On November 2, 2022, the Ontario Superior Court of Justice (the Court) issued its decision in 2788610 Ontario Inc. v Bhagwani, 2022 ONSC 6098, ordering that the interlocutory injunction previously granted by the Court be vacated.
In February 2022, the Court granted an interlocutory injunction prohibiting Hemant Bhagwani, Fatima Bhagwani, 1727799 Ontario Inc., and Bombay Frankie Inc. (collectively, the Appellants), from using the term “Bombay Frankie” as the name of any restaurant, franchising business, social media account, or website, as previously reported by the E-TIPS® Newsletter here.
The Appellants submitted that the motion judge erred in law in granting the interlocutory injunction, as 2788610 Ontario Inc. (the Respondent) had not registered “Bombay Frankie” and had not established any goodwill.
First, the Court held that the motion judge made an error in principle in finding a serious issue to be tried. The Court stated that the Respondent had no registered trademark, and a mere application to register a trademark is insufficient to support a cause of action for trademark infringement under the Trademarks Act. In addition, the Court clarified that it would be an error to presume that a trademark (for which an application had been filed) would be registered. Accordingly, the Respondent had no claim for trademark infringement and failed to meet the low threshold of a serious issue to be tried.
Second, the Court held that the Respondent’s claim for passing off also failed to meet the threshold of a serious issue to be tried and constituted an error in principle. Specifically, the Court found no evidence of the Respondent’s use of “Bombay Frankies” in providing any goods or services, including franchise services, to customers or to the public. The Court concluded that as the Respondent failed to meet the first prong of the RJR-MacDonald test for an interlocutory injunction, the injunction order should not have been granted.
In obiter, the Court determined that the motion judge also made a palpable and overriding error in finding that the Respondent would suffer irreparable harm if an injunction was not granted.
Lastly, the Court noted that the balance of convenience may have weighed in favour of the Appellants who were required to take down their website, social media accounts, and any signs bearing the “Bombay Frankie” name.
Ultimately, the Court allowed the appeal and vacated the injunction order.
Summary By: Steffi Tran
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