Target’s Expansion Into Canada Stymied by Prior Trademark Holder
Target Corp., the bullseye-logoed company surely familiar to most Americans, has renewed its plans to expand into Canada over the past few months, and has stated it looks to open five or six Target stores in Canada by mid-decade, and is already scouting out locations and speaking to developers. Such confidence is interesting, given that in order to use their name in Canada, it will first have to deal with the fact that the trademark “Target” is already owned by Isaac Benitah, chief executive of the INC Group. He acquired the trademark from the dying company Dylex in 2001, which used the trademark since the 1980s. After the acquisition, he made use of it in the Target Apparel line of clothing. Target Corp. has challenged Mr. Benitah over his right to hold the mark.
It is not the first time Target tried to expand into Canada, nor the first time they’ve encountered this particular stumbling block. Back in 2002 the US company challenged Mr. Benitah over his right to use the name. While Benitah was manufacturing clothing under the Target Apparel label, none of the three hundred stores in his retail chain bore the Target name. After five years of wrangling the Federal Court of Appeals upheld his right. Three years later, Target Corp. is challenging him again with the same claim, that he has not used the mark for the last three years and that he no longer has claim to it. In response, Benitah has opened the first Target Apparel store in Nanaimo, British Columbia, and plans to open more in the future, strengthening his hold on the mark.
Target has refused to discuss the current lawsuit other than stating they feel that they have the right to use the trademark. The case could easily drag on for another five years, if not longer, and could end with Target unable to expand into Canada at all under its own name. Perhaps, like other companies, it will adopt a new mark and identity for the new market. Or possibly Target knows something the rest of us don’t.
In US law, the requirement that a trademark be used in commerce is certainly important, and presumably the same applies to Canadian law. It is certainly to no one’s advantage to allow companies to sit on unused trademarks, closing out competition simply because they thought of a name first. It seems that Benitah is making use of the mark, even if he was not, at the time of the lawsuit, operating stores with the name. Even if he only began plans to open Target Apparel stores after Target began seriously moving towards expansion in Canada, law does not prohibit good business practice and defensively strengthening the use of a mark, as long as it is good faith use in commerce.