Federal Court Of Canada Dismisses IP Dispute Relating to BBQ Restaurants

On May 10, 2023, the Federal Court of Canada (the Court) issued its decision in Boubala v Khwaja, 2023 FC 658, in which the Court dismissed an application relating to a dispute between previous business partners and the operation of African charcoal barbecue restaurants in Ottawa, Ontario.

In 2019, one of the Applicants, Mr. Lazare Boubala, and one of the Respondents, Mr. Mussa Siddiqui Khwaja, incorporated a company (the Corporation) for the purpose of operating a barbecue restaurant called “Lazare’s BBQ House” together.  In 2020, they ceased operation of the restaurant due to conflicts relating to the management of the business.  Later that year, Mr. Khwaja opened his own restaurant called “African BBQ House” in the same location as the first restaurant.  Mr. Boubala subsequently opened another restaurant called “Lazare’s BBQ House”, registered a new corporation called Lazare’s BBQ House Inc., and filed a trademark application for “Lazare’s BBQ House”.  The trademark application was abandoned after opposition by Mr. Khwaja and the Corporation.

Mr. Boubala and Lazare’s BBQ House Inc. (collectively, the Applicants) filed a Notice of Application against Mr. Khwaja and his corporation, African BBQ House Inc. (collectively, the Respondents), seeking declarations that the Respondents had infringed their copyrights in menus and food photos, and had infringed their common law trademark rights by using the restaurant concept that Mr. Boubala designed for the first restaurant, including the outdoor and indoor signage and menus.

At the hearing, the Applicants confirmed that they had abandoned all the reliefs they initially sought in their Notice of Application.  However, the Applicants did not seek to amend their Notice of Application prior to the hearing.  In their Memorandum of Fact and Law, the Applicants submitted that the main issue was whether the Applicants were entitled to register and use the trademark “Lazare’s BBQ House” and they sought an order confirming that the Applicants had the right to register the mark and the Respondents have no title or rights in the trademark.

The Court ultimately held that the new reliefs requested in the Applicants’ Memorandum were not ancillary to the reliefs in the Notice of Application and therefore were not properly before the Court and could not be entertained.  The Court also determined that, even if these new reliefs were properly before the Court, the Court could not entertain them as it lacks jurisdiction to grant the requested remedy in the context of this application. This was due to the declaratory relief sought not being grounded in any rights or remedies under the Trademarks Act as the Applicants did not have a registered trademark and had abandoned their passing off claims.

On the issue of costs, the Court noted that the Applicants’ conduct did not rise to the standard of “scandalous” or “outrageous” conduct required to award solicitor-client costs.  However, the Court found it “troubling” that the Applicants continued with their application after abandoning their claims and reliefs, and that they sought a declaration of entitlement to the trademark that was allowed to be abandoned before the Registrar of Trademarks.  Thus, the Court awarded lump sum costs representing 50% of the legal fees incurred by the Respondents.

Summary By: Michelle Noonan