Failure to Preserve Business Records Contributes to Applicant Failing in Trade-marks Act Section 57 Expungement Application
Kamsut, Inc. v. Jaymei Enterprises Inc. 2009 FC 627 (Lemieux, J.)

June 10, 2009

Bruce M. Green for the Applicant, Kamsut, Inc. (“Kamsut”)
Tim Goepel for the Respondent, Jaymei Enterprises Inc. (“Jaymei”)

Kamsut brought a Section 57 application against Jaymei’s registered trade-mark KAMA SUTRA applied for on February 19, 2002 and registered August 21, 2003. The registration claimed use of the KAMA SUTRA mark with chocolates and hot chocolate, among other food products, since 1994 and July 2003 respectively.

Kamsut’s application asserted that Jaymei was not entitled to secure the registration because of:

1. confusion with Kamsut’s KAMA SUTRA trade-mark for body, skin care and personal care items, personal lubricants and clothing and edible chocolate products including chocolate-flavoured body soufflé, chocolate body paints and chocolate body oil (“Kamsut Chocolate Products”), respectively sold in Canada since 1973 and 1998; and
    
2. non-distinctiveness.

Jaymei’s defences were:

1. Kamsut’s evidence did not show use of its KAMA SUTRA mark prior to the use claim or filing date of Jaymei’s application;
    
2. no confusion due the differences in the parties’ respective KAMA SUTRA wares; and
    
3. Jaymei’s mark is distinctive to its customers and associated with its products in Jaymei’s channels of trade.

The Court dismissed Kamsut’s application, as Kamsut’s evidence did not establish use of Kamsut’s KAMA SUTRA mark in Canada, with the Kamsut Chocolate Products, before the material date. While Kamsut explained in its evidence that it does not keep records beyond seven (7) years for undisclosed reasons, that practice did not lower Kamsut’s burden.

While assessing confusion was unnecessary since Kamsut did not establish prior rights in the KAMA SUTRA trade-mark, the Court assessed confusion anyway, finding in Jaymei’s favour. The Court noted that: KAMA SUTRA is not an inherently distinctive trade-mark; the record did not show that Kamsut’s KAMA SUTRA trade-mark is well known; Kamsut’s KAMA SUTRA chocolate sex aids do not fall into the same category as Jaymei’s edible chocolates; and Kamsut’s channels of trade (distributors and retailers, including national drug stores) are different than Jaymei’s (individuals and corporations mainly in the Vancouver area).

The Court also found that Jaymei’s KAMA SUTRA mark had local distinctiveness, due in part to Jaymei’s direct sales to its Vancouver customers and word of mouth advertising. Kamsut’s evidence (including ads mainly in U.S. publications with small Canadian circulation and sales figures which did not show the Canadian revenue for the KAMA SUTRA Chocolate Products) did not establish distinctiveness though use or reputation in Canada.

By: Lorraine M. Fleck, Barrister & Solicitor, Trade-mark Agent