Federal Court of Appeal assesses confusion between marks consisting of Chinese characters

Canada

In Saint Honore Cake Shop Limited v Cheung's Bakery Products Ltd (2015 FCA 12), the Federal Court of Appeal has considered the likelihood of confusion between two design marks consisting of Chinese characters.

A dispute arose between two Chinese bakeries: Cheung’s Bakery Products, which had operated in the Vancouver area for many years, and Saint Honore Cake Shop, a company from Hong Kong looking to start up business in Canada. Saint Honore applied to register two design marks comprising Chinese characters which translated to 'Saint Honore':

 http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/100688/123668/res.do

Cheung opposed the applications on the ground that the marks were confusing with its own registered marks, which translated into 'Anna's Cake House':

 http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/100688/123663/res.do

Cheung put forward evidence of a Chinese language expert to show that the characters for 'Anna' and the characters for 'Honore' are both pronounced 'an na' in Mandarin and 'on no' in Cantonese, and that the characters would be read the same and translated into the same English words. Cheung also put forward evidence of a census expert to indicate that a large number of people in Canada, particularly in the Vancouver area, speak and understand Chinese.

In applying the test for confusion, the Opposition Board held that it is the persons who are likely to buy the wares who are to be considered. The board found that Cheung had adduced sufficient evidence to show that the average customer of its cake shop is able to read and understand Chinese characters. As such, the marks were confusing and the applications were refused.

On appeal, Saint Honore argued that the board had erred in concluding that the ability to speak a Chinese language directly corresponded with the ability to read and understand the written Chinese language. As such, Saint Honore argued, the board had erred in finding that the average consumer of the Cheung’s cake shop could read and understand Chinese characters. In support of this argument, Saint Honore filed the affidavit of Dr Chen.

The court rejected Dr Chen’s evidence for two reasons:

  1. Her affidavit was inadmissible because she did not comply with Rule 52.2(1)(c) of the Federal Court Rules, which requires experts to read and agree to the Code of Conduct for Expert Witnesses; and
  2. even if her affidavit were admissible, Dr Chen was not qualified as an expert to provide her opinion as to whether the average customer of Cheung can read and understand Chinese characters upon first impression because she is not a statistician or otherwise qualified to provide an opinion on demographics.

The Federal Court held that the board was open to find that a substantial portion of Cheung’s actual customers would be able to read and understand Chinese characters and that, to such customers, the marks shared a similarity in sound and appearance. As such, the court upheld the board’s decision to refuse the applications.

On appeal, the Court of Appeal held that the lower court had erred in excluding the Chen affidavit noting that:

"... the judge erred when he found the Chen affidavit to be inadmissible in the circumstances. His finding confuses the particular content requirements of an expert affidavit pursuant to Rule 52.2(1)(c) with the general objective of Rule 52.2(2) regarding compliance with the Code of Conduct for Expert Witnesses. Lack of compliance with the former should not be conflated with a failure to comply with the Code of Conduct for Expert Witnesses. Indeed, whilst Rule 52.2(2) permits the exclusion of some or all of an expert’s affidavit for failing to comply with the Code of Conduct, the same cannot necessarily be said for failing to comply with particular content requirements of an expert affidavit set forth by Rule 52.2(1).
 

...  [T]here was no evidence that Dr Chen had failed to comply with the Code of Conduct for Expert Witnesses pursuant to Rule 52.2(2). The only evidence before the judge was the inadvertent absence of the certificate acknowledging that Dr Chen had read the Code of Conduct for Expert Witnesses when the Chen affidavit was sworn on November 25 2011. This absence of certificate was cured by the affidavit dated November 19 2012. It is also worthy of note that during Dr Chen’s cross-examination on August 21 2012 - nearly a year prior to the hearing before the judge - the respondent was also aware that Dr Chen was put forward as an expert and there is no evidence on record that the delay in providing the required certificate caused any prejudice to the respondent.

In the circumstances, I am accordingly of the view that the judge was incorrect in law when he found the Chen affidavit to be inadmissible on the sole basis that it was not accompanied initially by the required certificate which was subsequently produced." (Paragraphs 24-27)

However, having reached the conclusion that the evidence was admissible, the Court of Appeal gave it little weight, stating that “it is not significant and would not have materially affected the decisions of the board" (Paragraph 31). The Court of Appeal went on to uphold the lower court’s decision with respect to the likelihood of confusion. 

This case has salient implications for trademark practitioners on two levels. First, it is a reminder of the need to comply with the Code of Conduct for Expert Witnesses. Secondly, it flags the importance of assessing the actual consumers of the product or services in question, as opposed to all potential consumers. As noted in another recent decision of the Federal Court:

"There is also an air of unreality in positing a test of an average Canadian consumer who would never purchase the goods in question and would approach the purchase with no knowledge whatsoever. The average consumer has, presumably, some intelligence and is concerned about what he or she is purchasing, its contents and its origins." (MC Imports Ltd v Afod Ltd (2014 FC 1161), Paragraph 39)

Robert A MacDonald, Gowlings, Ottawa

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