SECTION 45 PROCEEDINGS
TRADE-MARK: DURACRAFT
REGISTRATION NO. TMA432,633
[1] On May 18, 2006, at the request of Blain Supply, Inc., the Registrar issued the notice prescribed by s. 45 of the Trade-marks Act, R.S.C. 1985, c. T-13 (the “Act”) to Quality Craft Importers Ltd. (the “Registrant”), the registered owner of registration No. TMA432,633 for the trade-mark DURACRAFT (the “Mark”). The Mark is registered in association with hand tools, hand trucks and tool boxes; hand tools, power bench tools, hand trucks and dollies; tool chests and tool boxes.
[2] Section 45 requires the registered owner of a trade-mark to show whether the mark has been used in Canada in association with each of the wares and services listed in the registration at any time during the three years preceding the date of the notice, in this case between May 18, 2003 and May 18, 2006. If the mark has not been used during that time period then the registered owner is required to indicate the date on which it was last used and the reason why it has not been used since that date.
[3] What qualifies as use of a trade-mark is defined in s. 4 of the Act, which is reproduced below:
4. (1) A trade-mark is deemed to be used in association with wares if, at the time of the transfer of the property in or possession of the wares, in the normal course of trade, it is marked on the wares themselves or on the packages in which they are distributed or it is in any other manner so associated with the wares that notice of the association is then given to the person to whom the property or possession is transferred.
(2) A trade-mark 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 trade-mark that is marked in Canada on wares or on the packages in which they are contained is, when the wares are exported from Canada, deemed to be used in Canada in association with those wares.
[4] In response to the s. 45 notice, on December 4, 2006 the Registrant filed an affidavit of John Nigel Brice.
[5] On January 11, 2007, the registration was amended to show that the name of the Registrant had changed from Quality Craft Importers Ltd. to Quality Craft Ltd. on October 13, 2000.
[6] Only the Requesting Party filed a written argument. An oral hearing was not requested.
[7] The Requesting Party has submitted that the registration ought to be expunged and, for the reasons set out below, I agree.
[8] The evidence provided by the Registrant is insufficient in that it does not show use of the Mark in association with any of the registered wares during the relevant three-year period and it does not set out special circumstances that would justify such non-use. In particular, the pertinent portions of the evidence of Mr. Brice, the President of Quality Craft Ltd., are as follows:
• In a fax to the Registrant’s trade-mark lawyer, Mr. Brice advised that the Registrant was using the Mark on hand tools and hand trucks as of September 23, 1993. (Exhibit 1)
• In approximately 2004, Wal-Mart asked the Registrant to use the Mark exclusively for goods sold to them; the Registrant therefore discontinued the use of the Mark.
• In about April 26, 2006, the Registrant began to create artwork for wares that would be sold to Wal-Mart; in particular artwork was prepared for workbenches, circular power saws and garage door openers. (Exhibits 2, 3 and 4)
• A thread of e-mails between an employee of the Registrant and a representative of Rhine Electronic Co. Ltd. discussing carton layout dating from April 2006 is said to relate to artwork and packaging that was being prepared for Wal-Mart. (Exhibit 5)
• Due to changes in buyers at Wal-Mart, purchasing delays have occurred but a purchase order for DURACRAFT wares is expected from Wal-Mart within the next 6 months (i.e. by June 2007).
[9] Mr. Brice’s evidence does not show use of the Mark in Canada in association with any of the registered wares during the material three-year period. Therefore I must assess whether special circumstances have been put forward that excuse the non-use.
[10] When considering whether or not there are special circumstances that would excuse non-use of a mark, one must consider 1) the length of time during which the mark has not been in use, 2) whether the reasons for non-use were beyond the control of the registered owner, and 3) whether there exists a serious intention to shortly resume use [Registrar of Trade Marks v. Harris Knitting Mills Ltd. (1985), 4 C.P.R. (3d) 488 (F.C.A.)]. "Special circumstances" mean "circumstances that are unusual, uncommon or exceptional" [John Labatt Ltd. v. Cotton Club Bottling Co. (1976), 25 C.P.R. (2d) 115 (F.C.T.D.)] and the intent to resume use must be substantiated by the evidence [Arrowhead Spring Water Ltd. v. Arrowhead Water Corp. (1993), 47 C.P.R. (3d) 217 (F.C.T.D.); NTD Apparel Inc. v. Ryan (2003), 27 C.P.R. (4th) 73 (F.C.T.D.)].
[11] Regarding the first consideration, the Act requires that the registered owner provide the date when the trade-mark was last in use. Although Mr. Brice states that use of the Mark was temporarily discontinued in 2004 pending receipt of a purchase order from Wal-Mart, he has not provided any evidence that shows use of the Mark at any time prior to the alleged discontinuance in 2004. However, the case law indicates that the failure to provide the last date of use is not fatal; generally the registration date will be used as the date of last use or, if the mark has been the subject of an assignment, the date of the assignment may be used [GPS (U.K.) v. Rainbow Jean Co. (1994), 58 C.P.R. (3d) 535 (T.M.O.B.)]
[12] Based on the foregoing, I think the most appropriate date to accept as the last date of use is the registration date, namely September 2, 1994, because an assignment of the Mark has not occurred. However, in the event that the more appropriate date would be October 13, 2000 then I note that this would not change the outcome of my decision.
[13] Turning to the second factor, the Registrant appears to be submitting that the special circumstances that excuse the non-use is Wal-Mart’s delay in placing an order. However, this excuse is insufficient. A delay in a potential purchaser placing an order is not an exceptional circumstance; instead it is the sort of thing that happens in the normal course to everyone seeking to sell wares. It appears that the Registrant chose of its own free will to cease using its Mark in the hope that it would secure an exclusive contract from Wal-Mart. Nothing prevented the Registrant from using its Mark by selling its wares through channels of trade other than Wal-Mart.
[14] It is noteworthy that Mr. Brice has not presented any documentary evidence of the business negotiations that he says have been occurring between the Registrant and Wal-Mart. One would expect that there would be something in writing from Wal-Mart that would support its alleged interest in purchasing the Registrant’s wares, especially since such interest had apparently existed for two years as of the date of Mr. Brice’s affidavit. Moreover, the evidence does not show that there is a serious intent to shortly resume use of the Mark. Although Mr. Brice makes the bald statement that a purchase order is expected within 6 months, he does not provide any basis for this expectation.
[15] The Requesting Party has also submitted that the wares shown in the artwork provided by Mr. Brice do not include any of the registered wares. Although there is some question whether a circular saw might qualify as a power bench tool, I will not pursue that question further both because the Registrant has not made any submissions to that effect and because even if it did, the registration would still be expunged for power bench tools on the basis that the Mark was not in use with such wares during the relevant three-year period and special circumstances justifying such non-use have not been presented.
[16] Pursuant to my delegation under s. 63(3) of the Act, I conclude that the Registrant has not satisfied the requirements of s. 45. The registration will therefore be expunged, in accordance with the provisions of s. 45(5) of the Act.
DATED AT TORONTO, ONTARIO THIS 13th DAY OF MAY 2009.
Jill W. Bradbury
Member
Trade-marks Opposition Board