Executive Summary: Key Legal and Evidentiary Issues

• Materiality and admissibility of new evidence submitted on appeal, considering amendments to subsection 56(5) of the Trademarks Act.

• Sufficiency of evidence demonstrating use of the FLOW mark in Canada during the relevant period.

• Effect of administrative errors on Big Duck Games’ failure to respond to the section 45 notice.

• Interpretation of “use” of a trademark in the context of digital goods, such as software and mobile games.

• Limitation of the trademark registration to exclude physical consoles due to lack of evidence of use.

• No costs awarded, as the respondent did not participate and there was no evidence of gamesmanship.

Facts of the case

Big Duck Games, LLC is a mobile games studio that owns the Canadian trademark registration for the word mark “FLOW” in association with software for playing computer games on mobile and cellular phones, as well as computer games, video games, and related downloadable software for various devices. The Registrar of Trademarks issued a notice under section 45 of the Trademarks Act on May 9, 2024, at the request of X-Flow Ltd., requiring Big Duck Games to show use of the FLOW mark in Canada within the three-year period immediately preceding the notice, from May 9, 2021 to May 9, 2024. Big Duck Games did not respond to the notice, leading the Registrar to issue a decision on September 18, 2024, expunging the FLOW registration.

The section 45 proceeding and new evidence

Big Duck Games appealed the Registrar’s decision to the Federal Court. The company submitted new evidence, including affidavits from Stephen McArthur, a United States attorney coordinating Big Duck Games’ global trademark portfolio, and Michael J. Newman, the co-founder and Chief Executive Officer of Big Duck Games. The affidavits explained that Big Duck Games did not receive the section 45 notice due to a zip code error, a change of address, and the retirement of the Canadian trademark agent who filed the FLOW application. The new evidence included details about the FLOW mark’s use in Canada, such as screenshots from app stores and the company’s website, as well as download statistics. The FLOW mark was shown to be used in association with the games at the point of download and on the title screens. During the relevant period, Flow Free was downloaded approximately 676,000 times on iOS devices, over 213,000 times on Android devices, and 575 times from the Microsoft Store in Canada.

Discussion of policy terms and legal standards

A procedural issue was raised regarding whether Big Duck Games needed leave to file new evidence on appeal due to amendments to subsection 56(5) of the Trademarks Act. The Court determined that Big Duck Games’ right to file new evidence vested before the amendment took effect on April 1, 2025, so leave was not required. The Court considered whether the new evidence was material and whether it established use of the FLOW mark as required by the Act. The evidence needed to show use of the trademark in the normal course of trade, with the mark visibly and prominently displayed in connection with the goods.

Analysis and outcome

The Court found that the new evidence was material, substantial, significant, and probative, filling the gap noted in the Registrar’s decision. The evidence established a prima facie case of use of the FLOW mark in Canada during the relevant period in respect of the registered goods, except for physical consoles, for which no evidence of use was provided. The appeal was allowed, the Registrar’s decision was set aside, and the FLOW registration was maintained with an amended list of goods that excluded physical consoles. The Court ordered that there would be no costs, as the respondent did not participate in the appeal and there was no evidence of gamesmanship or extra work imposed on Big Duck Games.

Ruling and overall outcome

The Federal Court allowed the appeal in favor of Big Duck Games, LLC, set aside the Registrar’s decision dated September 18, 2024, and ordered that the list of goods in Registration No. TMA924,809 be amended to exclude physical consoles. There was no order as to costs, and no damages or monetary amounts were awarded.