Bombay Frankie restaurant

Bombay Frankie trademark injunction sets new legal precedent

By James Wan

What you need to know (in a nutshell)

  1. The case of 2788601 Ontario Inc. v. Bhagwani et al., 2022 ONSC 905, drew attention due to the rarity of granting interlocutory injunctions in trademark matters and the long-standing precedent that merely filing a trademark application does not confer enforceable rights.
  2. Justice Nishikawa, upon appeal, concluded that the motion judge erred by ruling that mere possession of a claim alone was sufficient without any actual goodwill attached or required evidence of landlord hesitation, leading to the judgment being vacated.
  3. The verdict serves as an important reminder that true ownership is achieved through the registration process rather than relying on pending status alone, emphasising the importance of obtaining an availability opinion before product launch and the relevance of assessing risks and potential gains in using a service despite a lack of protection at a later stage.

Full Article

The recent case of 2788601 Ontario Inc. v. Bhagwani et al., 2022 ONSC 905, has garnered attention within the trademark community for two notable reasons: (1) the uncommon granting of an interlocutory injunction in trademark matters; and (2) the long-standing principle that merely filing a trademark application does not bestow enforceable rights. On October 30, 2020, 278861 Ontario Inc. (First Filer) filed an application to register the BOMBAY FRANKIES mark for restaurant services and related offerings. However, establishments had yet to be opened under this name when First User registered the bombay-frankie.com domain name on March 15, 2021. Subsequently, First User created social media accounts, opened two restaurants under the name, and submitted their registration request. This left only a one-letter difference between the marks, causing confusion among potential customers and landlords hesitant to enter lease agreements due to the similarity. Consequently, First Filer initiated legal proceedings alleging infringement and passing off, seeking an interlocutory injunction order based on the tripartite test established in RJR MacDonald v Canada [1994] SCCR 311.

However, upon appeal, Justice Nishikawa concluded that the motion judge had erred by ruling that mere possession of a claim alone was sufficient, without genuine goodwill or required evidence of landlord hesitation. This precluded the finding of the necessary “serious question exists requiring trial” element, leading to the judgment being vacated. The full three-part requirement needed to be satisfied, including a clear, non-speculative demonstration of loss of reputation resulting from the defendant’s actions, implying that financial damages could not compensate for the same. Additionally, the situation required considering the disadvantage imposed upon the applicant, combined with any improvement favouring another party, and other factors weighed before granting the remedy.

This verdict is an important reminder that true ownership is achieved through registration rather than solely relying on pending status. It also highlights the importance of obtaining an availability opinion before product launches to avoid potential entitlement issues. Furthermore, it underscores the relevance of assessing whether the existing risk of impairment outweighs the gain acquired from proceeding with the use of a service despite a lack of protection at a later stage, depending on the circumstances.