Federal Court finds no need to defer to Trademark Opposition Board

In Alticor Inc v Nutravite Pharmaceuticals Inc, the Federal Court of Canada has ruled that the defendant's use of its NUTRAVITE mark did not infringe the plaintiff's NUTRILITE mark for identical goods. The court gave little weight to the Trademark Opposition Board (TOB) decision to refuse the NUTRAVITE registration on the basis that it was confusingly similar to the NUTRILITE mark.

In 1997 Alticor Inc, which incorporates the well-known Amway Corporation and is the owner of the Canadian trademark NUTRILITE for, among other things, a variety of vitamin, mineral and herbal supplements, successfully opposed Nutravite Pharmaceuticals Inc's application to register the mark NUTRAVITE for the same products. In 1999 Alticor filed an action with the Federal Court of Canada for, among other things, trademark infringement upon discovering that Nutravite was still using the NUTRAVITE mark.

The court dismissed Alticor's claim. It evaluated the factors set out in Section 6(5) of the Trademarks Act to determine whether the marks were confusingly similar. The court gave particular emphasis to the differences in the nature of the parties' trade, finding that Alticor's products were sold through a multi-level marketing scheme whereby "independent business owners" (IBOs) buy the products from Alticor and sell them to (i) "members", who pay an initial fee and can then purchase Alticor products at a reduced cost, and (ii) "clients", who purchase products at their regular price. Members and clients can only purchase products directly from IBOs or online. The court also noted that Alticor's products were unlikely to be sold in any other way, whereas Nutravite's products were sold in normal retail outlets such as drugstores. The court concluded that the channels of trade involved made the possibility of confusion remote, notwithstanding the resemblance between the marks and the overlap in goods to which they applied.

In reaching its conclusion, the court gave little weight to the TOB decision to refuse the NUTRAVITE registration, even though the TOB considered the same factors laid out in the Trademarks Act and determined that the marks were confusingly similar. The court stated that the board "had before it a different record and was making a different determination with a different burden of proof… Accordingly, even though the parties and the issue of confusion [were] the same, [the court did not] defer to the [TOB] in reaching [its] own conclusions".

For a discussion of another case involving the same parties where both the TOB and the Federal Court refused the opposition, see Opposition to NUTRAVITA mark fails.

Toni Polson Ashton, Sim Hughes Ashton & McKay, Toronto