Sarmad Hasan Manto

Attorney at Law

United Trademark & Patent Services

sarmad@unitedtm.com; dubai@unitedtm.com

Calgary, September 7, 2019

 

Trademark Use – Redefined

 

Abstract

 

The ever-evolving intellectual property laws and concepts demand evolution of the definition of “use” on the basis of which non-use cancellation could be sought or denied. The same concept could be followed to establish use at the prosecution stage in countries where use is a prerequisite to registration and for maintenance of rights, where use is required at the time of renewal.

 

This article opens the door for deliberation to reevaluate the definition of “use” for the betterment of public as well as the rights holders.  

 

Background

 

The requirement of use has been incorporated as a pre-requisite to registration, with a few exceptions, in some countries such as the United States of America and to maintain the registration in Philippines, Algeria and many other countries. Similarly, the national laws of almost all countries provide for cancellation of a registered trademark if it is not used by the rights holder or their authorized representative within a period of three to five years from the date of filing or registration, depending upon the jurisdiction. This requirement is also stipulated in Article 19 of the TRIPS Agreement which states as follows:

 

1. If use is required to maintain a registration, the registration may be cancelled only after an uninterrupted period of at least three years of non-use, unless valid reasons based on the existence of obstacles to such use are shown by the trademark owner.  Circumstances arising independently of the will of the owner of the trademark which constitute an obstacle to the use of the trademark, such as import restrictions on or other government requirements for goods or services protected by the trademark, shall be recognized as valid reasons for non-use.
2. When subject to the control of its owner, use of a trademark by another person shall be recognized as use of the trademark for the purpose of maintaining the registration.

 

The basic purpose behind requiring “use” is to support public right by discouraging defensive filings and to ensure provision of goods and services to public under the “trademark” in the country where the rights holder obtains protection. At the same time a trademark registration ensures protection of the consuming public from deception and provision of counterfeits under the registered trademark.

 

On the other hand, the purpose of registration of a trademark is to extend protection to the trademark owner who has made huge investments to develop and market the trademark, the product sold under the mark and the research and development expenses incurred in this respect. 

 

We do not have to find relevance as partial conflict between the aforementioned two “basic purposes” is obvious. That said, the common factor between the two is protection of public right which in all cases should be supported.

 

Conflict

 

While there is no second thought about maintaining public right, non-use cancellation of trademarks opens the door for third parties to register and/or use trademarks which do not belong to them. This results in provision of counterfeits to the public and hence violation of their right of not being deceived.

 

In order to overcome the aforementioned issue if provisions related to non-use cancellation are expunged, we will see monopolies being created whereby entities having resources shall register trademarks in multiple non-associated classes and in countries where they do not have existing or future commercial interests. Accordingly, the motivation behind provision of goods or services in certain jurisdictions would fail to exist. Similarly, trademarks will be registered in multiple non-relevant classes.

 

In order to overcome the aforementioned conflict an equilibrium needs to be found which guarantees protection of public right and as a consequential relief ensures that interests of the rights holder are protected. This requires a review of the definition of “use” and its expansion, where required. 

 

Definition of Use

 

The definition of “use” differs according to the national legislation or judicial precedents in different countries. A few definitions are reproduced hereunder for the purpose of evaluation and discussion.

 

United States of America

 

Section 45 of the Trademark Act, 15 U.S.C. §1127, defines "commerce" as "all commerce which may lawfully be regulated by Congress."  

 

Section 45 defines "use in commerce" as follows:

The term "use in commerce" means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.  For purposes of this Act, a mark shall be deemed to be in use in commerce—

 

(1) on goods when—

(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and

(B) the goods are sold or transported in commerce, and

(2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

Canada

 

Section 4 (1) A trademark 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.

(2) A trademark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.

(3) A trademark that is marked in Canada on goods or on the packages in which they are contained is, when the goods are exported from Canada, deemed to be used in Canada in association with those goods.

 

Australia

 

Section 7 - Use of trademark

 

(1)  If the Registrar or a prescribed court, having regard to the circumstances of a particular case, thinks fit, the Registrar or the court may decide that a person has used a trademark if it is established that the person has used the trademark with additions or alterations that do not substantially affect the identity of the trademark.

(4)  In this Act:

use of a trademark in relation to goods means use of the trademark upon, or in physical or other relation to, the goods (including second‑hand goods).

(5)  In this Act:

use of a trademark in relation to services means use of the trademark in physical or other relation to the services.

 

United Kingdom

 

Section 6A

 

(3)16 The use conditions are met if –

(a) within the relevant period the earlier trade mark has been put to genuine use in the United Kingdom by the proprietor or with his consent in relation to the goods or services for which it is registered, or

(b) the earlier trade mark has not been so used, but there are proper reasons for non- use.

(4)17 For these purposes -

(a) use of a trade mark includes use in a form (the “variant form”) differing in elements which do not alter the distinctive character of the mark in the form in which it was registered (regardless of whether or not the trade mark in the variant form is also registered in the name of the proprietor), and

(b) use in the United Kingdom includes affixing the trade mark to goods or to the packaging of goods in the United Kingdom solely for export purposes.

 

The aforementioned definitions stipulate that the mark should be affixed to goods or in any manner conveyed to the public establishing a link between the goods / services and such goods or services should be made available to the public in the concerned country. Some jurisdictions, like the USA, Canada and the UK consider use in relation to exports as valid use for the purpose of registration or avoiding non-use cancellation. Similarly, several countries around the world consider availability of products online as sufficient use. A valuable resource pertaining to online trademark use is published by INTA and can be accessed at http://www.inta.org/Advocacy/Documents/Online%20Trademark%20Use.pdf. 

 

It is interesting to note that the definition of “use” had been constantly evolving over time to include online use and use for export purposes in several jurisdictions including Australia, Canada, the EU, USA, and the UK. Although all these jurisdictions require that goods should be directed to consumers in these jurisdictions, many do not require evidence of actual online purchase. Similarly, countries in which use on goods for export purposes is considered actual use, sales in the local market, that is availability of goods under the mark to local consumers, is not mandatory. This establishes that public interest is considered achieved when the national interest is met.

 

Irrespective of the aforementioned evolution, there remain numerous countries which are oblivious of these developments and strictly require provision of goods and services under the trademark in their country to establish “use”.

 

My two cents

 

The above discussion shows that the main elements to be considered while evaluating “use” are public interest, rights of the trademark owner and to some extent national interest. Public interest is served through provision of or easy access to goods under the trademark and protection from being deceived; interest of the rights holder is achieved through registration and exclusion of third parties from adopting their trademark and national interest is served in different ways including contributions to the government exchequer and fulfillment of their commitment to protect trademark rights belonging to a registered owner or a well-known mark.

 

While a lot of work is done in relation to online use and exports, use of a mark through enforcement has been ignored so far. There is certainly no doubt that whenever an owner of a registered or unregistered well-known mark enforces its trademark rights through filing an infringement, passing off or unfair competition action, the consequences of such an action are three-fold. Firstly, the rights holder protects its own rights through stopping a third party from selling counterfeits under their trademark. Secondly, provision of counterfeits to the public is stopped which acts in public interest and thirdly, an action against counterfeits supports government’s commitment to enforce trademark rights, hence, acting in national interest. It also adds to the exchequer through payment of enforcement costs and taxes paid by the attorney assisting the rights holder; thus, achieving the three main elements required to determine “use”.

 

If the aforementioned argument is considered, whenever an owner of a registered mark or of an unregistered well-known mark successfully enforces their rights in a trademark in a certain jurisdiction, irrespective of whether they are producing or selling products under the mark in that country, they are fulfilling the criterion of “use” for the purpose of registration, maintenance and avoiding non-use cancellation. Accordingly, it can be argued that whenever a rights holder has successfully enforced their mark in a country, they have validly used the mark and such use could be taken as a defense in a non-use cancellation action. If the mark was not registered and the action was based upon well-known status of the mark, such an action should contribute towards use for the purpose of registration.

 

Some may argue that despite use through enforcement, public right is not satisfied as the people of that country still remain deprived of goods or services under the mark. In order to satisfy this aspect of public interest, it could be argued that if goods under the trademark are available online and there are no restrictions imposed by the brand owner on supply to the concerned jurisdiction, enforcement combined with online availability satisfies the requirements of valid “use”.  

 

If online use, whether or not directed to a certain jurisdiction, combined with successful enforcement is considered valid “use”, this proposition will not act favorably towards defensive filings and hence the threat of undue monopolization would be avoided.

 

Recommendations:

 

1. Prior successful enforcement of a trademark should be brought in the ambit of valid “use” for the purpose of registration, maintenance or avoiding non-use cancellation.
2. In accordance with domestic legislation, online use of a mark without restrictions on supply to the concerned country may be annexed to successful enforcement to act as valid “use”.