Federal Court Of Canada Finds Trademark Infringement In Hotpot Restaurant Case

On January 31, 2025, the Federal Court of Canada (the Court) issued its decision in Young v Li, 2025 FC 210, finding that the respondent, 1000237903 ONTARIO INC. (903 Ontario), infringed, passed off and depreciated the goodwill of the registered trademarks DAHU HOTPOT and DAHU HOTPOT & Design. (collectively, the Marks) in the operation of a restaurant in the Greater Toronto Area.  

The parties were part of a business relationship among restaurateurs and investors that soured in late 2022 when Hon Chung Young et al. (collectively, the Applicants) were pushed out of their Richmond Hill restaurant by members of the respondents, including 3838 Midland Inc. (collectively, the Respondents).  Soon after, the restaurant was operated by the sole director of 903 Ontario with the company registering business names featuring “DAHU HOTPOT” and doing business as DAHU HOTPOT & DIM SUM. The Applicants moved on and opened a new restaurant in November 2023 in conjunction with the Marks. The Applicants maintained ownership over the Marks but withdrew authorization for the Respondents to use the Marks with the Richmond Hill restaurant and expected a new name to be chosen, which did not occur. This led the Applicants to bring an application for infringement, passing off, and depreciation of goodwill of the Marks. The application was undefended.

In reviewing the matter, the Court found that there was only sufficient evidence with respect to the claims against 903 Ontario with the Applicants not being able to establish sufficient “use” of the Marks among the other Respondents. The Court held that 903 Ontario infringed the Marks because the trademarks used by 903 Ontario at the Richmond Hill restaurant were identical to the Marks. The nature of the goods, services, business and channels of trade were also found to be essentially the same.

Furthermore, the Court held that the Applicants met the test for passing off under the Trademarks Act with the Applicants having sufficient ownership and reputation in connection with the Marks; there being a likelihood of confusion with identical trademarks being used at both restaurants; and the establishment of damage from a loss of control over the Marks. Lastly, the Court found that the Richmond Hill restaurant had several negative online reviews, which established the likely depreciation of goodwill attached to the Marks.

This led the Court to grant the Applicants’ application only against 903 Ontario, issuing a judgement for declaratory relief, a permanent injunction, nominal damages; and the delivery of materials bearing the Marks.

Summary By: Amy Ariganello