Canada: Supreme Court Clarifies Test For Trademark Confusion

Trademarks perform a key function in the marketplace. Trademarks serve as a shortcut for consumers: "trade-marks assure consumers that they are buying from the source from whom they think they are buying and receiving the quality which they associate with that particular trade-mark."1 Not surprisingly, the issue of consumer confusion between sources of goods and services is often at the center of a trademark dispute.

In a recent trademark decision, Masterpiece Inc. v. Alavida Lifestyles Inc.,2 the Supreme Court of Canada provided clarification on key legal principles concerning confusion.

This decision, which addressed the issue of confusion in the context of competing trademark rights flowing from registration and common law, affirmed the first-to-use principle in Canada: "It is not the registration that makes the party proprietor of a trade-mark; he must be proprietor before he can register."3

The Trial Court and Court of Appeal

The issue in this case was whether the trademark MASTERPIECE LIVING proposed (and subsequently registered and used) by Alavida, a company entering the retirement residence industry in Ontario, was then confusing with the unregistered trademarks/trade name previously used by Masterpiece, a competitor operating in Alberta.

Masterpiece commenced an application in the Federal Court to invalidate (and expunge) Alavida's trademark registration for MASTERPIECE LIVING. Masterpiece argued that Alavida's trademark was invalid because, on the date Alavida's application was filed, it was confusing with Masterpiece's previously used unregistered trade name and trademarks, all of which included the word "Masterpiece".

The Federal Court and Federal Court of Appeal dismissed the application, finding that the registration was not invalid as there was no likelihood of confusion. The Federal Court and Federal Court of Appeal found that there was no likelihood of confusion because (1) the respective trademarks were not being used in the same geographic area, (2) the designs were sufficiently different and (3) the high cost of the services would result in greater care when making the purchase.

The Supreme Court Decision

In the Supreme Court, Masterpiece's prior common law rights prevailed over Alavida's subsequently obtained (and used) registered trademark rights. The Supreme Court reversed the courts below, finding that the registration was invalid.

In reaching its conclusion, the Supreme Court made a number of important clarifications on the test for confusion.

Location of Actual Use

The Supreme Court clarified that the test for confusion is based upon the hypothetical assumption that the marks are used in the same area, irrespective of whether this is actually the case. In reaching this conclusion, the Supreme Court considered the exclusive right granted under section 19 of the Trade-marks Act. In particular, given that the exclusive use is granted throughout Canada, the requirement that there be no likelihood of confusion with another trademark or trade name must also extend throughout Canada. In other words, to obtain a registration and therefore exclusive use in Canada, there can be no likelihood of confusion with another trademark or trade name anywhere in the country.

In this case, the fact that Masterpiece's prior use of its unregistered marks was localized in Alberta, and not in Ontario where Alavida provided competing services, was irrelevant.

Assessing Resemblance

In assessing the resemblance between Alavida's MASTERPIECE LIVING trademark and Masterpiece's existing unregistered trade names and trademarks, the Supreme Court provided the following guidance:

  • The degree of resemblance is often likely to have the greatest effect on the confusion analysis.
  • A separate resemblance analysis of each asserted trademark/trade name and the registered trademark must be conducted. In this case, the trial judge erred in considering the unregistered marks as a composite.
  • A registered trademark must be considered based on the registration and not by its actual use. In this case, the trial judge erred in considering only Alavida's actual use of MASTERPIECE LIVING and not how it may use the mark under the registration (i.e., in any size, font style, colour or design).
  • A common law trademark must be considered according to its actual use. In this case, because Masterpiece's trademarks were unregistered on the date of issue, it could only rely on those trademarks and trade names that it had actually used (and not any future uses).

The Supreme Court found that the marks shared striking similarities and that there was a strong resemblance as a whole between the Masterpiece trademark and the Alavida trademark.

Cost of the Wares or Services

The Supreme Court confirmed that the test for confusion is still a test of first impression. Therefore, while it is possible that there may be a lesser likelihood of confusion where consumers are in the market for expensive or important wares or services, this reduced likelihood is still premised on the first impression of consumers when they encounter the trademarks in question.

The trial judge erred in discounting the likelihood of confusion by considering what actions the consumer might take after encountering a mark in the marketplace (for example, subsequent research which may be undertaken by consumers of expensive wares and services).

The Supreme Court emphasized that while careful research and deliberation may dispel any trademark confusion that may have arisen, it does not mean that no confusion ever existed or that it will not continue to exist in the minds of consumers who did not carry out that research. The Supreme Court highlighted that diversion (leading a consumer to seek out or consider the wares and services from a source they previously had no awareness of or interest in) prior to remedying confusion, diminishes the value of the goodwill associated with the trademark the consumer initially thought he or she was encountering upon seeing the trademark.

In this case, the Supreme Court held that cost was not irrelevant because consumers for expensive retirement residence accommodation may be expected to pay somewhat more attention when first encountering a trademark than consumers of less expensive wares or services. However, in this case, the Supreme Court did not find that cost would change the conclusion of a likelihood of confusion dictated by the strong resemblance between the marks.

Expert Evidence

In addition to clarifying legal principles on confusion, this case is also notable for the Supreme Court's critical observations on expert and survey evidence.

The Supreme Court emphasized the court's gatekeeper role in ensuring that unnecessary, irrelevant and potentially distracting expert and survey evidence is not allowed to extend and complicate court proceedings.

In this case, the Supreme Court rejected the expert evidence filed by the parties, finding that the expert and survey evidence failed the relevant and necessary elements of the test in R. v. Mohan.4 In particular, the expert evidence directed to assessing the resemblance of the marks was not necessary. The Supreme Court held that in cases of wares or services being marketed to the general public, judges should consider the marks at issue, each as a whole, but having regard to the dominant or most striking or unique feature of the trademark. They should use their own common sense, excluding influences of their "own idiosyncratic knowledge or temperament" to determine whether the casual consumer would likely be confused. The survey evidence in this case was not relevant because the consumers surveyed did not have an imperfect recollection of the first mark (Masterpiece had not yet established a presence in the community).

Also interesting is the Supreme Court's recommendations proposing that expert and survey evidence be assessed for admissibility and usefulness at an early stage in the litigation so as to avoid large expenditures of resources on evidence of little utility.


This decision reinforces the importance of conducting thorough searches of unregistered (and not only registered) trademarks and trade names in assessing the risk associated with the adoption of a proposed trademark.


1. Mattel Inc. v. 3894207 Canada Inc., 2006 SCC 22 at paras. 21-22.

2. 2011 SCC 27 (Masterpiece).

3. Masterpiece at para. 35, citing Partlo v. Todd (1888), 17 SCR 196 at 200.

4. [1994] 2 SCR 9.

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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.