Subway vs Budway, Highlands mine in the BCCA, and privacy vs open courts

This week on Legally Speaking with Michael Mulligan:

Budway, a Vancouver marijuana store, has been using a logo similar to the Subway sandwich logo. Budway also had a mascot in the form of a submarine sandwich filled with cannabis leaves, with bloodshot, half-open eyes. 

Subway sued Budway, alleging various breaches of the Trademarks Act. 

One of the issues in the case was whether what Budway was doing amounted to “passing off” This can occur if consumers could be misled into believing that something is being manufactured, sold, or performed by a different company. 

Last year, Toys “R” US sued another Vancouver marijuana store called Herbs “R” US. In that case, while Toys “R” US was successful in proving that their goodwill was being depreciated by Herbs “R” US, they failed to prove that Herbs “R” US was engaged in passing off because even a casual consumer would not think the same company that sold toys was also selling marijuana. 

Subway was successful in their passing off claim because the Subway trademark was related to the sale of things including cookies, muffins, and pastries.

Budway was selling marijuana edibles, including cookies and brownies, and has posted an online video promoting Munchie Monday with 10% off all edibles. 

Subway was awarded $15,000 in damages plus $25,000 in legal costs. 

Also on the show, the Highlands District Community Association was unsuccessful in the BC Court of Appeal challenging the decision of the Mines Inspector to approve a mine in the District of Highlands. 

Unlike other kinds of development, municipalities don’t decide if a mine can be built. That decision is made by the Mines Inspector: a provincial government official. 

The community association argued that the Mines Inspector was obliged to consider the climate change implications of permitting the mine. 

On a judicial review of an administrative decision, judges are not permitted to just make whatever decision they think would be best. Judges can only overturn an administrative decision, such as the one to permit the mine, if they conclude the decision was unreasonable, or if there was no authority to make the decision. 

In this case, the Court of Appeal agreed that climate change was important and found that the Mines Inspector would be permitted to consider it, however, all three judges agreed that the Mines Inspector’s decision was not made unreasonable by his decision not to seek out evidence about how the proposed mine would impact climate change. 

Finally, on the show, a Supreme Court of Canada case involving how privacy interest should be weighed against the principle that courts are to be open and transparent. 

The case involved an application by the estate of a wealthy Toronto couple, who was murdered in 2017, to keep the estate file private. 

The Supreme Court of Canada concluded that the file should not be sealed because ensuring court decisions were open to the public was important and an essential feature of a democracy. It’s important that the public be able to know what’s happening when courts make decisions. 

The Supreme Court of Canada did find that, in limited circumstances, court proceedings could be sealed when allowing access would undermine the dignity of individuals involved by permitting access to private information that was so sensitive that it could be said to strike at the biographical core of the individual.

Follow this link for a transcript of the show and links to the cases discussed. 

Transcript

Legally Speaking June 17, 2021

Adam Stirling [00:00:00] Time for Legally Speaking with Michael Mulligan from Mulligan Defence Lawyers. Morning, Michael, how are you doing? 

Michael T. Mulligan [00:00:06] I'm doing great. Always good to be here. 

Adam Stirling [00:00:08] All right. I can hear you. So that's good. What's on the agenda today? 

Michael T. Mulligan [00:00:12] Well, the first thing on the agenda, I think the fact pattern is great. It's a case brought by Subway, as in the sandwich store against a corporation in Vancouver called Budway Cannabis and Wellness Store. And this was an application brought under three different sections of the Trademarks Act, with Subway claiming that Budway had interfered with the provisions of the subway trademarks. And so, the essential fact pattern is that this unlicensed cannabis store in Vancouver had done itself up to look a whole lot like a Subway store. But with Budway rather than Subway in the logo, you know, the kind of curvy arrow logo. Yeah. And then the ad to the effect, they also had the benefit of a mascot. And the mascot in this case was a life-sized submarine sandwich with cannabis leaf sticking out of it with apparently bloodshot half open eyes and the mascot dancing around smoking what appeared to be a joint. And then the caption online for this was: "It's the way Bud" appearing below it. And so, this prompted Subway, perhaps not surprisingly, to pursue Budway and the fellow that they allege owned it for doing various things in contravention of the Trademarks Act. 

Adam Stirling [00:01:40] Yes. 

Michael T. Mulligan [00:01:40] They claimed that this effort is passing off to look like Subway, that it was an infringement of the trademark and that it had the effect of depreciating the goodwill of Subway. Now, one of the interesting things about that is that this isn't the first time that there has been an issue with a marijuana dispensary in Vancouver using a name awfully similar to a retail establishment. And in fact, last year there was the case of Toys “R” Us suing Herbs R Us for a very similar allegation of infringing trademarks. And Herbs R Us had a logo that looked a whole lot like Toys “R” Us, but they got the R the right way. (Laughter)And so in Herb’s R Us, Toys “R” Us sued Herbs R Us under these same sections of the Trademark Act. And interestingly, in the Herb's, our case, which is referenced in the Bud, is the Bud Case, the Subway case. Again, Toys “R” Us allege that Herbs R Us was passing off in contravention of Section 7b of the Trademark Act and very interestingly in Herbs R Us on that argument, they failed and both in Herb's R Us, I should say, both in Herbs R Us and in the Budway case, neither of the stores or owners seemed to be able to develop the motivation necessary to actually show up in court and contest these efforts. Perhaps that's a function of the product they were selling. 

Adam Stirling [00:03:19] Yes. 

Michael T. Mulligan [00:03:20] But in Herb's R Us, despite the fact that the Herbs R Us people didn't even show up to defend it, Toys “R” Us was unsuccessful in trying to establish that Herbs R Us had been passing off under the Trademark Act. And the reason that they failed that part of their claim, at least, was, as the judge described it, we "profound differences between the goods and services of Herbs R Us and those are Toys “R” Us" such that the judge could not conclude that a consumer, even a casual one, someone in a hurry with imperfect information or recollection of Toys “R” Us, would infer that these two things were the same entity. Right. 

Adam Stirling [00:04:02] Yes. 

Michael T. Mulligan [00:04:02] You know, the person going into the restaurant probably not confusing it, thinking that. Is this really a Toys “R” Us? Oh, well, here I am. I guess I'll buy a bunch of marijuana now. The Toys “R” Us succeeded on the basis, to a limited extent, on the basis that the Herb's R Us people were likely depreciating the goodwill of Toys “R’” Us, but they did not succeed on the passing off. Now in the Subway case, even though again, it wasn't defended, in fact, Subway succeeded on that argument. And the reason that they succeeded on that part of their argument was that the Subway trademarks, when they're filed, there's an indication of what they're supposed to be associated with. And in the Subway case, they were to be associated with sandwiches, prepared salads, buns and rolls, cookies, muffins, pastries, beverages, namely fruit juice, vegetable juice, soft drinks, tea, and coffee. And the Budway people, in addition to having the dancing subway mascot with marijuana sticking out of it, were also had postings online advertising their edible cannabis products, (cookies and brownies). For sale with the caption "Munchies Monday's" with 10% off all edibles. And so, in the Budway case, in addition to using a very similar logo and having the dancing sandwich, they also happened to be selling cookies. And because the Budway people were advertising edible cannabis products, cookies and brownies, things which were also sold by Subway, unlike in the Toys R US, Herbs R US case, the Subway was in fact successful in that part of their claim, the claim that they were passing them off themselves in a way that could cause somebody to think, well, perhaps this is Subway selling these cannabis filled cookies. And so, there was success. And the result for the Budway people was that they wound up with an injunction ordering that Budway stop doing what they were doing, and they wound up with the damages in the amount of $15,000. And as well, they wound up with a costs order against them for $25,000, even though they didn't show up to defend the case. The court accepted that that was the cost incurred by Subway and going through all of the machinations necessary to come to court and prove the infringement, even though there was no particular effort to defend it. And so, I suppose that may leave questions about how successful somebody is going to be collecting their $40,000 dollars from Budway, but one would expect, at the very least, they will be rid of the dancing marijuana sandwich. 

Adam Stirling [00:07:03] All right. There we go. Intellectual property law is far beyond my understanding or even basic comprehension. But I think I can understand intuitively that there's got to be some sort of threshold where a similarity stops, and sort of outright theft or misappropriation of a likeness begins. So, I'm glad that it's all sorted out because I don't really understand it. 

Michael T. Mulligan [00:07:24] Yeah. And I mean, part of the analysis, of course, is there some harm in this? And sort of the fundamental issues would be things like, you know, are these two symbols, you know, sort of close enough to be confusing? They're plainly not the same. But are they close enough to be confusing such that there would be infringement? Yeah, but then that passing off element of it is looking at whether somebody could be confused to thinking that, you know, hey, am I in a toy store here? Is this hey, what's going on? Why is Toys “R” Us selling marijuana, that kind of thing. But there can also be damages that flow from the idea that you might be generally damaging the or depreciating the goodwill somebody has built up as represented by their trademark. If a person thinks, hey, this seems to be a low-quality marijuana cookies or something that's being flogged by the store, that's sort of appropriated the image or likeness that's protected by trademark. The other interesting things with all of these is that they are decided in federal court. We do have a parallel federal court system. And so, it is a separate court system from the one which would exist in British Columbia with the provincial court, B.C. Supreme Court and Court of Appeal. We have a specialized federal court system that would deal with matters, including these. And so, there is a completely different legal process that would be involved. And when you look at the cases, there are some interesting differences there, including, for example, I mentioned these large costs awards both in the Toys “R” Us and in the subway case, and the costs awards were based on, hey, what did this cost you to come here? Which is a different thing from how costs would be assessed if you were suing somebody in Supreme Court in B.C., for example, where there would be a sort of a schedule of costs that ordinarily are not going to represent your actual costs of bringing or defending the case. And in both of these, the costs awards appear to have been based on Counsel simply saying this is what it cost my client. And the court saying, well, yeah, that seems reasonable. Perhaps there would have been some more scrutiny had either of these people decided to show up to defend it. But you can see that there are clear procedural differences and it's a completely separate parallel court system which would deal with federal matters, including trademark cases. 

Adam Stirling [00:09:42] All right, Michael Mulligan with Legally Speaking on CFAX. We'll take our first break and resume things right after this. We'll be right back. Stick around. 

[00:09:52] COMMERCIAL. 

Adam Stirling [00:09:52] There Michael Mulligan with Legally Speaking, as we continue our conversation, where were we? 

Michael T. Mulligan [00:09:57] Well, the next story involves a controversial mine which has been developed in the district of the Highlands. That's been an issue out there now for some time. And there was a, that process involves, first of all, approval from somebody who is the Mines Inspector. And I must say, if you asked a bunch of kids in kindergarten, what do you want to be when you grow up, I'm guessing none of them stick up their hands and say, I want to be the Mines Inspector. But nonetheless, we have a Mines Inspector in British Columbia. 

Adam Stirling [00:10:30] Excellent. 

Michael T. Mulligan [00:10:30] And it matters because the issue of whether you're allowed to set up a mine is not something which is decided by the local city council. And the rationale for that, I suspect, is the fact that they're going to be a whole lot of city councils that are going to be necessarily keen on the idea of a mine being opened up in their municipality. 

Adam Stirling [00:10:54] hmm. 

Michael T. Mulligan [00:10:55] Perhaps in some places, lots of good jobs may come from it. But naturally, people living next to the mine are probably not going to be too keen on that. We saw that controversy play out, of course, up at Shawnigan Lake, where they were engaged in mining activity. That was of concern in terms of water quality there. And there's a similar concern about this approval for a mine in the district of the Highlands. And so, there was a local community group, the Highlands District Community Association, that was trying to challenge the decision of the Mines Inspector to approve this mine. And it was a mine that was going to be quarry is quarrying rock for the purpose of road paving. So, it's going to come from somewhere. Right. And in this case, the Mines Inspector granted approval and the Community Association took issue with that and tried to challenge that decision in court, which made its way most recently all the way up to the B.C. Court of Appeal. And there are a few things that come out of that. First of all, I must say, if you're in the Highlands District Community Association opposed to the mine, you're probably not too happy with the Court of Appeal, describing the District of Highlands as a "semirural and industrial community". But in any case, there's now some judicial authority for that.

Adam Stirling [00:12:16] Interesting.

Michael T. Mulligan [00:12:19] And when you challenge a decision like that in court administrative decision about something like cake in a mine be set up here? The basis upon which you can challenge that is an argument about was that decision a reasonable one? You don't get to go to court and say, hey, judge, what do you think of the idea of a mine in the, you know, industrial community of the Highlands? That's not the question a judge is allowed to ask. A judge is not permitted to just substitute their view of the thing or whether they think this would be a good idea. A judge always needs to ask themself, is this a decision which is reasonable? Right. 

Adam Stirling [00:12:58] Yes. 

Michael T. Mulligan [00:12:59] Could somebody justify the decision that was arrived at? And the, I think, creative argument that the Highlands District Community Association brought what was an argument that the Mines Inspector had not considered the issue of climate change when deciding whether to approve the mine. And indeed, the Mines Inspector was pretty blunt about that. The Mines Inspector in his decision essentially said that's an important issue but is not relevant to the Mines Act. That is the issue of climate change. And so, the Community Association argued that your failure to consider that amounted to making your decision unreasonable because you refuse to consider something they said would be both important and required under the Mines Act when making an assessment about whether this mine should have been approved. 

Adam Stirling [00:13:53] mhmm. 

Michael T. Mulligan [00:13:53] And so that's the basis upon which the matter got the court and the basis upon which the case went all the way up to the Court of Appeal. And ultimately, the way the Court of Appeal approached it is that they found that, while, the Mines Inspector, when they said, look, the Mines Inspectors say climate change is not relevant to the act, the court of appeal said, well, that comment was overly broad. It could form a part of a decision. Right. It's not fair to say that's not something that could be considered under the act because the act is quite broad in terms of considering environmental factors. But the Court of Appeal said that didn't amount to making the decision an unreasonable one. The Mines Inspector was not required to go out and do their own investigation with respect to the impact on climate change or the release of carbon dioxide into the atmosphere. And so, on that basis, the Court of Appeal upheld the decision of both the Mines Inspector and the trial judge who found that the Mines Inspector had acted reasonably, and the Court of Appeal upheld that. And so, the ultimate consequence is that the mine, despite the objections of the members of the Community Association, will carry on and presumably continue to dig out rocks to pave roads. That appears to be the basis for it. 

Adam Stirling [00:15:16] (Indiscernible.)

Michael T. Mulligan [00:15:16] So what is the takeaway is you don't get to go to court and just argue it again. It's always looked at from the perspective of was the decision that was made a reasonable one or not? And so that's why we're going to have a mine in the semi-rural and industrial community of the Highlands. 

Adam Stirling [00:15:33] I want to talk about the open court principle next, because I see it's being discussed once again. And it's a matter that you and I have touched upon in a number of times in the past. The importance of, amongst other things, maintaining public confidence in the courts requires that the public is able to access information and reasons on decisions made and whatnot. Where are we going today? 

Michael T. Mulligan [00:15:53] Yeah, that it is a very important principle. And the Supreme Court of Canada just reiterated that once again in the context of what was an application to seal the estate files relating to Barry and Honey Sherman. That's the wealthy couple from Toronto who was murdered in 2017 and for whom nobody has been charged or convicted of committing that apparent crime. And what happened in that case is that the estate of the couple was required to file for probate and so forth in court there. And the estate applied to seal all of the file on the basis of an argument that allowing the public to have access to the estate file would involve a breach of privacy interests. And they argued a risk to safety, I suppose, necessarily, of the beneficiaries of the estate. And they succeeded initially in getting that order. But thanks to the tenacity of the journalist from the Toronto Star, that the decision to prevent and any access to the estate file was successfully challenged, it went up to the Court of Appeal. The Toronto Star succeeded, and then the estate appealed all the way to the Supreme Court of Canada and the Supreme Court of Canada upheld the decision that the file should be open. And in doing so, the court reiterated that, that principle, that rule, that court proceedings are to be open to the public, applies to all manner of court proceedings, not just criminal or other things that would include estate matters. 

Adam Stirling [00:17:44] Yes. 

Michael T. Mulligan [00:17:45] And the Supreme Court of Canada has connected that important principle of openness to the constitutional right to freedom of expression and described it as an essential feature of our democracy. And I think that's fair. You know, everything we do sort of as lawyers in court is and courts decisions are, of course, presumptively open. And that's important. Not much good comes of secret proceedings. Right. Like we see in China, for example, where the men that the Michael’s that China is just held in custody in retaliation for executing the warrant for the Huawei executive. 

Adam Stirling [00:18:26] Yes. 

Michael T. Mulligan [00:18:27] They wind up having sort of some secret court proceedings and nobody knows what on earth went on in there. We are the opposite here. And the Supreme Court of Canada does point out that public scrutiny can, of course, be a source of inconvenience or indeed embarrassment for people, there are lots of people with all kinds of things that would prefer that they have privacy. Right. But the court has once again reiterated that sort of the general desire for privacy or indeed here, which was sort of a generalized claim of, well, there could be some physical risk, will not be sufficient. So there needs, there are, however, the court pointed out circumstances in which privacy concerns could rise to the level where there could be a discretionary ban on publication. But in order to get there, it cannot be simply a general desire for privacy. And the approach that the Supreme Court of Canada has directed judges to take is to analyze whether allowing public access to a file, a court file, would potentially involve things like privacy that would rise to the level of interfering with the dignity of the individual. Dealing with information which would be so sufficiently sensitive. 

Adam Stirling [00:19:49] Yes. 

Michael T. Mulligan [00:19:49] That it would go to what was described as a biographical core of the individual. 

Adam Stirling [00:19:56] hmm. 

Michael T. Mulligan [00:19:56] And so that's a pretty high threshold, and here, for example, the files in question would show that they were, of course, allowed access. The files showed that, you know, the couple left their estate to their children equally. Right. 

Adam Stirling [00:20:10] hmm. 

Michael T. Mulligan [00:20:10] And there's nothing particularly sensitive about that information that would sort of go to the, you know, biographical core of the individual. 

Adam Stirling [00:20:20] hmm. 

Michael T. Mulligan [00:20:20] And so because there's this really high threshold created by the principle of an open court process, as is bound up in the concept of freedom of expression, that's not enough. And nor is sort of generalized comments about the risk to the safety of somebody. I mean, I suppose you can appreciate how in a general way, if you said, look, these were very wealthy individuals, they were philanthropists and they were murdered by persons unknown, I suppose it's not a crazy situation to say, well, perhaps if somebody else was shown to have inherited, you know, 1 or 2 billion dollars from them, perhaps that person would be in some jeopardy. But more than that is required. There has to be something specific. Those generalizations won't do it because that concept of having an open, transparent process is just so important that, I think, really what the decision stands for and so if the public's interested, they can look at that file. The court also commented that in some cases there could be a middle ground which would prohibit the publication of information. That might be that sort of information that would go to the dignity of the individual, but still allow somebody, if they wanted to go and look at the file to do that. 

Adam Stirling [00:21:39] Yeah. 

Michael T. Mulligan [00:21:39] Because, of course, that would allow some clarity in terms of what the court's doing so that we're not in the back room making secret decisions. 

Adam Stirling [00:21:47] Indeed, Legally Speaking, I learn something new every week, including this week. Thank you very much, Michael. Pleasure as always. Until next week, 

Michael T. Mulligan [00:21:53] I always enjoy it. Have a great weekend. 

Adam Stirling [00:21:55] Michael Mulligan Barrister and Solicitor with Mulligan Defence Lawyers, Legally Speaking, every Thursday on CFAX.

Automatically Transcribed on June 25, 2021 – MULLIGAN DEFENCE LAWYERS