Don’t Rock The Boat! Federal Court Invalidates Trademarks In Recreational Boat-Towing Dispute

On January 6, 2025, the Federal Court (the Court) issued its decision in Sea Tow Services International, Inc. v C-Tow Marine Assistance Ltd., 2025 FC 27, striking Sea Tow Services International Inc.’s (Sea Tow) SEA TOW & DESIGN and SEA TOW trademarks (the Sea Tow Marks) from the Register and granting summary judgment in favour of C-Tow Marine Assistance Ltd. (C-Tow) on a related motion heard at the same time.

C-Tow owns pending applications for its C-TOW and C-TOW & DESIGN marks (the C-Tow Marks). In April 2022, C-Tow brought an application contesting the validity of the Sea Tow Marks on the grounds that: (i) Sea Tow was not the person entitled to secure the registration of the Sea Tow Marks; (ii) Sea Tow filed its application for registration of the marks in bad faith; and (iii) the Sea Tow Marks were not distinctive at the time the application was commenced. In response, Sea Tow filed an action for the infringement of its marks by C-Tow and served a motion for summary judgment. The issue of confusion was not before the Court, as the parties agreed that their respective marks were confusing.

The Court found that C-Tow produced evidence of its chain of title to the C-Tow Marks dating back to 1985, demonstrating that its use of the C-Tow Marks predated Sea Tow’s adoption of the Sea Tow Marks in 2010.

In addition, the evidence established that Sea Tow had knowledge of previous use of the C-Tow Marks by C-Tow’s predecessor in title as early as December 1992. Therefore, the Court held that Sea Tow was not the person entitled to secure the registrations of the Sea Tow Marks. However, while Sea Tow failed to establish early use of its marks in Canada, the Court held that Sea Tow’s arguments were not frivolous and declined to find that the Sea Tow Marks were filed in bad faith.

Lastly, the Court held that the Sea Tow Marks were not distinctive at the time the application was commenced. Sea Tow had not achieved any material acquired distinctiveness for its marks in Canada, and any potential distinctiveness would be negated by the substantially larger presence of the C-Tow Marks.

Ultimately, the Court granted C-Tow’s application in part, declared the Sea Tow Marks to be invalid, and ordered that they be struck from the Register.

Summary By: Amy Ariganello