FCA Ruling Brings Trademark Law into 21st Century

In September 2020, the Federal Court of Appeal (FCA) released its highly anticipated decision in Miller Thomson LLP v Hilton Worldwide Holding LLP (Hilton Worldwide), affirming the Federal Court’s ruling that found Hilton’s trademark registration to be valid.

The decision in Hilton Worldwide has far-reaching implications for trademarking online services. Following the FCA’s reasoning, any service that provides a “material benefit” to Canadians, including services offered online, may be eligible to acquire a registered trademark.

Background

In Hilton Worldwide, the law firm Miller Thomson challenged Hilton’s WALDORF ASTORIA trademark registration in association with “hotel services.” The Waldorf Astoria is a famous and historical hotel in Manhattan that has since expanded to add many new locations across the world – although there is not currently a Waldorf Astoria hotel in Canada.

Miller Thomson alleged that because Hilton’s trademark was not used in Canada, it should lose its registration. Despite Hilton’s registration in Canada and their apparent intent to open a hotel bearing the Waldorf Astoria name in Montreal, Hilton had never used the WALDORF ASTORIA trademark in connection with a physical hotel in Canada. However, despite not having a physical location, Hilton presented evidence that Canadians had benefitted from services branded with the WALDORF ASTORIA trademark. Hilton submitted evidence that:

  1. Canadian consumers booked hotel rooms while logged in to Hilton’s WALDORF ASTORIA-branded website
  2. 50,000 Canadians had stayed in WALDORF ASTORIA-branded hotels and spent over $50,000,000 in the three years prior to Miller Thomson’s opposition
  3. Of the hotels booked by Canadians online, 1,300 were paid for at the time of booking in exchange for discounted room rates
  4. More than 400,000 Canadians were registered in Hilton’s loyalty program. The loyalty program rewards members for staying in Hilton hotels, including the WALDORF ASTORIA hotels. Hilton additionally evidenced how this program gave members access to benefits including faster reservations and check-ins, late check-outs and express check-out services at hotels owned by Hilton.

The Registrar of the Trademark Opposition Board was unconvinced by this evidence and found that a trademark registration in association with hotel services required a physical hotel. Hilton appealed this decision to the Federal Court.

Considering the evidence submitted by Hilton, the Federal Court concluded that Canadians benefitted from Hilton’s trademarked services. The Court found that Canadians had benefitted from online booking and the ability to pre-pay for rooms and receive discounts, as well as earning loyalty points for stays in trademarked hotels that could be redeemed at hotels in Canada. The Federal Court thus overruled the Registrar and declared that Hilton’s trademark was valid. The Registrar appealed this decision to the FCA.

In a unanimous decision, the FCA affirmed the decision of the Federal Court and found Hilton’s trademark registration was valid. In addition to the FCA rubber-stamping the Federal Court’s decision, they provided the following non-exhaustive guidance regarding the kinds of evidence that can support the use of a trademark in association with an online service:

  1. Metrics indicating the number of times a webpage displaying the trademark in question has been accessed by people in Canada
  2. Data showing the number of people in Canada who have used the trademarked services in question
  3. Sales figures from services offered over the internet to Canadian consumers
  4. The content offered on the website is stored on servers located in Canada
  5. Canadian consumers are targeted with advertising
  6. Pricing is in Canadian dollars
  7. The trademark owner abides by the Canadian regulatory framework of their respective service

While certain kinds of evidence can support the use of trademarks online, that evidence alone may not be enough to satisfy decision makers. To make a finding that a trademarked service has been used online, the FCA stated that it is essential that there be sufficient “interactivity between the trademark and the Canadian consumer.” Additionally, while evidence showing that services were advertised in Canada is useful, such evidence must show that the services advertised were actually available to Canadians, and not merely advertised.

Practical Implications of Hilton Worldwide

To use a trademark in association with a service, Hilton Worldwide establishes that there is no longer a need to have a physical location. Having a presence on the internet directed toward and used by Canadians may suffice.

To establish the use of a trademarked service online, it is necessary for trademark owners to submit evidence that their service interacts with Canadian consumers. To do so, trademark owners may rely on the FCA’s guidance as a checklist. Any data showing that Canadians have used the trademarked online services are important to submit. This includes website metrics, data showing the number of Canadians who have used the service and Canadian sales figures. If there is evidence showing that the services are directed to Canadians, such as prices being in Canadian dollars or advertisements targeting Canadians, it is important to submit this as well.

Because no single factor is necessarily decisive and given the non-exhaustive nature of the FCA’s guidance, trademark owners should submit all evidence that supports the use of their trademarked service online and its connection to Canada.

Conclusion

By adjusting the Court’s view of trademark use online, Hilton Worldwide expands the services eligible to receive trademark registrations. By finally treating online services the same as physical services, Hilton Worldwide brings Canadian trademark law in line with 21st century commercial practices.

From a practical standpoint, this provides more perspectives for trademark owners to consider when registering their trademark. It is important for trademark owners to consider their businesses from both a brick-and-mortar and online perspective. Depending on the industry and stage of a trademark owner’s business, the description of services to register the trademark with may change. These considerations are complex, and decisions should only be made after consulting with a registered trademark agent.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.