March 3, 2021
In Loblaws Inc. v. Columbia Insurance Company , 2021 FCA 29, the Federal Court of Appeal (the “Court”) dismissed an appeal of a lower court decision that saw Pampered Chef successfully defend Loblaws Inc.’s (“Loblaws”) claim for trademark infringement.
Loblaws and Pampered Chef each use short form trademarks that include the letters “PC” (the “PC Marks”). Loblaws uses the letters to denote its “President’s Choice” brand and Pampered Chef uses them to reflect its corporate name for its business selling kitchenware.
The trial judge held that, despite the marks bearing some resemblance and being used to sell similar wares, confusion was unlikely. He reasoned that Pampered Chef sells its wares as a direct seller, and consumers would know that Loblaws does not sell wares in this channel of trade. Also, the trial judge reasoned that Pampered Chef deploys its PC Mark alongside its corporate name and long form trademark, which strongly reduces any risk of confusion.
The Federal Court of Appeal Decision
On appeal, Loblaws argued that the trial judge made four reversible errors of law.
First, Loblaws argued that the trial judge erred by relying on visual differences in the marks in finding that their resemblance is not particularly strong. Loblaws claimed that the PC Marks’ identical sound sufficiently established that they share a strong resemblance. It cited the Trademarks Act, which states that resemblance must be assessed in “appearance or sound or in the ideas suggested by [the marks]”. The Court found that the word “or” is meant to be inclusive, such that the trial judge was not limited to only considering the PC Marks’ sound.
Second, Loblaws argued that the trial judge misapplied the “nature of trade” factor, as he neglected to acknowledge that both parties have similar target audiences. The Court explained that the trial judge actually turned his mind to that issue at a different point in his analysis, and he did not need to repeat himself.
Third, Loblaws argued that the trial judge inappropriately drew an adverse inference because there was no readily available evidence that the PC Marks caused actual confusion. According to Loblaws, this was problematic because the parties had only coexisted for 2-3 years. The Court countered that there is no set amount of time that must pass before an adverse inference may be drawn; context dictates any assessment of sufficient duration. Although only a short period had passed, Pampered Chef had already made a high volume of sales. It was thus acceptable for the trial judge to infer that, if there was a strong likelihood of confusion between the marks, there would have already been some evidence of actual confusion.
Fourth and finally, Loblaws argued that the trial judge improperly emphasized how consumers’ awareness of the parties’ different channels of trade would prevent confusion, because some consumers would be oblivious to Pampered Chef and the way it markets its wares. The Court dismissed this notion and found no error in the trial judge’s assessment that consumers seeing Pampered Chef’s PC mark for the first time would be unlikely to be confused, because those marks are always accompanied by its corporate name or long form mark.
Authors: Mark Leonard and Aaron Barrett