Trademark Confusion and the Tort of Passing Off

What is trademark confusion?

A trademark exists to identify the source of products and services to customers. Trademark confusion, then, occurs where a customer would be likely to confuse the source of particular products or services with another source – for example, by assuming that someone’s products and services are actually provided by someone else.

Section 6 of the Trade-marks Act says that trademark confusion occurs where “both trade-marks in the same area would be likely to lead to the inference that the wares or services associated with those trade-marks are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class.”

So if the use of a trademark in a particular area would be likely to lead someone to believe that the products and services associated with it are actually provided (i.e. manufactured, sold, leased, hired or performed) by someone who already has a trademark in that area, then there is trademark confusion. Intention is not a requirement, which means that there can be trademark confusion even if a person did not intend for his or her products and services to be confused with those from another source.

In Masterpiece Inc. v. Alavida Lifestyles Inc., the Supreme Court of Canada established that the test for determining whether there is trademark confusion is “a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the [mark], at a time when he or she has no more than an imperfect recollection of the [prior] trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks.”

This means that in order to establish trademark confusion, one does not have to place the two trademarks side-by-side and then closely examine them. If a “casual consumer” with an imperfect recollection of the first trademark would, upon seeing the second trademark, be likely to think that the two belonged to the same source, then there is trademark confusion.

A court will consider certain factors when making its assessment of trademark confusion. The factors, which can be found under section 6(5) of the Trade-marks Act, are the following:

(a) the inherent distinctiveness of the trade-marks or trade-names and the extent to which they have become known;

(b) the length of time the trade-marks 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 trade-marks or trade-names in appearance or sound or in the ideas suggested by them.

What is the tort of passing off?

The tort of passing off exists to protect a person’s products, services or business from the misrepresentations of other people. Whether such misrepresentation is intentional or unintentional, people are not allowed to create the impression that their products, services or business are associated with or belong to someone else in a way that would deceive or confuse consumers. The tort of passing off is one type of action that could be brought against someone for having misrepresented his or her products, services or business in such a way.

There are three elements required to establish the tort of passing off:

1) The plaintiff must have what is called a “goodwill” (essentially a consumer base) for his or her product, service, or business;

2) The defendant must have misrepresented his or her product, service, or business in a way that causes deception or confusion between the two products, services, or businesses;

3) There must be actual or likely damage to the plaintiff.

The tort of passing off exists both at common law and under section 7(b) of the Trade-marks Act. In Kirkbi AG v. Ritvik Holdings Inc., the Supreme Court wrote that section 7(b), which applies to unregistered trademarks, was essentially a codification of the common law tort of passing off.

However, it has also been suggested that there is a difference between the two in that section 7(b) applies only to valid and enforceable trademarks, whereas a trademark is not a requirement under the common law tort of passing off. See the Federal Court of Appeal decision in Kirkbi AG v. Ritvik Holdings Inc at paragraph 38. This seems to suggest that even if there is no trademark, the common law tort of passing off can be used to protect products or services from misrepresentation by others.