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Bad faith has been an interesting topic since the amendments to the Trademark Act came into force on June 17, 2019. With these amendments, bad faith was introduced as a new ground to oppose the registration of a trademark and, by implication, a new ground to expunge an existing registration.[1]
Relying upon confusion and bad faith, the Federal Court recently invalidated the registration of two Chinese character marks in its decision in Cheung’s Bakery Products vs. Easywin.[2]
Facts
The Applicant, Cheung’s Bakery Products Ltd. (herein after “CBP”), began its family-owned and operated bakery business in Vancouver, British Columbia in 1974. CBP currently operates 4 stores in the Greater Vancouver Area in association with the registered trademarks shown below:
| CBP’s Trademark | Registration Number and Date |
 |
TMA354194 March 31, 1989 |
 |
TMA480506 August 14, 1997 |
 |
TMA667403 July 12, 2006 |
The Respondent, Easywin Ltd., is a wholly-owned subsidiary of Saint Honore Holdings Limited which also includes Saint Honore Cake Shop Limited. The members of this group engage in the manufacturing, distribution and sale of bakery and other products in Hong Kong, Macau, China and foreign markets, including in Canada. Established in 1972, the Saint Honore group is now one of the largest chains of bakery stores in Hong Kong.
Critically, Easywin’s sister company, Saint Honore Cake Shop Limited, had lost a similar trademark dispute in Canada with CBP relating to the same marks only two years before Easywin filed the trademark applications that were the subject of this decision, namely:
| Easywin’s Trademark | Registration Number |
 |
TMA1044058 |
 |
TMA1044062 |
Analysis
Justice Fuhrer found that the average consumer for these two businesses overlap, and would be one of an average, casual Canadian consumer who can read and understand Chinese characters. With this consumer perspective in mind, use of the Easywin trademarks in Canada would cause confusion because the last two characters in each of Easywin’s trademarks are the same as the first two characters in CBP’s two registered Chinese character marks shown above. In other words, CBP’s two registered Chinese character marks translate to “Anna’s Cake House” while Easywin’s two Chinese character marks translate to “Hong Kong Saint Anna” or “Saint Anna of Hong Kong.”
With respect to bad faith, Justice Fuhrer found that this was not a case where Easywin could claim to be unaware of CBP and its trademarks. Nor could Easywin claim to be “wilfully blind as to whether it had the right to make the application[s] in the face of its competitor” in the sense of failing “to make the obvious inquiries.”[3]
In the words of Justice Fuher:
Here, no inquiries were necessary. Rather, I find Easywin simply ignored the very facts that should have given it pause before filing the trademark applications. At the time of the filing, Easywin was familiar with CBP and knew that they targeted the same consumers and sold the same types of bakery-related goods and services. Both parties recognize the corporate relationship between Easywin and Saint Honore. Further, Easywin was aware of the previous dispute between Saint Honore and CBP regarding similar issues (that was resolved before the Federal Court of Appeal only two years before the trademark applications were filed) and, thus, in my view Easywin could not have been satisfied that it was entitled to apply for the trademarks that resulted in the registrations having numbers TMA1044058 and TMA1044062.
Justice Fuhrer therefore relied upon both confusion and bad faith as grounds to expunge the subject registrations.
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[1] Trademarks Act, R.S.C., 1985, c. T-13 (the “Act”) at s.18(1)(e)
[2] 2023 FC 190
[3] ibid. at para. 89 with reference to Norsteel Building Systems Ltd v Toti Holdings Inc., 2021 Fc 927 at para 75