B.C. man registered Chinese company's trademark in Canada so he could extort it, court rules

Scales of justice. (Shutterstock)

A federal court has expunged a trademark registered by a Richmond, B.C. man, concluding that his only purpose for registering it was to extort money from a Chinese restaurant chain or profit off that chain's image.

In a decision issued earlier this month in Toronto, Justice Angela Furlanetto ruled in favour of Beijing Judian Restaurant Co., which had applied to have the trademark registered by Wei Meng expunged.

The company has operated a chain of barbecue restaurants in China since 2005, and had "close to 40" restaurants in operation in that country as of July 2020, according to court documents.

Since 2018, the company has also expanded into Canada, opening restaurants in Vancouver, Toronto and Richmond. All of the restaurants display the company's Ju Dian characters, which it sought to trademark in November 2017.

"Unbeknownst to the applicant, on June 27, 2017, the individual respondent … had already applied to register the JU DIAN and Design Mark for use in association with 'restaurant services; take-out restaurant services' and 'beer' based on proposed use," Furlanetto wrote in her decision.

"Around the same time, the respondent also applied, based on proposed use, to register the trademarks of other restaurant chains in China."

Meng's trademark application was granted, and in April 2019 he began approaching the company alleging that its Canadian restaurants were violating his trademark, according to court documents.

At one point, Meng had a meeting with representatives from Beijing Judian at their Vancouver location and demanded $1.5 million for the use of the trademark, reads Furlanetto's decision, noting that the company refused to pay.

Later, after getting nowhere in his efforts to make the company pay, the decision indicates that Meng posted a public advertisement on the Chinese-language online marketplace VanSky, offering the trademark for sale to prospective restaurant operators for an annual fee of $100,000.

An associate of Beijing Judian responded to the ad, and received the following response, as quoted in the decision:

"$100,000 a year is merely one person’s salary, no other service fees. You won’t find another franchise as low as this price. If you open a store with no reputation, you’ll lose even more money [than my asking price]. You can search JuDian Chuan Ba on Baidu and you will see how many stores are in Beijing. Anyone in the industry knows powerful brands attract customers. If you are interested, contact me."

This response, plus the fact that Meng's trademark was identical to Beijing Judian's and the fact that he had registered several other trademarks resembling logos of other Chinese restaurant chains, led Furlanetto to grant the company's application and expunge Meng's trademark.

"There is no evidence from the respondent to rebut the inference created by the circumstantial evidence or to indicate any intention to use the JU DIAN and Design Mark as a trademark in association with its own restaurant services," Furlanetto wrote. "Rather, all evidence points to the Respondent’s intention of using the JU DIAN and Design Mark to extort money from the applicant, or to obtain money from others."

The judge declined to grant the company's request for $15,000 in exemplary damages, however, determining that "expungement of the mark is the appropriate remedy."

She did conclude that Beijing Judian is entitled to court costs.