Canada: Marketplace Reality And Infringement

Last Updated: August 5 2019
Article by John McKeown

A recent decision of the Federal Court emphasizes the need for evidence of actual confusion in an action for infringement.

The Facts

Loblaws Inc. (Loblaws) brought an action against Pampered Chef Ltd. and related corporations (Pampered Chef) in the Federal Court for trademark infringement.

Loblaws owns the following registered trademarks:

(a). the word mark PC, registered for use with (1) food and kitchenware products, and (2) the operation of a reward incentive program for points which can be redeemed for various products (the PC Word Mark);

(b). the design mark (see ) registered for use with (1) food and kitchenware products and (2) the following services: cooking school services, application for digital electronic devices and mobile phones for viewing recipes and nutritional information, and operating a reward incentive program for points.

Loblaws also owns and uses the following mark in connection with its "President's Choice" brand (the President's Choice Mark):

Pampered Chef has used the trademark PAMPERED CHEF in Canada for several years in association with the sale of housewares. In 2015 and/or 2016, Pampered Chef filed trademark applications in Canada for the following trademarks, which employ a component referred to as the "Happy Spoon":

(a). the Happy Spoon Mark; see here.

(b), the Long Form Mark; see here.

(c). see here – and

(d). see here

The parties filed detailed evidence concerning the extent their respective marks had been used and become known.

Infringement

The primary issue at trial was whether section 20 of the Trademarks Act had been breached. The elements required to be proved by Loblaws were: (i) it has a validly registered trademark; (ii) Pampered Chef has sold, distributed, or advertised goods or services in association with a trademark; and (iii) the latter trademark was confusingly similar with that of Loblaws and was used without Loblaws' permission.

The Test for Confusion

Under the Act in making the determination whether trademarks are confusing, a Court must consider all the surrounding circumstances including (a) the inherent distinctiveness of the trademarks and the extent to which they have become known; (b) the length of time the trademarks have been in use; (c) the nature of the goods, services or business; (d) the nature of the trade; and (e) the degree of resemblance between the trademarks in appearance or sound or in the ideas suggested by them.

In addition, the determination is made as a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the mark when he or she has no more than an imperfect recollection of the prior trademark(s) and does not give the matter any serious consideration or scrutiny, nor to examine closely the similarities and differences between the marks. The test does not contemplate a careful examination of competing marks or side-by-side comparison.

The Judge started his analysis by comparing the PC word mark and the mark (see here) since these marks appeared to the closest in resemblance.

Regarding factor (e) the marks were identical in sound but have less resemblance visually and the ideas suggested by them added little to the analysis. Pampered Chef's mark bears some resemblance to the PC Word Mark, but that resemblance was not particularly strong.

Loblaws acknowledged that its mark had no inherent distinctiveness as it comprises two letters of the alphabet. However, they established that because of extensive use, publicity and sales the mark had a very high level of acquired distinctiveness. Pampered Chef's marks had developed some acquired distinctiveness and had some inherent distinctiveness because of the use of the Happy Spoon component. However, when compared with the level of distinctiveness that the PC Marks had acquired, it was clear that factor (a) strongly favoured Loblaws.

Regarding factor (b) the length of time the marks had been in used this factor strongly favoured Loblaws.

Regarding factor c) the similarity of the respective goods favoured Loblaws. In addition, as far as the respective businesses were concerned the judge did not think there were material differences in the respective customers.

There was substantial evidence concerning whether the parties' channels of trade overlapped. The judge found there were differences.

The "other surrounding circumstances" was the lack of any evidence of confusion between the parties' marks, despite a lengthy period of concurrent use, appears to have been the deciding factor.

The judge said that the degree of resemblance between the respective marks warranted consideration of the other factors. The acquired distinctiveness of the PC Word Mark strongly favoured Loblaws, as does the length of time its mark has been in use and the similarity in the parties' goods and customers. However, the nature of the trade, considering both the differences in the channels of trade and the reduction of the likelihood of confusion resulting from the evidence surrounding the use of Pampered Chef's name and Long Form Mark in pursuing its channels of trade, strongly favoured Pampered Chef. Taking those considerations into account, in the combination of the very probative nature of the lack of evidence of actual confusion, he concluded that Loblaws had not established a likelihood of confusion.

Comment

While evidence of actual confusion is not required to establish confusion, an adverse inference can be drawn when there is extensive concurrent use and no evidence of actual confusion. Marketplace reality becomes the most important factor.

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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