Trademarks - Infringment. 2788610 Ontario Inc. v. Bhagwani
In 2788610 Ontario Inc. v. Bhagwani (Div Court, 2022) the Divisional Court considers an appeal of a granted interlocutory injunction, here in a trademark infringment case:
 Under s. 19 of the Trademarks Act, the registration of a trademark in respect of goods or services gives the owner of the trademark the exclusive right to use the trademark throughout Canada in respect of those goods or services. Subsection 20(1) states that the right of the owner of a registered trademark to its exclusive use is deemed to be infringed by any person who, among other things, sells, distributes or advertises any goods or services in association with a confusing trademark or trade name. Therefore, in order to state a cause of action for trademark infringement under ss. 19 or 20 of the Trademarks Act, the claimant must have a registered trademark that is alleged to have been infringed.
 In this case, the Respondent has no registered trademark for “Bombay Frankies”. While the Respondent has filed an application to register the trademark, its application has yet to be examined, approved or advertised for opposition by the Registrar of Trademarks. A mere application to register a trademark is insufficient to support a cause of action for trademark infringement under the Act.
 Further, it is an error to presume that a trademark for which an application has been filed will be registered. Registration is not a foregone conclusion. The Registrar may refuse to register the trademark on the basis that it is, for example, not distinct within the meaning of the Act: Trademarks Act, s. 37(1). In addition, another party may oppose the registration of the trademark (s. 38(2)), as is likely to happen here.
 Because the Respondent has only made an application for a trademark and no registered trademark, it has no claim for trademark infringement under the Act. It has no right that could ultimately be vindicated at trial. As a result, its claim cannot meet even the low threshold of a serious issue to be tried.
 In my view, the Respondent’s claim for passing off under ss. 7(b) and (c) of the Act also fails to meet the threshold of a serious issue to be tried. The elements of a cause of action for passing off are: (i) the existence of goodwill in a trademark in association with the claimant’s goods or services; (ii) a misrepresentation to the public that creates or is likely to create confusion to the public; and (iii) actual or potential damages to the claimant: Kirkbi AG v. Ritvik Holdings Inc.,  3 S.C.R. 302, 2005 SCC 65, at paras. 66-68; Ciba-Geigy Canada Ltd. v. Apotex Inc., 1992 CanLII 33 (SCC),  3 S.C.R. 120, at para. 12. The plaintiff must also show ownership of a valid registered or unregistered trademark: TFI Foods Ltd. v. Every Green International Inc., 2020 FC 808, at para. 21, citing Sandhu Singh Hamdard Trust v. Navsun Holdings Ltd., 2019 FCA 295, at paras. 36-39.
 In Veuve-Clicquot Ponsardin v. Boutiques Cliquot Ltée,  1 S.C.R. 824, 2006 SCC 23, at para. 50, the Supreme Court of Canada noted that goodwill is not defined in the Trademarks Act, but that “in ordinary commercial use, it connotes the positive association that attracts customers towards its owner’s wares or services rather than those of its competitors.” In Ciba-Geigy v. Apotex, the Supreme Court held that goodwill “must be understood in a very broad sense, taking in not only people who are customers but also the reputation and drawing power of a given business in its market.”
 In Kirkbi v. Ritvik Holdings Inc. (at para. 67), the Supreme Court further clarified that “the claimant must establish goodwill in respect of the distinctiveness of the product. Evidence of goodwill solely attached to the techniques and processes which create the product will not do. The doctrine of passing off did not develop to protect monopolies in respect of products but of guises, get-ups, names and symbols which identify the distinctiveness of a source.” (Internal citations omitted.)
 The case law demonstrates that goodwill attaches to a name or mark as it relates to the reputation or association with the goods or services provided by the owner of the mark. The Respondent’s evidence was that it had retained franchise lawyers and a marketing firm to develop the franchise. The Respondent also had discussions with landlords about renting locations for franchises and with suppliers of food products. In all of the interactions detailed by the Respondent, it was obtaining goods or services in connection with starting up a franchise business. The Respondent’s start-up activities do not constitute goodwill as that concept has been recognized in the case law.
 Given the Respondent’s franchising business, I recognize that goodwill in the Bombay Frankie’s name could exist from the perspective of potential franchisees, as opposed to customers of the restaurants or the general public. However, there was no evidence on the record from the perspective of potential franchisees that could support a finding that the Respondent had developed goodwill in the Bombay Frankie’s name as a franchising business. The Respondent’s evidence was that they had previously developed relationships in the course of conducting franchise businesses under a variety of different names. The Respondent provided no evidence of use of the Bombay Frankie’s name in providing any goods or services, including franchise services, to customers or to the public. See: Trademarks Act, ss. 4(1) and (2).
 Given the absence of evidence of goodwill, a finding that the Respondent’s passing-off claims raised a serious issue to be tried constitutes an error in principle.
 In Centre Ice Ltd. v. National Hockey League,  F.C.J. No. 68 (C.A.) at para. 9, the Federal Court of Appeal held that “confusion does not, per se, result in a loss of goodwill and a loss of goodwill does not, per se, establish irreparable harm not compensable in damages.” The Court further held that the loss of goodwill and resulting irreparable harm cannot be inferred, but must be established by clear evidence. In that case, the plaintiff had some evidence of confusion, but none demonstrating that the plaintiff’s reputation had been impeached or lessened in any way or that confusion led any customer to stop, or consider not, dealing with them.