Federal Court Of Canada Expunges JU DIAN & Design Trademark On The Basis That It Was Registered In Bad Faith

On May 18, 2022, the Federal Court of Canada (the Court), in Beijing Judian Restaurant Co Ltd v Meng, 2022 FC 743, found that the trademark registration for the JU DIAN & Design Mark owned by the Respondent, Wei Meng, was registered in bad faith, and therefore invalid and should be expunged from the Register.  This decision represents the first time the Court has invalidated a trademark registration under the new section 18(1)(e) of the Trademarks Act (the Act) on the basis of bad faith.

The Applicant, Beijing Judian Restaurant Co Ltd, has owned and operated two restaurants in British Columbia since 2018 and a chain of restaurants in China since 2005, through which it has used a family of JU DIAN character trademarks, including one identical to the JU DIAN & Design Mark.

The Respondent, Wei Meng, obtained a registration for the JU DIAN & Design Mark on August 25, 2019, for use in association with “restaurant services; take-out restaurant services” and “beer.”

The Applicant sought to invalidate the JU DIAN & Design Mark on the basis that it was obtained in bad faith, contrary to section 18(1)(e) of the Act, and as a result, it should be expunged from the Register. The Applicant also sought a declaration that the Respondent’s actions constituted passing off under section 7(b) of the Act and at common law.

The Court held that the Respondent registered the JU DIAN & Design Mark without a legitimate commercial purpose, constituting bad faith under section (18)(1)(e) of the Act. Thus, the Court ordered the Registrar to expunge the registration. In reaching its conclusion, the Court relied on evidence filed by the Applicant which established that the Applicant had a reputation amongst the Chinese Canadian population in British Columbia at the time the Respondent filed the application for the JU DIAN & Design Mark. The Court noted that the evidence indicated that the Respondent was aware of the Applicant’s restaurants and the reputation associated with the JU DIAN trademarks. The Court found that the Respondent did not have a legitimate commercial intention to use the mark, rather, the Respondent intended to extort money from the Applicant or use the Applicant’s reputation in the JU DIAN trademarks to obtain money from others.

The Applicant sought $15,000 in punitive damages relating to the finding under section (18)(1)(e) of the Act on the basis that such damages should be awarded as a deterrent for the reprehensible conduct of the Respondent.  Relying on the Supreme Court of Canada’s decisions relating to punitive damages (Sun Life Assurance Company of Canada v Fidler, 2006 SCC 30 and Whiten v Pilot Insurance Co, 2002 SCC 18), the Court held that allegations of bad faith are not a separately actionable tort, and therefore there was no basis to grant punitive damages.

The Court also dismissed the Applicant’s passing off claim, finding that there was insufficient evidence to establish that the Respondent had created confusion or the likelihood of confusion in the marketplace as to the source of any goods, services, or business since there was no commercial use of the JU DIAN & Design Mark by the Respondent.

Summary By: Victoria Di Felice