The Laa Presse newspaper reported that David Gavitian, the lawyer for the building's owner, said many people in the neighbourhood were uncomfortable with the name and some tenants in the building were threatening to leave because of it.
Fukyu defines itself as a sushi bar and urban Asian cuisine and opened in August this year.
The restaurant was ordered by a Montreal judge to cover its sign with plastic sheeting.
The owners admitted the name was risque and intended to grab attention, but argued that Fukyu is actually a a sequence of positions and movements in Japanese martial arts.
The restaurant wrote on its facebook page Fukyu Sushi Bar that "Everybody's got an opinion about our name, and we thank you for it! The name we chose signified 'Good Fortune' in Japanese! It also a Karate stance in the gata form...! Also, it is obviously a play on words! We won't deny that! LOL We didn't mean to offend or insult anybody, in fact, we found it hilarious and thought it was reflective of our OPEN-MINDEDNESS & CREATIVITY."
John De Melo, the restaurant's owner told reporters: "We wanted something catchy and Japanese. We didn't think that it would be such a problem."
The restaurant has decided to change its name to the Kabuki bar.