Pro-C Case looks at trademarks and online advertising

The Ontario Court of Appeal has clarified the circumstances in which internet advertising originating outside of Canada can constitute use of a trademark in Canada pursuant to the Canadian Trademarks Act.

In the case of Pro-C Ltd v Computer City, Pro-C, a small Canadian software developer, had purchased the trademark WINGEN for "computer programs used to generate programs for Windows".

Computer City, a large US-based retailer, subsequently developed an in-house line of computers that also used the WINGEN mark. Computer City was aware that Pro-C owned the mark in relation to Canada, so Computer City did not sell Wingen computers in its retail outlets in Canada. When Computer City's Wingen computer line was launched, internet users seeking information swamped Pro-C's website at 'wingen.com' by mistake, allegedly causing Pro-C's systems to fail.

The trial court awarded substantial damages to Pro-C. However, the Court of Appeal reversed the decision stating that "there was no use of the trademark in Canada" in association with the computers. The court pointed out that:

• the Wingen computer line was not sold in Canada;
  
  
• the Computer City website could not constitute 'use in association with wares', since no transfer of ownership was possible through the site;
  
  
• Wingen computers did not fall within the description of the goods covered by the trademark registration; and
  
  
• while the mere advertising of services could constitute use of a trademark under Canadian law, Computer City had not marketed any services using the WINGEN mark.

This case clarifies the limited territorial nature of trademark enforcement relating to goods advertised on the Internet, but does not address the issue of how to deal with infringing wares that are actually sold through a foreign website.

Mark Hayes, Davies Ward Phillips & Vineberg LLP, Toronto