroad is true when made. Soon enough, this issue will become moot, as amendments to the Canadian Trademarks Act were passed in June 2014. When the amendments take effect as expected in 2015, Canadian trademark applicants will no longer be required to state a basis or provide any use information.