Confusion between Trade-marks (Masterpiece v. Alavida)

June 19th, 2011

The Supreme Court of Canada on May 26, 2011 released the decision of Masterpiece Inc. v. Alavida Lifestyles Inc. (2011 SCC 27) regarding the test for confusion between trade-marks.  At issue was whether the Court should consider whether two marks could be confusing if they were used in different geographical areas.  The Court confimed that for the purpose of the confusion test, the trade-marks are assumed to exist in the same area.

The case dealt with two retirement living businesses, one in Alberta and one in Eastern Canada.  The Alberta business (Masterpiece) began using its unregistered trade-mark “Masterpiece” in approximately 2001, whereas the Eastern Canadian business (Alavida) began to use its registered trade-mark in approximately 2006.  Upon learning that Alavida was using their trade-mark, Masterpiece commenced an action to expunge the Alavida registration.

The trial court and appeal court each determined that the marks were not confusing for a variety of reasons, including that their geographic locations were distant, and that such a purchase involved considerable capital and purchasers would research their decision between each of the retirement companies.

The Supreme Court of Canada found confusion between the trade-marks, allowed Masterpiece’s appeal, and ordered that the Alavida trade-mark be expunged.  The Court confirmed that to take advantage of exclusive use of a trade-mark in Canada, there must be no likelihood of confusion with another trade-mark anywhere in Canada.

The Supreme Court also affirmed that while purchasers of expensive goods may research their decision to purchase the goods extensively, the issue of confusion is confirmed to be one of first impression, meaning that any research after the first contact with the trade-mark is largely irrelevant.

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