A recent decision of the Federal Court illustrates the importance of monitoring competitors' activities including the Trade-mark Journal.

The Facts

Masterpiece Inc. and Alavida Lifestyle Inc. ("Alavida") both carry on the business of offering retirement residences and related services. Masterpiece Inc. claimed that it had been using various trade marks that include the word MASTERPIECE for approximately five years.

On December 1, 2005, Alavida applied to register the trade mark MASTERPIECE LIVING and began using it in early January 2006 on its website. A registration was issued in March 2007.

Expungement

Masterpiece Inc. was unaware of the application and failed to oppose it despite its advertisement in the Trade-marks Journal. As a result, Masterpiece Inc. brought proceedings in the Federal Court to expunge Alavida's registration on the grounds that Alavida was not entitled to register the trade mark MASTERPIECE LIVING since it was confusing with its mark.

Under the Act, the registration of the trade mark is invalid if the applicant for a registration was not the person entitled to secure its registration. An applicant who has filed an application for registration of a proposed trade mark is entitled to secure its registration unless at the date of the filing it was confusing with a trade mark that had been previously used in Canada by another person.

Masterpiece Inc. was required to show that it had used its trade mark prior to December 1, 2005. The evidence that it filed was categorized by the Judge as being rather sporadic as it gave more priority to the trade name CLUB SIERRA. However, it was found that Masterpiece Inc. had shown some use of its trade mark before December 1, 2005.

Confusion

Under the Act, the use of a trade mark causes confusion with another trade mark if the use of both marks in the same area would be likely to lead to the inference that the services associated with the trade marks were provided by the same person  

The Statutory Factors

In determining whether trade marks are confusing, the Court or the Registrar, as the case may be, must have regard to all of the surrounding circumstances, including:

  1. the inherent distinctiveness of the trade marks and the extent to which they have become known;
  2. the length of time the trade marks have been in use;
  3. the nature of the services;
  4. the nature of the trade; and
  5. the degree of resemblance between the trade marks in appearance or sound or in the ideas suggested by them.

 Both parties filed expert evidence. Alavida filed the affidavit of an expert in marketing. Masterpiece Inc. filed the affidavit of a marketing expert who had carried out a survey. Alavida filed an affidavit of additional expert to comment on the way in which the survey had been carried out.

In considering this evidence, the Judge arrived at the following conclusions:

  • The word MASTERPIECE in association with retirement residences and related services was somewhat distinctive.
  • Masterpiece Inc.'s marks had not acquired distinctiveness given the inconsistent manner in which they were used before Alavida registered its mark.
  • While both companies operate in a similar area, people take considerable care in choosing a retirement residence and selecting the company that will provide services. In such circumstances, consumers can be presumed to be less susceptible to confusion about the source of the services because they are unlikely to make choices based on first impressions.
  • There was an overlap in the respective services despite the fact that there were some differences. While there was some degree of resemblance between the respective marks, Alavida used MASTERPIECE LIVING as a slogan accompanying its corporate identity. By contrast, Masterpiece Inc. used MASTERPIECE to identify the company itself along with other words and phrases of less prominence, and in conjunction with a distinctive butterfly logo.  

Looking at all of these matters, the Judge was not satisfied that Masterpiece Inc. had established a likelihood of confusion. As a result, the application was dismissed.

Comment

It would have been in the interest of Masterpiece Inc. to have opposed the application. In opposition proceedings the onus is primarily on the applicant (Alavida) unlike the proceedings seeking expungement where the onus is on the initiator (Masterpiece Inc.).