Targeting the Target Name in Canada

Nora Sleeth is a JD candidate at Osgoode Hall Law School.

On May 2, 2011, Target Corporation and Fairweather Ltd. went to court disputing the rights to the Target name in Canada. While Target Corporation plans to open its doors to Canadian consumers in 2013, Fairweather’s Target Apparel hopes to remain the only Target in Canada.

In the United States, Target Corporation is known for offering Americans high quality merchandise at an affordable price. As soon as 2013, the Target shopping experience will also be available in Canada. In January of this year, Target announced that it would be purchasing the leases of as many as 220 Zellers stores from the Hudson’s Bay Company. Between 100 and 150 of these stores will be renovated to become Target locations. Target recently finalized plans for three Canadian distribution centers and also intends to sell groceries at some stores. This is just the beginning of Target’s Canadian expansion. Target hopes to increase its Canadian presence by continuing to open more locations.

Some Canadians may already be familiar with Target Apparel; however, this discount retailer is not to be confused with Target Corporation. While Target is known for “cheap chic” shopping, Target Apparel does not offer the same quality of merchandise. Further, Target Apparel is owned by Fairweather Ltd., one of a few retailers under the control of Toronto-based fashion mogul, Isaac Benitah. It is not difficult to understand how Canadian shoppers may be confused about Target Apparel and assume that it is connected with the American Target. Target Apparel’s storefront displays the red and white block lettering that is associated with Target Corporation and emphasizes the word “Target” while “Apparel” is in much smaller lettering. Further, a bullseye symbol similar to that used by Target has reportedly been used in Target Apparel advertisements. Target Apparel stores can currently be found in Sudbury, Ontario and Nanaimo, British Columbia. Some Target Apparel shoppers have expressed confusion and understandably think that Target Apparel is owned by Target Corporation.

Target has filed for a preliminary injunction against Fairweather, stating that Target’s “reputation and goodwill” has been jeopardized and that Target Apparel was “deliberately calculated to deceive and confuse the public in Canada.” If Target is successful, Fairweather will be prevented from opening additional Target Apparel stores in Canada. Fairweather has filed a counterclaim accusing Target of trademark infringement and asking for exclusive rights to the Target name in Canada or, alternatively, $250 million in damages “for profits unjustly gained” by using the Target trademark.

The parties appeared before the Federal Court (Mr. Justice Mandamin) on May 2, 2011, on Fairweather’s motion for an “interlocutory injunction restraining Target Corporation, until trial from operating a retail store in association with a trade mark or trade name comprising TARGET and/or a bullseye design and such further and other relief”. There is no word yet on a decision.  The parties are next slated to attend mediation for two days beginning on June 2, 2011.

This is not the first time Target and Fairweather have disputed the Canadian rights to the Target name. Six months after Fairweather bought the trademark from failed retailer Dylex Ltd. in 2001, Target filed a challenge with the Canadian Registrar of Trademarks stating that the trademark should be invalidated for non-use. The Registrar’s office invalidated the trademark but the decision was overturned by the Federal Court when, in the interim, Fairweather began manufacturing clothing bearing the Target Apparel name. Target appealed, but the decision was upheld by the Federal Court of Appeal in 2007; however, it applies only to the use of the name as a clothing label and not as the name of a retail store.

One Comment
  1. The last remark that the trademark “applies only to the use of the name as a clothing label and not as the name of a retail store” is interesting. Further, it would be interesting to see if confusion would remain an issue if the Target Apparel line of clothing were only permitted to be sold in Fairweather stores and not from ‘Target Apparel’ retail locations.

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