IPIC Intervention – “Bombay Frankies” Trademark

Counsel for the Defendants in 278861 Ontario Inc. v Bhagwani et al, 2022 ONSC 905 have asked IPIC to intervene in an appeal to be heard in the Ontario Divisional Court. The appeal relates to the proposed use trademark “Bombay Frankies”. The Intervention Committee has reviewed the request and recommended to the IPIC Board of Directors that IPIC file an intervention provided that pro bono counsel can be retained. The Intervention Committee also recommends that the Chair of the Litigation Committee solicit interest in identifying intervention counsel willing to act on a pro bono basis. Given that the appeal will take place in Ontario, preference should be given to Ontario counsel.  The IPIC Board has met on the matter and has agreed that IPIC should intervene on the matter. 

Background Facts

The numbered company Plaintiff filed a trademark application based on proposed use for the mark “Bombay Frankies”. The Plaintiff had not started using the mark and had no reputation associated with the mark at the time of the hearing. The Defendants had actual knowledge of the proposed use mark because it was located in a search. Nonetheless, before the Plaintiff started using the mark, the Defendants opened two restaurants under the name Bombay Frankies. The Plaintiff sued for trademark infringement and passing off and sought an interlocutory injunction.

On January 28, 2022, Chief Justice Brown issued the injunction and his decision has been the subject of much criticism. An interlocutory injunction requires an applicant to demonstrate: 1) an arguable case; 2) irreparable harm; and 3) the balance of convenience favours the applicant. While the first part of this test has been described as a low bar, most commentators have focused on this issue in criticizing the decision.  As will now be explained, neither trademark infringement nor passing off are supportable based upon the facts found by Chief Justice Brown.

An applicant who has filed a proposed use trademark application cannot sue for infringement until the trademark registration has issued. As such, there should have been a finding of no cause of action/no arguable case on this point. Unregistered trademark owners can sue for passing off but this requires a finding that the mark in issue has developed a reputation. Here, the Plaintiff had not started using the proposed use mark, so it had not established a reputation. Thus, at this point, passing off is not a viable cause of action.

This appeal highlights a potential shortcoming in the Canadian trademark system. An applicant can apply for registration of its proposed use mark and a third party can potentially appropriate that mark for its own use. As such, the Intervention Committee believes that the underlying decision is of broader interest to the IP profession related to the question of whether the mere filing of a trademark application can properly be considered to confer enforceable right to restrain use and, if so, when such trademark rights “crystallize”.

The Appeal Procedure

In the Superior Court of Justice – Ontario, for interlocutory non-final decisions (i.e. those that do not dispose of an action), an appeal does not exist as of right to the Ontario Court of Appeal. Rather, Ontario has something called a Divisional Court comprised of judges from the Superior Court. An unsuccessful party in an interlocutory matter may seek leave to appeal to the Divisional Court. Leave will be granted only if the Court considers the matters raised by the appeal are of broader interest. Chief Justice Brown granted leave to the Defendants to appeal to the Divisional Court. Incidentally, from the Divisional Court a further appeal exists to the Ontario Court of Appeal if leave is granted by that Court.

The appeal is scheduled for October 20, 2022. The Appellants had a deadline of July 8, 2022 to serve and file the Appeal Book and Compendium, Exhibit Book, and the Appellant’s Factum. This deadline has been met. The Respondent has an upcoming deadline of September 8, 2022 to serve and file its Factum. September 8, 2022 is also the deadline for both parties to serve and file brief costs submissions/bills of costs.