Bad Faith Trademark Filings: Lessons from the Tress Wellness Case
When you build a brand, protecting it with a trademark is essential. But what happens when someone else registers your brand name before you do? A recent Federal Court decision in FXSWEDE AB v. Gengbin Xu (2025 FC 1864) sheds light on this issue. The case highlights how Canadian law deals with bad faith trademark filings and what business owners can do to safeguard their intellectual property. In this post, we’ll break down the case, explain key legal principles, and share practical tips for brand protection.
Background of the Case
FXSWEDE AB, a Swedish company, owns the brand TRESS WELLNESS, which it uses for home waxing kits and accessories. The company began selling in Canada in late 2020 and achieved over CAD $1 million in sales by 2024. However, on the same day FXSWEDE made its first Canadian sale, Gengbin Xu applied to register Tress Wellness in Canada, along with three other unrelated trademarks.
Xu’s registration was granted in April 2023. Later, when FXSWEDE tried to register its own mark, it discovered Xu’s registration and demanded cancellation, alleging bad faith. Xu’s representative even offered to sell the trademark for CAD $30,000, far above registration costs—a red flag for bad faith.
Key Legal Issues
The Justice Fuhrer of the Court considered five main questions under the Trademarks Act:
- Was FXSWEDE a “person interested” in challenging the registration?
- Did FXSWEDE properly serve Xu with legal documents?
- Was Xu’s application filed in bad faith?
- Was Xu entitled to register the trademark?
- Was the trademark distinctive of Xu?
Was FXSWEDE a “Person Interested”
The Court confirmed that FXSWEDE met the threshold:
“I am satisfied that fxswede meets the low threshold of establishing that it is a ‘person interested’ as defined in section 2 and required by subsection 57(1) of the TMA” (para. [16]).
Why?
- FXSWEDE had used the trademark before Xu’s registration.
- FXSWEDE had applied to register TRESS WELLNESS & Design, and Xu’s registration was an obstacle.
This shows that even if your own application is pending, you can still challenge a conflicting registration if it affects your rights.
Did FXSWEDE Properly Serve Xu
Service was complicated because Xu resides outside Canada. The Court noted:
“I accept that if fxswede properly served Mr. Xu with its Notice of Application, which I believe it has, then fxswede was not required to serve Mr. Xu with any further documents” (para. [19]).
FXSWEDE first tried to serve Xu at a Toronto address but failed. It then served Xu’s Canadian trademark agent, arguing this satisfied Rule 135 because the agent facilitated Xu’s business dealings in Canada (paras.
Justice Fuhrer concluded:
“Even if I am incorrect… I am prepared to validate service under rule 147” (para. [29]).
Takeaway: If the respondent avoids service, Canadian courts may validate alternative methods if they ensure notice.
Bad Faith Filing
The Court found that Xu filed the application in bad faith.
“I am persuaded… that Mr. Xu filed the underlying application to register Tress Wellness in bad faith” (para. [30]).
Key factors were:
- Xu applied for multiple unrelated trademarks with no evidence of use.
- Xu’s representative tried to sell the registration for CAD $30,000.
- There was no proof Xu ever used the mark in Canada.
Under section 18(1)(e) of the Trademarks Act, a registration is invalid if filed in bad faith.
“A purpose of paragraph 18(1)(e) is to prevent the use of the trademarks regime as a means to extract money from the rightful owner of a mark” (para [32]).
Distinctiveness
The Court also ruled that the trademark was not distinctive of Xu. FXSWEDE had strong evidence of use and recognition in Canada, while Xu had none. This satisfied section 18(1)(b), which requires a trademark to distinguish the owner’s goods from others.
Entitlement
Interestingly, FXSWEDE could not prove Xu lacked entitlement because both parties’ first use and Xu’s filing occurred on the same day. This highlights the importance of filing early—even one day can make a difference.
Practical Takeaways for Business Owners
- File early: Apply for trademark protection as soon as you choose a brand name.
- Monitor filings: Regularly check trademark databases for suspicious applications.
- Act quickly: If you discover a bad faith filing, consult an IP lawyer and consider an expungement application.
- Document use: Keep records of when and where you use your trademark—sales, ads, packaging.
Why This Case Matters
This decision reinforces that Canadian courts take bad faith filings seriously. It also shows that distinctiveness and evidence of use are critical in trademark disputes. For businesses expanding into Canada, proactive trademark strategies can prevent costly legal battles.
Conclusion
The Tress Wellness case is a cautionary tale for brand owners. Bad faith trademark filings can derail your plans, but Canadian law offers remedies—if you act promptly. Protect your brand by filing early, monitoring the marketplace, and keeping solid evidence of use.
Want to Read the Full Case?
You can access the case, AB v. Xu – Federal Court, 2025 FC 1864 here.
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Updated November 2025
