Ashlee Froese is an Osgoode Hall alumnus and currently practices intellectual property at the law firm of Keyser Mason Ball LLP.
For the first time since 2006, the Supreme Court of Canada ("SCC") has been asked to clarify on important trade-mark law principles. The Supreme Court of Canada has granted leave to hear an appeal from the Federal Court of Appeal (“FCA”) decision in Masterpiece Inc v Alavida Lifestyles Inc. (2009 FCA 290). Although this case is centered on a Section 57 expungement application, the real issue before the SCC is whether a likelihood of confusion between two trade-marks can exist if the trade-marks are not already in competition in the same geographical area.
Facts of the Matter
Both parties operate in the retirement residence field.
Since 2001, Masterpiece Inc. has been using a series of unregistered trade-marks that incorporated the components MASTERPIECE and LIVING.
One December 1, 2005, Alavida Lifestyles Inc. applied to register MASTERPIECE LIVING.
In 2006, Masterpiece Inc. applied to register its trade-marks MASTERPIECE and MASTERPIECE LIVING for registration based on prior use. Those trade-mark applications were denied registrability on the basis of Alavida Lifestyles Inc.’s previously filed MASTERPIECE LIVING trade-mark application.
Whereas Masterpiece Inc.’s trade-mark applications were denied registrability, Alavida Lifestyle Inc.’s trade-mark subsequently registered.
Masterpiece Inc. filed a Section 57 expungement application against Alavida Lifestyle Inc.’s registered trade-mark, relying on its use of a series of unregistered trade-marks that incorporated the components MASTERPIECE and LIVING since 2001.
The Federal Court's Decision
At the trial level, the expungement application was denied. The Federal Court employed the standard Section 6 confusion analysis and found that there was no likelihood of confusion.
Alavida Lifestyles Inc.’s trade-mark registration was upheld.
The Federal Court of Appeal Decision
The FCA upheld the Federal Court's decision.
The FCA further added that as Masterpiece Inc.’s common law trade-marks were not being used in the same geographic region as Alavida’s Lifestyle Inc.’s trade-mark, at the time of filing of Alavida Lifestyles Inc.’s trade-mark application, there was no likelihood of confusion. Thus, Alavida Lifestyles Inc.’s trade-mark registration should be upheld.
In essence, the FCA held that there must be a present-day likelihood of confusion – not a future likelihood of confusion based on hypothetical business growth into an expanded geographic area.
Issues Before the Supreme Court of Canada
Two important issues will be addressed at the SCC level. First, when conducting an analysis of confusion, should the geographic scope of use between the trade-marks be a consideration? If there is no current geographic overlap between the trade-marks, can there be confusion? Second, if no, has the FCA elevated the test for Section 57 expungement to a passing off action?
Summary
It is not often that trade-mark matters reach the SCC. Trade-mark practitioners will be watching with interest to see how the SCC deals with the potential ramifications that prior use of an unregistered trade-mark in Canada can have on preventing confusingly similar trade-mark registrations.