Pushing the boundaries of trade-mark use in cyberspace 

publication 

January 2013

Intellectual Property Bulletin/Lexology

The Federal Court recently addressed the thorny issue of when trade-marks displayed on foreign-based Internet websites are used in Canada.

In HomeAway.com, Inc v Hrdlicka,1 the applicant succeeded in expunging a registration for the trade-mark VRBO that the respondent had registered in Canada. The applicant, HomeAway.com, Inc. and its predecessor ("HomeAway"), both Delaware corporations, claimed to have used the trade-mark VRBO in Canada in association with a well known online vacation real estate listing service. The VRBO trade-mark was displayed on HomeAway's website based in the United States and some Canadian properties were featured on the website.

An individual, Hrdlicka, applied to register the VRBO trade-mark in Canada on September 2, 2009, and eventually succeeded. HomeAway sought to expunge the registration on the basis that Hrdlicka was not the person entitled to the registration and that the trade-mark was not distinctive of Hrdlicka at the date the Court proceeding to expunge the registration was commenced.

The success of HomeAway's attack on Hrdlicka's registration turned on whether HomeAway had used the VRBO trade-mark in Canada in association with vacation real estate listing services. Section 4 of the Trade-marks Act states that a trade-mark is deemed to be "used" in association with services if it is used or displayed in the performance or adverting of those services. Jurisprudence has added an additional requirement, namely that where advertising is the sole mode of "use," the services must also be available to be performed in Canada.

The Court took the view that HomeAway had used the VRBO trade-mark in Canada in association with vacation real estate listing services prior to the date Hrdlicka filed the application for the VRBO trade-mark in Canada, on September 2, 2009. Justice Hughes held that prior to the filing date, HomeAway was "advertising to and contracting with Canadians to display their premises on the VRBO website and was displaying those Canadian premises on its website. The website displayed the trade-mark VRBO to Canadians as well as persons of every other country who visited the website."2 As a result, Justice Hughes was satisfied that prior to the date of application "HomeAway was using the trade-mark VRBO by means of advertising and use on its website in association with vacation real estate listing services."3 He also found that the VRBO trade-mark was distinctive of HomeAway.

In contrast, Hrdlicka had not used the trade-mark before November 2012.

In considering the trade-mark use issue, the Court reviewed a number of decisions in other fields involving the application of Canadian laws to electronic information or electronic transmissions. Justice Hughes concluded that the fact that the computer information on the website was likely inputted and stored outside Canada did not mean the VRBO trade-mark was not used in Canada:

I find … that a trade-mark which appears on a computer screen website in Canada regardless where the information may have originated from or be stored, constitutes for Trade-marks Act purposes, use and advertising in Canada.4

This is a broad statement that appears to have glossed over the legislative and common law principles that the services in question must also be performed or available to be performed in Canada. In this case, HomeAway's property listing services were available to Canadians, so the decision is consistent with these principles. However, it will be interesting to see if future litigants are able to rely on the Court's statement for a broader proposition, particularly in disputes involving Internet websites. If the display of a trade-mark on a computer screen website in Canada constitutes "use" of a trade-mark in Canada with services, it will be significantly easier for web-based businesses located outside of Canada to register their trade-marks in Canada and to bring claims and trade-mark opposition proceedings against persons who use or apply to register confusingly similar trade-marks in Canada. Similarly, companies which do not believe they are offering a service in Canada could be the subject of infringement claims in Canada simply because their website is viewed in Canada.

This case is also a reminder to trade-mark owners that use of a trade-mark is fundamental to obtaining and maintaining trade-mark rights in Canada. Once a trade-mark is registered, the registration can be lost if the trade-mark was not properly used before registration or is not properly used thereafter.

by Alison Hayman

1 2012 FC 1467.

2 Ibid §28.

3 Ibid §29.

4 Ibid §22.

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2013