LE REGISTRAIRE DES MARQUES DE COMMERCE
THE REGISTRAR OF TRADE-MARKS
Citation: 2014 TMOB 18
Date of Decision: 2014-01-28
IN THE MATTER OF A SECTION 45 PROCEEDING requested by Gouverneur Inc against registration No. TMA722,923 for the trade-mark STK in the name of The One Group LLC
[1] At the request of Gouverneur Inc (the Requesting Party), the Registrar of Trade-marks issued a notice under section 45 of the Trade-marks Act, RSC 1985, c T-13 (the Act) on October 3, 2011 to The One Group LLC (the Registrant), the registered owner of registration No. TMA722,923 for the trade-mark, STK (the Mark).
[2] The Mark is registered for use in association with the services “bar services; restaurants”.
[3] Section 45 of the Act requires the registered owner of the trade-mark to show whether the trade-mark has been used in Canada in association with each of the services specified in the registration at any time within the three year period immediately preceding the date of the notice and, if not, the date when it was last in use and the reason for the absence of such use since that date. In this case, the relevant period for showing use is between October 3, 2008 and October 3, 2011.
[4] The relevant definition of “use” is set out in section 4(2) of the Act:
4(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.
[5] Section 45 proceedings are considered to be summary and expeditious for clearing the register of non-active trade-marks. The expression “clearing deadwood” has often been used to describe such proceedings [Philip Morris Inc v Imperial Tobacco Ltd (1987), 13 CPR (3d) 289 (FCTD)]. Consequently, the threshold for establishing use in these proceedings is quite low [Woods Canada Ltd v Lang Michener (1996), 71 CPR (3d) 477 (FCTD)] and evidentiary overkill is not required in order to properly reply to a section 45 notice [Union Electric Supply Co Ltd v Registrar of Trade-marks (1982), 63 CPR (2d) 56 (FCTD)].
[6] In response to the section 45 notice, the Registrant furnished the affidavit of Jonathan A. Segal, the managing member of the Registrant, sworn on April 25, 2012, and the affidavit of Michael Achenbaum, owner of the Gansevoort Hotel Group, a company with which the Registrant was negotiating an agreement to establish a bar and restaurant bearing the Mark, sworn on April 26, 2012. Both parties filed written representations; an oral hearing was not held.
[7] In his affidavit, Mr. Segal attests that the Registrant operates “high energy, female friendly” bars and restaurants targeted at women in their mid-20s to mid-50s. Mr. Segal explains that the STK bars and restaurants are located in “highly visible … hotspots” in five major cities in the United States, namely New York, Los Angeles, Atlanta, Miami, and Las Vegas and is currently expanding operations worldwide. Since opening in 2006, Mr. Segal explains that the STK establishments have grossed over USD$131.7 million. Exhibits A through E consist of interior photographs of the STK restaurants and bars in New York, and various promotional flyers depicting events organized at these locations. Exhibit F consists of a DVD containing video clips of celebrities frequenting the Los Angeles STK location and events taking place at that location, while Exhibit G consists of a list of the celebrities and the events contained on the DVD.
[8] With respect to use of the Mark in Canada, Mr. Segal explains that although the Registrant has not opened an STK bar and restaurant in Canada, there is “extensive use, popularity and fame of the STK mark in, at least, the United States (and arguably, in Canada, and even Worldwide)”. In this regard, Mr. Segal explains that STK has been featured in periodicals with a Canadian readership including the New York Times and Life & Style magazine. He further provides lists of “guest reservations” at the various STK locations in the United States at Exhibits H through L, which include contact telephone numbers with Canadian area codes that Mr. Segal “presumes … originated from Canada”.
[9] Although the Registrant has not opened an STK bar and restaurant in Canada, Mr. Segal attests “it has not been for failure of effort, nor for failure of good faith intent”. The Requesting Party submits that the evidence furnished by the Registrant “unequivocally supports the expungement of the [Mark]” since the Registrant has not commenced use and has not demonstrated special circumstances excusing the non-use. Accordingly, the issue in this case is whether special circumstances existed, pursuant to section 45(3) of the Act, to excuse non-use of the Mark in association with the services during the relevant period.
Special Circumstances
[10] Generally, a determination of whether there are special circumstances that excuse non-use involves consideration of three criteria: the first is the length of time during which the trade-mark has not been in use; the second is whether the reasons for non-use were beyond the control of the registered owner; and the third is whether there exists a serious intention to shortly resume use [Registrar of Trade Marks v Harris Knitting Mills Ltd (1985), 4 CPR (3d) 488 (FCA)].
[11] Smart & Biggar v Scott Paper Ltd (2008), 65 CPR (4th) 303 (FCA) offered further clarification with respect to the interpretation of the second criterion, with the determination that this aspect of the test must be satisfied in order for there to be a finding of special circumstances excusing non-use of a trade-mark. In other words, the other two factors are relevant but, considered by themselves, in isolation, cannot constitute special circumstances.
[12] In addition, the Requesting Party submits that the reasons for non-use of the Mark should be “unusual, uncommon or exceptional” [citing John Labatt Ltd v Cotton Club Bottling Co (1976), 25 CPR (2d) 115 (FCTD)].
Length of time during which the trade-mark has not been in use
[13] Generally, where a date of last use is not provided or is inapplicable as in the present case, the Registrar considers the date of registration as the relevant date for purposes of assessing the length of non-use [see Clark, Woods v Canaglobe International Inc (1992), 47 CPR (3d) 122 (TMOB); Oyen Wiggs Green & Mutala LLP v Rath (2010), 82 CPR (4th) 77 (TMOB)]. In the present case, the Mark was registered on September 4, 2008 (based on a claim of foreign use and registration pursuant to section 16(2) of the Act), whereas the section 45 notice was issued on October 3, 2011, just over three years after the date of registration. I would note that section 45(1) prevents any person other than the Registrar from initiating section 45 proceedings before a period of three years has elapsed following the registration of a trade-mark; this is consistent with the apparent legislative intent that, generally, there is a maximum start-up time of three years for a registrant to commence serious commercial use in Canada [see Humpty Dumpty Foods Ltd v CPG Products Corp (1985), 5 CPR (3d) 384 (TMOB) at para 14; Registrar of Trade Marks v Securicor Investigation & Security Ltd (1990), 32 CPR (3d) 512 (TMOB) at 513; and 2001237 Ontario Ltd v Footstar Corp, 2003 CarswellNat 6254 (TMOB) at para 12].
[14] In view of the foregoing and as discussed further below, I consider this relatively short period of non-use since registration to support a finding of special circumstances in this case.
Whether non-use was beyond the control of the Registrant
[15] In his affidavit, Mr. Segal attests that the process to find a location and establish one of its bars and restaurants “can, and quite often does, take years”. He explains that once a location is found, negotiations with the landlord must be completed before construction of the bar and restaurant can be commenced and completed prior to its opening. As examples of the length of time required by the Registrant to open a new bar and restaurant, Mr. Segal attests that the New York and Los Angeles search and negotiations only took two years, while the Las Vegas search and negotiation took four years and the Miami and Atlanta search and negotiations took three years.
[16] Mr. Segal’s affidavit describes the steps taken by the Registrant to establish an STK bar and restaurant in Canada, as summarized in part below:
• March 2008: On behalf of the Registrant, Mr. Segal “negotiated and reached agreement to use the Canadian builder and developer TAS DesignBuild … for the design and construction of a possible first STK location for Toronto, Canada in Gansevoort Hotel Group’s proposed new Ganesvoort Hotel”. However, as discussed below, Ganesvoort Hotel Group ultimately decided not to go forward with the construction of its hotel in Toronto.
• May and June 2009: meetings and discussions occurred between the Registrant and three different large hotel chains having locations in Toronto.
• October and November 2009: the Registrant held discussions with the owner of the Thompson Hotel in Toronto and Thompson’s developer regarding the possibility of establishing an STK in Thompson’s proposed new hotel in Toronto, the Mondrian; as with the Ganesvoort Hotel, Mr. Segal notes that the Mondrian hotel “unfortunately was never built”.
• December 2009 and January 2010: the Registrant met with Westmont Hospitality Group regarding the possibility of establishing an STK in one of the Canadian hotels where Westmont operated food and beverage services.
• August and October 2011: the Registrant was in contact with Icon 1 Realty in Toronto discussing various locations to establish an STK bar and restaurant.
• December 2011: Mr. Segal explains that because the Registrant had “been so active in … looking for space in Toronto” that commercial real estate brokers began soliciting the Registrant with potential properties.
• April 2012: Mr. Segal attests that the Registrant “appear[s] to now be closing in on a deal for space for an STK in the new Four Seasons Toronto Hotel that currently plans to open in 2012”.
[17] Mr. Segal attributes the Registrant’s non-use of the Mark during the relevant period to special circumstances beyond the Registrant’s control. As noted above, he explains that, as part of its effort to build a bar and restaurant bearing the Mark in Canada, the Registrant was in the process of negotiating deals with two separate hotel chains, namely, the Gansevoort Hotel Group and the Thompson Group. As Mr. Segal explains, “based upon special circumstances beyond [the Registrant’s] control, both these esteemed hotel chains decided not to move forward with their proposed hotels in Toronto, thereby uncontrollably stalling [the Registrant’s] efforts to open an STK in Canada”.
[18] Corroborative of the above is the affidavit of Mr. Achenbaum, owner of the Ganesvoort Hotel Group. In his affidavit, Mr. Achenbaum explains that Ganesvoort has hotels located in New York City, Miami and the Turks and Caicos. He attests that Ganesvoort considered expanding its operations into Canada and particularly into Toronto and in 2008 began discussions with the Registrant to locate an STK bar and restaurant in its proposed Ganesvoort Toronto hotel. Ultimately, however, Ganesvoort decided not to expand into Toronto, and Mr. Achenbaum attests that “but for … Ganesvoort Hotels’ decision to postpone building a Ganesvoort in Toronto, Ganesvoort Hotels fully expects it would have reached agreement with [the Registrant] on terms of an STK space to be located in the Ganesvoort Toronto”.
[19] The Requesting Party submits that there is nothing “special” about the circumstances regarding the Registrant’s searching and negotiation efforts during the relevant period and up to the date of Mr. Segal’s affidavit. Indeed, I note that poor or unfavourable market conditions are generally not considered special circumstances excusing non-use [see Harris Knitting, supra; Rogers, Bereskin & Parr v Registrar of Trade-marks (1987), 17 CPR (3d) 197 (FCTD); Lander Co Canada Ltd v Alex E Macrae & Co (1993), 46 CPR (3d) 417 (FCTD)].
[20] However, as summarized above, Mr. Segal provides a detailed account of the Registrant’s efforts to establish its services in Canada post-registration of the Mark. Based on Mr. Segal’s description of the steps taken by the Registrant to establish an STK location in Canada, I agree that it was proactive and diligent in trying to secure a location and that such efforts were consistent with the aforementioned legislative intent of affording a reasonable amount of time to commence serious commercial use in Canada. Further, I accept that the Registrant’s inability to secure a location and subsequent non-use of the Mark was a result of and due to circumstances beyond the Registrant’s control. I agree with the Registrant that “non-use did not result from a deliberate choice by the Registrant”; rather, it was the result of decisions by Ganesvoort Hotels and Thompson Hotels not to proceed with the building of their hotels in Toronto.
[21] As such, in my view, the cumulative nature of the circumstances of the present case is “unusual, uncommon, and exceptional,” and qualifies as “circumstances not found in most cases of absence of use of the mark” (per Scott, supra). Given the nature of the services and the relatively short time frame involved, I consider the present case akin to those in which the loss of a distributor or comparable link in the chain of commerce were accepted as circumstances excusing the absence of use for a certain period of time [see for example Ridout & Maybee v Sealy Canada Ltd/Ltée (1998), 83 CPR (3d) 276 (TMOB); Sim & McBurney v Hugo Boss AG (1996), 67 CPR (3d) 269 (TMOB)]; Wolfe & Bazinet v Labelmasters Canada Inc (1995), 60 CPR (3d) 106 (TMOB); Rogers, Bereskin & Parr v Canada (Registrar of Trade Marks) (1987), 17 CPR (3d) 197 (FCTD)].
[22] In view of the foregoing, I am satisfied that the non-use of the Mark can be attributed to circumstances beyond the Registrant’s control.
Whether there exists a serious intention to shortly resume use
[23] While the reasons for non-use may have been beyond the Registrant’s control, the Registrant’s intent to resume or commence use must be substantiated by the evidence [see Arrowhead Spring Water Ltd v Arrowhead Water Corp (1993), 47 CPR (3d) 217 (FCTD); NTD Apparel Inc v Ryan (2003), 27 CPR (4th) 73 (FCTD)].
[24] The Requesting Party submits that the Registrant has not provided an “affirmative statement” that it will use the Mark shortly in Canada. However, as noted above, Mr. Segal attests that, despite the setbacks to the Registrant’s plans caused by Gansevoort and Thompson deciding not to proceed with construction of their hotels in Toronto, the Registrant continued in its efforts to open an STK bar and restaurant in Canada. I am of the view that such diligent continuous efforts demonstrate a serious intention on the part of the Registrant to shortly resume use of the Mark in Canada.
[25] Moreover, Mr. Segal states that, at the time of signing his affidavit, “we are actively continuing our pursuit of this important expansion” and that the Registrant “appear[s] to now be closing in on a deal for space for an STK in the new Four Seasons Toronto Hotel that currently plans to open in 2012”. He further states that “we are hopeful that an arrangement can be solidified … and maybe even have our first Canadian STK opened in late 2012, or at the very least, in early 2013.”
[26] Although Mr. Segal equivocates somewhat in the “hopeful” date of use of the Mark in Canada, this is understandable in the circumstances as a reasonable timeframe and does not detract from the totality of the evidence before me which indicates that the Registrant does, indeed, have a serious intent to commence use of the Mark in Canada.
[27] In view of all of the foregoing, I am satisfied that the Registrant has demonstrated special circumstances excusing non-use of the Mark in association with “bar services; restaurants” during the relevant period within the meaning of section 45(3) of the Act.
[28] Nonetheless, it should be noted that these same circumstances would not likely excuse non-use over a much longer period of time. The longer the duration of non-use, the less likely a trade-mark owner would be successful in demonstrating diligent and reasonable efforts to commence use and in attributing non-use to circumstances beyond its control.
Disposition
[29] Pursuant to the authority delegated to me under section 63(3) of the Act, and in compliance with the provisions of section 45 of the Act, the registration will be maintained.
______________________________
Andrew Bene
Hearing Officer
Trade-marks Opposition Board
Canadian Intellectual Property Office