Date:
20121212
Docket:
T-1497-12
Citation: 2012
FC 1467
Toronto, Ontario,
December 12, 2012
PRESENT: The
Honourable Mr. Justice Hughes
BETWEEN:
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HOMEAWAY.COM, INC.
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Applicant
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and
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MARTIN HRDLICKA
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
[1]
This
is an application brought under the provisions of section 57(1) of the Trade-Marks
Act, RSC 1985, c. T-13 to expunge Canadian Trade-Mark Registration No.
TMA770822. For the reasons that follow I am expunging that registration with
costs to the Applicant on the basis set out herein.
THE REGISTRATION
AT ISSUE
[2]
Particulars
of the registered trade-mark at issue are as follows:
Registration
Number: TMA770822
Date of
Registration: June 28, 2010
Registered
Owner: Martin Hrdlicka
Trade-Mark: VRBO
Services for which the
mark is registered: Vacation real
estate listing services
[3]
The
application for registration was filed on September 2, 2009. No use was
claimed; the application was based on proposed use in Canada. The applicant for the trade-mark registration, Martin Hrdlicka, apparently filed a
declaration as to use of the trade-mark in Canada on June 28, 2010 however the
certified record provided by the Trade-marks Office shows only a blank
declaration form. The parties speculated before me that a Declaration may have
been filed electronically. This situation exposes a problem with the
Trade-Marks Office records which should contain a full and accurate record as
to everything that has been filed, electronically or not.
THE PARTIES
[4]
The
Applicant HomeAway.com Inc. is a Delaware corporation which, effective December
31, 2010, merged with another Delaware corporation, VRBO.com, Inc. I am
satisfied from reading the Dickey affidavit that the whole of the business and
assets, including all trade-mark rights of VRBO.com, Inc., now are owned by
HomeAway.com, Inc..
[5]
The
Respondent Martin Hrdlicka is an individual residing in Toronto, Ontario and is the person registered as owner of the trade-mark registration at issue. He
represented himself in these proceedings.
BASIS
FOR THE APPLICATION TO EXPUNGE
[6]
The
basis upon which the application to expunge the registration is set out in the
Notice of Application and repeated at paragraph 2 of the Applicant’s Memorandum
as follows:
2. The Applicant [hereinafter
“HomeAway.com”] makes this application on the basis that TMA770822 is invalid
and void for the following reasons:
a. Hrdlicka was not the
person entitled to register the trade-mark VRBO when he filed the VRBO
application based on proposed use, i.e. at the VRBO Application Filing Date,
because HomeAway.com, whether by itself and/or its predecessors-in-title,
substantially and continuously used a confusing and identical trade-mark VRBO
for identical services, namely, vacation real estate listing services, in
Canada, since at least as early as 26 March, 2003, that is, more than six years
prior to the filing date of the proposed use VRBO application;
b. At the date of this
application to the Court [hereinafter the “Court Application Filing Date”] the
VRBO trade-mark was not distinctive of Hrdlicka and was not capable of being,
or becoming, distinctive of Hrdlicka because at that date, and at all relevant
times, the VRBO trade-mark has been and is distinctive of HomeAway.com and its
predecessors-in-title; and,
c. The VRBO Registration
was obtained on the basis of material false or fraudulent statements because
Hrdlicka did not intend to use the VRBO trade-mark when he filed the VRBO
application, and did not use the VRBO trade-mark before he registered it, but nevertheless
filed a declaration of commencement of use of the trade-mark VRBO in order for
the VRBO application to register.
THE
EVIDENCE
[7]
The
Applicant filed the affidavit of Courtney Hicks Dickey, corporate counsel of
the Applicant HomeAway.com, together with exhibits A to U, inclusive. The
Applicant also filed a certified copy of the Trade-Mark Office file respecting
the registration at issue.
[8]
The
Respondent Martin Hrdlicka filed two affidavits; both his own. One was affirmed
September 7, 2012, and attached Exhibits A and B. The other was affirmed
November 22, 2012 and attached Exhibits A through N.
[9]
There
was no cross-examination upon any affidavit.
USE
[10]
The
resolution of this matter turns on a question of use, in this case of the
initials VRBO as a trade-mark, for services described as vacation real estate
listing services.
[11]
The
concept of use is fundamental to trade-mark rights, whether or not that
trade-mark is registered. In Fox on Trade-Marks, 2001, Carswell, Toronto, the authors state at paragraph 5.2(a):
Use creates the right to a trade-mark, whether in Canada or a country of the Union, registration does not. With one important exception, registration
merely serves to confirm the title which has already been established by use.
In Partlo v Todd Ritchie C.J. succinctly explained this theory of confirmation
of title by registration: “It is not the registration that makes the party
proprietor of a trade mark; he must be proprietor before he can register.”
[12]
Professor
Vaver, in “Intellectual Property Law, 2d, Irwin Law, Toronto, writes at
pages 471 to 472:
Without “use” a trade-mark is nothing. It cannot be
registered; if registered, it can be expunged. Anyone holding an unused mark
probably cannot or does not want to invest in it, may just want to play dog in
the manger and block competitors from using it, or may want to get into the
business of selling marks, not goods or services. None of this is worth
encouraging and the system treats him as an undesirable.
[13]
Use
is defined for purposes of the Trade-Marks Act, in respect of services,
in section 4(2):
4(2) A trade-mark is deemed to be used in
association with services if it is used or displayed in the performance or
advertising of those services.
[14]
As
will be discussed, the use of the trade-mark at issue, VRBO, is the offering
vacation rental services and by advertising such services over the web. The
trade-mark will appear on the screens of computer users in Canada and elsewhere. Given that HomeAway is a Delaware company, we may presume that the
information is inputted through one or more computers in the United States. The computer screens display the information in Canada as well as elsewhere.
[15]
There
has been very little jurisprudence to date as to “use” by means of computer
screen display.
[16]
In
FileNET Corp v Canada (Registrar of Trade-Marks), 2001 FCT 865, aff’d 2002
FCA 418, Blais J (as he then was) wrote at paragraph 65:
65 I believe that the fact, that the mark was
advertised and accessed on the respondent's website prior to the public notice being
given is sufficient to establish that the mark was adopted and used by the
respondent. I do not believe that the official mark could only be considered
adopted and used if the tax forms were effectively issued.
[17]
In
a case dealing with disclosure of information for income tax purposes, which
information resided in computers in the United States but was readily
accessible for business purposes by a taxpayer in Canada, I wrote in eBay
Canada Limited v Canada (Minister of National Revenue), 2007 FC 930, at
paragraph 17 that the modern approach in interpretation of statutes generally
is to construe legislation reasonably, having regard to its object and purpose:
17 The old maxim that taxing statutes are to be
strictly construed must give way to the modern approach in interpretation of
statutes generally which is to construe legislation reasonably, having regard
to its object and purpose. To quote from Justice Dickson in Covert v. Nova Scotia (Minister of Finance), [1980] 2 S.C.R. 774 at 806 and 807:
In all Courts the appellants advanced a number
of propositions regarding principles of statutory construction of fiscal
legislation that require comment. It is said taxing statutes are to be strictly
construed. The Court, it is contended, can only look to the express words of
the statute and cannot explore and give effect to the intention or purpose of
the Act. A passage from the judgment of Lord Halsbury in Tennant v. Smith [
[1892] A.C. 150.], at p. 154, is cited. Then it is said there is no equity in the
Crown's favour in a taxing statute. Reliance is placed on a passage from
Attorney-General v. The Earl of Selborne [[1902] 1 K.B. 388.], in which Collins
M.R. adopted this principle, at p. 396:
If the person sought to be taxed comes within the
letter of the law he must be taxed, however great the hardship may appear to
the judicial mind to be. On the other hand, if the Crown, seeking to recover
the tax, cannot bring the subject within the letter of the law, the subject is
free, however apparently within the spirit of the law the case might otherwise
appear to be.
...
Fiscal legislation does not stand in a category
by itself. Persons whose conduct a statute seeks to regulate should know in
advance what it is that the statute prescribes. A court should ask--what would
the words of the statute be reasonably understood to mean by those governed by
the statute? Unnatural or artificial constructions are to be avoided.
The correct approach, applicable to statutory
construction generally, is to construe the legislation with reasonable regard
to its object and purpose and to give it such interpretation as best ensures
the attainment of such object and purpose. The primary object of a succession
duty statute, such as the legislation under consideration, is to capture such
amounts for the fiscal coffers as the words of the statutory net can catch. No
legislative intention can be assumed other than to collect such tax as the
statute imposes, no more and no less.
[18]
At
paragraph 23, relying on a Supreme Court of Canada decision, I wrote that
computer accessible information is “both here and there”:
23 The issue as to the reach of section 231.2
when information, though stored electronically outside Canada, is available to
and used by those in Canada, must be approached from the point of view of the
realities of today's world. Such information cannot truly be said to
"reside" only in one place or be "owned" by only one
person. The reality is that the information is readily and instantaneously
available to those within the group of eBay entities in a variety of places. It
is irrelevant where the electronically-stored information is located or who as
among those entities, if any, by agreement or otherwise asserts
"ownership" of the information. It is "both here and there"
to use the words of Justice Binnie in Society of Composers, Authors and Music
Publishers of Canada v. Canadian Ass'n of Internet Providers, [2004] 2 S.C.R.
427 at paragraph 59. It is instructive to review his reasons, for the Court, at
paragraphs 57 to 63 in dealing with whether jurisdiction may be exercised in Canada respecting certain Internet communications, including an important reference to
Libman v. The Queen, [1985] 2 S.C.R. 178 and the concept of a "real and
substantial link".
57 The applicability of our Copyright Act to
communications that have international participants will depend on whether
there is a sufficient connection between this country and the communication in
question for Canada to apply its law consistent with the "principles of
order and fairness ... that ensure security of [cross-border] transactions with
justice"; see Morguard Investments, [1990] 3 S.C.R. 1077, supra, at p.
1097; see also Unifund Assurance Co. v. Insurance Corp. of British Columbia,
[2003] 2 S.C.R. 63, 2003 SCC 40, at para. 56; Sullivan and Driedger [page455]
on the Construction of Statutes (4th ed. 2002), at pp. 601-2.
58 Helpful guidance on the jurisdictional point is
offered by La Forest J. in Libman v. The Queen, [1985] 2 S.C.R. 178. That case
involved a fraudulent stock scheme. U.S. purchasers were solicited by telephone
from Toronto, and their investment monies (which the Toronto accused caused to
be routed through Central America) wound up in Canada. The accused contended
that the crime, if any, had occurred in the United States, but La Forest J.
took the view that "[t]his kind of thinking has, perhaps not altogether
fairly, given rise to the reproach that a lawyer is a person who can look at a
thing connected with another as not being so connected. For everyone knows that
the transaction in the present case is both here and there" (p. 208
(emphasis added)). Speaking for the Court, he stated the relevant territorial
principle as follows (at pp. 212-13):
I might summarize my approach to the limits of
territoriality in this way. As I see it, all that is necessary to make an
offence subject to the jurisdiction of our courts is that a significant portion
of the activities constituting that offence took place in Canada. As it is put by modern academics, it is sufficient that there be a "real and
substantial link" between an offence and this country ... . [Emphasis
added.]
59 So also, in my view, a telecommunication from a
foreign state to Canada, or a telecommunication from Canada to a foreign state,
"is both here and there". Receipt may be no less
"significant" a connecting factor than the point of origin (not to
mention the physical location of the host server, which may be in a third
country). To the same effect, see Canada (Human Rights Commission) v. Canadian Liberty Net, [1998] 1 S.C.R. 626, at para. 52; Kitakufe v. Oloya, [1998] O.J. No. 2537
(QL) (Gen. Div.). In the factual situation at issue in Citron v. Zundel, supra,
for example, the fact that the host server was located in California was
scarcely conclusive in a situation where both the content provider (Zundel) and
a major part of his target audience were located in Canada. The Zundel case was
[page456] decided on grounds related to the provisions of the Canadian Human
Rights Act, but for present purposes the object lesson of those facts is
nevertheless instructive.
60 The "real and substantial connection"
test was adopted and developed by this Court in Morguard Investments, supra, at
pp. 1108-9; Hunt v. T&N plc, [1993] 4 S.C.R. 289, at pp. 325-26 and 328;
and Tolofson, [1994] 3 S.C.R. 1022, supra, at p. 1049. The test has been
reaffirmed and applied more recently in cases such as Holt Cargo Systems Inc.
v. ABC Containerline N.V. (Trustees of), [2001] 3 S.C.R. 907, 2001 SCC 90, at
para. 71; Spar Aerospace Ltd. v. American Mobile Satellite Corp., [2002] 4
S.C.R. 205, 2002 SCC 78; Unifund, supra, at para. 54; and Beals v. Saldanha,
[2003] 3 S.C.R. 416, 2003 SCC 72. From the outset, the real and substantial
connection test has been viewed as an appropriate way to "prevent
overreaching ... and [to restrict] the exercise of jurisdiction over
extraterritorial and transnational transactions" (La Forest J. in
Tolofson, supra, at p. 1049). The test reflects the underlying reality of
"the territorial limits of law under the international legal order"
and respect for the legitimate actions of other states inherent in the
principle of international comity (Tolofson, at p. 1047). A real and
substantial connection to Canada is sufficient to support the application of
our Copyright Act to international Internet transmissions in a way that will
accord with international comity and be consistent with the objectives of order
and fairness.
61 In terms of the Internet, relevant connecting
factors would include the situs of the content provider, the host server, the
intermediaries and the end user. The weight to be given to any particular
factor will vary with the circumstances and the nature of the dispute.
62 Canada clearly has a significant interest in the
flow of information in and out of the country. Canada regulates the reception
of broadcasting signals in Canada wherever originated; see Bell ExpressVu
Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 SCC 42. Our courts and
tribunals regularly take jurisdiction in matters of civil liability arising out
of foreign transmissions which are received and [page457] have their impact
here; see WIC Premium Television Ltd. v. General Instrument Corp. (2000), 8
C.P.R. (4th) 1 (Alta. C.A.); Re World Stock Exchange (2000), 9 A.S.C.S. 658.
63 Generally speaking, this Court has recognized, as
a sufficient "connection" for taking jurisdiction, situations where
Canada is the country of transmission (Libman, supra) or the country of
reception (Liberty Net, supra). This jurisdictional posture is consistent with
international copyright practice.
[19]
The
Federal Court of Appeal, in reasons cited as 2008 FCA 348, agreed. At
paragraphs 50 to 52, Linden J.A., for the Court, wrote:
50 Counsel concedes that the information
identifying PowerSellers registered as having an address in Canada would be located in Canada if the appellants had downloaded it to their computers. In my
view, it is formalistic in the extreme for the appellants to say that, until
this simple operation is performed, the information which they lawfully
retrieve in Canada from the servers, and read on their computer screens in
Canada, is not located in Canada.
51 I would only add that, although Justice
Hughes does not frame his reasons by reference to the statutory definition of
"foreign-based information" in subsection 231.6(1), he clearly meant
that the information in question could be "located" at places other
than the site of the servers where it is stored. For example, he stated ( 2007 FC
930 at para. 23) that information stored electronically outside Canada "cannot truly be said to 'reside' only in one place", and (supra at para. 25) the
information required by the Minister "is not foreign but within Canada" for present purposes.
52 Having concluded that information in
electronic form stored on servers outside Canada is in law capable of being
located in Canada for the purpose of section 231.6, I now consider whether
Justice Hughes's application of the law to the particular facts of this case
was vitiated by palpable and overriding error. In my view, it was not. In
finding that the information in question was located in Canada within the
meaning of section 231.6, Justice Hughes properly took into consideration the
fact that eBay US and eBay International had granted the appellants access to
information about Canadian PowerSellers for the purpose of their business, and
that they indeed used it for this purpose. The facts support the following
conclusion by Justice Hughes (supra at para. 25):
For perhaps corporate efficiency the information is
stored elsewhere, but its purpose is in respect of Canadian business. The
information is not foreign but within Canada for the purposes of section 231.2
of the Income Tax Act.
[20]
While
not a perfect analogy, the eBay case serves to demonstrate that
legislation must be interpreted in a manner consistent with modern day
realities and that computer information which is stored in one country can be
said to exist in another; in this case, Canada.
[21]
In
Hayes v Sim & McBurney, 2010 FC 924, Justice Boivin acknowledged
that use on a website would constitute good use of a trade-mark. He wrote at
paragraph 26:
26 In the case at bar, the nature of the
appellant's business is to provide electronic information concerning travel and
travel destinations, the rental and sale of vacation properties and publication
in those fields distributed over computer networks, wireless networks and
global communication networks. The exhibits attached to Mr. Hayes' affidavit
clearly demonstrate that he is the administrator of the website WHERE2GO2.COM
[see Exhibit 1] and that this website has been used continuously since
September 18, 1999 up until today, therefore including the relevant period. Mr.
Hayes provided screen shots of the website at various time periods over the
period in question through an internet site, archive.org, which holds records
of how the website looked at the date indicated [see Exhibit 2]. It is also
clear from the evidence that a number of the property listings and vacation deals
are from the relevant time period.
[22]
I
find, therefore, that a trade-mark which appears on a computer screen website
in Canada, regardless where the information may have originated from or be
stored, constitutes for Trade-Marks Act purposes, use and advertising in
Canada.
EVIDENCE AS TO
USE AND MAKING KNOWN IN CANADA BY THE APPLICANT
[23]
The
Applicant is HomeAway.com, Inc., a Delaware corporation. As I have stated, I am
satisfied, based on the affidavit evidence of Dickey - particularly paragraphs
2 and 5, and Exhibit A - that HomeAway is the successor to the whole of the
business and assets, including trade-mark rights, of VRBO.com, Inc.; also a
Delaware corporation. Therefore, I am satisfied that the previous use of the
trade-mark VRBO by VRBO.com, Inc. accrues to the benefit of HomeAway. I will
refer to use by either of them simply as use by HomeAway.
[24]
The
business in which HomeAway is engaged is that of advertising, on its website,
homes, apartments and the like owned by third persons who wish to rent them out
to others, such as vacationers. The trade-mark VRBO appears prominently on the
screen when the website is accessed. In a sense it is offering the same
services as the Classifieds section of a newspaper, only on the web.
[25]
Owners
of premises such as homes and apartments suitable for short-term vacation use
contract with HomeAway to display the features of their premises on the website
provided by HomeAway, for a fee. The display is arranged according to a
predetermined format. The website is located at www.vrbo.com and is owned and
hosted by HomeAway. Any person interested in renting vacation premises may
visit the website and, by following the links provided, locate the country and
the community in which the person is interested. For instance, “Canada” may be entered, followed by “Niagara-on-the-Lake” or “Montreal”, wherein available rental
premises are displayed. If interested, a person may contact the owner whose
address is provided and make arrangements to occupy the premises for an agreed
period of time.
[26]
The
evidence is that HomeAway commenced this business in 1996. It has secured
domain names such as vrbocanada.com and canadavrbo.com in 2003. By entering
those domain names in a computer, the user will be directed to HomeAway’s
website, where the trade-mark VRBO is displayed. An article appearing in the
Toronto Star in 2012, Exhibit L to the Dickey affidavit, describes the website
as one of the ten best travel websites for 2012 and tells the reader that VRBO
stands for “vacation rental by owner”.
[27]
However,
it is most important to know what use was made by HomeAway in Canada of the trade-mark prior to the date when the Respondent Hrdlicka filed an
application to register the trade-mark VRBO in his name. That date is September
2, 2009.
[28]
I
am satisfied, based on the affidavit of Dickey that, prior to September 2, 2009
HomeAway was advertising to and contracting with Canadians to display their
premises on the VRBO website, and was displaying those Canadian premises on its
website. That website displayed the trade-mark VRBO to Canadians, as well as
persons of every other country who wished to visit the website.
[29]
I
am satisfied, therefore, that prior to September 2, 2009 HomeAway was using the
trade-mark VRBO by means of advertising and use on its website in association
with vacation real estate listing services.
[30]
As
to “making known” of the trade-mark VRBO in Canada, the provisions of the Trade-Marks
Act are, to say the least, arcane and badly in need of updating. Section
5(b) (i) and (ii) of that Act requires that the services be advertised
in “any printed publication circulated in Canada” or “radio
broadcasts ordinarily received in Canada”. While the “use” of the
trade-mark by means of the internet websites has been established, this use is
by neither a printed publication nor a radio broadcast. In the circumstances of
this case, “making known” has not been established but use has therefore
“making known” is irrelevant. At the hearing Counsel for HomeAway abandoned
this point.
[31]
I
also find that the trade-mark VRBO is now distinctive, and was since before
September 2, 2009, of HomeAway. It is an invented mark, not a common word or
name. There is no evidence that any other person (I will discuss Hrdlicka
shortly) has used that mark in Canada or elsewhere in respect of any wares or
services, let alone vacation real estate listing services.
EVIDENCE AS TO
USE BY THE RESPONDENT
[32]
Other
than the declaration of use presumably filed by Hrdlicka with the Trade-Marks
Office, there is no evidence that he had ever used the trade-mark VRBO in Canada, or anywhere, in association with vacation real estate listing services or any other
services prior to November 2012. There are exhibited to Hrdlicka’s second
affidavit some screen-shots of a website service advertising vacation rentals
in Canada. These are dated November 2012, and are far too late in time to
affect any issue before me. I suspect that they were prepared for the purpose
of the hearing before me.
[33]
The
screenshot, Exhibit A to Hrdlicka’s September 7, 2012 affidavit, which is said
to be a screenshot of one of his first real estate websites in August 2009,
nowhere shows use of VRBO as a trade-mark or otherwise.
[34]
E-mail
communications, as exhibited to the Hrdlicka and Dickey affidavits, sent by
Hrdlicka to HomeAway, speak of future or intended use of the trade-mark VRBO by
Hrdlicka, not actual use. His email of July 5, 2010 (after the trade-mark was
registered) found at Exhibit Q to the Dickey affidavit, says, “If I post
my VRBO website (emphasis added)”. His letter of July 7, 2010, also at Exhibit
Q, says, “I was planning to post my own vacation rental website named
“VRBO” (emphasis added).
[35]
At
paragraph 2 of his September 7, 2012 affidavit, Hrdlicka states that:
At the time of applying for the VRBO trademark I was
aware of the website www.vrbo.com, but I was under the impression that in order
for HomeAway.com, Inc…to use the VRBO name in Canada, there must be some kind
of physical origin to that use…
[36]
It
is clear and I so find, that Hrdlicka has never used VRBO as a trade-mark in
Canada until November 2012, and that, at the time that he applied to register
that trade-mark in Canada, he was aware of at least some manner of use of that
trade-mark by HomeAway.
[37]
The
correspondence by e-mail and otherwise, not only that found at Exhibit Q to the
Dickey affidavit, but also attached to the two affidavits of Hrdlicka, show
that Hrdlicka was endeavouring to sell his registration to HomeAway for a large
sum of money and/or for employment or royalties. I find that Hrdlicka, in filing
the application for registration, had no bona fide intent of using it in
a legitimate commercial way in Canada. His intent was to extort money or other
consideration from HomeAway. Such activity should not be condoned or
encouraged.
CONCLUSIONS
[38]
I
therefore find that:
1.
The
trade-marks of both parties are not just confusing, they are identical and the
services are identical.
2.
HomeAway
has used the trade-mark VRBO in Canada for the services of vacation real estate
listing services since before the application to register the trade-mark at
issue based on proposed use was filed, and that such use was continuous.
Therefore, having regard to subsection 16(3) (a) of the Trade-Marks Act,
Hrdlicka was not the person entitled to register the trade-mark.
3.
Since
before the application to register the trade-mark at issue was filed based on
proposed use, the trade-mark VRBO was and continues to be distinctive in Canada of the vacation real estate listing services of HomeAway and of no other person,
particularly not of Hrdlicka. Therefore the registration is invalid having
regard to subsection 18(1) (b) of the Trade-marks Act.
4.
Hrdlicka
filed the application to register the trade-mark and secured the registration
for improper purposes and did not act bona fide or in good faith. I will
provide cost consequences.
[39]
As
a result, I will order that the registration be expunged and that the Applicant
be awarded its costs of this application at the upper level of Column V,
together with reasonable disbursements including travel from Ottawa to Toronto for the Hearing.
JUDGMENT
FOR
THE REASONS PROVIDED:
THIS
COURT’S JUDGMENT is that:
1.
The
application is allowed;
2.
Canadian
Trade-Mark Registration TMA770822 shall be struck out from the Trade-marks
register; and
3.
The
Applicant is entitled to its costs, to be paid by the Respondent at the upper
level of Column V together with reasonable expenses including travel from Ottawa to the Court in Toronto for the Hearing.
“Roger
T. Hughes”
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