SECTION
45 PROCEEDINGS
TRADE-MARK: SPEEDNET
REGISTRATION NO.: TMA 356,622
On July 16, 1997 at the request of Shapiro Cohen, the Registrar forwarded a Section 45
notice to Speedware Corporation Inc., the registered owner of the above-referenced trade-
mark registration.
The trade-mark SPEEDNET is registered for use in association with the following wares:
(1) computer software.
In response to the notice, the registrant furnished the affidavit of Randolf Chambers,
Secretary-treasurer and Chief Financial Officer of the registrant. Neither party filed a
written argument. However, both parties were represented at the oral hearing held on
December 17, 1998.
At the hearing, counsel for the registered owner pointed out that he became aware of the
hearing only two days prior to the hearing date; he also stated that his office had not
received the hearing notice and that Shapiro Cohen's letter of November 17 confirming
attendance at the hearing was only received by the registrant on December 9, 1998.
Further, Mr. Kotarba stated that he had not received the list of case law the requesting
party intended to rely upon at the hearing. However, as he indicated that he wanted the
hearing to proceed, I proceeded to hear the parties' representations concerning the
evidence of record.
The main argument of the requesting party is that the registrant's evidence fails to show
use in Canada. After having considered the evidence and the parties' representations, I
arrive at the same conclusion.
In his affidavit, Mr. Chambers states that the registrant produces and sells a variety of
software products. With respect to the trade-mark he explains that he proceeded to
prepare an analysis of the licensing and
software revenue which the registrant has derived
from the SPEEDNET product for the 3 years and 9 months preceding the notice and
he
then listed the licensing revenue and support revenue for such period. He explained the
difference between those revenues as follows: licensing revenue is derived from
the
licensing of the SPEEDNET product to customers; support revenue is derived from
technical assistance provided to customers by the registrant's worldwide telephone
support center in Montreal. As
part of the support services, the company also distributes
updates and enhancements of the software product to end users. He specifies that in the
three (3) years preceding the notice, the product SPEEDNET has been distributed
on
large reel computer tapes; but he specifies that updates and enhancements are
distributed
electronically, not by way of a physical
media. As Exhibit A he has provided copies of
extracts from the software manuals which he states have been distributed with
the
SPEEDNET software product. He
confirms that when the software is licensed, this
manual is provided to customers. He also provided a copy of the form of label which has
been used in the distribution of the product on large reel computer tapes. As
Exhibit 8, he
has attached copies of invoices and of purchase orders to evidence the
licensing of the
SPEEDNET product,
and as Exhibit C
he has provided copies of documents to evidence
the support provided for the SPEEDNET product.
Concerning the documents of Exhibit B,
the requesting party argues that they show
transactions that occurred in the United States and not in Canada. I agree. The purchase
order from the Monterey College shows the vendor as Speedware Corp., San Ramon,
CA.; the three (3)-page invoice dated March
17, 1995, identifying the
customer as
Monterey Peninsula College of California U.S.A., the invoice shows that
payment is to be
remitted to Speedware U.S.A. Inc.
of Chicago, Illinois.
Although Mr. Chambers has stated that the revenue was
booked in the name of the
registrant's wholly owned subsidiary strictly for internal purposes, and that
the revenue
was ultimately reported on the audited consolidated financial statement of the
registrant
company, which are distributed to public shareholders of the company and to
interested
parties, I am of the view that without further details concerning the sale to Monterey
College, the above statement is insufficient to permit me to infer that the use of the trade-
mark has been by the registrant. In particular, the invoice shows the vendor as Speedware
Corp. of California USA, (not the registrant) and a sale to a company in the States. There
is no clear indication in the affidavit that the software had been exported by the registrant.
Further, even were I prepared to infer that it was so exported there is no clear indication
that when exported it was marked with the trade-mark in Canada by the registrant. It may
be that when distributed in the States the software bears the label shown in Exhibit A,
however we have not been informed who applies the label thereon and whether it was
applied in Canada. Consequently, the use shown does not meet the requirements of
Section 4(3) of the Trade-marks Act which reads:
(3) Use by export. - 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.
Consequently, I conclude that use complying with Section 4(3) of the Trade-marks Act
has not been shown.
Further, as there is no evidence of a transfer of the property in or possession of the wares
in Canada, namely a sale or licensing to a customer in Canada, I conclude that the use
shown is not use complying with Section 4( 1) of the Act which requires that the transfer
of the wares in the normal course of trade occur in Canada.
The second transaction, which in any event, bears a date prior to the relevant period, also
occurred in the United States between Speedware U.S.A. Inc. and Alphabet Inc. of Ohio,
U.S.A. Consequently it is irrelevant in showing use during the relevant period and
further it does not show use in Canada complying with either Section 4( I) or Section
4(3) of the Act.
As there is no evidence that the wares were sold or licensed to any customers in Canada
pursuant to Section 4( 1) and as the transactions of Exhibit B do not show that the wares
were exported from Canada by the registrant, and that when exported they bore the
3
trade-mark in the manner
required by Section 4(3) of the Act, I conclude that use as
required by the Act has not been shown.
Concerning any other use, Mr. Chambers has referred to "support revenue" which
is
derived from technical assistance provided to customers by the registrant's
worldwide
telephone support center in Montreal. This, in my view, appears to consist of a service
rendered by the registrant and, unfortunately, "services" are not
covered by the present
trade-mark registration.
However, Mr. Chambers has pointed out that as part of
the support services the
registrant distributes updates and enhancements of the software to end users.
I find it
arguable whether updates and enhancements are "wares" or whether they consist merely
of a service,
namely the
upgrading and enhancement of the software that has been
licensed.
Notwithstanding the above, even if they
can be considered as being wares, the evidence
fails to show the manner the trade-mark
appears in association with the updates and
enhancements when they are electronically distributed from the Montreal support centre
to the end users. As the evidence only shows customers in the United States, the use still
would have to comply with Section 4(3) of the Act. As the evidence fails to show that
when exported electronically the
trade-mark was marked in some manner on the wares
in Canada, I conclude again, that the evidence fails to show use
complying with the
requirements of the Act. Although, I accept that what we are dealing with
here are
intangible goods, the use that must be shown is still use complying with
Section 4(3) of
the Act. If the registrant had shown
that the trade-mark appeared on the end user screen
when the updates were received by such end users, then I would have been prepared to
conclude that logically the trade-mark had to have appeared on the updates in Canada
and that it so appeared when the product was electronically exported from Canada.
However, the evidence completely fails to show that this was the case.
What Mr. Chambers has stated, is that the
customers and the staff use and refer to the
trade-mark SPEEDNET when support is being provided in Canada. However, as clearly
stated in the
case Playboy Enterprises Inc. v.
Germain (No. I), 16 C.P.R. (3d) 518, a
verbal description is not use of a trade-mark within the meaning of the
Trade-marks Act
and that a mark must be something that can be represented visually.
Further, the evidence is
ambiguous as to whether updates and enhancements were
distributed during the relevant period. Mr.
Chambers has not
provided a breakdown
with respect to "support revenue" and none of the invoices clearly
refer to "updates or
enhancements". The words "maintenance and technical support" appearing on the
invoices are, in my view, too broad and
vague and I would not be prepared to infer that
they include "updates and enhancements".
In view of the above, I conclude that the evidence fails to
show any use of the trade-
mark in the manner required by Section 4(1) or Section 4(3) of the Trade-marks
Act.
At the hearing, counsel for the
registrant submitted that in view of the purpose and intent
of Section 45, as long as some evidence of use has been furnished, the
registration
should be maintained. Although I agree, based on the jurisprudence, that
evidentiary
overkill is not required, it
is also clear that sufficient facts must be provided to lead to a
conclusion of use in Canada and that the use must be as required pursuant to
Section 4 of
the Act. Here, not enough facts have been provided to
permit me to arrive at a
conclusion of use of the trade-mark in Canada in the manner required by Section
4(1) or
Section 4(3) of the Act.
Consequently, in view of the
evidence furnished, I conclude that the trade-mark
registration ought to be expunged.
Registration No. TMA 356,633 will be expunged in compliance with the requirements of Section 45(5) of the Trade-marks Act.
DATED AT HULL, QUEBEC THIS 8TH DAY OF MARCH 1999.
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.,
D. Savard
Senior Hearing Officer
Section 45