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Infringing Use as a Defence to Infringement

Can a trademark infringer argue that its own infringing use has rendered the trademark unenforceable?

In Canada, absolutely yes, though the prospects of success in that argument will depend on the facts.  A trademark can become unenforceable if it ceases to be distinctive of the owner (s. 18(1)(b), Trade-marks Act).  At one time, some Canadian jurisprudence suggested that it might be untenable for an infringer to rely on its own infringing use to argue loss of distinctiveness.  For example, at least one Canadian firm stated that “Only in rare cases can the defendant’s own infringing sales be used to support a claim of loss of distinctiveness”.

The Federal Court of Appeal has now clearly overruled that view.  Though the facts clearly support the result, the case is notable in how categorically the Court set out the law regarding the effect of an infringer’s own use, even though there was no “infringer” in this case.

In Sandhu Singh Hamdard Trust v. Navsun Holdings Ltd., 2019 FCA 10, the Federal Court of Appeal was faced with competing Punjabi publications, each of which included the word “AJIT” meaning “invincible”.   The Trust sought to register the mark on the basis of use of its mark since 1968, though only in very modest volumes (an annual peak of 29 Canadian subscribers).  Navsun opposed on the basis of use of its own mark since 1993 with a newspaper circulation of about 20,000 per week in Canada.   The extent of the opponent’s use made for a compelling case, yet the applicant was clearly and by far the earlier user of the mark in Canada.

In accepting an argument that Navsun’s use for over a decade served to negate the distinctiveness of the Trust’s mark, the court stated in no uncertain terms:

Whether or not the appellant was the first to use the mark in Canada and whether or not the respondent’s subsequent use was infringing are of no consequence where, as here, the parties have used the mark concurrently for over a decade, and, in that time, the respondent has successfully acquired notoriety in the mark in Canada sufficient to negate the distinctiveness of the appellant’s mark. As noted by this Court in Farside Clothing Ltd. v. Caricline Ventures Ltd., 2002 FCA 446 (CanLII) at paragraph 9, 22 C.P.R. (4th) 321 (Farside Clothing), infringing prior use may cause a mark to lose its distinctiveness, although the extent or degree to which distinctiveness is eroded by infringing use remains a question of fact to be considered in each case. The allegation of passing off does not preclude a party from relying on the alleged infringing use to challenge distinctiveness.

The Court went a little further, warning trademark owners to enforce their rights or lose them:

It is incumbent upon a trader to protect the distinctiveness of its mark, even in the face of infringing use (see Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22 (CanLII) at para. 26, [2006] 1 S.C.R. 772; Suzanne’s at paras. 6-7; Farside Clothing at para. 9). The new evidence of readership in relation to the appellant’s newspaper cannot change that fact. It was open to the appellant to take sufficient steps to protect its rights to the impugned mark, which it did not do.

The take-aways from the Navsun case are:

  1. In Canada, trademarks are subject to an “enforce it or lose it” risk.
  2. An infringer’s own use can be relied on to assert that the complainant’s mark has become unenforceable, though the success of that argument will depend on the facts of the case.