Ten Ren Tea Co. v. Van Cheong Tea Inc., 2003 FC 819

Date: 20030702

Docket: T-2120-02

Citation: 2003 FC 819

BETWEEN:

                                                            TEN REN TEA CO. LTD.,

                                                                                                                                                         Plaintiff,

                                                                              - and -

                                     VAN CHEONG TEA INC., SHU-MEI CHANG and

            BILL BEAUTY & HEALTH PRODUCT LTD. c.o.b. as SHING HING FOODS,

                                                                                                                                                   Defendants.

                                                            REASONS FOR ORDER

LAYDEN-STEVENSON J.

[1]                 The plaintiff, Ten Ren Tea Co. Ltd. (Ten Ren), seeks summary judgment pursuant to Rule 213 of the Federal Court Rules, 1998, SOR/98-106 (the Rules) with respect to its action for trade-mark infringement, passing off and ancillary relief against the defendants. These are my reasons for dismissing the motion.

FACTS

[2]                 Ten Ren is a publicly traded company incorporated under the laws of Taiwan, having its principal office at Taipei, Taiwan. It is engaged, among other things, in the business of manufacturing, importing, distributing, advertising, promoting, selling and otherwise dealing with tea leaves merchandise in Canada and other parts of the world.

[3]                 The defendant, Van Cheong Tea Inc. (Van Cheong), is a company incorporated under the laws of the province of British Columbia, having its registered office at Richmond in that province. It operates under the name and style of Van Cheong Teas.

[4]                 The defendant, Shu-Mei Chang (Chang), resides in Richmond. The corporate search results regarding Van Cheong reveal that Chang is its president, sole director and sole shareholder.

[5]                 The defendant, Bill Beauty & Health Product Ltd. (Bill Beauty), is a corporation incorporated under the laws of the province of Ontario, having its registered office therein at Scarborough. The Ontario Ministry of Consumer and Commercial Relations Companies Branch Business Names Report indicates that the defendant, Shing Hing Foods (Shing Hing), is registered as a business name for Bill Beauty.

[6]                 Ten Ren obtained registration, in Canada, for the trade-mark KING'S on January 23, 2003, in association with the following wares:

Tea, tea bags, tea leaves, cakes, tea-based fillings for cakes and pies, cocoa, coffee, cookies.

It obtained registration for the trade-mark "103" in Taiwan on January 1, 1984 and applied for registration of the same trade-mark in Canada on March 28, 2001, in association with wares identical to those listed for the trade-mark KING'S, but with the addition of "candies". The "103" trade-mark was registered, in Canada, on April 2, 2003.

[7]                 Ten Ren claims to have been using the trade-marks "103" and KING'S in Canada since at least April, 2000, in association with tea leaves products packaged in deep green boxes imprinted with gold letters, Chinese style paintings and Chinese poems. The products are sold in retail Ten Ren stores in Ontario and British Columbia located, for the most part, in areas frequented by the Chinese-speaking community.

[8]                 Van Cheong is also in the business of marketing tea leaves products. The Shing Hing chain of stores markets and sells Chinese dried sea food delicacies, bird's nest, health foods, herbs and tea products, including Van Cheong tea products.

[9]                 Ten Ren alleges that it purchased tea leaves, at different Shing Hing locations, packaged in boxes having the same deep green shade as those of Ten Ren, imprinted with gold letters, Chinese style paintings and Chinese poems and bearing the marks "103", "108" and/or KING. On December 18, 2002, Ten Ren commenced an action for trade-mark infringement, passing off and ancillary relief with respect to the defendants' use of Ten Ren's trade-marks as well as with respect to the packaging and get-up of its tea leaves products known as "103 King's Tea".

[10]            The defendants filed a defence and counterclaim on January 31, 2003, and the plaintiff filed a reply and defence to counterclaim on February 10, 2003. The defendants deny infringement and contend that the marks do not have distinctive features, goodwill or valuable reputation. They claim: that the mark "King's" is generic and descriptive in that it implies supreme quality; that the names of the respective manufacturers appear in conspicuous places on their respective products; that the phrase "King Tea" predated the use by Ten Ren in Canada of its alleged trade-marks; that the packaging is traditional for Chinese merchants, and that Ten Ren does not indicate on its packaging that either "103" or KING'S is a registered trade-mark. The counterclaim, among other things, seeks a declaration that the trade-mark registrations for "103" and KING'S are invalid and void and an order directing the Registrar to expunge them from the register. In its reply and defence, Ten Ren maintains that the marks used by the defendants are so confusingly similar with those of the plaintiff that they constitute infringement of Ten Ren's marks and passing off of its products. Ten Ren also denies that the packaging used by Van Cheong pre-dated that of Ten Ren.

[11]            The evidence of the plaintiff consists of the affidavit of the vice general manager of the Ten Ren group of companies in Canada with various exhibits attached thereto. For the defendants, the evidence is comprised of the affidavit of the defendant Chang, director and president of the defendant, Van Cheong, and the affidavit of the director and president of the defendant, Bill Beauty, who is also the director of the defendant, Shing Hing. The latter affidavit includes one exhibit.

THE RELEVANT RULES WITH RESPECT TO SUMMARY JUDGMENT

ANALYSIS

[12]            The Federal Court of Appeal, in ITV Technologies Inc. v. WIC Television Ltd. (2001), 199 F.T.R. 319 (F.C.A.), leave to appeal dismissed, [2001] 2 S.C.R. ix., confirmed that the correct test for summary judgment is that set out in Granville Shipping Co. v. Pegasus Lines Ltd. S.A., [1996] 2 F.C. 853 (T.D.). The principles articulated in Granville Shipping (citations omitted) are as follows:

(1)            The purpose of the provisions is to allow the court to summarily dispense with cases which ought not to proceed to trial because there is no genuine issue to be tried;

(2)            There is no determinative test. It is not whether a party cannot possibly succeed at trial, it is whether the case is so doubtful that it does not deserve consideration by the trier of fact at a future trial;

(3)            Each case should be interpreted in reference to its own contextual framework;

(4)            Provincial practice rules (especially rule 20 of the Ontario Rules of Civil Procedure) can aid in interpretation;

(5)            This court may determine questions of fact and law on the motion for summary judgment if this can be done on the material before the court (this is broader than rule 20 of the Ontario Rules of Civil Procedure);

(6)            On the whole of the evidence, summary judgment cannot be granted if the necessary facts cannot be found or if it would be unjust to do so;

(7)            In the case of a serious issue with respect to credibility, the case should go to trial because the parties should be cross-examined before the trial judge. The mere existence of apparent conflict in the evidence does not preclude summary judgment; the court should take a "hard look" at the merits and decide if there are issues of credibility to be resolved.

[13]            The responding party has the evidential burden of showing that there is a genuine issue for trial, but the moving party bears the legal onus of establishing the facts necessary to obtain summary judgment. Both parties must put their best foot forward to enable the motions judge to determine whether there is an issue that should go to trial: F. Von Langsdorff Licensing Ltd. v. S.F. Concrete Technology, Inc. (1999), 165 F.T.R. 74, 1 C.P.R. (4^th) 88 (T.D.).

[14]            The plaintiff's action is in relation to the trade-marks KING'S, "103" and the get-up of the tea leaves products known as "103 King's Tea" and all other tea leaves products in the same series. The get-up, as I understand the plaintiff's position, is the colour of the packaging, its gold lettering and depiction of Chinese poetry and pictures on the box. Before dealing with the infringement and passing off issues, it is useful to set out some pertinent facts arising from the evidence. It is not disputed that Ten Ren has obtained registrations in Canada for the trade-marks KING'S and "103", that it has been using those marks since at least April, 2000, and that it continues to use the marks. It is also not disputed that Van Cheong has used the numbers 103 and 108 as well as the word "King" on its products and that Shing Hing has sold the Van Cheong products. There are additional facts that, while suspect from the plaintiff's perspective, stand uncontradicted in the material before me. Those facts are: Van Cheong has used the marks 103, 108 and the word "King" since at least the beginning of 2000, and Shing Hing has been selling the products since early 2000; the Ten Ren tea products are sold packaged, not only in deep green boxes, but in a variety of colours and designs containing various numbers; the Chinese equivalent for the word "King" is commonly used by Chinese merchants, not only for tea products, but for a variety of products to denote supreme quality; only one of eight Shing Hing stores is in a shopping centre where a Ten Ren store is located.

[15]            Initially, the plaintiff took the position that because the marks are registered, they are immune from any attack with respect to validity. However, at the hearing, counsel agreed that antecedent use, by the defendants, if established, constitutes grounds for a declaration of invalidity. The plaintiff's counsel characterized the defendants' evidence in this regard as self-serving and suspect and identified what she described as "huge credibility issues" in relation to it. It is clear, given the respective positions of the parties that this is a significant issue that will require a weighing and assessing of evidence and, in all likelihood, a determination involving credibility. These are matters to be resolved by a trial judge, not a motions judge. Although, in my view, this finding is sufficient to dispose of the motion, there are other issues raised by the defendants that also lead me to conclude that this is not an appropriate case for summary judgment.

[16]            The reasoning with respect to antecedent use applies not only to the allegation of infringement of registered trade-marks, it also applies with respect to the allegation of passing off. The defendants have additionally challenged the plaintiff's marks on the grounds that they are non-distinctive and lack goodwill. The first issue that arises in that respect is referred to in Warner-Lambert Co. v. Concord Confections Inc. (2001), 201 F.T.R. 270, 11 C.P.R. (4^th) 516 (T.D.). There, Lemieux J. describes the question of "...whether get-up or packaging is a relevant consideration when dealing with registered trade-mark infringement versus passing off" as an unresolved legal issue. Secondly, the plaintiff must meet the test for passing off delineated in Ciba-Geigy Canada Ltd. v. Apotex Inc., [1992] 3 S.C.R. 120, 44 .C.P.R. (3d) 289. The test has three components: the existence of goodwill; deception to the public due to misrepresentation, and actual or potential damage to the plaintiff.

[17]            Regarding goodwill, the plaintiff relies on its use of the marks in Canada since April, 2000, and the fact that the "103" mark has been used in Taiwan since 1984. Its position is that because the Ten Ren stores are located in areas frequented by the Chinese-speaking community, this population includes those who have immigrated to Canada from that part of Asia and who are therefore familiar with the mark. The defendants rely on the alleged antecedent use in Canada and further state that, in any event, the goodwill lies not in the marks, but in the name "Ten Ren". These issues, too, will entail the weighing and assessing of evidence. The evidence before me is neither comprehensive nor complete and I am unable to make determinations, one way or the other.

[18]            With respect to distinctiveness, the defendants refer to the fact that both Ten Ren and Van Cheong use not only dark green boxes, but a variety of colours and a variety of numbers. Additionally, there is evidence, although scant, of the word "King" being traditionally and commonly used by Chinese merchants to market their wares and goods. Again, a determination in relation to distinctiveness will require the weighing and assessing of evidence and the drawing of factual inferences. It is a determination that I am unable to make on the basis of the material before me.

[19]            The misrepresentation aspect of passing off asks whether the defendant has made a misrepresentation (intentional or unintentional) leading or likely to lead the public to believe that the source of the defendants' goods is the same as those offered by the plaintiff. In short, it asks whether there is a likelihood of confusion. The plaintiff's only evidence in this respect is the get-up and the fact that both the Ten Ren and Shing Hing stores are located in Chinese-speaking communities. It alleges that this creates confusion, but does not provide examples of actual confusion. The defendants again refer to the fact that only one of eight Shing Hing stores is located in the same shopping centre as a Ten Ren store, that Ten Ren stores sell Ten Ren tea products while Shing Hing stores sell a variety of products including Van Cheong tea products, and that the name and style of Ten Ren and Van Cheong is conspicuously printed on the boxes of their respective products in both English and Chinese. At the risk of redundancy, determination of this question also requires that the evidence be weighed and assessed. Moreover, it requires more evidence than I have before me.

[20]            Summary judgment provides an avenue whereby claims or defences that are without foundation will not take up the time or incur the costs of a trial: Feoso Oil Ltd. v. The Sarla, [1995] 3 F.C. 68 (C.A.). It is a valuable tool for striking sham claims and defences, but is not intended to deprive a litigant of the right to a trial unless there is a clear demonstration that there is indeed no genuine issue material to the claim or defence which the trial judge must resolve: Aguonie v. Galion Solid Waste Material Inc. (1998), 38 O.R. (3d) 161 (C.A.). That is not the situation here. This action raises issues with respect to distinctiveness, confusion and passing off, matters that this court has recognized to be complex: Nature's Path Foods Inc. v. Country Fresh Enterprises Inc. (1998), 85 C.P.R. (3d) 286 (F.C.T.D.); ITV Technologies Inc. v. WIC Television Ltd. (1999), 2 C.P.R. (4^th) 1 (F.C.T.D.), aff'd. ITV Technologies Inc., supra. For the reasons stated, I am satisfied that the defendants have raised genuine issues and I conclude that the determinations necessary to dispose of this matter cannot be made on the basis of the material before me. Summary judgment is therefore not appropriate.

[21]            At the hearing the plaintiff requested that, if it was not successful on the motion, an interim injunction issue pending trial. While I am prepared to assume that the plaintiff has established a serious issue, there is no evidence before me regarding irreparable harm. Even if there were such evidence, the plaintiff's counsel conceded that the nature of the harm is not such that it cannot be compensated by damages. In such circumstances, I find that the balance of convenience lies with the defendants. The request for an interim injunction is denied.

[22]            In the result, the motion is dismissed and an order will so provide. The defendants are entitled to costs and I fix such costs at $1,000.

                                                           < < Carolyn Layden - Stevenson > >         

__________________________________

     Judge

Fredericton, N.B.

July 2, 2003

                          FEDERAL COURT OF CANADA

                   Names of Counsel and Solicitors of Record

DOCKET:                                              T-2120-02

STYLE OF CAUSE:                           Ten Ren Tea Co. Ltd. v. Van Cheong Tea Inc.,

Shue-Mei Chang and Bill Beauty & Health Product Ltd.

c.b.o. as Shing Hing Foods

DATE OF HEARING:                         June 24, 2003

PLACE OF HEARING:                        Toronto, Ontario.

REASONS FOR ORDER BY:             Layden-Stevenson J.

DATED:                                                   July 2, 2003

APPEARANCES BY:                         Ms. Eva W.W. Mak                                                                                                                                                                                For the Plaintiff

                                                                 Mr. Oscar Wong

                                                                                                                     For the Defendants

SOLICITORS OF RECORD:           Ms. Eva W.W. Mak

                                                                 Sun & Partners

                                                                 North York, Ontario

                                                                                                                     For the Plaintiff

                                                                   Mr. Oscar C. Wong

                                                                 Oscar C. Wong and Associates

                                                                 Richmond Hill, Ontario

                          For the Defendant