Matthew Burt Kwan T. Loh Evan Nuttall February 27 2023 Federal Court invalidates foreign-language marks filed in bad faith Smart & Biggar | Intellectual Property - Canada Matthew Burt, Kwan T. Loh , Evan Nuttall Intellectual Property IntroductionFactsDecisionCommentIntroductionThe Federal Court recently revisited the issue of confusion between foreign-language trademarks involving the use of Chinese characters in Canada.The litigants in this matter were familiar with each other. In the early 2010s, the applicant, Cheung's Bakery Products (CBP) Ltd, had successfully prevented the registration of trademarks that had been applied for by an entity related to the respondent, Easywin Ltd.In the present case, CBP succeeded, as it had in the past, on the basis of its Chinese character trademarks. The Court granted its application to expunge from the Trademark Register the two Chinese character and design marks shown in Figure 1, both registered in the name of Easywin (the Easywin marks).(1)Figure 1: the Easywin marksThe Court declared that the Easywin marks were invalid on the bases that they:were confusingly similar to the trademarks asserted by CBP; andhad been filed in bad faith.FactsFor nearly 50 years, CBP had operated Anna's Cake House, an award-winning, family-owned bakery business in the Greater Vancouver Area offering bakery-related products and services in association with one or more of the trademarks shown in Figure 2, featuring Chinese characters (the Cheung marks).Figure 2: the Cheung marksThe respondent, Easywin was a part of the Saint Honore Group of companies, which operated one of the largest chains of bakery stores in Hong Kong and also made and sold bakery-related food products for distribution in Hong Kong, China and foreign markets, including in Canada.In July 2019, unbeknown to CBP, Easywin obtained registrations for the Easywin marks, both of which comprised the identical two Chinese characters "安娜" that were found in each of the Cheung marks, translating into English as "Anna" or "Anna's" and transliterating to "an na" (in Mandarin) or "on naa" (in Cantonese).Subsequently, in February 2021, CBP brought an application against Easywin in the Federal Court seeking to expunge the Easywin marks on the grounds of trademark confusion and bad faith.DecisionTrademark confusionThe Court confirmed that whether a mark is likely to cause confusion is a question that is to be asked in respect of the particular market in which the goods or services are offered.As was the case in CBP's previous successes, the Court inferred from the evidence in this case that the likely consumers of the parties' goods and services would be able to read and understand Chinese characters. The Court noted, for example, that both parties primarily targeted their goods and services to the Chinese Canadian community and that they used Chinese characters consistently in their marketing materials, suggesting that they both believed many of their customers would be able to read and understand them.Therefore, the Court held that rather than interpreting the parties' Chinese character marks simply as design elements, as suggested by one of Easywin's experts, the relevant consumer would understand their meaning and construe them in this light.Given that each of the parties' marks shared the same two Chinese characters "安娜" (meaning "Anna" or "Anna's") as dominant elements, the Court found that the parties' trademarks were similar in appearance, sound and in the ideas suggested. While the similarities in appearance were somewhat diminished by the balance of the parties' marks, this was not sufficient to disturb the Court's finding that the marks resembled one another.The other factors which were to be considered in the confusion analysis, including the length of time that the marks had been in use and the extent to which the parties' goods and services overlapped, also favoured CBP. The Court concluded that the relevant consumer would be likely to think that Easywin was the same source of the bakery products as CBP.Bad faithThe Court also held that the Easywin marks were invalid because the applications from which they were registered had been filed in bad faith.At the time of filing its trademark applications, Easywin was familiar with CBP and knew that it targeted the same consumers and sold the same types of bakery-related goods and services in association with the Cheung marks. Easywin was also aware of the above-noted previous dispute between its sister company and CBP.Notwithstanding the above, Easywin filed for and obtained the registrations only two years after the dispute between CBP and Saint Honore had been resolved in CBP's favour.Overall, the Court concluded that Easywin had ignored facts that should have given it pause before filing the trademark applications and could not have been satisfied that it had been entitled to register the Easywin marks.CommentThe Court's decision highlights the importance of identifying the relevant consumer, particularly in circumstances involving foreign-character marks. The ability of the relevant consumer to read and understand the foreign characters can significantly impact how the marks are interpreted for the purposes of assessing confusion (for strategies to help brand owners keep control of their key trademarks in all languages, see "Strong trademark jumps language barrier; foreign-language mark refused in Canada").For further information on this topic please contact Matthew Burt, Kwan T Loh or Evan Nuttall at Smart & Biggar by telephone (+1 613 232 2486) or email ([email protected], [email protected] or [email protected]). The Smart & Biggar website can be accessed at www.smartbiggar.ca.Endnotes(1) 2023 FC 190.