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Well Done, not Burnt: STK Trade-Mark Maintained

In The One Group LLC v Gouverneur Inc, the Federal Court of Appeal allowed The One Group’s appeal and maintained the registration of the trade-mark STK.

The One Group registered the Mark for use in association with bars and restaurants in 2008. In 2011, Gouverneur initiated a proceeding pursuant to section 45 of the Trade-marks Act. In such proceedings, a mark will be expunged unless the registrant shows use of that mark in Canada or shows that the mark was not used because of “special circumstances that excuse the absence of use”.

The One Group operates STK restaurants in the United States; there are no STK restaurants in Canada. Before a Hearing Officer of the TMOB, The One Group filed evidence of its efforts to partner with a hotel to build a restaurant in Toronto. The establishment of an STK restaurant in Canada was delayed when successive potential landlords abandoned their projects. The evidence also described The One Group’s continued efforts to build a restaurant in Canada.

In his decision, the Hearing Officer considered the length of the non-use, whether the non-use was beyond The One Group’s control, and whether The One Group had a serious intention to shortly resume use of the mark. The Hearing Officer concluded that each criterion had been satisfied and maintained the registration of the Mark.

Gouverneur appealed this decision to the Federal Court. In her decision, Justice Bédard held that the factors to be considered when determining whether non-use of a mark is excusable are:

  1. the reason for the non-use,
  2. whether the circumstances explaining the non-use are “special circumstances”, and
  3. whether the special circumstances excuse the non-use.

Justice Bédard concluded that the Hearing Officer had taken into account the relevant factors but that he had applied them unreasonably. Justice Bédard determined that the non-use of the Mark was not attributable to decisions made by potential landlords and that these decisions were not “special circumstances”. Justice Bédard ordered the mark expunged.

Justice Scott, writing for the Federal Court of Appeal, agreed with the test articulated by Justice Bédard. However, he concluded that the Hearing Officer should be afforded more deference in making findings of fact such as whether circumstances are “special circumstances” given that this term is not defined in the Trade-marks Act. Justice Scott concluded that the Hearing Officer’s decision was reasonable and maintained the registration of the Mark.

A copy of the Court of Appeal’s decision may be found here. The first Canadian STK restaurant is expected to open in Toronto this fall.