Whither Survey Evidence? What The Supreme Court Of Canada Said In Masterpiece

Ruth M. Corbin, Ph.D., LL.M., is the Managing Partner at CorbinPartners Inc. and an Adjunct Faculty member at Osgoode Hall Law School.^[1]

The Supreme Court of Canada, in its recent “Masterpiece” decision,^[2] sent a strong message to the legal and social science communities with respect to survey evidence.

The Court ruled on a dispute between two parties operating in the retirement residence industry, one using the trade-mark “Masterpiece the Art of Living” (among others), and one using the trade-mark “Masterpiece Living.”  The Court determined that there was likely to be marketplace confusion created by use of these two trade-marks, and ordered the latter expunged from the trade-mark register. The decision clarified certain statutory details about the geographic extent of a trade-mark owner’s rights, and the relevant dates and circumstances for determining confusion.   Many members of the bar have written excellent summaries of the legal content of the decision, which need not be repeated here.  [IP Osgoode note: the decision was covered in the IPilogue in “A Masterpiece of Trade-mark Clarity”.]

The decision, written for the court by Mr. Justice Rothstein, incorporated a forcefully written opinion about the value of expert evidence, and a new standard of validity for the design of confusion surveys.  Survey researchers may need to approach questionnaire design differently in the future, or be prepared to explain the necessity of a particular design in the context of particular facts.  The practical implications of the decision with respect to survey evidence are explained below.

1. Is survey research needed at all?  Decide early.

The Supreme Court said that the standard for admissibility of expert evidence should be necessity, and not mere helpfulness.  Necessity means “likely to be outside the experience and knowledge of a judge.”^[3] The Court suggested there are matters of consumer perception that judges may readily adduce without the participation of expert witnesses.  “[Judges] should use their own common sense, excluding influences of their ‘own idiosyncratic knowledge or temperament’ to determine whether the casual consumer would be likely to be confused.”^[4]

There will surely be uncertainty in predicting whether a particular matter of evidence is one for which a judge can anticipate the perceptions of the casual consumer, based on common sense.  Indeed, the evolution of surveys as expert evidence has arisen from earlier observations of courts that judges may not be ideally suited to put themselves in the shoes of the average consumer.   Justice Macfarland in Sun Life has so often been quoted on this point:  “To attempt to make such a determination [of confusion] without regard to evidence of what others may think or have said would to my mind be nothing more than an exercise in pure judicial fantasy, and of not much assistance at all.”^[5] Some matters will present clearer occasions than others for deciding between expert evidence and deferring to judicial notice.  (For example, extent of reputation, consumer perceptions of distinctiveness or secondary meaning, lapses into generic use, or damage to goodwill are issues–among possible others–for which some form of survey evidence may continue to be necessary.)

The Supreme Court found a role for officers of the court system to help avoid excessive costs and complications earlier on in the litigation process.  “Courts must fulfil their gatekeeper role to ensure that unnecessary, irrelevant and potentially distracting expert and survey evidence is not allowed to extend and complicate court proceedings.”^[6] Trial judges should consider whether certain evidence need be introduced at all.  Justice Rothstein went further to suggest that counsel might discuss at the early stage of case management whether their proposed evidence would be admissible at trial.

The efficiency benefits of the Court’s proposal in this regard are too tempting to ignore.  The proposal is consistent with the spirit of the Federal Court rule of “hot-tubbing” among experts to iron out areas of prior agreement.  Counsel may wish to retain one form of expert or another to advise at an early stage about the necessity of survey evidence.  Other possibly equally relevant and less expensive forms of market reconnaissance are available and appropriate to put facts before a court.   Mystery shopping, deep-search internet analysis, media content analysis, and reviews of professional literature are all highly cost-efficient alternatives to survey evidence that have proven their relevance in specific circumstances.  Any of these market evidence options is also adaptable to mediation and arbitration processes that could end a dispute even before the case management stage.

2. A new standard for pertinent population in survey evidence

Confusion has been interpreted in case law as being a matter of first impression of one trade-mark by a consumer who holds an “imperfect recollection” of another trade-mark, the so-called senior mark of the two.  The Supreme Court would appear to indicate that survey respondents must actually have an imperfect recollection of a senior mark, not merely be subjected to the senior mark for purposes of simulating imperfect recollection. The Court appears to say that surveys are not to test consumers who, conditionally, could have an imperfect recollection in the future, but only those who have one on the day that the survey is conducted.  This new guideline, if interpreted at face value, would have two significant consequences.  One is an increase in potential cost of confusion surveys, because a survey researcher would have to look longer and harder for survey respondents with an imperfect recollection.  The second is the disadvantage to smaller companies with localised use of registered marks:  if their marks are not yet widely-known, the prospect of finding people with an imperfect recollection is geographically restricted, and possibly prohibitively expensive.   It is hard to imagine that the Supreme Court intended such disadvantage to small business.

3. Some questionnaire designs more welcome than others

The third implication of the Supreme Court comments about confusion surveys is a potentially wider digression from American practice.  One of the established survey formats, first brought to the attention of the legal community by an American psychologist, is the so-called “same company/different company” format.  According to that questionnaire format, respondents are first exposed to the senior mark, which is then removed from view (to simulate imperfect recollection); respondents are next exposed to the junior mark and asked whether the two marks they have seen “are put out by the same company or by different companies or can you not say?”  Justice Rothstein’s remarks appear to discourage that format, unless accompanied by confirmation that respondents had an imperfect recollection before being reminded of the trade-mark a few moments earlier.   What makes this requirement curious is that a plaintiff survey that simulates “near-perfect” rather than imperfect recollection—by displaying a mark a few moments before the  survey question is put to the participant—would produce even more conservative evidence in respect of the plaintiff’s case.  A finding of confusion in the face of “near-perfect recollection” would be even stronger evidence of the potential for confusion in the marketplace.  Also, there are situations where likelihood of confusion may have to be tested between trade-marks which have not yet been used, such as in a dispute between two co-pending “intent-to-use” applications. In such a case, both marks would need to be put to survey respondents. In short, litigants in future disputes, who continue to support the objective evidentiary value of the “same company/different company” format, should be prepared to explain the relevance of that format to the facts or theory of their case.

In summary, members of the social science community who spend at least part of their time serving the Canadian justice system have received new guidelines from the Supreme Court with possible far-reaching implications.  While the Supreme Court’s common sense approach and sound guidance to rein in costs of expert evidence make a distinct contribution to the exercise of justice, it may be that the Court did not intend to create all of the new dilemmas identified above.  At the same time, it acknowledged the continuing potential of surveys “to provide empirical evidence which demonstrates consumer reactions in the marketplace — exactly the question that the trial judge is addressing in a confusion case.  This evidence is not something which would be generally known to a trial judge, and thus unlike some other expert evidence, it would not run afoul of the second Mohan requirement that the evidence be necessary.”^[7] The standard is necessity.  The challenge is recognizing it.