Confusion Analyses: No Need to Consider All Potential and Unidentified Uses of a Word Mark

On April 27, 2017, the Supreme Court of Canada denied leave to appeal from the Federal Court of Appeal decision, Domaines Pinnacle Inc v Constellation Brands Inc, (2016 FCA 302) (“Domaines Pinnacle”) regarding confusion analyses when it comes to considering potential uses of a trademark.

While the journey of this case through the courts led to a flip flop of overturning and reinstating its various fates, Domaines Pinnacle is important for a number of reasons; namely, it offers an interpretation and clarification of the law post-Masterpiece. How? First, the case pumps the breaks for situations where trademarks are registered in a word format without limits with regard to the way the words are presented; i.e., limits are thus being imposed to hinder this practice. Second, the case demonstrates that it is not necessary for courts to consider each and every potential unidentified use of a trademark when assessing trademark confusion.

The Parties:

Appellant: Domaines Pinnacle Inc. – a family business in Quebec that produces apple cider (among other apple-based alcoholic beverages)

Respondent: Constellation Brands Inc. – an international company in the business of producing and marketing premium wine, beer, and spirits

The Issue:

Domaines Pinnacle applied to register DOMAINES PINNACLE & DESIGN for use with regard to apple-based alcoholic and non-alcoholic beverages and food. Their design depicted below:​​

Source: (2016 FCA 302)

To this, Constellation Brands opposed mainly on the ground that the mark was confusing with its own registered word marks for use in association with wines: PINNACLES and PINNACLES RANCHES

Timeline:

Trademarks Opposition Board (TMOB) (2013 TMOB 153): confusion was unlikely

The Trademarks Opposition Board stated that Domaines Pinnacle’s word and design mark were visually distinctive, suggesting “cold and winter”, which was very different in comparison to Constellation Brands’ mark, which the TMOB said suggested “the idea of a plurality of summits” (para 80 of TMOB decision).

On Judicial Review before the Federal Court (2015 FC 1083): Appeal allowed; Trademarks Opposition Board decision set aside.

The Court held that the Trademarks Opposition Board erred in failing to consider in its confusion analysis other potential uses that Domaines Pinnacle might have made in their registered mark. The Court was of the opinion that the Trademark Opposition Board should have taken into account the fact that PINNACLES could very well be capable of being presented in a way that could be associated with “cold and winter”.

In its reasoning, the Court cited Masterpiece (paras 53 and 59), stating that “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” (para 40). The Court was of the view that the Trademarks Opposition Board erred in failing to consider the registered word mark according to its terms rather than resorting to actual use in the degree of resemblance analysis (para 4).

Federal Court of Appeal (2016 FCA 302): overturned; Trademarks Opposition Board decision reinstated

The Federal Court of Appeal stated that the first off, the Federal Court erred in reviewing the Trademark Opposition Board’s interpretation and application of Masterpiece on a correctness standard, rather than on a standard of reasonableness (i.e., reasonableness being the appropriate standard to apply) (para 10). The Federal Court went on to state that the Federal Court faulted the Trademark Opposition Board for not having explicitly considered the possible uses open to the respondents of their word mark; uses that could give their mark “more of a flavour of ‘ice and winter’” (para 10). The Federal Court of Appeal held that the Trademark Oppositions Board applied Masterpiece reasonably, and that “it was not the task of the Board to consider all potential and unidentified uses of the respondents’ word mark, which had been characterized by the Board as weak.”

The Federal Court of appeal agreed with Domaines Pinnacle that the full scope of the rights granted to Constellation Brands’ registered mark would not permit them to use the distinctive graphic elements (i.e., the apple and snowflake design) that the Trademarks Opposition Board identified as being central to the distinctiveness of Domaines Pinnacle’s mark (para 11). For the Federal Court of Appeal, even if Constellation Brand chose in the future to use the same font as Domaines Pinnacle, the Trademarks Oppositions Board finding on the likelihood of confusion would still hold; the reasoning, because the combination of word and design in Domaines Pinnacle’s mark are sufficiently distinctive (para 11).

The Takeaway:

Masterpiece had laid out that actual trademark use should not be considered to the exclusion of potential uses of a registered mark when considering confusion. To this, the Domaines Pinnacle case has shed some light on interpreting the law moving forward when considering confusion of a mark: ultimately, that the Trademarks Opposition Board does not have to consider all potential ways in which a mark may be used.