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A Bigger Bullseye – Target’s Double Trouble In Canada

01/14/2011

Target Canada, eh?

Target Corp announced Thursday it intends to open 100 to 150 stores in Canada in a 24 month period beginning 2013. In a $1.85 billion deal, Target has acquired the leasing interests in up to 220 stores in Canada from discount retailer Zellers, Inc., a subsidiary of Canada’s legendary merchant the Hudson Bay Co.

Unfortunately, Target has a problem. Its name is Target.

A Toronto entrepreneur already owns the right to the Target brand. This Target is run by a Canadian retail

OOPS! Same Name – Same Font!

mogul who could make the American giant’s foray into Canada very costly, or potentially foil the company’s plans altogether.

The mogul in question, Toronto fashion merchant Isaac Benitah, has owned the rights to the Target name in Canada for almost a decade. Today, the U.S. discounter is challenging Mr. Benitah’s right to use the name before federal trademark authorities. Undeterred, Mr. Benitah is pressing on with plans to expand his Target Apparel chain by adding at least a dozen of the superstores across the country in the next couple of years, a source familiar with the situation said.

Dealing with Mr. Benitah isn’t a new problem for Target. In 2002, the U.S. chain first took issue with Mr. Benitah’s right to use the name; ultimately, the case went to the Federal Court of Appeal, which came down in his favour five years later. This summer, the U.S. company tried again. It filed another challenge with a Canadian trademark office, arguing that because Mr. Benitah hadn’t used the Target name for three years, his right to it had dissolved under domestic trademark laws.

About six months later, Target Corp. filed a challenge with the federal trademark office. It agreed with Target, but the Federal Court of Canada overturned the decision. The appeal court upheld the judgment in 2007.

Now Target is back at the trademark office, trying again to knock out Mr. Benitah’s right to the Target moniker.

“I guess it’s made more pressing because Target has indicated a willingness to come to Canada now,” said Ron Dimock, a lawyer with Dimock Stratton LLP in Toronto. “Until a decision is made to invalidate the mark [of Mr. Benitah], this represents somewhat of a shield to Target’s entry into Canada,” he said. The case could be dragged out for years, with appeals available at two levels of federal court, he added.

I hope Isaac Benitah has deep pockets!

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