Background
Beijing Pop Mart Cultural Creative Co., Ltd. is a Chinese toy designer and marketer that has operated vending machines under the mark POP MART ROBO SHOP in Canada since at least 2020, generating growing Canadian revenues — over $620,000 in 2024. The machines dispense collectible toys and have developed a reputation particularly among Canadian consumers interested in Asian pop culture and anime. Pop Mart holds a pending Canadian trademark application for its mark, filed in March 2023 with a priority date of February 2, 2023.
In 2020, Pop Mart’s wholly owned subsidiary licensed the Canadian operation of POP MART ROBO SHOP vending machines to Encounter Entertainment Operations Management Inc., an affiliated entity of the respondent EC New York (UK) Ltd. The licence agreement expressly acknowledged that intellectual property rights in the ROBO SHOP mark belonged to the licensor. Despite this, on October 20, 2022 — after the licence expired — the respondent (through a network of affiliated companies controlled by overlapping principals) filed a Canadian application to register the trademark ROBO SHOP in association with vending machines and related services. The mark was registered on July 26, 2024.
Pop Mart learned of the registration only on October 31, 2024, when the respondent wrote to three Toronto shopping malls — the same locations where Pop Mart had installed its licensed vending machines — asserting its registered trademark rights and demanding removal of Pop Mart’s machines within thirty days. Pop Mart issued a cease-and-desist letter in December 2024 and commenced expungement proceedings in July 2025. The respondent, a UK-incorporated entity, was dissolved on January 28, 2025, and did not appear in the proceedings. A parallel UK cancellation proceeding had already succeeded on bad faith grounds in January 2025.
The Court’s Holding
Justice Lafrenière granted the application and ordered the Registrar of Trademarks to forthwith expunge registration No. TMA1246685 for the trademark ROBO SHOP. The Court found the registration invalid on three independent grounds under section 18 of the Trademarks Act: lack of distinctiveness (s. 18(1)(b)), lack of entitlement (s. 18(1)(d) read with s. 16(1)(a) and (c)), and bad faith filing (s. 18(1)(e)).
On distinctiveness, the Court found that Pop Mart’s POP MART ROBO SHOP mark had acquired significant reputation and goodwill in Canada well before the expungement proceedings were filed on July 11, 2025, leaving no room for the respondent’s ROBO SHOP to function as a distinctive identifier — particularly since the respondent had itself been dissolved months earlier and could not have used the mark at the relevant date. On entitlement, the Court conducted a full confusion analysis under s. 6(5) and found that ROBO SHOP was confusingly similar to POP MART ROBO SHOP: the ROBO SHOP element is the most striking component of Pop Mart’s mark, the parties operated in the same channels with overlapping goods and services, and Pop Mart had used its mark in Canada since at least 2020, predating the respondent’s October 2022 filing date.
On bad faith, the Court found that the respondent, as an affiliate of Pop Mart’s former licensee, was fully aware at the time of filing that the proprietary rights in ROBO SHOP vested in Pop Mart. The licence agreement itself acknowledged those rights. Notwithstanding that knowledge, the respondent registered a confusingly similar mark and then weaponized the registration against the very clients identified in the licence agreement, causing those clients to terminate their relationships with Pop Mart. The Court concluded that the respondent’s conduct departed from accepted principles of ethical behaviour and honest commercial practice, satisfying the bad faith standard.
Key Takeaways
- A former licensee — or its corporate affiliate — that registers a confusingly similar version of the licensor’s own mark after the licence expires will face a bad faith finding, particularly where the licence agreement expressly acknowledges the licensor’s ownership of the intellectual property.
- A registered trademark can be expunged for lack of distinctiveness where the applicant for expungement has already built substantial reputation and goodwill in Canada under a confusingly similar mark; dissolution of the registrant before the relevant date reinforces this ground.
- Identical or near-identical elements shared between competing marks — here, ROBO SHOP appearing in both POP MART ROBO SHOP and ROBO SHOP — weigh heavily in the confusion analysis, and the addition of a house brand prefix (POP MART) does not diminish the resemblance.
- An unopposed expungement application still requires the applicant to discharge its burden of proof on every invalidity ground; detailed affidavit evidence supported by documentary exhibits satisfied that burden here.
Why It Matters
This decision reinforces that Canadian courts will look through corporate structures when assessing bad faith trademark filings. Where principals of a former licensee incorporate a separate entity to register the licensor’s mark — and then assert that registration against the licensor’s customers — the corporate separation will not shield the registrant. The reasoning aligns with a growing body of Canadian and international authority holding that awareness of a prior user’s rights, combined with conduct designed to exploit or undermine those rights, satisfies the bad faith threshold under the Trademarks Act.
The case also offers practical guidance on parallel proceedings: the UK cancellation decision on bad faith grounds (Trade Marks Inter Partes Decision O/0040/25) preceded and lent context to the Canadian proceeding, illustrating how adverse findings in one jurisdiction can inform, though not bind, courts in another. For brand owners facing cross-border trademark squatting by former licensees or business partners, this decision confirms that Canadian courts will apply the expungement provisions robustly to protect legitimate prior users.