At issue in this case was whether the trade-mark
"Masterpiece Living", registered by Alavida Lifestyles
Inc. ("Alavida"), was confusing with the
unregistered trade-marks or trade-name previously used by another
company, Masterpiece Inc. Both Alavida and Masterpiece Inc. were in
the retirement residence industry.
Justice Rothstein wrote the unanimous decision of the
seven-member panel of the court. He found that the trial judge (as
upheld by the Federal Court of Appeal) had made several errors of
law in concluding that there was not confusion between the
The trial judge found that Masterpiece Inc. had established the
use of the trade-name "Masterpiece" and the trade-marks
"Masterpiece the Art of Retirement Living" and
"Masterpiece the Art of Living" at the time of the
application for registration by Alavida for "Masterpiece
Living". However, when conducting the confusion analysis, the
trial judge undertook a single composite analysis rather than
comparing each of Masterpiece Inc.'s marks and trade-name
separately. Justice Rothstein found that this was an error of law.
In his own analysis, Rothstein J. found that because
"Masterpiece the Art of Living" was most similar to
"Masterpiece Living", he could conduct the analysis once.
If there was no confusion between these two marks, then there would
not be confusion with the other less similar marks.
The trial judge found that confusion between Alavida's
"Masterpiece Living" and Masterpiece Inc.'s
trade-marks and trade-name was lessened because Alavida operated
predominantly in Ontario and Masterpiece Inc. operated in Alberta.
Justice Rothstein found that this was an error of law. The owner of
a trade-mark has the right to exclusive use of the trade-mark
throughout Canada. The appropriate question was for the trial judge
to ask whether there would likely be confusion between the marks if
they were used in the same area.
The trial judge also erred when considering the actual use of
Alavida's trade-mark. He found that Alavida used
"Masterpiece Living" as a slogan. Justice Rothstein found
that the trial judge must look to all of the available uses for the
marks allowed by the registration, and not solely at the actual
use. In this case, the application and subsequent registration were
very broad, and thus Alavida could use "Masterpiece
Living" in a variety of forms.
Finally, the trial judge found that because retirement living
was expensive, consumers were more likely to do research after
encountering these trade-marks, and thus would be less likely to be
confused about the companies behind the respective marks. This too,
as found by Rothstein J., was in error. While the value of the
goods or wares is relevant in that a consumer will likely pay more
attention when purchasing something expensive, the test focuses on
a consumer's first impression of the marks. The likelihood of
subsequent research after encountering the marks is irrelevant.
Justice Rothstein also criticized the use of expert evidence in
the trial. He found that the experts produced by both sides were
unhelpful, and that they likely contributed to leading the trial
judge astray from the proper questions and factors he should have
been addressing. Justice Rothstein reasoned that in a trade-mark
confusion case where the goods were sold to the general public, the
trial judge can put him or herself into the position of the
potential consumer. As expert evidence is unlikely to be necessary,
it will not be admissible under the Mohan test.
In the result, the appeal from the decisions of the trial judge
and the Court of Appeal were allowed, and the registration of
"Masterpiece Living" by Alavida was ordered expunged.
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