Anita Gogia is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

On November 2, 2022, in the case of (“Bhagwani”), the Ontario Superior Court of Justice upheld trademark principles which state that an enforceable right does not exist on the mere filing of a trademark application absent use of the mark.

In Bhagwani, the divisional court an injunction prohibiting Bhagwani from using “Bombay Frankie” in any restaurant they operate. The motion judge had to 2788610 Ontario Inc. because it was the first to file a trademark application for “Bombay Frankies” despite not having yet used the mark. The divisional court reversed this decision and held that an applicant cannot sue for trademark infringement until the . If they are to sue for passing off when registration is pending, they cannot do so successfully unless the mark has developed goodwill.

2788610 Ontario Inc. applied to register the mark in October 2020 but that application had yet to be examined, approved, or advertised. It was in the process of developing a franchise system of restaurants but had not opened or advertised any restaurant or obtained any reputation associated with the mark. In contrast, Bhagwani had on various menu items and to register “Bombay Frankie” in 2021. They also opened two restaurants with the “Bombay Frankie” name.

In granting the injunction, the motion judge applied the :

• First, a serious issue to be tried is present. The issue is whether 2788610 Ontario Inc.’s entitlement to the trademark manifests on the application date or registration date. The judge accepted that this is a novel claim and to establish a “serious issue to be tried”.
• Second, the judge held that 2788610 Ontario Inc. would suffer irreparable harm that is not compensable without the injunction. The judge concluded that Bhagwani would have a significant advantage if they continued operation with the marks in issue on their restaurants.
• Third, the balance of convenience favoured the granting of an injunction.

The divisional court reviewed the motion judge's decision on a standard of correctness because it is an error in principle attributable to the application of an . The divisional court applied the test in accordance with established trademark principles:

• First, in finding a serious issue to be tried, the motion judge incorrectly concluded that 2788610 Ontario Inc. had a right to the marks by virtue of the trademark application or that its trademark would be registered (both errors of law). Per , a trademark must be registered to give rise to a cause of action. There is no certainty that 2788610 Ontario Inc.’s application will be granted. In considering a possibility of a passing off claim, the court upheld that to establish passing-off per , 2788610 Ontario Inc. must have shown existing goodwill. While 2788610 Ontario Inc. was engaged in start-up activities, those per the jurisprudence. In this analysis, the court notably recognized that goodwill could exist from the perspective of potential franchisees (but was not established on the facts of this case).
• Second, the court held that the motion judge made a by ruling that 2788610 Ontario Inc. would suffer irreparable harm without an injunction because the loss of goodwill , only established by clear evidence. The cause of action protects existing, not potential goodwill. The court cited , noting that confusion does not per se result in “irreparable harm not compensable in damages.” Irreparable harm is a high bar.
• Third, although the divisional court did not consider the balance of convenience, the court did note that such consideration may favour Bhagwani, who had to remove signs, website content, and social media accounts bearing the “Bombay Frankie” name.

The post The “Bombay Frankie” Confirms That First Mover’s Advantage Remains Without Enforceable Trademark Rights appeared first on IPOsgoode.

A Tale of Two Woodpeckers

Two businesses operating in BC allegedly marketed wood flooring products using a trade-mark that contains either an image of a woodpecker or the word "woodpecker" itself. The plaintiff, Woodpecker Hardwood Floors (2000) Inc, has been in the hardwood flooring business since as early as 2000. The defendants, Wiston International Trade Co, Ltd and Wiston Building Materials Co, obtained trade-mark registrations in early 2013 for various logos and word marks including some which use the word “Woodpecker” in association with wares and services involving hardwood floors. The plaintiff, in response to what it viewed as an infringement of its common law trade-mark rights, alleged passing off and sought a declaration of invalidity, as well as an interim injunction.

This situation closely tracks elements in most trade-mark litigation – save for the fact that Woodpecker sought relief in the BC Supreme Court, the provincial court of general jurisdiction. Since the claim involves allegations of invalidity concerning a registered trade-mark, such a claim would at first seem clearly within the Federal Court’s jurisdiction. The fact that an injunction was granted – and upheld on appeal – by BC provincial courts suggests that, in at least one province, whether or not provincial courts can declare trade-mark registrations to be invalid is a serious question to be tried. Related to this issue is whether or not owners of registered trade-marks can be restrained from using their marks by unregistered owners in various provinces.

The “Trump Card” and the Federal View

In Ontario, the Court of Appeal has referred to a trade-mark registration as a “trump card” which gives the owner a full answer to an allegation for passing off. In ([2002] OJ No 2029), the ONCA found that the defendant was entitled to use its registered mark in association with beer, and if a competitor takes exception to that use, “its sole recourse is to attack the validity of the registration” [at para 16].

While the plaintiff in Woodpecker did attack the validity of the defendant’s registration, it did so by seeking a declaration of invalidity in provincial court. This type of attack differs from the interpretation of Molson v Oland offered by the Federal Court in (2010 FC 1099, reversed in part on different grounds) in which Justice de Montigny found that the appropriate remedy for an unregistered owner alleging passing off against the holder of a registration was to “seek the expungement of the infringing trade-mark” [at para 209]. While the Federal Court of Appeal clarified that Molson v Oland only applied to the use of the mark as registered, the decision still seems dispositive in the current case.

Yet the BCCA still confirmed that there is a serious question to be tried. To understand why, one has to look to the language of the Trade-marks Act, the jurisdiction of the Federal Court, and even the division of powers established in .

Jurisdictions, Conflict and the Availability of Relief in Provincial Court

Trade-marks are not explicitly subject to the exclusive legislative authority of the Parliament of Canada under the Constitution Act, 1867, unlike “Patents of Invention and Discovery” and “Copyrights” (, respectively). Instead, federal legislative competence has historically been grounded in the broad section permitting legislation regarding the “Regulation of Trade and Commerce” ().

Parliament’s legislative competence to pass legislation which affects the common law tort of “passing off” was the subject of a direct challenge in , 2005 SCC 65. In Kirkbi, the Supreme Court found that , which codifies the common law civil action of passing off, is sufficiently integrated into the federal trade-mark scheme and therefore constitutional.

However, passing off remains a valid cause of action in provincial courts, who have original jurisdiction with respect to “Property and Civil Rights in the Province” (). Therefore, Parliamentary and provincial authority over trade-marks overlaps between the two jurisdictions.

As a result, potential overlapping jurisdictions can exist between federal and provincial courts where explicitly statutory language does not grant the federal court exclusive jurisdiction. Unfortunately, the Trade-marks Act may not be explicit enough to preclude a declaration of invalidity by a provincial court. The language of grants exclusive original jurisdiction to the Federal Court to order that any entry in the register be struck out or amended on the ground that the entry as it appears on the register does not accurately express or define the rights of the person appearing to be the registered owner of the mark. In addition, grants exclusive original jurisdiction to the Federal Court in any case in which it is sought to have any entry of the register of trade-marks made, expunged, varied or rectified. The subtle distinction drawn by the provincial courts in BC is that a declaration of invalidity is not an order to strike out or amend the register – and therefore does not necessarily fall under the exclusive jurisdiction of the court [see Woodpecker, at para 10].

The Position of the BCCA and its Potential Ramifications

For the interim order, the court concluded that it had the jurisdiction to issue an injunction against the defendants’ use of their registered marks on this basis, as well as jurisdiction flowing from and the inherent jurisdiction of the court. As this appeal involved an interim injunction, it was unnecessary to conclude that the provincial courts in BC did in fact have jurisdiction to make a declaration of invalidity regarding an entry on the Trade-mark Register. The decision simply stands for the proposition that provincial courts in BC still view the effects of registration which were the subject of comment in Molson v Oland and Philip Morris v Marlboro Canada, as well as the effects of to be unsettled matters of law – indicating that they may not interpret the FCA’s interpretation to be binding for the purposes of provincial law.

The issue, if it goes to trial, could have important ramifications. A system of national registration which is subject to inconsistent provincial restrictions could pose obstacles to rights-holders. More importantly, the ability of provincial courts to make differing declarations of invalidity undermines the purpose of a national trade-mark registry, creating gaps in coverage for a system intended to provide an easy method of national protection. In any case, this decision shows that provincial courts are unwilling to limit their jurisdiction without a full hearing on the merits of the case, and that any restrictions imposed on that jurisdiction will not be taken lightly.

David Bowden is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

The post The Curious Case of the Woodpecker and the Injunction appeared first on IPOsgoode.

Claim for Infringement and Counterclaim

Mattel argued that Zynga's use of the mark was contrary to article 9 of the��.��This provision allows exclusive rights to a community mark, and the right to prevent use of a sign that is either : 1) identical ��to the registered mark, 2) similar to the registered mark and likely to cause confusion in relation to identical and similar goods, or 3) where use of the mark takes unfair advantage of the distinct character and reputation of the community mark.��Zynga counterclaimed that the SCRAMBLE mark was invalid as it lacked distinctive character, was descriptive and had common usage, and that their mark was therefore non-infringing.

Evidence provided to the court indicated that Mattel was aware of the game for a number of years before launching a claim. At the time of the decision, the game was in its fifth version, and not only was Mattel aware of the game in earlier incarnations, but employees played the game with each other. The court also found it troubling that the claim was launched soon after negotiations regarding a joint venture between Mattel and Zynga broke down. The court concluded that such a delay indicated at worst that the negotiations were not carried out in good faith, and at best, that Mattel did not consider the game worthy of an infringement claim.�� In comparison, the court found that an email detailing Zynga’s concern over the potential confusion between Scrabble and Scramble to be insignificant.

Decision

The Court held that the word “scramble” was the common name for this type of game. As a result, the court agreed that Zynga merely used a wording in��the public domain that is descriptive of the game and therefore did not infringe the mark.��The Court concluded that neither “Scramble” nor “Scramble With Friends” infringed the SCRABBLE trade-mark. The Court deemed that mark was not similar and not likely to cause confusion for infringement or passing off. Yet, the Court did qualify this decision on a modification of the logo. The Scramble logo at the time contained an “m” on its side. The Court found that this gave “the impression that the word is scrabble when one looks at it quickly and has the propensity to confuse.” Although Zynga was largely successful they will have to alter their logo to avoid this potential confusion.

Canadian Outcomes

In North America, Hasbro holds the�� trade-mark, and Electronic Arts holds the rights to�� of the game. In addition, Hasbro entered into an����to create physical versions of games in the Zynga family, similar to the failed agreement in the Mattel claim. These games include a "" version of Monopoly��and a "" version of Pictionary that have tie-ins to the online versions of Zynga games.

In a similar case in Canada,��, the Canadian Federal Court examined the similarity between Trivial Pursuit and a parodic adult version. In a comparison of the script and packaging, the court found that the defendant’s script was reminiscent of, but not identical to, the plaintiff’s script. The court went on to hold that the design and appearance of the game intended to raise an association with Trivial Pursuit. The court in that case rejected an argument that Trivial Pursuit was descriptive of the type of game, as it did more than merely describe the game. In that case, the court turned its mind to the use of a trade-mark and made it clear that the focus of the action is "use", not the similarities between the games.��In that case, the court did find that the parody infringed the Trivial Pursuit trade-mark.

Due to the agreement between Hasbro and Zynga and the fact that the game is unavailable to Canadian consumers, a similar claim is unlikely to be made in Canada. If a claim was brought in Canada, the claimant would have to show infringement of the SCRABBLE mark itself, rather than rely on the Zynga game’s similarity to Scrabble, or infringement of SCRAMBLE, since that ��is owned by Konami. ��Even absent this web of ownership, I believe that based on��Horn Abbot,��a Canadian court would be unlikely to find infringement in this case. To��determine whether trade-marks or trade-names are confusing, the court must have regard for the surrounding circumstances including the degree of resemblance between the marks in appearance or sound or the ideas suggested according to ��of the��Trade-marks Act.��Unlike in��Horn Abbot, the marks are not similar in appearance. The UK court noted the use of��different words, script and packaging. Furthermore, I think that the addition of “With Friends” to the Zynga game's name identifies Scramble as a member of the Zynga "With Friends" family of marks rather than an attempt to confuse consumers by passing off.

In this case, Scrabble appears to be scrambling for a better result. A Mattel spokesperson has that Mattel was “disappointed that the court did not rule that Zynga should cease using the Scramble name, which Mattel intends to appeal.”

Allison McLean is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.��

The post Scrabble Scrambles for Trade-mark Infringement Ruling appeared first on IPOsgoode.

At in Vancouver BC, Michael Hallatt resells marked-up and unmodified Trader Joe’s products purchased at retail price in Washington State Trader Joe’s locations. Currently, Trader Joe’s only operates in the United States and hold several registered trade-marks on . The mark is used to identify both the company itself, and its branded goods. Trader Joe’s also currently has two ��for retail grocery services in Canada.

In the��, Trader Joe’s alleged that Hallatt prominently displayed their mark in an attempt to pass as an authorized dealer of their products. Interestingly, in the wake of the trade-mark infringement claim made by Trader Joe’s, Hallat’s store now goes by _IRATE JOE’S with the tagline “Unauthorized, Unaffiliated and Unafraid”. On October 2^nd, a Seattle Washington court����the claim for lack of subject-matter jurisdiction, but allowed Trader Joe's to amend the claim under state laws.

Under Rule of the United States��Federal Rules of Civil Procedure,��a court can ��only if it is immaterial and appears to be made solely for the purpose of obtaining jurisdiction, or the claim is wholly immaterial or frivolous. In making this determination, the court unless the party mounting a jurisdictional challenge asserts facial or factual attacks on the claims. The court held that Hallatt failed to make a factual or facial attack but that nevertheless there was no basis for extra-territorial application of the ��in this case.

The Lanham Act confers broad power on the court to exert jurisdiction. To make this determination, courts must apply the .�� First, courts ask whether the actions complained of effect American foreign commerce. Second, whether this effect presents a cognizable injury under the Lanham Act. Third, the court must conduct a seven-factor analysis as to whether assertion of extra territorial authority is justifiable. To satisfy the first two parts of the test, a plaintiff must show only that there has been “some” effect on foreign commerce when construing all facts in their most favourable interpretation. In this case, all the alleged trade-mark infringement took place in Canada and there was no proof of economic harm in the United States.

Trader Joe’s failed to show an effect on American commerce that would warrant the application of the Lanham Act. ��The degree of conflict with foreign law or policy weighed against establishing jurisdiction because Trader Joe’s has two trade-mark applications in Canada and the infringement is wholly foreign. Hallatt’s permanent resident alien status and his frequent purchase trips to the US would likely be sufficient for establishing jurisdiction through the nationality factor. Third, Hallatt’s presence is not strong enough in the US to apply jurisdiction. Fourth, as wholly foreign acts, there was not a significant effect in the United States. (Even if there was some diversion of business or impact on the reputation of Trader Joe's, this factor still weighed against applying jurisdiction.) Fifth, Pirate Joe’s�� clearly purchased Trader Joe’s products at retail value to resell and it was unclear whether this was intended to harm Trader Joe's since it did not actually lose sales. As a result, it was was not necessarily foreseeable under the sixth factor that the actions would cause harm. Finally, the actions were clearly more significant in Canada than in the United States, since that is where the products were sold after being lawfully purchased in the US.��The court found that on the whole the seven factors supported not extending jurisdiction.

Until Trader Joe’s actually enters into the Canadian market they may have a difficult time preventing Hallat from selling their products at Pirate Joe's. To be successful in a claim in a Canadian court, Trader Joe’s would have to show actual use of the mark in Canada. Trader Joe's may have an argument that if their mark is displayed on a website accessed by Canadians it should be considered “used”��, though this has been a controversial point of law in recent times. (It is important to note that a mark displayed on a website is not�� “used” in Canada unless Canadians can����associated with the mark.) Currently, Trader Joe’s does not allow Canadians to purchase goods through their site and therefore may not pass the threshold for use in Canada. As time goes on, even with trade-mark applications, if the mark is not used ��in Canada the registration could be expunged. Moreover, with Pirate Joe's tagline "Unauthorized, Unaffiliated and Unafraid", I think it would be difficult to indicate consumer confusion in the face of such clear indications about the lack of association with Trader Joe's.

Despite the favourable ruling, Hallatt may still have difficulty stocking his shelves. Several Trader Joe's locations now , and Hallatt has already had to resort to sending others in to shop for him. ��That said, for the time being, fans of Pirate Joe’s can continue to sing “Yo ho ho and a bottle of all-natural apple juice!”

Allison McLean is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.��

The post Shiver Me Timbers! US Court Declines to Exert Jurisdiction Over Pirate Joe's appeared first on IPOsgoode.

Rotem Guez officially to Mark Zuckerberg as of December 7, 2011. His decision was prompted by threats of legal action from Facebook against Guez’s website, . Likestore claims to boost website traffic by allowing users to increase their Facebook page “likes”. Likestore is a violation of Facebook’s and Facebook proceeded to a Facebook page created by Guez to promote his business. Last September, Facebook also sent Guez a cease and desist , threatening to sue if Guez did not stop his activities with Likestore.

Guez retaliated by changing his name and on December 14, 2011, Facebook threatened to sue, unknowingly targeting someone with the same name as Facebook’s founder. It seems that Guez hopes that Facebook will not want to sue someone named Marc Zuckerberg. Further, Guez/Zuckerberg is planning on creating a stir and has already started both and accounts under the name Mark Zuckerberg.

Facebook has to protect its trademark and Zuckerberg’s name has become almost synonymous with Facebook itself. The tort of involves consumer confusion when a trademark is used by someone not associated with the original source. The misrepresentation may also harm the reputation of the original trademark owner. Perhaps Mark Zuckerberg The Second should consider returning to Rotem Guez. Facebook is for launching lawsuits against potential competitors and likely will not hesitate to continue targeting Guez and Likestore.

Nora Sleeth is a JD candidate at Osgoode Hall Law School.

The post Israeli Entrepreneur Changes Name to Mark Zuckerberg, Facebook Dislikes This appeared first on IPOsgoode.