Lazare VT Boubala and Lazare’s BBQ House Inc. v Mussa Siddiqui Khwaja (AKA Khwaja Siddiqui; AKA Khwaja Mussa Siddiqui) and African BBQ House, 2023 FC 658
Why Is This Case Important?
This case illustrates the importance of procedural compliance and understanding jurisdiction in intellectual property litigation in the Federal Court. It highlights how a failure to properly plead and pursue claims—especially in trademark and copyright disputes—can lead to dismissal, even when substantive issues may still exist. The decision also reinforces the Federal Court’s limited jurisdiction under the Trademarks Act and the need for applicants to follow the statutory process for trademark disputes. Additionally, it demonstrates the consequences of abandoning claims mid-proceeding and the risks of introducing new reliefs without proper amendment or legal foundation.
MBM was successful in recuperating costs at the unconventionally high lump sum award of 50% of counsel’s legal fees and 100% of disbursements claimed.
Summary
Mr. Lazare Boubala and Mr. Mussa Khwaja co-founded a restaurant in Ottawa in 2019 under the name “Lazare’s BBQ House”. After their business relationship deteriorated, Mr. Khwaja independently opened a new restaurant in the same location called “African BBQ House” and incorporated African BBQ House Inc. to operate it. Mr. Boubala also opened a separate restaurant under the original name “Lazare’s BBQ House”, but in a different location. Mr. Boubala subsequently incorporated Lazare’s BBQ House Inc., without Mr. Khwaja’s knowledge or consent. Lazare’s BBQ House Inc. filed a trademark application for “Lazare’s BBQ House”, which was opposed by Mr. Khwaja. The trademark application was later abandoned under section 38(11) of the Trademarks Act for failure to file a counter statement to the opposition.
Mr. Boubala and his company commenced an application in the Federal Court alleging copyright infringement and passing off remedies relating to menus, food photographs, signage, and branding. The parties exchanged evidence comprising 5 affidavits from the applicants and 4 from the respondents. All but one of the affiants were cross-examined. Strangely, when the applicants filed their Application Record, none of their 5 affidavits were included. Instead, the applicants filed a new affidavit. The applicants’ Memorandum of Fact and Law also did not address any of the issues or relief that they had claimed in their Notice of Application. Instead, their Memorandum raised one issue and two claims for relief that were entirely new. The new issue and relief related to the right to register and use the “Lazare’s BBQ House” trademark, notwithstanding that their trademark application for this mark had already been abandoned before the Registrar. The applicants did not seek to amend their Notice of Application prior to the hearing but attempted to do so at the hearing. At the hearing, the applicants also unequivocally confirmed to the Court that they had abandoned all relief initially claimed save for an injunctive relief.
Court Finding
The Federal Court dismissed the application. The Court found the late affidavit inadmissible, and held that the applicants’ new trademark-related relief was not properly before the Court, and not ancillary to the original claims. In any event, the Court held that it lacked jurisdiction to grant the new declaratory reliefs noting that trademark registration disputes must be addressed through the Registrar of Trademarks. Indeed, the Court found it troubling that the applicants continued the proceeding after they unequivocally abandoned their claims and also for introducing new claims of relief relating to their trademark application, which had already been abandoned before the Registrar. Citing the applicants’ conduct as contributing to unnecessary litigation costs, the Court awarded in favour of the respondents in the amount of $54,372.21, representing 50% of their legal fees and 100% of disbursements.
Key Takeaway
This case underscores the importance of adhering to procedural rules and jurisdictional limits in trademark and copyright litigation. The Federal Court cannot adjudicate trademark ownership or registration disputes outside the framework of the Trademarks Act. Abandoning claims late in the proceeding, failing to follow procedural timelines, can result in dismissal and significant cost consequences.
