A decision of the Federal Court confirms the approach to be taken concerning trademarks composed of Chinese characters and deals with bad faith. Cheung’s Bakery Products Ltd. v. Easywin Ltd. 2023 FC 190
The Facts
The Applicant sought the expungement of two trademark registrations owned by the respondent.
The registrations owned by the respondent consist of the characters presented in a horizontal and vertical fashion for use with packaged food products including bakery goods.
The grounds relied upon by the applicant primarily turn on alleged confusion with the applicant’s registered trademarks:
for use with bakery goods and related services.
The parties were not strangers and a previous dispute about their respective trademarks had proceeded to the Federal Court of Appeal where the applicant had prevailed.
In addition, they were in direct competition in the field of bakery goods and related services. The applicant was a well-established incumbent in Greater Vancouver area. The respondent was one of the largest chains of bakery stores in Hong Kong, and apparently entering the Canadian market.
The applicant’s expert evidence consisted of an affidavit of a Certified Court Interpreter. He said the last two Chinese characters found in each of the respondent’s trademarks were the same first two characters found in two of the applicant’s registered trademarks containing Chinese characters and the same two characters found in an applied-for trademark, with different script styles analogous to different fonts. The pronunciation of these same characters in Mandarin is “an na” and in Cantonese is “on naa” and would be translated in English as “Anna.” In English, applicant’s trademarks containing Chinese characters translate to “Anna’s Cake House”, and respondent’s trademarks translate to “Hong Kong Saint Anna” or “Saint Anna of Hong Kong.”
The respondent’s expert evidence was primarily to the effect that Chinese-Canadians are more able than non-Chinese-Canadians to distinguish small differences in trademarks, as between different brands, for cultural and other reasons resulting in a level of “hypersensitivity” in the relevant market, particular those individuals who could not read and understand the characters.
Likelihood of Confusion
Under the Trademarks Act confusion occurs if the use of the trademarks in issue in the same area would be likely to lead a prospective consumer to infer “that the goods or services associated with those trademarks are manufactured, sold, leased, hired or performed by the same person, whether or not the goods or services are of the same general class or appear in the same class of the Nice Classification. The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the mark at a time when he or she has no more than an imperfect recollection of the prior trademark(s) and does not pause to give the matter any detailed consideration or scrutiny, or to examine closely the similarities and differences between the marks. While subsequent research and care may unconfuse the consumer, what is relevant for the confusion analysis is what occurs when the consumer first encounters the trademarks in the marketplace.
It is not just any hypothetical casual consumer that must be considered in the confusion analysis but persons who are likely to buy the goods or services associated with the trademarks in the market in which those goods or services are offered. The Judge said confusion must be assessed from the perspective of an average, casual Canadian consumer who can read and understand Chinese characters, with varying degrees of fluency. This followed the approach adopted in the previous litigation between the parties and the action of the applicant as it uses Chinese characters consistently and in so many of its materials, which suggested that it believes many of its customers can read and understand them.
The Judge then considered the subsection 6(5) factors. The last two characters of the respondent’s registered trademarks are virtually identical (but for somewhat different font-like script style) to the first two characters of the applicant’s registered trademarks that contain Chinese characters, as well as the two characters that comprise the applicant’s pending trademark application. A consumer who can read Chinese characters would read the last three characters of the respondent’s registered trademarks as either Saint Honore or Saint Anna (while the first two characters would be read as Hong Kong).
Both parties’ trademarks are inherently distinctive, although they both involve descriptive words or connotations. The extent to which the respective marks are known and their length of time in use in Canada favour the applicant. The parties’ goods and services overlap significantly and neither parties’ trademark registrations are restricted in terms of the channels of trade.
The parties’ evidence demonstrated that, as a matter of first impression, a casual consumer somewhat in a hurry who sees the respondent’s trademarks, when that consumer has no more than an imperfect recollection of any of the applicant’s trademarks, would likely be confused.
Bad Faith
The Judge said that the respondent ignored the facts that should have given it pause before filing the trademark applications. At the time of the filing, it was familiar with the applicant and knew that they targeted the same consumers and sold the same bakery-related goods and services. Both parties recognized existing the corporate relationships. Further, the Respondent was aware of the previous dispute between them regarding similar issues (that was resolved before the Federal Court of Appeal only two years before the trademark applications were filed). The respondent could not have been satisfied that it was entitled to apply for the trademarks that resulted in the registrations and did so in bad faith.
Comment
The decision is a reminder that marks consisting of Chinese characters must typically be considered from the perspective of a consumer who can read and understand them. The meaning or idea conveyed by the marks will be important.
The approach to bad faith seems less onerous than the approach of the U.K. courts where a dishonest or sinister motive is required. The respondent seems to have been misguided but not dishonest.
If you have questions, please contact me at mckeown@gsnh.com.
John McKeown
Goldman Sloan Nash & Haber LLP
480 University Avenue, Suite 1600
Toronto, Ontario M5G 1V2
Direct Line: (416) 597-3371
Fax: (416) 597-3370
Email: mckeown@gsnh.com
These comments are general in nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.
A version of this article originally appeared in the Lawyer’s Daily published by LexisNexis Canada Inc.
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