If you are a fan of the classic movie Top Gun, you may be familiar with the AVIREX brand of leather jackets worn by Tom Cruise and other actors. But did you know that the AVIREX trademark was recently expunged in Canada for non-use?

Background of the Expungement Case

In a recent decision, the Federal Court dismissed an appeal by Centric Brands Holding LLC (Centric), the current owner of the AVIREX trademark, from a decision of the Registrar of Trademarks to expunge the mark under section 45 of the Trademarks Act. Section 45 allows any interested party to request that the Registrar issue a notice to the owner of a registered trademark to furnish evidence of use of the mark in Canada within the three years preceding the date of the notice. If the owner fails to show use, or fails to show special circumstances beyond the owner’s control for non-use, the mark may be expunged.

The Notice and Response

In this case, the notice was issued to the previous owner of the mark, KVZ International Ltd. (KVZ), on October 12, 2018. However, on October 29, 2018, KVZ assigned the mark to Centric as part of a larger transaction involving hundreds of trademarks. Centric responded to the notice with an affidavit that did not provide any evidence of use of the mark in Canada during the relevant period, but asserted that there were special circumstances that excused the non-use, such as the pending acquisition of the mark and the delay of the release of the sequel to Top Gun.

Registrar’s Decision and Federal Court Review

The Registrar was not persuaded by Centric’s arguments and expunged the mark, finding that there was no use of the mark in Canada during the relevant period and that the absence of use was not due to special circumstances. Centric appealed to the Federal Court and filed new evidence concerning the details of the transaction and the efforts to relaunch the AVIREX brand in Canada.

The Federal Court conducted a de novo review of the Registrar’s decision and upheld the expungement of the mark. The Court agreed with the Registrar that the special circumstances exception under section 45(3) of the Trademarks Act must apply to the relevant period of non-use, and that Centric’s actions after acquiring the mark were not relevant. The Court also found that Centric’s evidence did not demonstrate that the non-use of the mark by KVZ during the relevant period was due to circumstances beyond its control or that there was a serious intention to shortly resume use of the mark. The Court noted that the mark had not been used since 2011 and that the evidence of KVZ’s negotiations with potential licensees where KVZ broke off the negotiations was insufficient to show special circumstances.

Implications for Trademark Owners

This decision illustrates the importance of maintaining use of registered trademarks in Canada and the risks of acquiring trademarks that have not been used for a long time. It also clarifies that the special circumstances exception under section 45(3) of the Trademarks Act is narrowly construed and that an intention to use a trademark at a future date is not enough to excuse non-use. Trademark owners and acquirers should be aware of the possibility of expungement proceedings and the evidentiary requirements to defend their marks.

Read the ruling here: Centric Brands Holding LLC v. Stikeman Elliott LLP

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