In Jose Cuervo S.A. de C.V. v. Bacardi & Company Ltd. (2009 FC 1166), the Federal Court dismissed an appeal of the expungement of trade-mark Reg. No. #341290 CASTILLO for non-use. The Court found that neither "special circumstances" nor sufficient evidence existed to justify what the "voluntary non-use" of the mark.

In 2005, alcoholic beverage manufacturer Bacardi had sought an expungement of the trade-mark CASTILLO for rum. Bacardi claimed that this mark, owned by Jose Cuervo S.A. de C.V. ("Cuervo"), had not been used in Canada in the three preceding years and was therefore vulnerable to expungement under section 45 of the Trade-Marks Act.

Jose Cuervo submitted that since 2002 their planned marketing for CASTILLO rum involved an additional trade-mark COHIBA used with permission from Tequila Cuervo, a Mexican company related to Jose Cuervo. This associated mark was the subject of an unrelated legal dispute, between Tequila Cuervo and another company, which prevented its use pending resolution. This dispute, they argued, represented a "special circumstance" under section 45(3) that justified their non-use. The Registrar disagreed and ruled for Bacardi in September 2008. Cuervo appealed this decision to the Federal Court.

Cuervo brought forth two main issues in the appeal. The first was whether the additional evidence filed would have affected the Registrar's decision. Cuervo had provided additional evidence that they had resumed the use of this mark in Canada in August 2008 through the single sale of 40 cases of rum to the Alberta Liquor Commission. Bacardi cited a prior Federal Court of Appeal case that states "that a single sale out of context (such as once a year or every 5 years) is not a sale 'in the ordinary course of business', and may not be considered use of a trade-mark in Canada." The Court was satisfied that this additional evidence would not have materially affected the decision of the Registrar. In addition, the Court noted that the evidence did not explain why the CASTILLO mark could not have been used alone (without the COHIBA mark) during the preceeding three years, and in fact confirmed that it could have.

The second issue was whether the Registrar reasonably concluded that special circumstances did not exist to excuse the absence of the use of the CASTILLO trade-mark and that the appellant instead made a voluntary decision not to use the trade-mark in Canada. The Court reiterated that Cuervo's decision not to employ the CASTILLO mark on its own was both voluntary and not explained by sufficient evidence. The Court laid out the test for "special circumstances", citing Scott Paper Ltd. v. Smart & Biggar (2008), 65 C.P.R. (4th) 303 (F.C.A.) for the proposition that the "special circumstances" justifying non-use had to be proven by the registrant to be unusual, external, and out of the registrant's control. Given the above facts, the Court found that the Registrar's finding that Cuervo's decision to postpone the use of the CASTILLO mark was voluntary due to the legal dispute (and therefore not a special circumstance) was reasonable and therefore upheld the expungement ruling. The Court dismissed the appeal.