May 27 2011

In its May 26, 2011 decision, the Supreme Court of Canada reversed the Federal Court’s finding of no likelihood of confusion between Alavida’s registered trademark MASTERPIECE LIVING and Masterpiece Inc.’s previously-used trademark MASTERPIECE ART OF LIVING, both for the operation of retirement residences. Because the marks were confusingly similar, Alavida’s registration was ordered expunged (cancelled).

The case provides a good overview of the process to be followed when assessing likelihood of confusion between trademarks. The Supreme Court came to the following key conclusions:

• The geographic areas in which the trademarks are actually used is irrelevant to the confusion analysis.

• Where a prior user asserts rights in several trademarks, confusion must be assessed on a mark-by-mark basis.

• The high cost of the goods or services cannot justify changing the confusion test from one of first impression. That expensive, important purchasing decisions may involve extensive research after the trademark is first encountered cannot act to reduce confusion.

• It is the manner in which a party is entitled to use its trademark (as set out in the registration) that should be considered, not the manner in which the party actually uses the mark.

• Expert evidence on the issue of how potential purchasers are likely to react to a trademark should be avoided, especially when the goods or services are marketed to the general public.

• Survey evidence is unlikely to be helpful when the trademark being tested has not yet established a sufficient presence in the marketplace. Courts should initiate procedures aimed at excluding dubious survey evidence at an early stage in the proceedings.

Read the full text of the decision.

This article is for information purposes only and does not constitute legal or professional advice.

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Tags: IP Litigation, Trademarks