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Are trademarks in association with computer software goods evolving with technology?

August 11, 2017

Computer software companies are cognizant of evolving challenges relating to patentable subject matter. Computer software companies should also consider managing trademark portfolios by evaluating whether existing trademark registrations may be at risk of expungement. Under the current Trade-marks Act, a trademark registration may be expunged if the trademark has not been used in association with the registered good(s) or service(s) in Canada during the past three years.

Computer software has traditionally been distributed on physical computer readable medium, such as compact discs or other tangible medium. Software distribution mechanisms have evolved in light of prevalent computer networks, such as the Internet. A recent case highlights that changes in the way software products may be accessed, distributed, or used may warrant some thought into whether a company’s registered trademarks continue to be used in association with the registered goods or services.

In Specialty Software Inc v Bewatec Kommunikationstechnik GMBH, 2016 FC 223 (“Specialty”), the Federal Court characterized an appeal from an expungement proceeding as arising from a “technological change”. In 1992, the Applicant (Specialty Software) registered the trademark “MEDINET” in association with the goods “computer software programs”. The trademark was not registered in association with any services.

The Respondent (Bewatec) initiated proceedings before the Trademarks Office to expunge the trademark. The Applicant failed to file evidence of use with the Trademarks Office and the trademark “MEDINET” was expunged. However, the Applicant subsequently appealed to the Federal Court and presented fresh evidence of use of the “MEDINET” mark for the relevant time period. The dispute at the Federal Court was not premised on whether the mark was in fact used during the relevant time period, but was premised on whether the mark was used in association with the good “computer software programs”.

The Court acknowledged a Trademarks Opposition Board (TMOB) decision that recognized computer software as not being a physical object, and that computer software companies may experience unique challenges when attempting to associate a trademark with software. The Court further noted:

[13] Even though Specialty used to sell its software on disks – which are obviously tangible and easily identified as wares – it was always really selling a license to use the software, which is an intangible good. Specialty did not actually sell the software itself; it sold an entitlement to obtain access to it by way of licenses. The disks merely represented the means by which the transfer of the goods occurred. The real goods were, and are, the licenses.

[emphasis added]

In characterizing the relevant good as a license to obtain access to software, the Court noted that the change to the means by which software is transferred (e.g., physical computer readable medium versus access over the Internet) to users do not change the nature of trademark use. The Court was satisfied that the mark was used in a manner that gave notice to purchasers of software licenses of an association between the goods and the registered trademark. The Court also noted that it was satisfied that the registered owner demonstrated that the mark was not merely “deadwood” on the register. In allowing the appeal, the expungement of the mark was set aside.

Although the Federal Court did not expunge the registered trademark at issue, the Specialty case demonstrates that the nature of software or technology goods and services can evolve over time, introducing risks to registered trademarks. Accordingly, trademark applicants / owners should: (1) consider drafting a list of goods and services with an eye to “future proofing”, where possible; and (2) periodically assess the list of registered goods and services during the life of the registered trademark. Goods and services that no longer apply can be deleted, or additional trademark applications can be filed in association with updated goods and services.

Tags: trademarks 


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