Choose Your Own Source: Adding A Trademark to Someone Else’s Goods

January 30, 2023

In a recent decision arising from an appeal of a decision of the Trademarks Opposition Board, the Federal Court commented on when a retailer can establish use of a trademark on goods when the retailer is not the “source” of the goods.  Specifically, if a retailer simply affixes its own trademark to goods manufactured by a third party, does that constitute use of the retailer’s trademark in association with those goods.

Background and Decision

GNR Travel Centre Ltd. v. CWI, Inc. dealt with an opposition to an application for the trademark GNR CAMPING WORLD & Design.  One of the grounds of opposition was that the applicant, GNR Travel Centre Ltd. (“GNR”), had not used its trademark in Canada as of the date claimed in the application.  GNR operated a business selling and servicing recreational vehicles (RVs) and RV accessories.  The evidence established that, at the date claimed in the application, the applicant was not selling any of its own goods, that is goods which it had manufactured specifically for it.  Rather, it was selling goods of third parties (RV manufacturers), some or all branded with the trademarks of the third-party manufacturer.

GNR affixed stickers which displayed the trademark at issue to those third-party RVs and RV accessories.  Those stickers were present at the time of sale to customers.  GNR relied on those sales as evidence of use of its trademark in association with RVs and the RV accessories.

Subsection 4(1) of the Trademarks Act (Canada) (the “Act”) defines when a trademark is used in association with goods. Use must be examined at the time the goods are transferred to another person, in the normal course of trade. At that point in time, the trademark is used in association with the goods if (i) it is “marked on the goods themselves or on the packages in which they were distributed,” or (ii) “it is in any other manner so associated with the goods that notice of the association is then given to the person to whom the property or possession is transferred.”

The Court examined three decisions respecting the meaning of “use” when a trademark is used in association with the goods made by another.  It is important to note that all those decisions arose in the context of summary non-use proceedings, although the Court discounted this fact.  However, what that means is that, in those cases there was no cross-examination on any of the evidence of use and the opposing party had no opportunity to file evidence.

The Court further specifically rejected the position that only an original manufacturer of a good can show use of a trademark affixed to those goods.  The Court was also not prepared to accept that all others in the supply chain are merely providing a service (for example, retail services) and any trademark they affix to the goods becomes associated only with their service.  The Court concluded that these propositions adopted an interpretation of the Trademarks Act that was “too narrow”. 

The Court also discounted the fact that two trademarks were affixed to the goods – that of the manufacturer and that of GNR.

The Court ultimately concluded that when a trader affixes its trademark to goods being manufactured or sold, that is evidence of the use of that trademark in association with goods, regardless of their provenance. 

 Issues Raised by Decision

The decision raises numerous issues for trademark owners.  For example, can a mass retailer now simply affix a sticker displaying its trademark to any good it sells and then assert use in association with those goods?  This decision would appear to answer that question with “yes”. 

However, the decision and the analysis by the Court is problematic since it disregards several foundational principles of trademark law.

In order to acquire, maintain or enforce trademark rights in Canada, the common factor is that the use must be for the purpose of distinguishing.  In the scheme of the Act, “use” usually relates to the primary function of a trademark as identifying the goods or services emanating from a particular source.  The “source” normally means the entity responsible for determining the character or quality of the goods or services.

The Supreme Court of Canada in Mattel, Inc v 3894207 Canada Inc. recognized this as the main function of a trademark when it concluded:

Merchandising has come a long way from the days when “marks” were carved on silver goblets or earthenware jugs to identify the wares produced by a certain silversmith or potter. Their traditional role was to create a link in the prospective buyer’s mind between the product and the producer. The power of attraction of trade-marks and other “famous brand names” is now recognized as among the most valuable of business assets. However, whatever their commercial evolution, the legal purpose of trade-marks continues (in terms of s. 2 of the Trade-marks ActR.S.C. 1985, c. T-13) to be their use by the owner “to distinguish wares or services manufactured, sold, leased, hired or performed by him from those manufactured, sold, leased, hired or performed by others”. It is a guarantee of origin and inferentially, an assurance to the consumer that the quality will be what he or she has come to associate with a particular trade-mark (as in the case of the mythical “Maytag” repairman). It is, in that sense, consumer protection legislation.

This principle has been relied upon to find that a licensor rather than a licensee is the owner of a trademark.  Similarly, a manufacturer who applies a trademark to goods rather than the distributor in the normal commercial chain owns the trademark. 

In this case, GNR has no control of the character or quality of the goods sold in association with its trademark.  Rather, it is the manufacturer who would have the requisite control.  In such a situation, can it be said that GNR’s trademark was distinguishing its goods from those of others?

For example, what distinguishes the RVs sold by GNR from the same RV sold by another dealer, if both RVs are manufactured by the same source.  There may be differences in service or price but the quality of the goods is identical.

Further, the decision appears to ignore the issue of distinctiveness.  To acquire, maintain or enforce rights in a trademark, whether under the common law or the Act, it is imperative that a trademark be “distinctive” of a single source.  Section 2 of the Act defines “distinctive” as referring to any trademark “that actually distinguishes the goods or services in association with which it is used by its owner from the goods or services of others or that is adapted so to distinguish them”.  This accords with the organizing principle of trademark law that a mark is first and foremost an indicator of source.

Under the source theory, the public interest is thought to be in the knowledge that a trademark identifies a single supplier of the goods or services.  The Supreme Court of Canada, in Masterpiece Inc. v. Alavida Lifestyles Inc., said that a trademark “allows consumers to know, when they are considering a purchase, who stands behind those goods or services.”  It is not necessary that the public knows the identity of the source, rather it is sufficient that the public can identify the goods or services with the trademark of the source.

The requirement that a trademark be “distinctive” is undermined if a trademark points to more than one source. 

The Court dealt with this issue in a very cursory way, noting that there is no prohibition on there being more than one trademark on a good. The Court cited with approval the case of AW Allen Ltd v Canada (Registrar of Trade Marks), [1985] FCJ No 824 (FCTD), where Justice Cullen observed: “[t]he law is also quite clear that there is nothing to prevent two registered trade marks being used at the same time and counsel for the respondent suggested ‘Kellogg's’ and ‘Special K’ as an example.”

Interestingly, the Court noted that the two trademarks in the example noted by Justice Cullen were both applied by the manufacturer and were its trademarks. However, the Court stated there is nothing in the Trademarks Act making this a requirement.  While this is technically true, that rationale completely ignores issues of distinctiveness.

For example, if the context of the goods sold by GNR that bear both its mark and the mark of the manufacturer, a customer may conclude that all of the marks associated with the goods identify the same source.   In situations where the marks of two unrelated parties appear on a single product (often referred to a “double trademarking”), courts generally require that the relevant public be made aware as to which marks are owned by each party, for example by the placement of trademark notices.  Otherwise, the distinctiveness of the trademarks will be impaired.


A party wishing to rely on this decision in order to attempt to claim trademark rights for goods it does not manufacture or source should proceed with caution.

In addition to the risks that its trademark may not be “used”, there is the risk that its trademark may be found to lack distinctiveness.

Further, the manufacturer could object to such use on the basis that the display of the retailer’s mark on its goods could depreciate the value of the goodwill associated with its trademark.  This has been found to be the case in situations where a competitor’s trademark is used on goods for the purposes of comparative advertising.

The manufacturer could also object on a theory of “reserve passing off” or "passing off by substitution" (which is codified as paragraph 7(c) of the Act).

Finally, although not mentioned in the decision, there could be contractual rights at issue.  For example, a manufacturer may include a clause in its distribution agreements that specifically prohibits a retailer or distributor from affixing its trademark to the manufacturer’s goods, or at least prohibit doing so in a way which would potentially (i) confuse customers as to the source of the goods (as opposed to the retail services), or (ii) impair or diminish the distinctiveness of the manufacturer’s mark.

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