Executive Summary: Key Legal and Evidentiary Issues

• Standing turned on whether fxswede AB qualified as a “person interested” under the Trademarks Act by virtue of its prior use and pending Canadian application for TRESS WELLNESS & Design.
• Service of the Notice of Application via the respondent’s Canadian trademark agent’s firm raised issues under rule 135 (deemed personal service on non-residents) and rule 147 (validation of service).
• Evidence of bad faith centred on a pattern of filing third-party marks with no proven use, an abandoned application opposed for bad faith, and an attempt to sell the TRESS WELLNESS registration for CAD $30,000.
• The non-entitlement claim failed because fxswede could not prove that its Canadian use of TRESS WELLNESS occurred prior in time to Mr. Xu’s filing date where both fell on November 30, 2020.
• Non-distinctiveness was established by fxswede’s substantial Canadian sales and exclusive use of TRESS WELLNESS, contrasted with the absence of any evidence that Mr. Xu used the mark.
• Costs were determined in the Court’s discretion, resulting in a reduced lump-sum award reflecting the undefended nature of the expungement application.

Background and parties

fxswede AB is a Swedish company that markets home waxing kits, electric wax warmers and waxing accessories under the brand TRESS WELLNESS, used both as a word mark and as TRESS WELLNESS & Design. It owns a U.S. registration for TRESS WELLNESS and, in January 2022, applied to register TRESS WELLNESS & Design in Canada for electric wax warmers. fxswede first sold TRESS WELLNESS products in Canada on November 30, 2020 via Amazon’s cross-border programs and later through the Amazon.ca marketplace, generating over CAD $1 million in Canadian sales between late 2020 and October 2024. The respondent, Gengbin Xu, filed a Canadian application for the word mark Tress Wellness on November 30, 2020, the same date as fxswede’s first Canadian sale, together with applications for Yeelen, BELLA VERDE and KoluaWax. The Tress Wellness application registered on April 5, 2023 as TMA1,117,533 for depilatory wax and related goods; the KoluaWax application was abandoned following an unanswered opposition alleging bad faith.

Pre-litigation correspondence and application

In October 2024, fxswede’s counsel wrote to Mr. Xu’s Canadian trademark agent alleging that the Tress Wellness registration had been obtained in bad faith and demanding that it be cancelled. A reply came from a person claiming to represent the trademark owner, denying bad faith, asserting use of the mark, and inviting negotiations to sell the registration. When fxswede offered CAD $1,000 to buy the registration as compensation for registration costs, the representative countered at CAD $30,000. Shortly afterward, fxswede commenced an application in the Federal Court under subsection 57(1) of the Trademarks Act to expunge Mr. Xu’s registration on the grounds of bad faith, lack of entitlement and non-distinctiveness. Mr. Xu did not file a notice of appearance and the matter proceeded undefended.

Service, standing and procedure

The Notice of Application was served on the law firm associated with Mr. Xu’s Canadian trademark agent after an unsuccessful attempt to serve him at a Toronto address listed on the KoluaWax application. The Court held that the requirements of rule 135 for deemed personal service on a non-resident using a Canadian intermediary in business transactions were met, or, in any event, that service should be validated under rule 147 because the documents clearly came, or would have come, to Mr. Xu’s attention. As no notice of appearance was filed, rule 145 relieved fxswede from serving further documents. On standing, the Court found that fxswede was a “person interested” under section 2 of the Trademarks Act because it had used TRESS WELLNESS in Canada before the impugned registration and its own pending application for TRESS WELLNESS & Design was obstructed by Mr. Xu’s registration.

Bad faith, entitlement and distinctiveness

On the merits, the Court concluded that Mr. Xu’s application for Tress Wellness was filed in bad faith within the meaning of paragraph 18(1)(e). The pattern of filing several apparent third-party marks, the unresisted bad-faith opposition to KoluaWax, the absence of any evidence of use by Mr. Xu, and the later attempt to sell the Tress Wellness registration back to fxswede for CAD $30,000 together supported the inference that the trademarks system was being used to extract money from the legitimate user. The ground of non-entitlement under paragraph 18(1)(d), however, was not made out because the evidence showed only that fxswede’s first use and Mr. Xu’s filing both occurred on November 30, 2020; without proof that fxswede’s use preceded the filing, the “previously used” requirement in section 16(1)(a) could not be satisfied. Separately, the Court held that the mark TRESS WELLNESS was not distinctive of Mr. Xu at the date the expungement application was filed, as required by paragraph 18(1)(b). fxswede had established a substantial Canadian market presence and consumer association with its waxing kits, while there was no evidence that Mr. Xu used the mark at all. Distinctiveness therefore lay with fxswede, not with the registered owner of record.

Costs and final outcome

In exercising its discretion under rule 400 and Tariff B of the Federal Courts Rules, the Court rejected fxswede’s claim for approximately CAD $17,000 based on Column V and instead treated the matter as an uncontested application more in line with Column III. After trimming unsupported or inappropriate disbursements but allowing reasonable photocopying for a paper hearing record, the Court awarded a lump sum of CAD $6,500 inclusive of permitted disbursements and taxes. Ultimately, the Federal Court declared Mr. Xu’s registration for TRESS WELLNESS (TMA1,117,533) invalid on the grounds of bad faith and non-distinctiveness, ordered that it be struck from the Register of Trademarks, and awarded fxswede AB— the successful party—lump-sum costs in the amount of CAD $6,500, with no separate damages quantified.