{"id":39848,"date":"2022-08-04T12:00:00","date_gmt":"2022-08-04T16:00:00","guid":{"rendered":"https:\/\/www.iposgoode.ca\/?p=39848"},"modified":"2022-08-04T12:00:00","modified_gmt":"2022-08-04T16:00:00","slug":"in-case-you-didnt-already-know-dont-do-anything-in-bad-faith","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2022\/08\/04\/in-case-you-didnt-already-know-dont-do-anything-in-bad-faith\/","title":{"rendered":"In case you didn\u2019t already know, don\u2019t do anything in bad faith!"},"content":{"rendered":"\n<hr \/>\n<p><em><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-39558 alignleft\" src=\"https:\/\/www.iposgoode.ca\/wp-content\/uploads\/2022\/05\/Anita-Gogia.jpeg\" alt=\"\" width=\"75\" height=\"56\" \/>Anita Gogia is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.<\/em><\/p>\n<hr \/>\n<p>On May 18, 2022, the Federal Court of Canada released its <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">decision<\/a> for <em>Beijing Judian Restaurant Co. v Wei Meng. <\/em>That marked the \u00a0<a href=\"https:\/\/www.dww.com\/articles\/federal-court-of-canada-expunges-ju-dian-design-trademark-on-basis-it-was-registered-bad\">first time<\/a> that the Court invalidated a trademark for reasons of bad faith <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/T-13\/page-5.html#h-450673\">per s. 18(1)(e) of the <em>Trademarks Act<\/em><\/a> (TMA). That case centered around the <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">issue<\/a> of whether the applicant\u2019s \u201cJU DIAN &amp; Design Mark\u201d was obtained in bad faith contrary to <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/T-13\/page-5.html#h-450673\">18(1)(e) of TMA<\/a> or was otherwise invalid per <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/T-13\/page-5.html#h-450673\">18(1)(b) or 18(1)(d) of the TMA<\/a>.<\/p>\n<p><strong>Background<\/strong><\/p>\n<p>The applicant, Beijing Judian Restaurant Co (\u201cJudian\u201d), has operated restaurants in Vancouver and Richmond since 2018, along with numerous well-known (<a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">served over 5,750,000 customers between 2011 and 2019<\/a>) restaurants in China since 2005. Judian opened locations specifically in metro Vancouver for the large Chinese Canadian population in this area who would recognize the Beijing Judian trademarks. The <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">following<\/a> family of JU DIAN character trademarks have been heavily used in China to promote their restaurants.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-39850 aligncenter\" src=\"https:\/\/www.iposgoode.ca\/wp-content\/uploads\/2022\/07\/Picture1-1.png\" alt=\"\" width=\"604\" height=\"422\" \/><\/p>\n<p><a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">Unknown to the applicant<\/a>, on June 27, 2017 the <a href=\"https:\/\/patentable.com\/federal-court-expunges-trademark-registration-for-bad-faith\/\">respondent, Wei Meng registered<\/a> the JU DIAN &amp; Design Mark shown below in association with \u201crestaurant services; take-out restaurant services\u201d, and \u201cbeer\u201d.\u00a0<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-39851 aligncenter\" src=\"https:\/\/www.iposgoode.ca\/wp-content\/uploads\/2022\/07\/Picture2.png\" alt=\"\" width=\"283\" height=\"77\" \/><\/p>\n<p>The evidence before the Court included <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">two affidavits filed by the applicant<\/a>. The first affidavit was of Jiantao Zou, the co-founder and general manager of Judain, and the second of Lai Lam Sing, a consult for Judian and employee of a Judain subsidiary operating the restaurant in Vancouver.<\/p>\n<p>The respondent appeared at the Vancouver restaurant and insisted that he did not care about the Chinese trademarks as he had the Canadian paperwork. On May 1, 2019 the respondent met with Mr. Sing and <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">demanded CAD $1,500,000 for Beijing Judian to acquire use of JU DIAN trademarks<\/a>. On June 3, 2019, Judian became aware of an advertisement for sale of the trademark on an online marketplace, VanSky. When the applicant\u2019s contact made inquiries about purchasing the mark, the respondent asked for $100,000 per year to license the registration.<\/p>\n<p><strong>The Decision <\/strong><\/p>\n<p>The Court evaluated many definitions of \u201cbad faith,\u201d as it was not defined in Bill C-86, which introduced the new <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/T-13\/page-5.html#h-450673\">s.18(1)(e) of the TMA<\/a>. The <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">purpose of the provision<\/a> is described as to \u201chinder the registration of a trade-mark for the sole purpose of extracting value from preventing others from using it.\u201d<\/p>\n<p>The <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">applicant noted similar provisions<\/a> in EU and UK trademark law that have been adjudicated. Under UK and EU law, bad faith includes applying for a trademark <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">without intention of using it in a legitimate commercial way<\/a> or when an applicant seeks a trademark as an <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">instrument of extortion<\/a>.<\/p>\n<p>The Court also considered <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">Professor David Vaver\u2019s statement<\/a>: \u201c[t]he bar vindicates the fundamental legal and moral principle that nobody should benefit from their wrong,\u201d which, as applied to trademarks, may be defined as attempting to use registration as a means to gain rights \u201cin an improper manner or for an improper purpose.\u201d<\/p>\n<p>The Court agreed that it is implausible that the respondent created the same original design on his own, but rather intended to obtain the trademark associated with Beijing Judian restaurants in China. Further, the respondent\u2019s awareness of the applicant\u2019s reputation is established by his text message to the potential purchaser of the trademark on VanSky. Additionally, at around the same time, the <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">respondent filed similar trademarks<\/a> associated with Chinese restaurants that he had no affiliation with. This made it more difficult for the court to rebut the inference of bad faith.<\/p>\n<p>The Court held that since the respondent\u2019s mark was registered <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">without a commercial purpose<\/a> and the <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">evidence shows the respondent\u2019s intention<\/a> of using the trademark for extortion and economic advantage, the respondent\u2019s registration of the mark constituted bad faith and was therefore <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">invalid<\/a> and <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">should be expunged from the Register<\/a>. \u00a0<\/p>\n<p><strong>Other issues<\/strong><\/p>\n<p>The <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">issue<\/a> of whether the use of the mark by the respondent constituted passing off was dismissed. Since there had been no commercial use of the trademarks, there was <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">insufficient evidence to prove confusion or likelihood of confusion<\/a> in the marketplace as required by the 3 part test to prove there had been passing off per common law or <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/T-13\/page-1.html#h-450214\">s. 7(b) of the TMA<\/a>.<\/p>\n<p>The <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">issue<\/a> of whether the applicant is entitled to punitive damages of $15,000 was also considered. In consideration of <a href=\"https:\/\/www.canlii.org\/en\/ca\/scc\/doc\/2006\/2006scc30\/2006scc30.html#document\"><em>Sun Life Assurance Company of Canada v Fidler<\/em><\/a> and <a href=\"https:\/\/www.canlii.org\/en\/ca\/scc\/doc\/2002\/2002scc18\/2002scc18.html#document\"><em>Whiten v Pilot Insurance Co<\/em><\/a>, the Court <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">concluded<\/a> there was no basis to grant punitive damages because allegations of bad faith are <a href=\"https:\/\/www.canlii.org\/en\/ca\/fct\/doc\/2022\/2022fc743\/2022fc743.pdf\">not a separately actionable tort<\/a>.<\/p>\n<p>Notably, this decision provides guidance on the applicability of a fairly new provision in the <a href=\"https:\/\/laws-lois.justice.gc.ca\/eng\/acts\/T-13\/page-5.html#h-450673\">TMA<\/a>. The case also illustrates that courts have a conscience are moved to consider concepts of morality and circumstantial evidence alone to make a just decision.<\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":2140,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","footnotes":""},"categories":[3,60,62],"tags":[4500,2110,4591,4592,4304,56],"class_list":["post-39848","post","type-post","status-publish","format-standard","hentry","category-blogs","category-ip","category-trademarks","tag-anita-gogia","tag-bad-faith","tag-novel","tag-restaurant","tag-trademark-act","tag-trademarks"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>In case you didn\u2019t already know, don\u2019t 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