The value of trademarks lies in their capacity to act as an indicator of source for the associated wares or services and the goodwill that flows therefrom. Use or registration by a third party of a confusing mark can lessen this value by reducing the established mark's distinctiveness, thereby diminishing the goodwill connection in the minds of consumers between the wares or services and the trademark owner. For this reason, trademark owners must be vigilant in preventing third parties from adopting and registering potentially confusing marks. It is also prudent to consider the possibility of confusion when selecting new marks.
As in the United States and the European Union, the test for confusion in Canada is governed by a statutory bar against the registration or use of marks deemed likely to cause confusion with a previously used or registered mark, with the test for determining confusion consisting of a non-exhaustive list of factors. Section 6(5) of the Trademarks Act provides that confusion is to be decided with regard to all surrounding circumstances, but includes five enumerated factors:
6(5). In determining whether trademarks or trade-names are confusing, the court or the Registrar, as the case may be, shall have regard to all the surrounding circumstances including
(a) the inherent distinctiveness of the trademarks or trade-names and the extent to which they have become known;
(b) the length of time the trademarks or trade-names have been in use;
(c) the nature of the wares, services or business;
(d) the nature of the trade; and
(e) the degree of resemblance between the trademarks or trade-names in appearance or sound or in the ideas suggested by them.
In almost every court or Opposition Board proceeding involving trademark confusion in Canada, the trier of fact considers each of the five factors listed in section 6(5). However, owing to the non-exhaustive language of the provision, Canadian courts have developed a litany of additional surrounding circumstances that may be taken into consideration. As such, it is important to be familiar with these surrounding circumstances, as they may strengthen or reverse the initial conclusion apparent from evaluation of the enumerated section 6(5) factors alone. While it has often been stated that the degree of resemblance is the most important factor, the relevant weight of any given factor, whether an enumerated ground or a surrounding circumstances, is fact-dependent.
Surrounding circumstances that have been applied in Canadian trademark proceedings include, for example:
- a history of concurrent use without evidence of significant confusion,
- actual confusion,
- third-party use of similar or identical marks,
- third-party applications and registrations of similar or identical marks,
- whether the mark is famous,
- survey evidence showing the likelihood of confusion or lack thereof,
- media coverage distinguishing the marks,
- disclaimers, and
- the existence of a family of marks.
Surrounding circumstances may have been pivotal in A & W Food Services of Canada v. McDonald's, in which the Federal Court considered the likelihood of confusion of the McDonald's mark CHICKEN MCGRILL with the plaintiff A&W's mark CHICKEN GRILL. In considering the five enumerated factors, the marks were deemed "obviously similar" and to "suggest similar qualities and characteristics"; the parties sold "virtually identical wares" (grilled chicken sandwiches), and the A&W mark had been used in Canada since 1988, while the McDonald's mark had only been used since 2001. In what seemed to be less relevant considerations, the Court held that the A&W mark had little inherent distinctiveness and, although the companies operated in the same trade, each sold its products only on its own premises. While the five enumerated factors may have favoured A&W, the Court denied A&W's claim. The deciding consideration seemed to be the evidence suggesting that there was no significant confusion between the two marks. Relying on the customer and survey evidence led by A&W, the Court made repeated references to the fact that "there [was] very little evidence that consumers have confused the two marks during their years of coexistence." The judge ultimately concluded: "I accept that the possibility [of confusion] exists in the circumstances of this case. However, the evidence before me simply does not establish A&W's claim."
Another case in which surrounding circumstances played a key role is Wrangler Apparel Corp. v. Big Rock Brewery Limited Partnership. In this case, the apparel manufacturer challenged the beer-maker's application based on proposed use of the trademark WRANGLER in association with its beer. In analyzing the five enumerated factors, the Court found that the distinctiveness of the mark and length of time in use favoured the opponent and that the marks were "identical." On the other hand, it was held that the different nature of the wares and trade favoured the applicant. As one relevant surrounding circumstance, it was held that the opponent's WRANGLER mark was famous in relation to jeans. However, the deciding factor seemed to be existence of third-party applications and registrations for the same mark. The Court "put significant weight on the additional surrounding circumstance that many others are able to use the mark WRANGLER in association with their unrelated wares without causing confusion." Other registrations for the mark WRANGLER included Chrysler's registration for vehicles, Goodyear's registration for tires and another company's registration for smokeless tobacco. The existence of these third-party marks led the Court to conclude that a consumer seeing the mark WRANGLER on beer would not make an association with the opponent Wrangler Apparel as a matter of first impression. Had the opponent been the only entity using the mark in Canada, the result may have been different.
In summary, it is important when applying the likelihood of confusion test in Canada not to restrict oneself to the five enumerated factors. Considering all relevant surrounding circumstances, including the five enumerated factors, will provide the most accurate assessment of the likelihood of confusion, and submitting appropriate evidence and arguments on these additional issues can be the deciding factor in succeeding in an opposition or infringement action.
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