Executive Summary: Key Legal and Evidentiary Issues

• Central dispute concerns whether section 45 of the Trademarks Act establishes a fixed rule that the period of non-use must begin from the date the mark was last in use, or whether it can begin from the date of acquisition by a new owner

• The "New Owner Jurisprudence" was expressly validated, permitting a recent arms' length acquisition of a trademark to constitute special circumstances excusing non-use prior to acquisition

• Appellants argued the respondent's failure to provide a date when the mark was last in use should be fatal and result in expungement

• Regulatory approval requirements for liquor sales across provincial jurisdictions were found to be circumstances beyond the respondent's control

• The respondent demonstrated a serious intention to shortly resume use through preparatory steps including product packaging development, consumer surveys, and launch planning

• The doctrine of horizontal stare decisis bound the Court to follow the prior Centric Brands decision affirming the validity of the New Owner Jurisprudence

Background and parties involved

This case involves an appeal from a Federal Court judgment concerning trademark expungement proceedings under section 45 of the Trademarks Act. The appellants, Comité interprofessionnel du vin de champagne and Institut national de l'origine et de la qualité, are two French public corporations that sought to expunge three trademark registrations owned by Coors Brewing Company. The trademarks at issue are "The Champagne of Beers," "Le Champagne des Bières," and the label and design for "Miller High Life, the Champagne of Beers," which were registered on August 6, 1971, October 10, 1986, and April 3, 1987, respectively.

The acquisition transaction and subsequent proceedings

On October 13, 2016, Coors Brewing Company acquired all of Miller Brewing International Inc.'s assets, including the trademarks, in a transaction worth approximately $12 billion. On April 3, 2017, at the appellants' request, the Registrar of Trademarks issued notices under subsection 45(1) of the Act requiring Coors to demonstrate whether the marks were in use in Canada during the three-year period immediately preceding the date of the notice, or to explain their absence of use. Coors provided an affidavit stating it was not able to demonstrate whether the marks had been in use during the relevant period and that the marks were apparently last used in Canada in 2012. The affidavit described steps taken toward marketing products bearing the marks, including obtaining the regulatory approvals required by the different provincial liquor bodies and boards.

The Registrar's decision and Federal Court judgment

On April 28, 2021, the Registrar decided to maintain the registrations, finding that the period of non-use should be calculated as of the date of acquisition of the marks, resulting in a period of no more than six months of non-use. The Registrar reasoned that it would be an overly burdensome approach to require a new owner of a registered trademark to justify the absence of use of the trademark by the previous owner, which in some cases could cover a period of several decades. The Registrar found the non-use was due to circumstances beyond Coors' control, namely, the requirement to obtain regulatory approval before marketing the products bearing the marks. On February 28, 2024, the Federal Court dismissed the appellants' appeal, finding no palpable and overriding error in the Registrar's approach and noting that section 45 does not contain a fixed legal rule that determines precisely when the period of non-use begins in all cases.

The central legal issue: starting point of non-use period

The appellants argued that section 45 of the Act is capable of only one interpretation, according to which the owner is required to justify the absence of use of the mark at issue since the date when it was last in use in Canada. They contended the Federal Court's interpretation disregards the clear wording of the statute and runs contrary to the cardinal principle animating trademarks—"use it or lose it." The appellants further argued that the approach encourages non-compliance with the Act as well as abuse, by placing the registered owner in a more advantageous position than the previous owner.

The Centric Brands decision and horizontal stare decisis

The Federal Court of Appeal found that its prior decision in Centric Brands Holding LLC v. Stikeman Elliott LLP, 2025 FCA 161, settled this issue by authorizing a more flexible reading of section 45. That decision established that the recent acquisition of a trademark may give rise to special circumstances contemplated in subsection 45(3) of the Act such that, in responding to a notice pursuant to subsection 45(1), the new owner is not required to account for a period of non-use pre-dating the acquisition. The Court applied the doctrine of horizontal stare decisis, which requires following prior decisions to ensure certainty, consistency, and predictability of the law. The Court found no basis to conclude that Centric Brands was manifestly wrong in the sense of overlooking a relevant statutory provision or a case that ought to have been followed.

Assessment of special circumstances

The Court found no palpable and overriding error in the conclusions that special circumstances excused non-use of the marks during the relevant period from October 2016 to April 2017. These circumstances included the short period of non-use, the scale and complexity of the transaction at the origin of the acquisition, and the regulatory approvals that had to be obtained before Coors could use the marks in Canada. The Court noted that Coors was required to submit labels that met Canadian standards as part of its application for regulatory approval, and thus its efforts to design appropriate labels were a necessary part of the approval process and therefore beyond its control. The Registrar had found that Coors provided a sufficient factual basis substantiating its serious intention to quickly resume use of the trademarks.

Ruling and outcome

The Federal Court of Appeal dismissed the appeal with costs in favour of Coors Brewing Company. The Court affirmed that section 45 of the Trademarks Act permits, in appropriate circumstances, using the date of acquisition as the starting point for the period of non-use requiring justification. The Court found no palpable and overriding error in the Federal Court's or Registrar's findings that special circumstances excused the absence of use during the period between Coors' acquisition of the marks and the date of the notice. No specific monetary amount was determined, as the primary relief sought was expungement of the trademark registrations, which was denied.