In Yiwu Thousand Shores E-Commerce Co Ltd v Lin, an Amazon.ca takedown request came back to bite the requesting party when its trademark registration was successfully challenged by the recipient of the takedown request.
Yiwu Thousand Shores E-Commerce (‘Thousand Shores’), an online retailer, had been selling goods into Canada through Amazon.ca since October 2014, in association with the trademark OHUHU. In August 2020 Thousand Shores received a notice from Amazon.ca that many of the goods it sold under the OHUHU mark were removed following a takedown request from Jinxing Lin.
Lin was the owner of a Canadian trademark registration for the mark OHUHU (No 1001070) covering a long list of goods and services, including audio equipment, bicycle equipment, furniture, clothing, music composition and instruction services, as well as services related to the rental, recording and live performance of music. Lin filed the application to register the OHUHU mark on 27 February 2017, claiming use of the mark in Canada since 1 January 2015. Lin filed the takedown request with Amazon.ca on the basis of its OHUHU registration and claimed that Thousand Shores’ goods were counterfeit. Thousand Shores received further notices that additional OHUHU goods were removed from Amazon.ca in September and November 2020.
In late November 2020 Thousand Shores filed an application in the Federal Court of Canada seeking to invalidate Lin’s OHUHU registration on the basis that:
- the mark was not distinctive of Lin;
- Lin was not the person entitled to its registration;
- the mark was abandoned;
- the registration was obtained on the basis of a material misstatement; and
- the application to register the mark was filed in bad faith.
Thousand Shores also claimed that Lin violated Section 7(a) of the Canadian Trademarks Act by making false and misleading statements tending to discredit Thousand Shores’ goods, services and business in making the takedown requests with Amazon.ca.
Lin did not participate in the Federal Court proceeding.
The court found in favour of Thousand Shores with respect to all claims of invalidity, except for the bad-faith ground. The most notable aspect of the decision was the court’s finding that Lin’s registration was void ab initio on the basis that the registration was secured via a material misstatement regarding the date of first use of the mark in Canada. Holding that Lin’s registration was void ab initio opened the door for the court
to find that Lin’s statements to Amazon.ca regarding its OHUHU registration were false and misleading and, therefore, in violation of Section 7(a) of the act. Thousand Shores was also granted an award for lost profits and storage of C$138,000 and C$25,000 for costs, which are not insignificant awards in the circumstances.
A material misstatement is not a statutory ground of invalidity in Canada, but has been recognised by the courts as grounds for invalidating a registration. As Lin did not participate in the proceeding, there was no evidence that the OHUHU mark was used since 1 January 2015, as claimed in the registration. In addition, Thousand Shores’ evidence showed that it conducted regular internet and marketplace searches and
investigations to identify third-party use of its marks, and these activities did not reveal any prior use of the OHUHU mark by Lin.
This case is noteworthy because, under Canadian law, a trademark registration is presumed to be valid unless shown to be invalid. Flowing from that, a registered trademark, unless found invalid, is a full defence to both an infringement action and a passing-off action. In this case, at the time Lin made the takedown request with Amazon.ca, the registration was valid. However, the court’s finding that the registration was void ab initio treats the registration as though it never existed, rendering Lin’s statements to Amazon.ca false and misleading and, therefore, a violation of Section 7(a) of the act.
Recent changes to the law in Canada have removed the requirement to include use claims in trademark applications. However, the overwhelming majority of subsisting Canadian registrations were secured under the old law and, therefore, may include claims with respect to use of the mark in Canada which could come under scrutiny in any proceeding involving the registration. If a fundamental material misstatement is found, it could result in the registration being considered void ab initio, which would destroy the shield provided by the registration that might otherwise have protected the owner against claims of infringement and passing off (as well as potential damage awards). A false statement of use has been recognised as a fundamental misstatement in Canada because, under the old law, the registration could not have been secured without the misstatement. This case underscores the importance of ensuring that any use claims set out in registrations are accurate, as any misstatements could potentially jeopardise the validity of the registration.
The instant case also recognises that complaints, such as a takedown request filed with Amazon, are material representations that may expose the complainant to a claim of making false and misleading statements tending to discredit a business. It is noteworthy that such complaints are typically submitted on good-faith information and belief. In this case, the defendant did not participate, and so there was no evidence tendered regarding its adoption, application and/or use of the mark, and the court does not appear to have taken at face value that takedown complaints are required to be submitted to Amazon.ca based on good-faith belief.
Finally, this case is also a good reminder that brand owners should:
- seek registration of their trademarks in the jurisdictions in which they operate as soon as possible; and
- actively monitor relevant trademark databases for third-party applications for confusingly similar marks, particularly for their core
This article first appeared in WTR Daily, part of World Trademark Review, in January 2022. For further information, please go to www.worldtrademarkreview.com