Canada: The Supreme Court Of Canada Allows Masterpiece's Appeal and Expunges Alavida's Registration

Last Updated: June 6 2011
Article by Kathleen Lemieux and Hafeez Rupani

Most Read Contributor in Canada, November 2017

In a strongly-worded and highly anticipated decision, the Supreme Court of Canada (SCC) unanimously allowed Masterpiece Inc.'s appeal in Masterpiece Inc. v. Alavida Lifestyles Inc. and ordered the expungement of Alavida Lifestyle Inc.'s registration for the trade-mark MASTERPIECE LIVING from the Canadian trade-marks Register based on the prior use by Masterpiece of unregistered trade-marks and trade names containing the element MASTERPIECE.

The key issues before the Court were: (1) is the geographic area where the trade-mark is used relevant when considering the likelihood of confusion between an applied for or registered trade-mark and a previously-used unregistered trade-mark?; (2) what are the relevant considerations for assessing resemblance between a proposed-use trade-mark and an existing unregistered trade-mark?; (3) what effect does the nature and cost of goods and services have on the "nature of the trade" portion of the confusion analysis?; and (4) when should courts take into account expert and survey evidence in trade-mark confusion cases?

These questions arose within the context of a trade-mark expungement proceeding initiated by Masterpiece, a company in the retirement residence industry based in Alberta. Before the Federal Court, Masterpiece argued that Alavida, a company who entered the retirement residence industry in Canada (Ontario) after Masterpiece, was not entitled to register the trade-mark MASTERPIECE LIVING as it was, as of the date the registration application was filed, confusing with the Masterpiece Inc. trade name and several MASTERPIECE trade-marks previously used by Masterpiece in Alberta.

1. Relevance of Geographic Area

In the appeal of the Federal Court's decision, which dismissed Masterpiece's application to expunge Alavida's registration, the Federal Court of Appeal (FCA) concluded that Masterpiece's plans to expand into Eastern Canada in the future were not relevant: as of the material date, Masterpiece was only active in Alberta. Accordingly, the FCA held that the parties were not in direct competition. On appeal to the SCC, Masterpiece argued that the FCA's conclusion suggested that geographic location was a relevant consideration when assessing the issue of confusion and that the FCA's decision effectively elevated the test for confusion in expungement proceedings to that considered in a passing off action, where the geographic area of reputation is an important consideration.

The SCC took the opportunity to dispel any doubt on this issue and concluded, based on its analysis of relevant sections of the Trade-marks Act, particularly Sections 6, 16 and 19, that geographical separation in the use of otherwise confusing trade-marks or trade names does not play a role in the test for confusion set out in Subsection 6(5), which is based on the hypothetical assumption that both trade-marks and trade names are used "in the same area", whether this is actually the case or not. In the SCC's view, [t]he application of the hypothetical test reflects the legislative intent to provide a national scope of protection for registered trade-marks in Canada".

2. Assessing the Degree of Resemblance

In setting out the proper approach for assessing the resemblance between a proposed use trade-mark and existing unregistered trade-marks, the SCC outlined a non-exhaustive list of considerations relevant to the analysis in this case. Applying this approach to the facts at hand, the SCC held that the Federal Court's consideration of Alavida's actual use of its trade-mark in the analysis of the degree of resemblance between the parties' trade-marks was problematic since it only took into account a single form of use occurring after the relevant date. In this regard, the SCC found that this approach did not reflect the entire scope of exclusive rights that were granted to Alavida under its registration.

The SCC stated that when engaging in a confusion analysis, it is important to keep in mind that the exclusive rights granted under the Trade-marks Act refer to a registered trade-mark and that where a court is called upon to decide if there is a likelihood of confusion between that registered trade-mark and any registered or previously used unregistered trade-marks, the analysis should address the proposed trade-mark for which the registration was ultimately obtained (in this case MASTERPIECE LIVING). Moreover, while actual use is not irrelevant, actual use should not be considered to the exclusion of potential uses within the registration. In this regard, the SCC noted that the trade-mark MASTERPIECE LIVING could be presented in many ways under the registration and it was therefore incorrect in law to limit consideration of Alavida's post-application use of its trade-mark to find a reduced likelihood of confusion. The SCC ultimately concluded that as both parties' trade-marks contained the dominant element MASTERPIECE, they bore striking similarities and a strong resemblance as a whole to one another.

3. Effect of Cost of the Goods and Services on "Nature of the Trade" Analysis

In considering this issue, the SCC disagreed with the weight attributed by the Federal Court to the cost associated with a retirement residence and the corresponding finding that consumers, taking more care as a result of higher cost, would be less likely to be led astray by confusing trade-marks than if they were in the market for less expensive goods or services. By emphasizing the importance and cost of expensive goods and services, the SCC held that the Federal Court erred in law by changing the likelihood of confusion test from one of first impression of a trade-mark to a test of consumers being "unlikely to make choices based on first impression".

While the SCC agreed that there may be a lesser likelihood of trade-mark confusion where consumers are in the market for expensive wares or services, the nature of the wares, services or business factor should be analyzed as a matter of first impression rather than from the perspective of a consumer that has conducted further research or inquiries after the consumer encountered a trade-mark in the marketplace. In this regard, the SCC stated that where a strong resemblance suggests a likelihood of confusion and the other factors in the confusion analysis do not point strongly against a likelihood of confusion, then the cost of goods and services is unlikely to lead to a different conclusion.

4. Expert and Survey Evidence in Trade-mark Confusion Cases

In a case involving extensive expert and survey evidence, the SCC noted that the tendering of expert evidence in a trade-mark case is no different than tendering expert evidence in any other context, where the focus is primarily on the relevance and necessity of the expert evidence. In this regard, the SCC noted that in cases where the "casual consumer" is not expected to be particularly skilled or knowledgeable, and there is a resemblance between the trade-marks, expert evidence that simply assesses that resemblance will generally not be necessary. Similarly, while survey evidence has the potential to provide empirical evidence of consumer reactions in the marketplace, and may therefore meet the test of necessary, the SCC cautioned against its use since such evidence may not be relevant. Therefore, the SCC instructed trial judges to carefully question the necessity and relevance of expert and survey evidence before admitting it.

In this case, having concluded that the expert evidence was of little or no use to the issue of confusion, the SCC held that a casual consumer observing the Alavida trade-mark having no more than an imperfect recollection of Masterpiece's trade-mark would likely be confused into thinking that the source of the services associated with the Alavida trade-mark was one and the same as the source of the services associated with the Masterpiece trade-mark. The SCC also concluded that none of the other circumstances assisted in reducing this likelihood of confusion to the point that confusion was not likely to occur.

Because Masterpiece's use of its trade-marks and trade names preceded Alavida's proposed use of its trade-mark, Alavida was not entitled to register the trade-mark MASTERPIECE LIVING under Section 16(3) of the Trade-marks Act. The SCC therefore allowed Masterpiece's appeal, set aside the decisions of the Federal Court and FCA and ordered the expungement of Alavida's registration for the trade-mark MASTERPIECE LIVING from the Canadian Trade-marks Register.

The decision of the SCC can be found at this link: 2011scc27.html

Supreme Court of Canada denies leave

The Supreme Court of Canada denied GSK's application for leave to appeal in Glaxo Group Limited v. Apotex et al. The Federal Court of Appeal's decision can be found here, and our summary of the decision here.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions