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.

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

On May 18, 2022, the Federal Court of Canada released its for Beijing Judian Restaurant Co. v Wei Meng. That marked the   that the Court invalidated a trademark for reasons of bad faith (TMA). That case centered around the of whether the applicant’s “JU DIAN & Design Mark” was obtained in bad faith contrary to or was otherwise invalid per .

Background

The applicant, Beijing Judian Restaurant Co (“Judian”), has operated restaurants in Vancouver and Richmond since 2018, along with numerous well-known () restaurants in China since 2005. Judian opened locations specifically in metro Vancouver for the large Chinese Canadian population in this area who would recognize the Beijing Judian trademarks. The family of JU DIAN character trademarks have been heavily used in China to promote their restaurants.

, on June 27, 2017 the the JU DIAN & Design Mark shown below in association with “restaurant services; take-out restaurant services”, and “beer”. 

The evidence before the Court included . The first affidavit was of Jiantao Zou, the co-founder and general manager of Judain, and the second of Lai Lam Sing, a consult for Judian and employee of a Judain subsidiary operating the restaurant in Vancouver.

The respondent appeared at the Vancouver restaurant and insisted that he did not care about the Chinese trademarks as he had the Canadian paperwork. On May 1, 2019 the respondent met with Mr. Sing and . On June 3, 2019, Judian became aware of an advertisement for sale of the trademark on an online marketplace, VanSky. When the applicant’s contact made inquiries about purchasing the mark, the respondent asked for $100,000 per year to license the registration.

The Decision

The Court evaluated many definitions of “bad faith,” as it was not defined in Bill C-86, which introduced the new . The is described as to “hinder the registration of a trade-mark for the sole purpose of extracting value from preventing others from using it.”

The in EU and UK trademark law that have been adjudicated. Under UK and EU law, bad faith includes applying for a trademark or when an applicant seeks a trademark as an .

The Court also considered : “[t]he bar vindicates the fundamental legal and moral principle that nobody should benefit from their wrong,” which, as applied to trademarks, may be defined as attempting to use registration as a means to gain rights “in an improper manner or for an improper purpose.”

The Court agreed that it is implausible that the respondent created the same original design on his own, but rather intended to obtain the trademark associated with Beijing Judian restaurants in China. Further, the respondent’s awareness of the applicant’s reputation is established by his text message to the potential purchaser of the trademark on VanSky. Additionally, at around the same time, the associated with Chinese restaurants that he had no affiliation with. This made it more difficult for the court to rebut the inference of bad faith.

The Court held that since the respondent’s mark was registered and the of using the trademark for extortion and economic advantage, the respondent’s registration of the mark constituted bad faith and was therefore and .  

Other issues

The of whether the use of the mark by the respondent constituted passing off was dismissed. Since there had been no commercial use of the trademarks, there was in the marketplace as required by the 3 part test to prove there had been passing off per common law or .

The of whether the applicant is entitled to punitive damages of $15,000 was also considered. In consideration of and , the Court there was no basis to grant punitive damages because allegations of bad faith are .

Notably, this decision provides guidance on the applicability of a fairly new provision in the . The case also illustrates that courts have a conscience are moved to consider concepts of morality and circumstantial evidence alone to make a just decision.

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