Canada: The Bay Builds Upon A Masterpiece

Last Updated: April 15 2013
Article by A. Kelly Gill

Beymen, the leading fashion brand in Turkey, has offered upscale men's clothing since 1971, more recently adding women's wear and home collections to its lines.  But when it sought to register two of its design marks in Canada (possibly to herald its entry into the Canadian retail market), Beymen ran into serious issues with Canada's leading department store, Hudson's Bay. 

Hudson's Bay objected to registration of the following design marks based upon its prior use and registration of various BAY and BAIE marks:

In 2010, the Trade-Marks Opposition Board sided with Beymen, finding, on a balance of probabilities, no reasonable likelihood of confusion between the above marks and those previously registered by Hudson's Bay, "primarily because of the Mark's inherent distinctiveness and the differences existing between the parties' marks which outweigh the other factors in the present circumstances."  On February 5, 2013, Justice Hughes of the Federal Court released his reasons in Hudson's Bay v Anonim Sirketi 2013 FC 124 and 2013 FC 125 and partially reversed the holding of the Board.

In so doing, Justice Hughes applied the same test that the Board had, saying that the determinative issue was the likelihood of confusion between the trade-marks sought to be registered and the various BAY marks.  Before the Board, The Bay had only evidenced copies of its various BAY registrations and nothing further.  On appeal, however, it filed two further affidavits attesting to the extensive use and promotion of its BAY marks, and the state of the Register with respect to third party BAY marks.  The nature and quality of this further evidence was considered by Justice Hughes to be significant, allowing him to consider the matter de novo instead of reviewing the Board decisions only on the basis of reasonableness.  Justice Hughes also noted the Supreme Court of Canada decision in Masterpiece Inc. v Alavida Lifestyles Inc., 2011 SCC 27  decided after the Board's finding in this case as further support for the matter to be addressed de novo.

In assessing the likelihood of confusion, Justice Hughes followed the approach outlined by the Supreme Court in Masterpiece, namely what is the first impression in the mind of the casual consumer, somewhat in a hurry, with an imperfect recollection and without close examination.  Justice Hughes specifically repeated the instruction of the Supreme Court that "[n]either an expert, nor a court, should tease out and analyze each portion of a mark alone. Rather, it should consider the mark as it is encountered by the consumer – as a whole, and as a matter of first impression."  He quoted the following from the Supreme Court:

[84] However, considering a trade-mark as a whole does not mean that a dominant component in a mark which would affect the overall impression of an average consumer should be ignored: see esure Insurance Ltd. v. Direct Line Insurance plc, 2008 EWCA Civ 842, [2008] R.P.C. 34, at para. 45, per Arden L.J.  This is because, while the consumer looks at the mark as a whole, some aspect of the mark may be particularly striking.  That will be because that aspect is the most distinctive part of the whole trade-mark.  In this case, contrary to the view of the expert, the most distinctive and dominant component of the marks in issue is in all cases the word "Masterpiece" because it provides the content and punch of the trade-mark.  The word "Living" is bland by comparison.

There has always been an underlying tension between these two instructions of the Supreme Court – that a mark must be considered as a whole and as a matter of first impression, but yet that a dominant component should not be ignored – because to determine the latter necessarily involves, at least to some extent, deviating from the former.  This tension is clearly evident on these appeals as Justice Hughes concludes at the outset that the essential part of the trade-marks sought to be registered is the word BEYMEN, and that the essential part of the Appellant's registrations is BAY or BAIE.  The result is that the analysis undertaken "is that of likelihood of confusion between BAY or BAIE and BEYMEN", and not between the applied for design marks as a whole and each specific BAY registration.

Some have suggested that this approach to the confusion analysis, the identification and subsequent weight given to a dominant component, combined with Justice Hughes' explicit and deliberate avoidance of "a slavish conformity to section 6(5)" of the Trade-marks Act, creates greater unpredictability in assessing the risks of confusion.  However, in my view, the analytical approach undertaken by Justice Hughes is really no different than that which been undertaken for more than a century.  Perhaps Justice Hughes was more clearly explicit in stating that there is no "rigorous formula" to determine likelihood of confusion, but that does not change the test, it merely acknowledges that this is nothing more than a "judicial determination of a practical question of fact" (to quote Justice Ritchie from Benson & Hedges (Canada) Ltd. v St. Regis Tobacco Corp., [1969) S.C.R. 192 at p. 199).  In other words, it is a question that has always been answered by ordinary common sense with all its inherent unpredictability.

This article originally appeared in IP Osgoode

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