Under the Canadian Trade-marks Act, the prior use of a trade name, in Canada, can be a basis for opposing a trade mark application or seeking the expungement of a trade mark registration.

On May 26, 2011, the Supreme Court of Canada issued its decision in Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27, arising from an action originally brought in the Federal Court of Canada by an Alberta company, Masterpiece Inc., to expunge (cancel) a registration of the trade mark MASTERPIECE LIVING registered by an Ontario business, Alavida Lifestyles Inc.

The Ontario company (Alavida) applied to the Canadian Trade-marks Office to register the trade mark MASTERPIECE LIVING on December 1, 2005 on the basis of “proposed use”, that is, its intention to use the trade mark MASTERPIECE LIVING in the future, in Canada, in association with “real estate development services, real estate management services, residential building construction services, dining services namely a dining room restaurant, housekeeping services, medical services namely medical clinic services, spa services, fitness services namely a fitness centre and concierge services”.

The Alberta company did not oppose the application before the Trade-marks Office and Alavida began actual use of MASTERPIECE LIVING in January of 2006, with its trade mark registration issuing March 23, 2007. The Alberta company sought expungement of the registration on the basis that it had used Masterpiece Inc. as a trade-name since 2001 and also, concurrently, used trade marks featuring the word MASTERPIECE, although it had not sought to register those trade marks with the Trade-marks Office. Evidence in the expungement action revealed that both parties offered services related to the development of retirement residences.

In finding for the Alberta company and ordering the expungement of the MASTERPIECE LIVING registration, the Supreme Court addressed four issues, one of which was the relevance of geographic area in assessing the likelihood of confusion, not only between one trade mark and a prior-used trade mark, but between a trade mark and a prior-used trade name. The Court found that geographical separation of use of trade marks and, importantly, trade names, does not play a role in determining whether there is a likelihood of confusion between a trade mark and a prior used trade mark or a prior-used trade name.  

In short, the fact that the earlier use of the Masterpiece Inc. trade name had taken place only in Alberta, did not limit or hamper the Alberta company’s ability to successfully assert a likelihood of confusion between that trade name in the wider Canadian marketplace, with a later-adopted trade mark for identical services. The Court confirmed a long-held understanding of the impact of the prior use of trade names as provided for in Sections 6 and 16 of the Trade-marks Act in opposition and expungement proceedings, namely that the presence of an earlier-used trade name in only one part of Canada does not limit the consideration of a likelihood of confusion to that geographic area.  

While this finding in support of the relevance of prior use of trade names is important, non-profit entities that rely solely or primarily on use of their trade names should, (1) consider conducting trade mark and common law searches to determine if other parties have adopted trade marks or trade names identical or similar to their trade name, first to determine if other parties have entered their field of use with confusing marks or names, and (2) consider applying to register their trade name as a trade mark, before the Canadian Trade-marks Office.