Canada: Canadian Federal Court Rejects US Doctrine Of Fraud For Material Misstatements In Declarations Of Use

In Parfums de Coeur, Ltd. v. Christopher Asta,¹ the Federal Court confirmed the Canadian treatment of "inadvertently" false declarations of use, thereby distancing itself from the position taken by the United States Patent and Trademark Office (USPTO), which defines fraud as "occurring when a trademark applicant or registrant makes a false statement to the USPTO regarding a material issue, resulting in the issuance, maintenance or renewal of a trademark registration, which may be sanctioned by the denial of an entire application or the cancellation of an entire registration."

Mr. Asta had filed a proposed use application for the trade-mark BOD in association with several wares relating to hair care, skin care, cosmetics and body care. In his declaration of use, he declared having commenced use, either by himself or through a licensee, of the trade-mark in Canada in association with the trade-marks listed in the application. Registration of the trade-mark ensued in due course.

Parfums de Coeur, Ltd. (PDC), an American distributor of body mists bearing the trade-mark BOD MAN, contacted Mr. Asta to inform him of its intent to initiate a procedure to have the BOD registration cancelled. Accordingly, Mr. Asta filed an amendment to his registration to reflect his actual use of the BOD trade-mark, i.e., with shampoo and conditioner. Notwithstanding this amendment, PDC sought the cancellation of the amended registration, which registration the Trade-Marks Office deemed to preclude PDC from obtaining a registration for the BOD MAN trade-mark in association with perfume for men.

Mr. Asta declared that he thought that to the extent he had used the trade-mark BOD in association with one of the wares listed in the application, he could file a declaration of use covering all of them. Justice Phelan concluded that although the declaration of use had certainly been made erroneously, such a mistake was either the result of a good faith mistake or of negligence. He reiterated the previously² stated rule to the effect that invalidity of a registration could result from two types of false declarations: (i) fraudulent, intentional misstatements; and (ii) innocent misstatements that are material in the sense that without them the Section 12 barriers to registration would have been insurmountable.

To the extent the application by PDC for cancellation of the trade-mark registration was filed at a date when the original trade-mark registration has already been amended to reflect actual use by the registrant, Justice Phelan concluded that although "clearly wrong," it was an innocent misstatement not sufficient to make the mark unregistrable in relation to shampoo and conditioner.

McCarthy Tétrault Notes:

Whether it is at the time of preparing a trade-mark application or filing a declaration of use, conveying the subtle nuances between the lay meaning of what constitutes "use" and its interpretation under the Trade-Marks Act is not an easy task. Although the Federal Court has rejected denying the monopoly granted by a trade-mark registration in the presence of a material misstatement in the trade-mark process, the specific facts of this case should serve as an additional reminder that this important analysis must be subject to the necessary scrutiny by both clients and their trade-mark agents.

Footnotes

1 2009 FC 21.

2 General Motors of Canada v. Moteurs Décarie Inc., [2001] 1 F.C. 665 (F.C.A.).

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