Indexed As: Masterpiece Inc. v. Alavida Lifestyles Inc.

Transcription

1 Masterpiece Inc. (appellant) v. Alavida Lifestyles Inc. (respondent) and International Trademark Association (intervenor) (33459; 2011 SCC 27; 2011 CSC 27) Indexed As: Masterpiece Inc. v. Alavida Lifestyles Inc. Supreme Court of Canada McLachlin, C.J.C., Binnie, LeBel, Fish, Charron, Rothstein and Cromwell, JJ. May 26, Summary: The question in this case was whether the trademark "Masterpiece Living", proposed and subsequently registered by Alavida Lifestyles Inc., a company entering the retirement residence industry in Ontario, was then confusing with the unregistered trademarks or trade name previously used by another company, Masterpiece Inc., in the retirement residence industry in Alberta. Masterpiece Inc. contended that Alavida's trademark, on the date its application for registration was filed, was confusing with Masterpiece Inc.'s trade name and trademarks. Thus, it argued, the registration of Alavida's trademark was invalid and should be expunged. The Federal Court, in a decision reported at 338 F.T.R. 168, dismissed Masterpiece Inc.'s application to expunge the Alavida trademark. Masterpiece Inc. appealed. The Federal Court of Appeal, in a decision reported at 397 N.R. 180, dismissed Masterpiece Inc.'s appeal. The relevant date for the confusion analysis was December 1, 2005, the date of filing of Alavida's trademark application. The court rejected evidence presented by Masterpiece Inc. that by December 1, 2005, it had unexecuted plans to expand into the central Canadian market. The possibility of future confusion was not relevant to the assessment of confusion. Masterpiece Inc. appealed. The Supreme Court of Canada allowed the appeal. The courts below did not interpret and apply the criteria for determining confusion correctly. Alavida's proposed trademark "Masterpiece Living" was confusing with at least one of Masterpiece Inc.'s trademarks when the registration application was filed. Therefore, Alavida was not entitled to registration of its proposed mark. Evidence - Topic Opinion evidence - Expert evidence - General - Admissibility - General - [See fifth ]. Court of Canada stated that "Where the trade-marks of different businesses are similar, a consumer may be unable to discern which company stands behind the wares or services. Confusion between trade-marks impairs the objective of providing consumers with a reliable indication of the expected source of wares or services. This case provides this Court with the opportunity of reviewing the basic approach and criteria applicable to a

2 confusion analysis between competing trade-marks under the Trade-marks Act, R.S.C. 1985, c. T-13" - See paragraph 1. Court of Canada stated that "In order for the owner of a registered trade-mark to have exclusive use of the trademark throughout Canada, there cannot be a likelihood of confusion with another trade-mark anywhere in the country... Whether in assessing trademark infringement under s. 19 [of the Trade-marks Act] or entitlement under s. 16, the test for likelihood of confusion is the same. The application of the hypothetical test reflects the legislative intent to provide a national scope of protection for registered trademarks in Canada" - See paragraphs 24 to 33. Court of Canada, to clarify the proper approach to assessing the resemblance between a proposed use trademark and existing unregistered marks, addressed a number of issues: (1) the relationship between use and registration; (2) the test for confusion; (3) the necessity to consider each mark separately; (4) the approach to testing for resemblance; (5) the necessity to consider the proposed use trade-mark according to its terms, rather than by its actual use; (6) the requirement to assess the unregistered marks according to their actual use; and (7) the resemblance between the trade-marks in issue - While those issues were relevant in this case, they were not intended to be an exhaustive list of all considerations that were relevant in assessing resemblance - See paragraphs 34 to 65. Court of Canada considered the following issue: "When considering the 'nature of the trade' under s. 6(5) [of the Trade-marks Act], what effect does the nature and cost of the wares or services have on the confusion analysis?" - The court concluded that it was an error to discount the likelihood of confusion by considering what actions the consumer might take after encountering a mark in the marketplace - See paragraphs 66 to 74. Court of Canada, in considering the issue of when courts should take into account expert evidence in trademark or trade name confusion cases, commented on a judge's role in controlling the admission of expert evidence - "If a trial judge concludes that proposed expert evidence is unnecessary or irrelevant or will distract from the issues to be decided, he or she should disallow such evidence from being introduced. I will also suggest that

3 92 to 101. Trademarks - Registration - Expungement of mark - Grounds - Confusion - The question in this case was whether the trademark "Masterpiece Living", proposed and subsequently registered by Alavida Lifestyles Inc., a company entering the retirement residence industry in Ontario, was then confusing with the unregistered trademark "Masterpiece the Art of Living" or trade name previously used by Masterpiece Inc., in the retirement residence industry in Alberta - The Supreme Court of Canada ordered the Registrar to expunge Alavida's registration - Consideration of all of the circumstances, including the factors in s. 6(5) of the Trade-marks Act and particularly that Alavida's trademark and Masterpiece Inc.'s were very similar, led to a finding that Masterpiece Inc. had proven that the use of Alavida's trade-mark in the same area as those of Masterpiece Inc.'s would be likely to lead to the inference that the services associated with Masterpiece Inc.'s trademark were being performed by Alavida - Because Masterpiece Inc.'s use preceded Alavida's proposed use, Alavida was not entitled under s. 16(3) to registration of its trademark - As a result, Alavida was not "the person entitled to secure the registration" of its trademark under s. 18(1) - See paragraphs 104 to 114. Trademarks - Registration - Expungement of mark - Grounds - Confusion - Masterpiece Inc. and Alavida Lifestyle Inc. were both involved in the retirement residence industry - Since 2001, Masterpiece Inc. had used unregistered trademarks, including "Masterpiece the Art of Living" - On December 1, 2005, Alavida applied to register the trademark "Masterpiece Living" - The mark was registered unopposed - The Registrar of Trade- Marks refused Masterpiece Inc.'s applications for "Masterpiece Living" and "Masterpiece", finding that each of those marks were confusingly similar to Alavida's proposed registration - Masterpiece Inc. applied to expunge Alavida's registration - It was unsuccessful at trial and on appeal - The Supreme Court of Canada allowed Masterpiece Inc.'s appeal - As a relevant surrounding circumstance under s. 6(5) of the Trade-Marks Act, the trial judge should have acknowledged the Registrar's finding, in weighing the evidence - The Registrar's decision supported a finding of likelihood of confusion between Alavida's trademark and Masterpiece Inc.'s trade name, and thus the "Masterpiece the Art of Living" trademark - See paragraphs 110 to 112. Trademarks, Names and Designs - Topic 890 Trademarks - Registration - Expungement of mark - Evidence and proof - [See fifth ]. Trademarks, Names and Designs - Topic 4408 Trademarks - Practice - Evidence - Public opinion surveys - [See fifth Trademarks, Names and Designs - Topic 889.5]. Trademarks, Names and Designs - Topic 4414 Trademarks - Practice - Appeals or judicial review - The Supreme Court of Canada stated that "The determination of whether a likelihood of source confusion exists is a fact-

4 finding and inference-drawing exercise, and thus, appellate courts should generally defer to the trial judge's fact findings and inferences, unless the facts and inferences were based on an error of law or constituted a palpable or overriding error of fact" - In this case, three errors of law had been identified in the interpretation and application of the confusion analysis conducted by the trial judge - In order to avoid further protracting the proceedings between the parties, the interests of justice would be served by the court making a fresh assessment of the evidence and finally deciding the matter - See paragraphs 102 and 103. Cases Noticed: Mattel Inc. v Canada Inc. et al., [2006] 1 S.C.R. 772; 348 N.R. 340; 2006 SCC 22, appld. [para. 1]. Partlo v. Todd (1888), 17 S.C.R. 196, refd to. [para. 35]. Veuve Clicquot Ponsardin v. Boutiques Cliquot ltée et al., [2006] 1 S.C.R. 824; 349 N.R. 111; 2006 SCC 23, appld. [para. 40]. Benson and Hedges (Canada) Ltd. v. St. Regis Tobacco Corp., [1969] S.C.R. 192, refd to. [para. 40]. Leaf Confections Ltd. v. Maple Leaf Gardens Ltd. (1986), 7 F.T.R. 72; 12 C.P.R.(3d) 511 (T.D.), affd. (1988), 87 N.R. 385; 19 C.P.R.(3d) 331 (F.C.A.), refd to. [para. 55]. Mr. Submarine Ltd. v. Amandista Investments Ltd., [1988] 3 F.C. 91; 81 N.R. 257; 19 C.P.R.(3d) 3 (F.C.A.), refd to. [para. 55]. Conde Nast Publications Inc. v. Union des éditions modernes (1979), 46 C.P.R.(2d) 183 (F.C.T.D.), refd to. [para. 63]. General Motors Corp. v. Bellows, [1949] S.C.R. 678; 10 C.P.R. 101, refd to. [para. 69]. R. v. Mohan, [1994] 2 S.C.R. 9; 166 N.R. 245; 71 O.A.C. 241, consd. [para. 75]. Ultravite Laboratories Ltd. v. Whitehall Laboratories Ltd., [1965] S.C.R. 734, appld. [para. 83]. esure Insurance Ltd. v. Direct Line Insurance plc, [2008] R.P.C. 34; 2008 EWCA Civ. 842, appld. [para. 84]. General Electric Co. (U.S.A.) v. General Electric Co., [1972] 2 All E.R. 507 (H.L.), consd. [para. 88]. Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 211 D.L.R.(4th) 577; 2002 SCC 33, appld. [para. 102]. Hollis v. Dow Corning Corp. et al., [1995] 4 S.C.R. 634; 190 N.R. 241; 67 B.C.A.C. 1; 111 W.A.C. 1, appld. [para. 103]. Statutes Noticed: Trade-marks Act, R.S.C. 1985, c. T-13, sect. 2, sect. 4, sect. 6, sect. 16(1), sect. 16(3), sect. 17, sect. 18, sect. 19, sect. 20, sect. 21, sect. 30, sect. 35, sect. 40, sect. 57(1) [Appendix]. Authors and Works Noticed: Fox, Harold George, The Canadian Law of Trade Marks and Unfair Competition (4th Ed. 2002) (2006 Looseleaf Update, Release 2), p [para. 49]. Hughes, Roger T., and Ashton, Toni Polson, Hughes on Trade Marks (2nd Ed. 2005) (2010 Looseleaf Update, Release 22), p. 939, 74 [para. 49].

5 Shorter Oxford English Dictionary on Historical Principles (5th Ed. 2002), p [para. 62]. Vaver, David, Intellectual Property Law: Copyright, Patents, Trade-marks (2nd Ed. 2011), pp. 532 [para. 49]; 536 [para. 33]. Counsel: W. Clarke Hunter, Q.C., Kelly Gill and Brandon Potter, for the appellant; Scott Miller, Sharon Griffin and Heather Gallant, for the respondent; Daniel R. Bereskin, Q.C., and Mark L. Robbins, for the intervenor. Solicitors of Record: MacLeod Dixon, Calgary, Alberta, for the appellant; MBM Intellectual Property Law, Ottawa, Ontario, for the respondent; Bereskin & Parr, Toronto, Ontario, for the intervenor. This appeal was heard on December 8, 2010, before McLachlin, C.J.C., Binnie, LeBel, Fish, Charron, Rothstein and Cromwell, JJ., of the Supreme Court of Canada. In reasons written by Rothstein, J., the Court delivered the following judgment, dated May 26, 2011, in both official languages. Editor: E. Joanne Oley Appeal allowed. Evidence - Topic Opinion evidence - Expert evidence - General - Admissibility - General - The Supreme Court of Canada, in considering the issue of when courts should take into account expert evidence in trademark or trade name confusion cases, commented on a judge's role in controlling the admission of expert evidence - "If a trial judge concludes that proposed expert evidence is unnecessary or irrelevant or will distract from the issues to be decided, he or she should disallow such evidence from being introduced. I will also suggest that 92 to 101. Trademarks, Names and Designs - Topic 890 Trademarks - Registration - Expungement of mark - Evidence and proof - The Supreme Court of Canada, in considering the issue of when courts should take into account expert evidence in trademark or trade name confusion cases, commented on a judge's role in controlling the admission of expert evidence - "If a trial judge concludes that proposed expert evidence is unnecessary or irrelevant or will distract from the issues to be decided,

6 he or she should disallow such evidence from being introduced. I will also suggest that 92 to 101. Trademarks, Names and Designs - Topic 4408 Trademarks - Practice - Evidence - Public opinion surveys - The Supreme Court of Canada, in considering the issue of when courts should take into account expert evidence in trademark or trade name confusion cases, commented on a judge's role in controlling the admission of expert evidence - "If a trial judge concludes that proposed expert evidence is unnecessary or irrelevant or will distract from the issues to be decided, he or she should disallow such evidence from being introduced. I will also suggest that 92 to 101. ***