In Canada’s competitive food industry, brand identity is everything, and the adoption of a confusingly similar trademark can lead to a costly legal battle. The recent Federal Court decision in YAT SUN FOOD PRODUCTS LTD. v GRIFFITH FOODS INTERNATIONAL INC., 2025 FC 1688, delivers a sharp reminder that brand owners cannot rely on narrow classifications of goods to justify co-existence with a nearly identical mark. This ruling provides a vital lesson in the application of the likelihood of confusion test, particularly concerning the critical factor of how and where goods are sold.
The dispute focused on two highly similar word marks: the senior registered mark, CHEFS-OWN (used for bean sprouts), and the junior application, CHEF'S OWN (applied for use with sauces and seasonings). Since both marks were nearly identical in appearance and sound, the case hinged primarily on the distinctiveness of the goods and the overlap between the parties' respective channels of trade.
The Trademarks Opposition Board (TMOB) initially dismissed the senior owner's opposition, finding that despite the near identity of the marks, the nature of the goods (sprouts versus sauces) and their respective channels of trade were sufficiently dissimilar to prevent a likelihood of confusion. This decision suggested that consumers were unlikely to infer a common source for these different food items.
On appeal to the Federal Court, the senior owner successfully introduced new material evidence. This new information addressed a specific gap in the evidence that the Opposition Board had relied upon in its original ruling.
In trademark appeals under the Trademarks Act, the introduction of material new evidence has a profound procedural effect: it changes the court's standard of review from the highly deferential "palpable and overriding error" to a de novo (fresh) assessment of the confusion factors affected by that new evidence. As a result, the Federal Court was entitled to reconsider the evidence concerning the nature of the wares and the channels of trade, as well as the overall weighing exercise, without the same level of deference normally afforded to the TMOB.
The core of the Federal Court’s reversal focused on the likelihood that the ordinary casual consumer, somewhat in a hurry, would be confused when encountering these marks in the marketplace. The court determined that the goods—bean sprouts and sauces/seasonings—are both food products that are frequently purchased through the same distribution networks, such as supermarkets and food service suppliers.
This finding established that the "nature of the trade" and the "nature of the wares" were not, in fact, sufficiently dissimilar, as both were destined for the same purchasing consumers and carried by the same retailers. This significant overlap "tipped the balance of probabilities" toward a likelihood of confusion, leading the Federal Court to conclude that the marks were confusingly similar and should not co-exist.
The YAT SUN decision offers three crucial lessons for businesses seeking to protect or enforce their brand rights in Canada:
Similarity in Trade Channels Is Highly Persuasive: If two sets of goods—even dissimilar ones like fresh produce and shelf-stable condiments—are sold together in a common marketplace (e.g., a supermarket aisle or through the same food distributor), a nearly identical trademark will likely be deemed confusing. Companies cannot rely on technical differences in product composition if the customer experience is the same.
The Peril of Near-Identical Marks: When the degree of resemblance between two marks is extremely high (like CHEFS-OWN and CHEF'S OWN), the other confusion factors, especially the nature of the trade, must show a significant separation to prevent confusion. If the marks are virtually indistinguishable, a strong connection in trade channels is fatal to the junior mark's application.
The Power and Risk of New Evidence: This case demonstrates the strategic advantage of filing material new evidence on appeal, as it allows the Federal Court to conduct a de novo review of key facts. However, the recent amendments to the Trademarks Act now require a party to seek leave (permission) to file new evidence on appeal. This new requirement makes it more critical than ever to ensure your evidentiary record is robust and complete before the initial hearing at the TMOB.
Navigating the likelihood of confusion test in trademark opposition and appeal proceedings requires deep expertise in gathering and presenting the right kind of evidence to demonstrate marketplace realities. Whether you are opposing a junior mark or defending your own application, the YAT SUN decision proves that the details of distribution and consumer overlap can make or break your case.
Therefore, in Canadian trademark oppositions and Federal Court appeals, it is important to build complete, winning evidentiary records at the TMOB stage to avoid the cost of an appeal, or strategically introduce new evidence when necessary to achieve a successful outcome at the Federal Court.