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Broad Interpretation of “Use” in Association with Retail Store Services

May 25, 2011

Terry Edwards & Megan Langley Grainger

The recent decision in TSA Stores, Inc. v. The Registrar of Trade-marks (2011 FC 273 (FC)) deals with the issue of use in Canada of services where a “bricks-and-mortar” business is not operating.

Following a request under Section 45 of the Trade-marks Act, the summary non-use cancellation proceedings, the Registrar issued notices requiring the registrant to show evidence of use of the marks THE SPORTS AUTHORITY, THE SPORTS AUTHORITY LOGO, and LE SPORTS AUTHORITY, each registered for services including retail store services. TSA Stores, Inc. (TSA) is a retailer operating approximately 400 stores across the United States, selling sporting and fitness equipment. The few stores operated by the registrant in Canada closed in 2000. Although TSA no longer operated stores in Canada during the relevant period, TSA continued to operate a website accessible to Canadians (although the website did not permit goods to be purchased and shipped to Canada).

The Registrar found that there was no evidence of controlled use by a licensee under section 50 of the Act, and ordered the expungement of the registrations. TSA appealed.

On appeal, the registrant filed additional evidence that the TSA website was being operated by a licensee under the control of TSA Stores.

The remaining issue in the appeal was whether the evidence filed established that the registrant, by means of the TSA website, had been providing retail store services in association with the trade marks in Canada during the relevant period.

The Federal Court noted that the word “services” is not defined in the Trade-marks Act, and that the term “services” should be given a liberal interpretation. The Court also noted that the Act makes no distinction between primary, incidental or ancillary services, and concluded that as long as some members of the public (consumers or purchasers) receive a benefit from the activity, it is a service.

The evidence showed that hundreds of thousands of Canadians made use of the website during the relevant period. The Court concluded that services provided on the TSA website, including the “Help Me Choose Gear”, “Shoe Finder”, and “Store Locator” services, were of benefit to Canadians, and further, that all of the marks were in use in Canada in connection with retail department store services, because ancillary store services were being provided by means of the website itself. Accordingly, the Court concluded that there was evidence of use in Canada during the relevant period, allowed the appeal, and restored the registrations.

This may be the first case in which the Court has found “use” of a mark for retail store services in the absence of any sales (whether made via a website, or otherwise) to customers in Canada. This appears to be a dramatic step-change from previous jurisprudence that held that retail services, in the sense of sales to customers, must occur in Canada for there to be use. This decision has implications for trade mark owners both in expungement proceedings, and when signing Declarations of Use covering retail store services where the owner may have an active informational website that is accessible to Canadians, but no physical stores in Canada. Care should still be taken to ensure that there is an identifiable service, ancillary or not, given to Canadian customers.

Terry Edwards, B.B.A., is a partner in Bereskin & Parr LLP's Trade Mark Practice group. She can be reached in Toronto at 416.957.1614 or tedwards@bereskinparr.com.

Megan Langley Grainger, B.A., MBA, J.D., is an associate lawyer in Bereskin & Parr LLP's Trade Mark Practice group. 

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Author(s):

Terry Edwards Terry Edwards
B.B.A.
Partner
416.957.1614  email Terry Edwards