A Canadian trademark registered in association with goods must be used in “the normal course of trade”.
Riches, McKenzie & Herbert LLP v. Cosmetic Warriors Limited, 2018 FC 63, considered whether Cosmetic Warriors’ registered trademark, LUSH, was used in association with t-shirts in the normal course of trade. Cosmetic Warriors sold the t-shirts to employees for promotional purposes.
On the evidence, Justice Manson concluded that promotional use intended to generate goodwill in a separate business does not constitute use in the normal course of trade:
Where items (here, t-shirts) are sold at cost for promotional purposes to employees only, to generate goodwill in a different business (here, cosmetics), it is difficult to find how that type of sale can be said to be in the normal course of trade … given the absence of profit, the promotional and de minimis nature of the sales to employees, and the fact that the Respondent is not normally in the business of selling clothing, the Registrar’s determination that the sales were “in the normal course of trade” is unreasonable.
A Canadian trademark that is registered for use in association with goods that are only distributed for promotional purposes and without profit is potentially vulnerable. Trademark owners must carefully document evidence of use in the normal course of trade to repel such post-registration attacks.