A recent decision of the Federal Court of Appeal, as the trial judgement emphasizes, determined that the Trademarks Act requires the court to consider and weigh all surrounding circumstances – the factors set out in subsection 6(5) and surrounding circumstances must be assessed and balanced. In addition, evidence of actual confusion can be vital.
The Action
In Loblaws Inc. v. Columbia Insurance Company Loblaws Inc. 2019 FC 961 an action was brought by Loblaws against Pampered Chef Ltd. and related corporations in the Federal Court for trademark infringement relating to the well known President’s Choice marks. Loblaw and Pampered Chef each use short form trademarks bearing the letters “PC” to reflect the “President’s Choice” proprietary Loblaw brand (the PC Marks) and the corporate name “Pampered Chef” with the defendants (the Short Form Marks). There was a design element consisting of a stylized spoon between the two letters in Pampered Chef’s Short Form Marks.
Pampered Chef used its Short Form Marks after a rebranding exercise which took place in 2016. The trial judge said that Loblaw’s PC Marks and Pampered Chef’s Short Form Marks bore some resemblance, that they were used while selling similar wares and the respective goods were sold to the same group of consumers.
The judge found that confusion was unlikely essentially for two reasons. First, Pampered Chef sold its goods as a direct seller rather than through retail stores and consumers would know that Loblaw does not sell its wares through that channel. Second, Pampered Chef deploys its Short Form Marks together with its corporate name “Pampered Chef” or its long form mark bearing that name, so consumers would know that they are looking at Pampered Chef products when encountering its Short Form Marks.
The action was dismissed because Loblaws had not established a likelihood of confusion. This conclusion was strongly influenced by the differences in the respective channels of trade and the lack of evidence of actual confusion.
The Appeal
Loblaws appealed to the Federal Court of Appeal. 2021 FCA 29 Loblaw argued that, given the judge’s conclusion that that Loblaw’s PC Mark and Pampered Chef’s Short Form Marks bore some resemblance, were used while selling similar goods and these goods would to sold to the same group of consumers, he should have concluded that the resemblance was strong.
The court did not accept this argument. The Trademarks Act requires the court to consider and weigh all surrounding circumstances – the factors set out in subsection 6(5) and surrounding circumstances must be assessed and balanced. The trial judge correctly said that the degree of resemblance between the [marks] … warranted consideration of the other factors.
The trial judge also correctly concluded that the design element between the two letters in Pampered Chef’s Short Form Marks—the spoon—diminished the resemblance between the competing marks. The trial judge had to view the respective marks as a whole and consider the “dominant” and “most striking” features.
Loblaws also argued that the judge erred in drawing an inference from the lack of evidence of actual confusion. It is clear that an adverse inference may be drawn from the lack of evidence of actual confusion if such evidence would readily be available if the allegation of likely confusion was justified. The court refused to accept this argument. They said if there was a likelihood of confusion as contended by Loblaws the intense exposure by Canadian consumers to the competing marks during the initial period of concurrent use would have led to some evidence of actual confusion.
Comment
In determining whether marks are confusing the Trademarks Act requires the court to consider and weigh all surrounding circumstances – the factors set out in subsection 6(5) and surrounding circumstances must be assessed and balanced.
While evidence of actual confusion is not required to establish confusion, an adverse inference can be drawn when there is extensive concurrent use and no evidence of actual confusion. Marketplace reality can become an important factor.
If you have questions, please contact me at mckeown@gsnh.com.
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Email: mckeown@gsnh.com
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.
A version of this article originally appeared on the Lawyer’s Daily website published by LexisNexis Canada Inc.