Press Release Details

For Immediate Release                                                                           Toronto Stock Exchange: BPF.UN

Boston Pizza International Reports Ongoing Boston Market Litigation

VANCOUVER, BC, OCTOBER 9, 2002 - Boston Pizza International Inc. ("BPI") and Boston Pizza Royalties Income Fund (TSX: BPF.UN) (the "Fund") announce that BPI has received a Statement of Defence and Counterclaim in its ongoing litigation with a group of entities attempting to open restaurants in Canada using the "Boston Market" name, including Global Restaurant Operations of Ireland Limited and McDonald’s Restaurants of Canada Limited (the "Boston Market Group"). The Statement of Defence and Counterclaim is a response to an action brought by BPI and the Fund for an interlocutory and permanent order preventing trademark infringement through the use of the name "Boston Market" in connection with restaurant services.

This litigation began in 1995 when members of the Boston Market Group registered trade marks for "Boston Chicken" in Canada under the Trade-Marks Act (Canada). BPI applied to the Registrar of Trade-Marks to have the registration cancelled for failure to use such marks in Canada in compliance with the Trade-Marks Act (Canada) and an application was made by BPI to the Federal Court of Canada to expunge the trade-marks on the basis that such marks were not registrable at the time they were originally registered. BPI’s application to have the trade-marks cancelled for lack of use was approved by the Registrar. The decision of the Registrar has been appealed and the "Boston Chicken" trade-marks will remain registered until the outcome of that appeal. BPI’s application for expungement was denied by the Federal Court and BPI is currently appealing that decision. In addition, entities in the Boston Market Group have made an application to register "Boston Market" as a trade-mark in Canada, to be used in connection with restaurant services. BPI has opposed this application. The "Boston Market" trade-mark has never been registered in Canada.

The Statement of Defence includes a Counterclaim challenging the validity of the registration of the "Boston Pizza" and related trade-marks under the Trade-Marks Act (Canada). BPI believes that the counterclaim is a purely strategic tactic and without merit and will vigorously contest the counterclaim. One of the trade-marks challenged in the counterclaim has been used by BPI and predecessor entities for over 30 years and was registered with the Registrar in 1970. Management of BPI believes that the counterclaim may be prohibited at law based on limitation periods in the Federal Court Act or the fact that the Federal Court has previously accepted the validity of the Boston Pizza trade-mark. In a previous decision in this litigation, the Federal Court concluded that the Boston Pizza trade-mark had acquired distinctiveness over many years of previous use and, as a consequence, a challenge to the Boston Pizza trade-mark based on lack of distinctiveness was rejected. The distinctiveness and strength of the trade-mark has only been increased by the expansion of the Boston Pizza restaurant family in recent years.

However, if this counterclaim is ultimately successful, BPI and the Fund would lose the benefits of registration of those trade-marks under the Trade-Marks Act, which may be the ability to prevent others from using the registered trade-marks for the goods and services for which they are registered and to prevent others from using similar or confusing trade-marks or names, in both cases throughout Canada, including in geographic territories where BPI or its sublicensees do not presently carry on restaurant operations. However, the loss of the registrations under the Trade-Marks Act (Canada) would not prevent BPI and the Fund from continuing to license and use the "Boston Pizza" and related trade-marks in the existing operations and geographic territories where they are presently used and from taking other measures to protect their rights in respect of, and their ability to use, the "Boston Pizza" and related trade-marks in new areas where BPI and its sublicensees do not presently operate Boston Pizza restaurants.

The legal costs of this action shall be principally paid by BPI.

The Fund is a limited purpose, open-ended trust established under the laws of British Columbia to acquire indirectly certain trade marks and trade names used by BPI in its Boston Pizza restaurants in Canada. The trade marks are licensed to BPI for 99 years for which BPI pays the Fund 4% of franchise revenues of its 154 Boston Pizza restaurants in Canada as at April 30, 2002.

BPI continues to operate the Boston Pizza franchise system and to develop new Boston Pizza restaurants in Canada and has opened eight new restaurants since April 30, 2002. The royalty paid to the Fund will be adjusted annually to include the franchise revenues of the new Boston Pizza restaurants opened prior to November 1 of each year. BPI currently has 162 restaurants in Canada.

FOR FURTHER INFORMATION PLEASE CONTACT:
Michael Cordoba
Director, Boston Pizza GP Inc.
Tel: 604-270-1108
E-mail:cordobam@bostonpizza.com