Registrar of Trade-marks Ordered to Reinstate Registration with Amendment
Tucumcari Aero, Inc. v. Cassels, Brock & Blackwell LLP, 2010 FC 267 (Barnes, J.)

March 9, 2010

Diane Cornish for the Applicant, Tucumcari Aero, Inc. (“Tucumcari”)
Shane Hardy and Elisabeth Sinnott for the Respondent, Cassels, Brock & Blackwell LLP

This was an appeal by Tucumcari to set aside the Registrar’s decision to expunge the registration for MOTO MIRROR and design (the “Mark”) for use with truck and automobile mirrors.

The expungement proceeding was initiated by Cassels, Brock & Blackwell LLP. As evidence, Tucumcari filed an affidavit attesting to Tucumcari’s use of the Mark in association with truck and commercial vehicle mirrors during the relevant period and to Tucumcari’s control over the quality of mirrors made under an unspecified licensing arrangement. The Registrar found the affidavit ambiguous with respect to Tucumcari’s control over the quality of those mirrors such that the licensed use of the Mark could not enure to the benefit of Tucumcari. As a result, the Registrar expunged the Mark.

On appeal, Tucumcari filed a new affidavit sworn by a Vice-President of Commercial Vehicle Group, Inc. describing the details of the licence arrangement. The affidavit stated that Tucumcari licensed to Echlin Inc. (“Echlin”) under agreement the exclusive use of the Mark in the U.S., Canada, and elsewhere. On Tucumcari’s consent, Echlin sold its assets, including the licence agreement, to Commercial Vehicle Systems, Inc. (“CVS”). CVS subsequently changed its name to Sprague Devices, Inc. (“Sprague”). The affidavit further stated that CVS/Sprague entered into a service and supply agreement with a related company, National Seating Company, Inc. (“National Seating”), which allowed the latter to manufacture and sell into Canada commercial vehicle mirrors bearing the Mark on behalf of CVS/Sprague. The relevant agreements were attached to the affidavit.

Justice Barnes held that the standard of review of a Registrar’s decision when new evidence is adduced that would substantially have materially affected the Registrar’s decision is correctness. Barnes J. also held that, in the context of sub-licensing, the indirect control contemplated by Subsection 50(1) of the Trade-marks Act does not require an express condition in the sub-licensing agreement that the registrant will continue to determine whether the quality of the wares produced has been maintained. What is required is that the registrant be able to control product quality under its contract with the intermediary, which in turn is entitled to control product quality under its contract with the sub-licensee. As long as there is a continuity of quality control that can be effectively maintained by the registrant under the chain of contracts, no special conditions or language is required. Barnes J. found that the agreements among Tucumcari, CVS/Sprague, and National Seating dealt effectively with product quality and specification, and included rights of annual inspection and termination relating to product quality. The agreements were therefore sufficient to establish Tucumcari’s indirect control over the quality of the mirrors produced under the Mark during the relevant period.

However, Barnes J. found that Tucumcari did not adduce any evidence to show that the Mark was used in association with automobile mirrors as specified in the registration during the relevant period. Therefore the registration must be amended to delete the reference to automobile mirrors.

The appeal was allowed in part. The registration for the Mark was reinstated with amendment.

By: Hung Nguyen, Deeth Williams Wall LLP