Wal-Mart: Dr. Jekyll or Mr. Hyde?

Oh Wal-Mart. I can’t live with you and I can’t live without you. You are that big bad department store having driven one too many mom and pop shops out of business. Yet you are my wallet’s saviour. It’s a love-hate relationship. I would not be surprised if the United Food and Commercial Workers Union (UFCW) – Wal-Mart’s workers union – felt the same way. You might just have to check out their website at www.walmartworkerscanada.ca to see for yourself. According to an article by Professor Sam Trosow at the University of Western Ontario, Wal-Mart has filed for an injunction in a Quebec Superior Court against the UFCW, citing grounds of trade-mark infringement and passing-off. For starters, Wal-Mart would like the court to order the union to stop using the trade-names WALMART or WAL-MART on their website.

The Trade-marks Act provides protection of trade-mark rights on a statutory level. Of particular interest in this Wal-Mart case is the notion of depreciation of good will. Section 22 of the Trade-marks Act provides that no person shall use a trade-mark registered by another person in a manner likely to have the effect of depreciating the value of the goodwill attached. According to Scott Jolliffe & Kelly Gill in Fox on Canadian Law of Trade-Marks and Unfair Competition, to depreciate the value of the goodwill means to reduce in some way the advantage of the reputation that may have been built up by years of honest work or gained by lavish expenditures of money, to which the association of the trade-mark with the goods or services largely contributed. For example, Louis Vuitton has been a designer and retailer of high-end luxury hand bags and fashion for more than a century. If the Louis Vuitton trade-mark was used in an unauthorized manner in conjunction with cheap t-shirts, then the goodwill of the Louis Vuitton brand is at risk of being depreciated.

It seems as though what Wal-Mart really is getting at is that the UFCW’s use of the WALMART or WAL-MART trade-name is depreciating their brand’s good will to some extent. It seems that what Wal-Mart is concerned with is that these negative comments by the UFCW on their website tarnishes their image. But here is the golden question: Does the Wal-Mart brand come with any good will to begin with? If the answer is yes, then perhaps such negative comments will indeed depreciate the good will of Wal-Mart’s brand. If the answer is no, then Wal-Mart’s much sought after injunction would – at least in this respect – be groundless. Good will cannot be depreciated where there is none. This brings me back in full circle to the beginning of my article. How do I – as a consumer – perceive Wal-Mart? Do I see them as a big and bad discount department store? And if so, then would it be reasonable to say that the negative comments on the www.walmartworkerscanada.ca website are just extensions of such an image and that no good will was depreciated because there was none in the first place? Or perhaps do I see Wal-Mart as the ultimate provider of affordable goods; the king of all department stores; a business concept so perfect and profitable that it is nearly recession proof? I’m not sure how I see Wal-Mart. How do you see Wal-Mart? What do you think?

Even if you or I had an answer, whether or not the UFCW’s use of Wal-Mart’s trade-names constitutes depreciation of good will is still precariously unclear. If Wal-Mart was seen by consumers as a provider of affordable goods, does this increase the amount of good will associated with the Wal-Mart brand? If Wal-Mart is seen by consumers as a big, bad discount department store, does this decrease the amount of good will associated with the Wal-Mart brand?

All this is to say, that when it comes to trade-mark infringement and depreciation of good will in this case, there are no easy answers.