Canadian Intellectual Property Office
Citation: 2023 TMOB 148
Date of Decision: 2023-08-23
IN THE MATTER OF A SECTION 45 PROCEEDING
Requesting Party: McMillan LLP
Registered Owner: Faris Georgis
Registration: TMA972384 for GUBIANI
Introduction
[1] At the request of McMillan LLP (the Requesting Party), the Registrar of Trademarks issued a notice under section 45 of the Trademarks Act, RSC 1985, c T-13 (the Act) on December 3, 2022, to Faris Georgis (the Owner), the registered owner of registration No. TMA972384 for GUBIANI (the Mark).
[2] The statement of goods and services, including Nice classes, is reproduced below:
25 (1) Clothing, namely, SHIRTS, SUCH AS, TEE-SHIRTS, SWEATSHIRTS AND TANK TOPS, JACKETS, VESTS, SWEATSHORTS, SWEATPANTS, HATS AND CAPS
33 (2) Alcoholic beverages, namely gin, liqueurs and vodka; White spirits made from neutral alcohol namely gin, vodka, ouzo, raki, and arak
40 (1) Alcohol distillery services
43 (2) Bar services; restaurant services
[3] The notice required the Owner to show whether the Mark was used in Canada in association with the goods and 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 use since that date. In this case, the relevant period for showing use is December 3, 2019 to December 3, 2022.
[4] The relevant definitions of use are set out in section 4 of the Act as follows:
4(1) A trademark 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.
4(2) A trademark is deemed to be used in association with services if it is used or displayed in the performance or advertising of those services.
[5] In the absence of use, pursuant to section 45(3) of the Act, the registration is liable to be expunged, unless the absence of use is due to special circumstances.
[6] In response to the Registrar’s notice, the Owner furnished his own affidavit, sworn March 1, 2023 in Toronto (the Georgis Affidavit).
[7] Neither party submitted written representations; a hearing was not requested.
The Owner’s Evidence
[8] In his affidavit, the Owner identifies himself as the President of Gubiani Distillery, a sole proprietorship alcohol beverage company that produces and distributes alcoholic spirits in Canada [paras 1 and 22].
[9] As the evidence of actual use of the Mark is limited in this case, noting that the Mark was applied for in December 2015 and registered in June 2017, it is helpful to provide a general overview of the Owner’s “startup” activities as described in the Georgis Affidavit. In this respect, the Owner attests to the following:
·From 2016 to 2018, he was “dealing with issues and matters relating to registering the trademark, the label design, the purchase of the distillery equipment and trying to obtain building permits for a distillery facility to product the Gubiani products” [para 30].
·Towards the end of 2018, he decided that “it would be more practical” to find another distillery to purchase his distillery equipment and contract with them to produce his “products” [para 30].
·In October 2019, he signed an agreement with Nickel 9 Distillery (Nickel 9), located in Toronto [para 31].
·From 2020 to 2022 – and noting that the creation of a new alcoholic beverage product “is very time consuming and requires much effort and time, not to speak of funds” – the Owner worked on product development (in conjunction with Nickel 9), as well as label production, web design and product launch planning [paras 32 and 39].
·The “Gubiani product” was commercially launched to the public in June 2022 [para 34].
·During 2022 and 2023, pursuant to their agreement, Nickel 9 was tasked with marketing the product in their distillery, and all “Gubiani product” sales were made at the Nickel 9 distillery through direct sales, online sales and for promotional use [para 35].
[10] The Owner asserts that “the COVID pandemic caused important delays in the initiation of production of Gubiani products” [para 33], which delayed product launch “by nearly 2 years” [para 40]. In addition, the Owner explains that the equipment manufacturer delayed equipment delivery “by over a year” due to the specialized and custom nature of the equipment and the scarcity of some of the materials and parts [para 40].
[11] With respect to the Owner’s agreement with Nickel 9, the Owner evidences a Bill of Sale of Equipment dated January 22, 2019, showing the sale of a still from the Owner to Nickel 9 [para 22, Exhibit 5]. As explained by the Owner, the sale contemplated the agreement (eventually executed in October 2019), that included terms for the production, promotion and distribution of Gubiani products [para 22]. Exhibit 8 includes images of the still equipment installed on Nickel 9’s premises [para 25]; I note that the equipment bears the Mark.
[12] Regarding such “Gubiani products … produced at Nickel 9 Distillers” [para 20], the Gubiani Affidavit evidences the following:
·The inspiration and nature of the Owner’s alcoholic spirits, specifically referring to “anice gin” [paras 9 to 14 and 26, Exhibit 9].
·The availability of the Owner’s alcoholic spirits for sales and tastings through its agreement with Nickel 9 and the availability of the Owner’s products through Nickel 9’s website, nickel9distillery.com [paras 16 and 17, Exhibit 2].
·Promotion of the Owner’s “Gubiani Maple Espresso Anice Gin” through its website, gubianispritis.com, and Instagram [paras 15 and 18, Exhibits 1 and 3]; images of bottles of this product bearing the Mark are shown throughout the exhibits.
·A sales report from Nickel 9 showing “promotional” sales of Gubiani Maple Espresso Anice Gin, totaling 36 bottles in 2022 [para 21, Exhibit 4].
·A sales report from Nickel 9 showing sales of Gubiani Maple Espresso Anice Gin through the Shopify platform, showing a total of 12 bottles sold in 2022 [para 23, Exhibit 6].
[13] The Owner explains that the reason for low sales to date is that “we have initially been occupied with the time consuming process of acquiring equipment, developing the product and manufacturing” [para 41].
[14] Otherwise, the Owner states that it is his intention “to continue to build the brand and promote the sales of products bearing [the Mark]” [para 27].
Use of the Mark in association with the Goods
Clothing Goods
[15] With respect to the Nice class 25 “clothing” in goods (1), the Owner acknowledges that it did not sell any such clothing goods during the relevant period [para 8].
[16] Nevertheless, the Owner states that “it is fully my intention to build the brand up in 2023 and to be able to sell desirable clothing branded with the Gubiani trademark” [para 44]. The issue of special circumstances is addressed below.
[17] In view of the foregoing, I am not satisfied that the Owner has demonstrated use of the Mark in association with goods (1) within the meaning of sections 4 and 45 of the Act.
Alcoholic Beverages and Spirits Goods
[18] With respect to the Nice class 33 “alcoholic beverages” and “spirits” in goods (2), the Georgis Affidavit only evidences sales of one Gubiani-branded product during the relevant period, being the aforementioned “Gubiani Maple Espresso Anice Gin” [paras 21 and 23, Exhibits 4 and 6].
[19] Although the Owner acknowledges its low sales during the relevant period, such evidence of transfers with respect to the Owner’s gin product bearing the Mark is sufficient for purposes of this proceeding.
[20] In terms of correlation with the registered goods, I accept that the evidence of use correlates with the registered goods “Alcoholic beverages, namely gin”. If there is a distinction between “Alcoholic beverages, namely gin” and “White spirits made from neutral alcohol namely gin”, such is not clear from the evidence. Noting the absence of reference to “white spirits” or “neutral alcohol” in the evidence (aside from a bare assertion at paragraph 41), and in the absence of representations from either party, I consider it appropriate to correlate the evidenced gin product only with the former registered goods.
[21] The issue of special circumstances with respect to the remaining alcoholic beverages and spirits is addressed below.
[22] In view of the foregoing, I am satisfied that the Owner has demonstrated use of the Mark only in association with “Alcoholic beverages, namely gin” in goods (2) within the meaning of sections 4 and 45 of the Act.
Use of the Mark in association with the Services
Alcohol Distillery Services
[23] With respect to services (1), the Owner asserts that, “through the still equipment sold to [Nickel 9] branded with the Gubiani trademark, [the Owner] provided Class 40 alcohol distillery services” [para 42].
[24] While the evidence indicates that it is Nickel 9 that offers distillery services, in view of the Owner’s agreement for the production of alcoholic products with Nickel 9 and the fact that the Mark is displayed on the still equipment located on Nickel 9’s premises, I am prepared to accept that this is sufficient to demonstrate licensed use of the Mark in association with services (1). In this respect, I note that services are to be interpreted broadly and that the Requesting Party chose not to submit any representations that may have assisted in refuting this conclusion.
[25] Accordingly, I am satisfied that the Owner has demonstrated use of the Mark in association with services (1) within the meaning of sections 4(2) and 45 of the Act.
Bar and Restaurant Services
[26] With respect to services (2), I first note that the Georgis Affidavit is substantively silent with respect to “restaurant services”.
[27] Otherwise, the Owner asserts that, through Nickel 9’s bar facility, the Owner “made use of Class 43 bar services”, where the Owner’s GUBIANI-branded goods were “sold or promoted from the bar”. However, the offering of the Owner’s GUBIANI alcoholic beverages does not constitute use of the Mark in association with “bar services”. Rather, it would appear that any relevant bar services were offered in association with the Nickel 9 brand.
[28] If the Mark was displayed in association with “bar services” (i.e. other than through sales of GUBIANI-branded products), this is at best unclear from the evidence.
[29] In view of the foregoing, I am not satisfied that the Owner has demonstrated use of the Mark in association with services (2) within the meaning of sections 4 and 45 of the Act.
Special Circumstances
[30] The general rule is that absence of use will be penalized by expungement, but there may be an exception where the absence of use is excusable due to special circumstances [Smart & Biggar v Scott Paper Ltd, 2008 FCA 129].
[31] To determine whether special circumstances have been established, the Registrar must first determine, in light of the evidence, why in fact the trademark was not used during the relevant period. Second, the Registrar must determine whether these reasons for non-use constitute special circumstances [per Registrar of Trade Marks v Harris Knitting Mills Ltd (1985), 4 CPR (3d) 488 (FCA)]. The Federal Court has held that special circumstances mean circumstances or reasons that are “unusual, uncommon, or exceptional” [John Labatt Ltd v Cotton Club Bottling Co (1976), 25 CPR (2d) 115 (FCTD) at para 29].
[32] If the Registrar determines that the reasons for non-use constitute special circumstances, the Registrar must still decide whether such special circumstances excuse the period of non-use. This involves the consideration of three criteria: (i) the length of time during which the trademark has not been in use; (ii) whether the reasons for non-use were beyond the control of the registered owner; and (iii) whether there exists a serious intention to shortly resume use [per Harris Knitting Mills].
[33] The intention to shortly resume use must be substantiated by “a sufficient factual basis” [NTD Apparel Inc v Ryan, 2003 FCT 780; see also Arrowhead Spring Water Ltd v Arrowhead Water Corp (1993), 47 CPR (3d) 217 (FCTD)].
[34] All three criteria are relevant, but satisfying the second criterion is essential for a finding of special circumstances excusing non-use [per Scott Paper].
[35] In this case, although the Owner attests to his efforts and expenditures in the startup of his business [e.g. para 39], all new businesses face challenges; such challenges are not “unusual, uncommon, or exceptional”. Furthermore, while part of the relevant period corresponds to the Covid-19 pandemic, the Owner merely asserts that it caused delays in the Owner’s product launch. However, as with the asserted equipment delay, the Owner does not provide sufficient details to explain how this prevented the Owner from using the Mark in association with the registered clothing goods or any alcoholic beverages other than “gin”.
[36] Rather, this appears to be a case where the Owner made business decisions to focus on its gin product. Indeed, as the Owner states at paragraph 11 of his affidavit, “Gubiani Spirits was established in 2016 with one mission: to bring a high-quality Anice Gin to the world”. While such focus may have been reasonable, for purposes of this analysis, it is best characterized as a voluntary business decision, even if compounded by any subsequent delays caused by the pandemic. It is well-established that unfavourable market conditions and voluntary business decisions are not the sort of unusual, uncommon, or exceptional circumstances that constitute special circumstances [see, for example, Harris Knitting; and Lander Co Canada Ltd v Alex E Macrae & Co (1993), 46 CPR (3d) 417 (FCTD)].
[37] In any event, although the Owner expresses his desire to expand the GUBIANI brand and product offerings, one is left in the dark as to when such sales will commence with respect to the remaining registered goods. There is also no indication of when use of the Mark will commence with respect to the registered bar and restaurant services. As such, at a minimum, I am not satisfied that the Owner’s intention has been sufficiently substantiated by the evidence.
[38] In view of the foregoing, I am not satisfied that the Owner has established special circumstances excusing non-use of the Mark within the meaning of section 45(3) of the Act with respect to any of the remaining goods and services.
Disposition
[39] In view of all of the foregoing, 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 amended to delete “…liqueurs and vodka; White spirits made from neutral alcohol namely gin, vodka, ouzo, raki, and arak” from goods (2) and the entirety of goods (1) and services (2). The amended statement of goods and services will be as follows:
33 (2) Alcoholic beverages, namely gin.
40 (1) Alcohol distillery services.
___________________________
Andrew Bene
Member
Trademarks Opposition Board
Canadian Intellectual Property Office
Appearances and Agents of Record
HEARING DATE: No hearing held
AGENTS OF RECORD
For the Requesting Party: McMillan LLP
For the Registered Owner: Taras Kulish