Tag Archives: injunctions

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.

Statutory Damages Awarded for Copyright Infringement Through Summary Proceedings

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The Federal Court recently provided us with a decision, in Patterned Concrete Mississauga Inc. v. Bomanite Toronto Ltd. (2021 FC 314), awarding both an injunction and damages through summary proceedings rather than the more complex (and costly) type of pleadings before this court. The decision at issue stems from the alleged copying by a competitor of certain forms used to contract with customers. Faced with the apparent copying of its forms by a competitor, the plaintiff requested that the Federal Court not only enjoin such copying but also that it grant the petitioner statutory damages. Fortunately for the plaintiff, it successfully proved its employee’s creation of the original forms, coupled with the transition of a long-time employee to the defendant’s organization, which explained how the documents were likely passed between the businesses at issue. Faced with such facts, the judge accepted the plaintiff’s position that its copyrights in those works had been adequately demonstrated, as was the copying by the defendant. The judge did so in the context of summary proceedings which may allow resolution of a claim, before the Federal Court, in months rather than years, at a fraction of the cost. It seems worth mentioning that the judge did so notwithstanding an attempt by the defendant to set aside the registration certificates obtained by the plaintiff immediately prior to its filing of legal proceedings. Indeed, the judge held such certificates could be taken into consideration upon ascertaining the copyrights of a plaintiff, even in cases where they were obtained concomitantly with the filing of proceedings, especially in the absence of evidence by the defendant contradicting ownership of copyright by the plaintiff, as had been the case here. The court in this case also easily concluded that the forms at issue qualified as works protected by copyright owned by the plaintiff, notably because of testimony from the actual creator of the original forms. This allowed the court to find infringement, including by side-by-side comparison of the documents at issue, which showed clear acts of reproduction. This allowed the court to award an injunction coupled with statutory damages of $24,000, namely $8,000 for each work that had been copied. This case is part of a trend showing a growing willingness by the Federal Court to award both injunctions and damages in matters of copyright, even through summary proceedings.