On May 31, 2016, the Canadian Trade-Marks Opposition Board released its decision in the case of Restaurant Development Group LLC v Vescio Group Inc. (case citation: 2016 TMOB 82). The case dealt with whether the applicant, Vescio Group Inc., was permitted to register the trademark ‘BurgerFi’ in Canada, even though it had never operated a business under this name in Canada, while another company, BurgerFi International (“BFI”), used the name extensively as part of a franchise system in the US.

The parties

The applicant was Vescio Group Inc. (“Vescio”), which was essentially a holding company of an individual.

The company opposing the registration, Restaurant Development Group LLC, was BFI’s licensor. BFI had 39 restaurants in the US operating under the BurgerFi trademark. Its trademark is an abbreviation of the word “Burgerfication”, which BFI coined to signify an eco-friendly restaurant with a focus on free-range beef with no chemicals.

BFI’s alleged Canadian use and Vescio’s alleged bad faith

BFI claimed that Vescio filed its application in bad faith because it had no intention of using the trademark in Canada and because it filed its application to impede BFI’s expansion into Canada.

In an effort to show that Canadians recognized its trademark, BFI brought the following evidence:

  • More than one thousand Canadians have visited three BurgerFi restaurants in Florida;
  • Some Canadian customers had left reviews on Yelp, Urban Spoon and other review websites;
  • More than thirty Canadians had expressed an interest to become BurgerFi franchisees;
  • Two BurgerFi franchise restaurants were scheduled to open in British Columbia;
  • A pub in Oakville sold various BurgerFi food products in its restaurant, and
  • Its website, BurgerFi.com, prominently displayed the trademark, and had over four thousand visits from Canadian web users.

The Board found that Vescio was aware of the BurgerFi trade-mark in the US. It also noted the similarity between the proposed trademark registration and BFI’s US trademarks, in referring to ‘all natural’ and ‘antibiotic and hormone free’.

However, the Board concluded that BFI did not prove that Vescio knew about its alleged trade-mark use or exposure in Canada, and noted that BFI did not claim that it was entitled to use the mark in Canada.

Further, the Board held that BFI did not prove that its trade-mark extended beyond the United States, such as through significant advertising or sales to Canadians, or that its trademark otherwise had substantial reputation in Canada.

The Board also noted that filing a trademark registration in Canada, even while knowing that the trade-mark is registered elsewhere, does not necessarily constitute bad faith. It noted that there was no evidence that Vescio intended to traffic in the trade-mark.

Commentary

As has been consistently held by the Board and Canadian courts in trademark opposition cases, this is yet another example demonstrating that “soft evidence” about surveys and online visits often falls short of the required evidentiary burden of proof to demonstrate substantial brand awareness in Canada.

It is often difficult to establish bad faith without proof of clear intent. This case is a reminder that franchisors need to protect their trademarks and apply to register them in Canada as soon as possible.

This article is provided for information purposes only. Law Works’ Franchise Law Blog does not provide legal advice.

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