Last week, the Supreme Court of Canada (SCC) released its
decision in Masterpiece Inc. v. Alavida Lifestyles
Inc., clarifying the application of
confusion analysis under the Trademarks Act. The
issue in the case was whether the trade-mark "Masterpiece
Living", proposed in 2005 and subsequently registered by
Alavida Lifestyles Inc., a company in the retirement residence
industry in Ontario, was confusing with similar unregistered
trade-marks used by Masterpiece Inc. in the retirement residence
industry in Alberta since 2001.
"the question is whether, as a matter of first impression,
the 'casual consumer somewhat in a hurry' who sees the
Alavida trade-mark, when that person has no more than an imperfect
recollection of any one of the Masterpiece Inc. trade-marks or
trade-name, would be likely to be confused; that is, that this
consumer would be likely to think that Alavida was the same source
of retirement residence services as Masterpiece Inc."
The decision included four key holdings related to the
application of the test for confusion. First, the test for
confusion is to be applied under the hypothetical assumption that
the trade-marks are used in the same area, irrespective of whether
they actually are. As such, for an owner of a registered trade-mark
to have exclusive use in Canada there cannot be a likelihood of
confusion with another trade-mark, registered or unregistered,
anywhere in Canada.
Second, an unregistered trade-mark can be used to challenge a
registration application or a registered mark based on confusion.
This is because the first use of a trade-mark and not the
registration itself confers priority of title and the exclusive
right to use the trade-mark.
Third, confusion must be assessed from the perspective of the
first impression of the consumer approaching a costly purchase when
he or she encounters the trade-mark. A pricier purchase will
generally be a factor against confusion as the consumer is deemed
to have researched his or her decision. That said, high cost is
likely not enough by itself to lead to a finding that the marks are
Fourth, expert testimony should only be considered in confusion
analysis if the testimony is likely to be outside the experience
and knowledge of the judge. When the casual consumer is not
particularly knowledgeable and there is a resemblance between the
marks, expert evidence that simply assesses resemblance will not
usually be necessary.
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.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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