Canada’s highest Court is scheduled to hear the appeal of Masterpiece Inc. v. Alavida Lifestyles Inc. (2008 FC 1412, aff’d 2009 FCA 290) on December 8, 2010. The case involves an application for expungement of a trade-mark registration.  

Both parties operate in the retirement residence business. Masterpiece Inc. (Masterpiece) operated mainly in Alberta, whereas Alavida Lifestyles (Alavida) primarily operates in Ontario. Masterpiece (the Applicant) claimed since 2001 to have used unregistered trade-marks, all of which contained the word "masterpiece", and some of which contained the word "living". On December 1, 2005, Alavida (the Respondent - represented by Scott Miller), on the basis of proposed use, applied to have the mark "Masterpiece Living" registered. The mark was unopposed, subsequently allowed and registered. In 2006, Masterpiece applied to register the marks, "Masterpiece" and "Masterpiece Living". Masterpiece’s applications were denied by the Canadian Intellectual Property Office in September 2006. The grounds of refusal were that Alavida had previously submitted an application for the mark "Masterpiece Living". Thereafter, on the basis of confusion, Masterpiece brought an application to the Federal Court  to expunge Alavida’s registered trade-mark. The Federal Court dismissed Masterpiece’s application and Masterpiece appealed to the Federal Court of Appeal.  

At the Federal Court of Appeal, Masterpiece asserted that the definition of confusion contained in Section 6(2) of the Trade-marks Act (Act) which includes the phrase "would be likely", should be interpreted so that the confusion analysis considers, not only confusion at the date of application, but also, whether confusion would occur in the future.  

In contrast, Alavida argued that the relevant date for assessing confusion is the application date of Alavida's proposed use trade-mark application, i.e. December 1, 2005. Mr. Miller surmised that to interpret the act differently would give no meaning to the following words in Section 16(3) of Act: "unless at the date of filing of the application it was confusing" with a previously used  trade-mark.  Section 16(3) of the Act is the the entitlement section of the Act for proposed use trade-marks.  

The Federal Court of Appeal agreed with Mr. Miller and dismissed the appeal. In interpreting the relationship of Sections 6(2) and 16(3) of the Act, the Federal Court of Appeal held that the phrase "would be likely" means "would be likely at the date of application". The Federal Court of Appeal reviewed jurisprudence and analyzed the French version of the Act.

Masterpiece has summarized the issues  before the Supreme Court of Canada as follows: First, can there be a likelihood of confusion between two trade-marks notwithstanding that they are not currently in competitive use in the same geographic area?; Second, can a likelihood of confusion apparent on consideration of two trade-marks, as registered or as proposed, be overcome by the manner in which one trade-mark is actually used, i.e. - by the "get-up" extraneous to the mark itself?; and Third, to what extend can this occur on an application for expungement of a proposed use trade-mark, when any "get-up" is utilized only after the application date? 

Trade-mark cases are rarely before the Supreme Court of Canada.  This case will be closely watched by the trademark community in Canada, and the outcome of this decision will have a great effect upon trade-mark law in Canada. If you have any questions, please do not hesitate to contact Scott Miller.