SUBWAY Wins Injunction Against BUDWAY Cannabis Shop
It has been said that imitation is the sincerest form of flattery. This provides little comfort to the owners of famous brands, however, since “imitation” can cause serious problems such as confused customers and erosion of the brand owner’s valuable reputation.
One such brand owner recently put a stop to the “imitation” of its brand by a cannabis retailer in Vancouver. SUBWAY, the world-famous chain of sandwich shops, obtained an injunction and damages against the retailer, which used the trademark BUDWAY, shown below, in an obvious attempt to imitate, or at least parody, the famous sandwich retailer.
In a decision of Canada’s Federal Court, it was determined that consumers were likely to be confused and infer that BUDWAY’s goods and services were connected with SUBWAY. It was also determined that BUDWAY’s unauthorized use of this mark depreciated the value of the extensive goodwill associated with SUBWAY’s registered trademarks in Canada. The Court ordered the cannabis retailer to stop all use of the BUDWAY trademark, and pay a modest damages and court costs (CDN$40,000 in total).
Interestingly, the decision was taken by the same judge of the Federal Court (Justice Nicolas McHaffie) that decided another case of a cannabis trader “paying homage” to the famous children’s retailer Toys ‘R Us, by using the trademark Herbs ‘R Us.
In the Herbs ‘R Us matter, the Court found that the goodwill in the Toys ‘R Us trademarks had been depreciated, but the trademark rights were not directly infringed because there was no reasonable likelihood of confusion. In Herbs ‘R Us, the goods and services of the parties were so unrelated, and indeed antithetical to one another – one side being intended for children, and the other clearly not so intended – that consumers would not likely infer that Toys ‘R Us was now in the cannabis business.
The Court found that this case was different, however, in that there was some relationship between some of the parties’ goods and services. BUDWAY sold edible products including cookies and other baked goods, which SUBWAY also sells. In this context, the Court found it reasonably likely that consumers could mistakenly infer that SUBWAY was the ultimate source of the BUDWAY goods and services.
Links to the Court’s decision, and the decision in Herbs ‘R Us, can be found below: