Beyond Restaurant Group LLC v Wang, 2020 FC 514

Proving non-use of a third party's mark can be a difficult exercise in evidence gathering. It is often said that it is hard to prove a negative. Indeed, the aphorism "absence of evidence is not evidence of absence" comes to mind. However, when it comes to court proceedings where evidence is assessed according to legal and evidentiary burdens, one cannot rely upon aphorisms and idioms. One has to prove its case with evidence. The recent POKEWORKS decision from the Federal Court of Canada is a cautionary reminder that the burden remains on the moving party and if you fail to meet the burden, you may lose your proceeding when otherwise you could have prevailed.

In Beyond Restaurant Group LLC v Wang, 2020 FC 514, the Applicant, Beyond Restaurant Group LLC ("BRG"), applied to invalidate the POKEWORKS trademark registered in the name of the Respondent, Qiang Wang ("Mr. Wang"). BRG faced no challenge as Mr. Wang did not appear or contest the proceeding. Nevertheless, BRG failed to invalidate the POKEWORKS registration because of evidentiary shortcomings in the eyes of the Court. In her decision, Madam Justice Fuhrer, a trademark lawyer before she joined the bench, dissected the evidence and considered it to be inadequate. She therefore dismissed the application and refused to invalidate the POKEWORKS registration.

In this article, we will describe some of the evidentiary missteps of BRG. This will provide a useful learning experience for the reader and also allow the reader to prepare cases in the future without making the same mistakes.

Overview of the facts

As in most trademark invalidity proceedings, the dates of first use and the dates of the filed applications are important. In the present case, Mr. Wang filed a trademark application for POKEWORKS in October 2016 based on proposed use in association with restaurant services, including sit-down services of food and take-out restaurant services. In November 2017, Mr. Wang filed a Declaration of Use, resulting in the registration of the POKEWORKS mark.

BRG opened a restaurant in Vancouver, Canada, in 2017 using the identical mark, POKEWORKS. On September 26, 2017, BRG filed an application to register POKEWORKS based on use since September 25, 2017, for restaurant services, including sit-down services of food and take-out restaurant services. Although Mr. Wang filed his application first, BRG apparently used the POKEWORDS mark first in Canada.

On July 22, 2019, BRG filed a Rule 300 Application in the Federal Court of Canada to have Mr. Wang's POKEWORKS registered mark declared invalid and to have it struck from the trademarks register pursuant to section 57 of the Trademarks Act. BRG alleged, among other things, that the POKEWORKS registration was invalid on the basis of lack of distinctiveness under section 18(1) of the Trademarks Act. The relevant date for the assessment of distinctiveness is the date which "proceedings bringing the validity of the registration into question are commenced", which was July 22, 2019.

The non-distinctiveness argument failed for lack of probative evidence

There are three conditions for proving distinctiveness in Canada: (i) the mark and the goods or services must be associated; (ii) the owner of the mark must use this association in manufacturing, advertising, and selling the goods or services; and (iii) this association must enable the owner of the mark to distinguish its goods or services from those of others (Roots Corporation v YM Inc (Sales), 2019 FC 16).

BRGattempted to prove that Mr. Wang had not used the POKEWORKS mark and that the mark therefore lacked distinctiveness and should be invalidated. To do so, BRG provided evidence of investigations conducted by a private investigator to demonstrate lack of use of the POKEWORKS mark.

The Court, however, was critical of this evidence as it contained important evidentiary gaps.

First, the investigator did not provide a list of the search terms she used in her online searches and investigations. For example, in her affidavit, the investigator stated only that she "…conducted an extensive internet and media search on 'pokeworks' in association with Qiang Wang in Ontario, as well as social media searches on Facebook, Twitter, Instagram and LinkedIn for Qiang Wang in association with 'pokeworks'". The lack of additional details regarding the search parameters made it difficult for the Court to ascertain the breadth or scope and hence the reasonableness of steps taken by the investigator. For example, no explanation was provided as to what "media" were searched and whether this involved online or offline searching or both.

Second, the investigation primarily occurred in April 2018, 15 months before the relevant date for assessing distinctiveness (i.e. the date the proceedings were commenced). Critically, the Court noted that there was no evidence of lack of use of the POKEWORKS mark in the period between April 2018 and July 2019. Given the presumption in Canada that trademarks are valid until proven otherwise, and any doubts must be resolved in favour of the validity of the registration, the Court was not persuaded that BRG had sufficiently demonstrated lack of use by Mr. Wang. The Court noted it was an open question whether Mr. Wang had used the POKEWORKS mark in the intervening period.

The Court also criticized BRG's failure to take further steps that were available to it. For example, greater details about the scope of the searches conducted could have been provided without much difficulty, and might have enabled the Court to conclude, on a balance of probabilities, that the POKEWORKS mark had not been used by Mr. Wang. Further, the investigator provided no information about how many hits or references were located for "Qiang Wang" or "Q Wang". Moreover, the focus on an internet search for hits "in association with pokeworks" unduly restricted the search at the outset, since it could be a minor or side business for Mr. Wang without much, if any, online or offline footprint. Thus, in light of the presumed validity of the registration, more was needed about the scope of the searches the investigator conducted to rebut this presumption, on a balance of probabilities.

The confusion allegation also failed for lack of evidence

BRG also submitted that Mr. Wang's POKEWORKS mark was confusing with BRG's own use of POKEWORKS in Vancouver beginning on September 25, 2017, more than two months before Mr. Wang filed his Declaration of Use in November 2017. However, the Judge quickly dismissed this argument as BRG's first use in Canada was after Mr. Wang filed his application for POKEWORKS in October 2016.

In a creative attempt to rely upon use in Canada that predated Mr. Wang's filing date in October 2016, BRG attempted to rely on its goodwill or reputation in POKEWORKS arising in Canada via its 44 restaurants in the United States that had operated before Mr. Wang filed his application. BRG provided some evidence of notoriety or reputation of POKEWORKS via third party articles in publications such as Food & Beverage Magazine, Forbes, NBC News and The Boston Globe, as well as social media promotion including on Instagram and Facebook, and a video posted by Food Insider reviewing POKEWORKS and its "sushi burrito" which allegedly received 50 million views.

The Judge was critical of this argument as no evidence was provided that any of this evidence pertained to Canada, such as spill-over circulation of any of the above-mentioned publications or whether any Canadians are among the Instagram followers, the Facebook likes, or the video views. Consequently, BRG failed to demonstrate any reputation of its POKEWORKS mark in Canada prior to commencing use at the Vancouver location in September 2017. BRG's allegation that Mr. Wang's POKEWORKS registration lacked distinctiveness because of confusion with BRG's earlier use of POKEWORKS in Canada therefore also failed.

Conclusion

This decision provides useful insight into several evidentiary missteps to avoid when bringing an application for expungement for lack of distinctness. Considering the presumption of validity of trademark registrations, any evidentiary gaps in your case may make it difficult for the decision maker to find in your favor. The same principles apply equally to a party wishing to prove use of its own marks. Indeed, the guidance in this decision may well be useful to anyone preparing affidavits for trademark oppositions, summary cancellation proceedings and court proceedings involving trademarks.

We recommend that if you intend to rely on the evidence of a private investigator to demonstrate non-use as a basis for invalidating a mark, you should ensure that the: (i) evidence is detailed and fulsome, (ii) methodology to gather the evidence is described, (iii) affidavits avoid unclear and imprecise words and phrases; and (iv) the evidence is current to the relevant date of assessment by the Court.

Finally, if you intend to rely on a mark's reputation or goodwill in Canada based on use "spilling-over" from other countries, or vague evidence from the internet or abroad, ensure that you provide evidence that the mark is actually known and recognized by Canadians rather than just floating around in the internet ether.