SCC ruling safeguards rights of prior trademark owners

Intellectual property lawyers say the Supreme Court of Canada’s decision yesterday in Masterpiece Inc. v. Alavida Lifestyles Inc. is a victory for those seeking stronger protection of trademark laws.

“The decision affirms that the Canadian trademarks regime is national in scope and upholds the plain language of the Trade-marks Act,” said Daniel Bereskin of Bereskin & Parr LLP, who represented the intervening International Trademark Association at the SCC.

The case holds that a registered trademark is not valid if a confusingly similar trademark had previously been used anywhere in Canada.

The case involved two retirement residence companies, Masterpiece, of Alberta, and Alavida Lifestyles, of Ontario. Alavida applied to resister the trademark “Masterpiece Living” in 2005. Masterpiece, meanwhile, had used several unregistered trademarks — such as “Masterpiece the Art of Living” — since it began operating in 2001.

Soon after Alavida’s application came forward, Masterpiece began using “Masterpiece Living” and applied to register it. Alavida’s application was granted, and Masterpiece’s was denied accordingly.

Masterpiece then applied to have Alavida’s registration quashed, but the trial judge denied that move and determined there was no likelihood of confusion between the marks. The Federal Court of Appeal upheld the trial decision, but the SCC decided to allow Masterpiece’s appeal and expunge Alavida’s registration.

“Consideration of all the circumstances of the case, including the factors set out in s. 6(5) of the Trade-marks Act and particularly that Alavida’s trademark ‘Masterpiece Living’ and Masterpiece Inc.’s ‘Masterpiece the Art of Living’ are very similar, leads to a finding that Masterpiece Inc. has proven that the use of Alavida’s trademark in the same area as those of Masterpiece Inc.’s would be likely to lead to the inference that the services associated with Masterpiece Inc.’s trademarks were being performed by Alavida,” wrote Justice Marshall Rothstein, on behalf of the unanimous court.

The court also ruled that, as Masterpiece’s use of the trademark came before Alavida’s proposed use, the latter company was barred from registering its trademark pursuant to S. 16(3) of the act.

“As a result, Alavida was not ‘the person entitled to secure the registration’ of its trademark under s. 18(1) and this ground of invalidity has been made out,” wrote Rothstein.

"The court’s remarks on survey evidence have a beneficial effect on trademark owners. Although enforcement of marks can still be an expensive proposition, the Supreme Court is clearly trying to cut down on the burden of enforcement costs by eliminating one of the significant expenses associated with taking a trademark case to trial," wrote Ingrid VanderElst and Joanne Nardi in a Torys LLP bulletin on the ruling.

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