Empresa Cubana Del Tabaco Trading v Shapiro Cohen, 2011 FC 102, aff’d 2011 FCA 34
Why Is This Case Important?
This case exemplifies how foreign trademark owners can maintain registrations in Canada, particularly when goods are sold through licensees, and that such owners may rely on evidence of indirect and actual control over production and quality of the goods—apart from the provisions of a written licence—to establish deemed use by the owner under section 50(1) of the Trademarks Act.
MBM stepped in after the trademark owner was unsuccessful before the Registrar of Trademarks, which resulted in the foreign owner’s COHIBA trademarks for its cigars and cigarillos being expunged pursuant to section 45 of the Trademarks Act. MBM was successful before both the Federal Court and the Federal Court of Appeal in having the Registrar’s decisions set aside, thereby permitting the owner to continue to use its COHIBA trademarks in Canada with respect to cigars and cigarillos.
Summary
Empresa Cubana del Tabaco (Cubatabaco), a Cuban state enterprise, owned Canadian registrations for the trademarks COHIBA and COHIBA & DESIGN. Corporacion Habanos S.A. S.A. (Habanos S.A.), a company incorporated in Havana, Cuba, received a license from Cubatabaco for the export, marketing, and commercialization of tobacco-related products bearing the trademarks. Havana House Cigar & Tobacco Merchants Ltd. (Havana House), a corporation based in Toronto, Canada, was Habanos S.A.’s distributor in Canada, and it held the exclusive right to import and sell Habanos S.A.’s goods in Canada.
Expungement proceedings were initiated under section 45 of the Trademarks Act in respect of both COHIBA trademarks at the request of Shapiro Cohen, an intellectual property law firm. The Registrar expunged both marks, finding no admissible evidence of use by Cubatabaco in Canada and concluding that cigars and cigarillos did not fall within the registered category of wares: “manufactured tobacco for smoking and chewing”.
Cubatabaco submitted new evidence on appeal to the Federal Court, including affidavits from its directors and from Habanos S.A., showing that Cubatabaco indeed exercised control over the production and quality of cigars sold in Canada. It also provided dictionary definitions to support its argument that cigars and cigarillos are “manufactured tobacco for smoking”.
Court Finding
The Federal Court found that the new evidence would have materially affected the Registrar’s decision and therefore applied a correctness standard of review under section 56(5) of the Act. The Court held that cigars and cigarillos fall within the general category of “manufactured tobacco for smoking”, and thus were covered by the COHIBA registration. It also found that Cubatabaco exercised adequate control over the quality and character of the cigars sold by Habanos S.A. to benefit from the deeming provision in section 50(1). Although Cubatabaco could not rely on the presumption in section 50(2) due to a lack of public notice, the Court accepted the affidavits as admissible evidence of actual control. The Federal Court of Appeal found no errors and upheld the decision of the Federal Court.
Key Takeaway
Trademark owners may rely on evidence of actual control, even indirect, over the production and quality of the goods—apart from what may be stated in a written licence—to meet the use requirement under section 50(1) of the Trademarks Act for the licensee’s use to accrue to the trademark’s owner. General categories of goods in trademark registrations, such as “manufactured tobacco”, may be sufficient to include more specific products within its category, like cigars, if supported by evidence. This case underscores the importance of providing clear, admissible evidence in section 45 proceedings to avoid expungement. It further affirms that courts may overturn decisions of the Registrar when new evidence materially affects the outcome.
