Federal Court of Appeal clarifies word mark considerations when assessing likelihood of confusion

When considering confusion, must the Trademarks Opposition Board consider all of the potential ways in which an opponent’s registered word mark may be depicted? The Federal Court of Appeal says “no”.

On April 27 2017 the Supreme Court released its decision denying leave to appeal from Domaines Pinnacle Inc v Constellation Brands Inc (2016 FCA 302), a decision of the Federal Court of Appeal clarifying the Supreme Court’s instruction in Masterpiece Inc v Alavida Lifestyles Inc (2011 SCC 27) that actual trademark use should not be considered to the exclusion of potential uses of a registered mark when considering confusion. According to the Federal Court of Appeal: “it is not the task of the [Trademarks Opposition Board] to consider all potential and unidentified uses of [a] word mark” when considering the likelihood of confusion between that mark and another.

The appellant, Domaines Pinnacle Inc, is a Quebec-based family business that had specialised in producing apple-based alcoholic beverages, most notably an apple-based ice cider. Domaines Pinnacle applied to register the word and design mark DOMAINES PINNACLE & DESIGN for use in association with apple-based alcoholic beverages and apple-based non-alcoholic beverages and foods. The design portion of Domaines Pinnacle’s mark featured a snowflake superimposed over an apple.

The respondents, Constellation Brands Inc, opposed on the grounds that, among other things, the applied-for mark was confusing with its own word marks PINNACLES and PINNACLES RANCHES, which were registered for use in association with wines. The board ultimately concluded that confusion was unlikely due to the low degree of inherent distinctiveness of both marks, and because the visually distinctive elements of the appellant’s word and design mark ‒ the apple and the snowflake ‒ suggested a different idea than the respondents’ mark. While Domaines Pinnacle’s word and design mark suggested “cold and winter”, Constellation Brand’s word mark PINNACLES suggested the idea of a plurality of summits (Constellation Brands Inc v Domaines Pinnacle Inc (2013 TMOB 153)).

On judicial review before the Federal Court (2015 FC 1083), Justice Gagné found that the board had erred in failing to consider in its confusion analysis other potential uses that the respondents might have made of their registered mark, as required by Masterpiece. In Masterpiece the Supreme Court had stated that a registered word mark can be presented in many ways, and that with respect to trademark confusion:

“[A] single use [does] not reflect the entire scope of exclusive rights that were granted to Alavida under its registration… [a]ctual use is not irrelevant, but it should not be considered to the exclusion of potential uses within the registration.”

Relying on these statements, Gagné held that the board should have taken into account that the registered word mark PINNACLES is capable of being depicted in a manner suggestive of “cold and winter”, perhaps by using a different style of lettering, colour or design. Gagné allowed Constellation Brand’s appeal, set aside the board’s decision and remitted the matter back to the board for reconsideration.

On appeal by Domaines Pinnacle, the Federal Court of Appeal overturned Gagné’s decision and reinstated the board’s decision. The court noted that decisions of the board must be reviewed on a standard of reasonableness, but Gagné’s decision effectively reviewed the board’s interpretation and application of Masterpiece on a correctness standard. Moreover, the court clarified that Masterpiece does not require the board to consider all of the potential and unidentified uses of a registered word mark when assessing the likelihood of trademark confusion.

In so holding, the court explained that the full scope of rights granted to the respondents would not permit them to use the distinctive graphic elements of Domaines Pinnacle’s design ‒ the apple and the snowflake ‒ that the board had identified as being central to the distinctiveness of the applied for mark, and that, in any event, these elements are protected by copyright.

The court further explained that even if the respondents were to use the same font as Domaines Pinnacle in the future, no likelihood of confusion would exist because the combination of word and design in Domaines Pinnacle’s mark is sufficiently distinctive.

This decision illustrates that there are limits to the advantages of registering a trademark in word format without limiting the way in which the words are presented. It also clarifies the law post-Masterpiece that, while various potential uses of a registered word mark may be considered when assessing trademark confusion, the board and courts alike need not consider every potential unidentified use.