Monthly Archives: June 2021

SUBWAY vs. BUDWAY: Federal Court Sides with Sandwich Restaurants Against Cannabis Store

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The Federal Court recently provided us with an excellent example of a company acting to curb use of a third-party trademark inspired from its own, in Subway IP LLC v. Budway, Cannabis & Wellness Store (2021 FC 583).

The facts at issue may have started by a couple of guys watching the sitcom How I Met Your Mother, and hatching a plan to open a store to sell cannabis-related products, the name of which would be a sort of play on words on a well-known restaurant chain and a word suggestive of pot selling. The unfortunate name they landed on was BUDWAY, which they then elected to present, graphically, using a logo they designed based on the very logo the SUBWAY chain uses. If you’re curious, the result was essentially the following, showing this “new” logo side-by-side with the original:

As we can all see (and as agreed by the court), the BUDWAY logo was more than likely purposely designed to imitate SUBWAY’s own, taking key features of that logo (including shape, font and arrows at the end of certain letters), even going so far as to use the green color often used throughout SUBWAY restaurants. In short, the defendant copied a third party’s name and logo, basically parodying it for their own purposes. Ah ha, funny.

Thought it may have been meant as a sort of joke, the Federal Court judge agreed with Subway restaurants that, at law, this was no laughing matter. Indeed, Subway managed to show how use of this “new” trademark was likely to cause confusion with their own trademark, constituted infringement, and how it was even likely to lead to the depreciation of the goodwill associated with the business tied to the SUBWAY trademark. The plaintiff managed to show evidence that BUDWAY store sold edibles, including cookies, which turns out to be problematic because of the presence of cookies in Subway trademark registrations. To boot, the evidence also showed that Budway created and used promotional materials showing a character in the form of a sandwich. Both these overlaps allowed the court to find sufficient commonalities and a resulting likelihood of confusion, etc.

Consequently, the court found infringement, passing off and a risk of depreciation of goodwill. Though the damages awarded were somewhat modest, all materials bearing the mark were confiscated, Budway also had to pay for costs, and the business is now enjoined from using the BUDWAY trademark.

In short, Subway managed a slam dunk, only failing to get punitive damages -something the court felt was not quite justified even under these circumstances. In the process, the court provides one with one more example of the fact that parody is NOT something Canadian trademark law allows. Trademark infringement remains infringement, even if the creator of the 2nd mark may have meant it as a tongue-in-cheek reference to another mark.

Eh, who knew: if you start a business, maybe it’s not the best idea to start by obviously copying a third party’s mark, including as to its name AND logo, and then compounding the problem by making references to the other party’s products in your promotional material, as plainly visible on social media. Whether your business is the same of the original trademark owner’s, or not, too clearly referencing another mark is ripe with risks.

Beware of Nick-of-time Copyright Registrations

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In Canada, copyright registrations comes cheap, very cheap. Nevertheless,.businesses and creators seldom register their rights, at least until they’re faced with a known infringer and want to sue. A recent Federal Court shows us this may not be wisest course of action when it comes to adequately protecting one’s I.P. rights.

The case at issue is that of Patterned Concrete Mississauga Inc. v. Bomanite Toronto Ltd. (2021 CF 314), a case involving a copyright owner faced with copying of some of its business forms, by a competitor called Bomanite Toronto Ltd. Faced with a clear case of copying, the copyright owner sued for infringement and eventually won a judgment awarding $8,000 in statutory damages, for each work that had been copied.

In addition to the plaintiff managing to secure such a judgment through summary proceedings, this case is also a good example of how proper copyright registration may well play a role when attempting to sue for infringement.

Here, even though PCM had done the right thing by obtaining copyrights registration certificates, prior to actually suing, it had done so around the time it first contacted the eventual defendant Bomanite. Under such circumstances, courts will sometimes question the value of the registrations at issue, given that they may have been obtained with the specific purpose of suing a specific infringer, as opposed to being obtained in the normal course of protecting the business’ IP rights, for no particular other reason.

Fortunately for the plaintiff, here the defendant failed to properly argue against existence of the copyrights at issue and/or ownership of those copyrights. Had the defendant done so, the court may have been moved to set aside the registrations, something that may well have resulted in throwing out the whole suit. In the absence of any contradictory evidence, the court allowed the registration certificates to stand.

This recent case serves as a good reminder that creators and businesses may want to revisit their habit of only registering copyrights, once an infringement problem occurs. A much better approach may be to register copyrights (over important works, at least) either as they are created or, at the very least, on a on-going basis, for example by doing a periodic sweep through the business’ most relevant and/or valuable creations, and registering copyrights thereon.

Copyright registration, in Canada, costs next to nothing and can be done through a process that requires minimal resources and information.

No Infringement Through Rehashing Facts Taken from a Book Marketed as True Crime

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The Federal Court recently provided us with a note-worthy decision relating to copyrights, in Winkler c. Hendley (2021 FC 498). This judgment relates to infringement proceedings as to a recent book that was written in large part by taking facts from an other book written about 70 years ago and entitled The Black Donnellys.

The main issue dealt with in this case involved determining whether borrowing facts from another book may, under Canadian law, amount to infringement if, say, the resulting narrative is basically the same. Though we know the answer to the foregoing question is that YES, similarities may amount to infringement if the structure and organization of a 2nd work is sufficiently similar to the original (including the sequence of events, etc.), this only goes for works of fiction. Indeed, whenever dealing with works of fiction, courts will generally be somewhat more critical of attempts by third-parties to copy facts and sequences of events, potentially finding infringement even when there has been no literal copy of text.

On the other hand, works which relate scientific or historical facts, for example, are treated somewhat differently by Canadian courts when assessing copyright infringement. Indeed, for these types of works, courts are generally opposed to allowing the original author from claiming exclusivity to the facts (included in his/her work), even if he/she may have been the first to publish about them. After all, human knowledge is built on reusing and discussing scientific or historical facts, for example -something Canadian courts have recognized over the years. In short, any author who pens something spelling out what may be described as scientific or historical facts should generally forget about any hope of claiming these very facts as his/her exclusive property; they basically become part of the common collective -essentially becoming part of the public domain.

The recent Winkler decision which we’re discussing in this post dealt with a work that was published years ago and thereafter promoted as part of the “True crime” genre, because it purported to tell the actual story of an specific Ontario family’s tribulations, at a certain time and place. Indeed, for 70 years during which the book at issue remained in print, its author and the publisher maintained it reflected actual events that really occurred during the XIXth Century, etc.

However, once the holder of the copyrights to the original book realized another author had seized upon the story of the Donnellys, litigation ensued in the context of which it soon became clear the book at issue may not have been as factual as one might think given how it has been marketed and promoted. Indeed, it turns out The Black Donnellys was not entirely factual; a large part of the events and “facts” described in the book having been invented by the author.

This lead the Federal Court in the decision at issue to refuse to entertain the notion that a 2nd author may have infringed the copyrights to the original book, under the circumstances of this case. Even though it was essentially a work of fiction, the court refused to consider the content of the original book as we would factual or historical works. Here, given how the original book was willingly presented and marketed, for so long, it simply did not make sense to allow the holder of the copyrights to suddenly claim that this book was really a work of fiction and, thus, deserving broader protection.

In effect, the Federal Court held here that the objective truth of what is contained in a book is not determinative, when it comes to ascertaining whether we should consider that specific work as being factual or fiction. It may suffice that the author held his/her work as being fact, to be able to rely on this, so as to be allowed to liberally borrow facts and narrative from such a work of authorship.

No, you can’t have your cake and eat it too.