Citation: 2017 TMOB 95

Date of Decision: 2017-08-15

IN THE MATTER OF SECTION 45 PROCEEDINGS

	Mentorum Solutions Inc.	Requesting Party
and
	BFS ENTERTAINMENT & MULTIMEDIA LIMITED	Registered Owner
	TMA453,194 for MENTOROM TMA460,766 for MENTOROM MULTIMEDIA	Registrations

• [1] This is a decision involving summary expungement proceedings with respect to registration Nos. TMA453,194 and TMA460,766, for the marks MENTOROM and MENTOROM MULTIMEDIA (collectively referred to hereafter as the Marks), owned by BFS ENTERTAINMENT & MULTIMEDIA LIMITED.

[2]  The Marks are both currently registered in association with “Prerecorded interactive CD ROM software for providing education and training, and reference information”.

• [3] For the reasons that follow, I conclude that both registrations ought to be expunged.

The Proceedings

[4]  On September 14, 2015, the Registrar of Trade-marks sent notices under section 45 of the Trade-marks Act RSC 1985, c T-13 (the Act) to BFS ENTERTAINMENT & MULTIMEDIA LIMITED (the Owner). The notices were sent at the request of Mentorum Solutions Inc.

• [5] The notices required the Owner to furnish evidence showing that it had used the Marks in Canada, at any time between September 14, 2012 and September 14, 2015, in association with the goods specified in the registrations.If the Marks had not been so used, the Owner was required to furnish evidence providing the date(s) when the Marks were last in use and the reasons for the absence of use since that date.

• [6] The relevant definition of use is set out in section 4(1) of the Act as follows:

4(1) A trade-mark 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.

• [7] It has been well established that the purpose and scope of section 45 of the Act is to provide a simple, summary, and expeditious procedure for clearing the register of “deadwood”. The criteria for establishing use are not demanding and an overabundance of evidence is not necessary.Nevertheless, sufficient evidence must still be provided to allow the Registrar to conclude that the trade-mark was used in association with each of the registered goods [see Uvex Toko Canada Ltd v Performance Apparel Corp, 2004 FC 448, 31 CPR (4th) 270]. Furthermore, mere statements of use are insufficient to prove use [see Plough (Canada) Ltd v Aerosol Fillers Inc (1980), 53 CPR (2d) 62 (FCA)].

• [8] In response to the Registrar’s notices, the Owner furnished a statutory declaration of Denis B.E. Donnelly, declared November 25, 2015, together with Exhibit A, with respect to TMA453,194, and another statutory declaration of Mr. Donnelly, together with Exhibit A, with respect to TMA460,766. While the date of the jurat in Mr. Donnelly’s TMA460,766 declaration appears as May 20, 2015, the endorsement on the associated exhibit is dated May 20, 2016.I note however, that this evidence was filed with the Registrar on May 31, 2016. It appears that the discrepancy in the dates in the evidence was simply a clerical error, and the correct date on the jurat should also reflect the year 2016. I am prepared to accept this deficiency as merely technical in nature and it is well established that technical deficiencies should not be a bar to a successful response to a section 45 notice [see Baume & Mercier SA v Brown (1985), 4 CPR (3d) 96 (FCTD)].

[9]  Neither party filed written representations or requested an oral hearing.

The Evidence

The Donnelly Declaration – TMA453,194

[10]  Mr. Donnelly is the President and CEO of the Owner. 

[11]  Mr. Donnelly attests that on or about October 15, 1995, the Owner “licensed, manufactured and distributed for sale throughout North America” a series of educational CD ROMs called Mentorom Multimedia bearing one or more of the Marks.

[12]  Mr. Donnelly explains that, due to technological developments, the use of CD ROMs diminished and was replaced with the DVD format because of its increased storage capacity. He attests that the Owner ceased the manufacture and distribution for sale of all CD ROMs including those bearing the Marks in 2001. Mr. Donnelly attests that between 2002 and 2005, the Owner focused on the distribution of DVDs containing entertainment programming, reducing the sale and distribution of educational programming. He attests that during this period, the Owner did not distribute programming containing the Marks.

[13]  Mr. Donnelly explains that, once again, changing technology has led to a reduction in the use of the DVD format, in favour of the direct download link (DDL) format.  He attests that notwithstanding this change, the Owner continues to distribute entertainment and educational programming in both DVD and DDL formats to its customers.

[14]  Mr. Donnelly states that, in 2005, the Owner reissued a series of educational programming bearing one or more of the Marks.  In support, he attaches as Exhibit A to his declaration “as evidence of [the Owner’s] continued use of the Marks” an insert sleeve for a DVD related to the educational program entitled The Meschino Weight Loss Program, “currently available for sale throughout North America”. He states that the Owner is in the process of converting this DVD into DDL format, which he states will also bear the MENTOROM MULTIMEDIA trade-mark.

The Donnelly Declaration – TMA460,766

[15]  This declaration is substantially identical to the one filed with respect to TMA453,194 above, with the exception that it does not refer to the Marks collectively, but rather singularly to the TMA460,766 trade-mark as the Mark.  In addition, Mr. Donnelly provides three additional paragraphs, which can be detailed as follows.

[16]  Mr. Donnelly attests that recently, the Owner became insolvent, resulting in its secured lender appointing a licensed insolvency trustee to oversee the wind-down of the Owner’s operations.  He attests that during this wind-down, he has continued to operate the business of the Owner for the purpose of realizing all of its assets and paying all of its liabilities. He concludes by stating that the Mark continues to be a valuable asset of the Owner and one he is compelled to protect.

Analysis and Reasons for Decision

[17]  The evidence does not show that the Owner used either of the Marks in Canada during the relevant period. Moreover, there is no evidence that the Owner ever sold the registered goods bearing either of the Marks in Canada at any time. Instead, Mr. Donnelly makes the bald assertion that the Marks were used in association with a series of CD ROMs called Mentorom Multimedia, which the Owner licensed, manufactured and distributed for sale throughout North America. In any event, he attests that the Owner stopped manufacturing and distributing CD-ROMs in 2001.

[18]  In the absence of use, a trade-mark is liable to be expunged unless the absence of use was due to special circumstances. A determination of whether there are special circumstances that excuse non-use involves consideration of three criteria: (1) the length of time during which the trade-mark has not been used; (2) whether the registered owner's reasons for not using its trade-mark were due to circumstances beyond its control; and (3) whether there exists a serious intention to shortly resume use [Canada (Registrar of Trade Marks) v Harris Knitting Mills Ltd (1985), 4 CPR (3d) 488 (FCA)].

[19]  The decision in Scott Paper Limited v Smart & Biggar et al, 2008 FCA 129, 65 CPR (4th) 303 (FCA), offered further clarification with respect to the interpretation of the special circumstances criteria set out in Harris Knitting, supra. In particular, the Court determined that the proper test when assessing whether there are special circumstances, which would excuse non-use of a mark, must refer to the cause of the absence of use, and not to some other consideration. After reviewing the case law on section 45(3) of the Act, the following conclusions were drawn by the Court:

1-    The general rule is that absence of use is penalized by expungement.

2-    There is an exception to the general rule where the absence of use is due to special circumstances.

3-    Special circumstances are circumstances not found in most cases of absence of use of a trade-mark.

4-    The special circumstances which excuse the absence of use of the trade-mark must be the circumstances to which the absence of use is due.

[20]  It would appear from this analysis that the second criterion of the Harris Knitting test must be satisfied in order for there to be a finding of special circumstances excusing non-use of a trade-mark. Furthermore, with respect to this criterion, “circumstances beyond the owner’s control” mean “circumstances that are unusual, uncommon or exceptional” [see John Labatt Ltd v Cotton Club Bottling Co (1976), 25 CPR (2d) 115 (FCTD)]. This is not to say that the other two criteria are not relevant factors to consider, but just that those factors, in isolation, cannot constitute special circumstances. Indeed, the relevance of the first criterion is apparent, as reasons that may excuse a brief period of non-use, may not excuse an extended period of non-use [Harris Knitting, supra; Goldwell Ltd, Re (1974), 29 CPR (2d) 110 (TMOB]. In any event, the intent to resume use must be substantiated by the evidence (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)]. 

[21]  In the present case, the absence of use of the Marks appears to stem from a business decision made back in 2001 to stop the manufacture and distribution for sale of all CD ROMs, in favour of the DVD format due to its increased storage capacity. While an extenuating circumstance in this case might have been the Owner’s insolvency, I note that bankruptcy has been held to excuse only short periods of non-use [see for example Burke-Robertson v Swan Recreational Products Ltd (1990), 33 CPR (3d) 56 (TMOB); Rogers & Scott v Naturade Products Inc (1988), 19 CPR (3d) 504 (TMOB)]. More importantly however, the decision had already been made long before to discontinue the sale of the registered goods bearing the Marks. 

[22]  Such voluntary business decisions are not the sort of “unusual, uncommon or exceptional” circumstances that constitute special circumstances [per Harris Knitting, supra]. Indeed, I note that Mr. Donnelly’s declaration refers to a number of apparent business decisions of the Owner to ultimately concentrate on goods delivered through DDL format.

[23]  In any event, having regard to the criteria outlined above [per Harris Knitting, supra; and Scott Paper, supra], I further find that the Owner’s evidence has not established that the reasons for non-use were beyond its control. I would add that the lengthy period of non-use in the present case further weighs against the Owner.

[24]  Furthermore, as previously indicated, an owner must provide details showing a serious intention to resume use of the trade-mark in the near future [per Arrowhead, supra; NTD Apparel, supra]. In the present case, no such details have been provided. Mr. Donnelly merely states, (and only with respect to registration No. TMA460,766) “… the Mark continues to be a valuable asset of the Owner and one he is compelled to protect”. For the purposes of section 45 of the Act, this is insufficient.

 

Disposition

[25]  Accordingly, pursuant to the authority delegated to me under section 63(3) of the Act, the registrations will be expunged in compliance with the provisions of section 45 of the Act.

Kathryn Barnett

Member

Trade-marks Opposition Board

Canadian Intellectual Property Office

TRADE-MARKS OPPOSITION BOARD

CANADIAN INTELLECTUAL PROPERTY OFFICE

APPEARANCES AND AGENTS OF RECORD

___________________________________________________

HEARING DATE No Hearing Held

AGENT(S) OF RECORD

Bresver Grossman Chapman & Habas LLP	FOR THE REGISTERED OWNER
JFBV LAW OFFICES, LLP	FOR THE REQUESTING PARTY