Target Misses the Mark for Interlocutory Injunction: Target Brands Inc. v Fairweather Ltd.

In the newest development in the ongoing trademarks case between Target and Fairweather, Target sought to restrain Fairweather from operating stores in association with the “TARGET” trademark/trade name or a bullseye logo so as to cause confusion with Target’s own business until the trial date late 2012. But Target failed the interlocutory injunction test according to the Federal Court, and the motion was dismissed.

Target is an American retail chain store, with no Canadian retail locations. It is famous for its U.S. trade name TARGET with or without a red bullseye mark. In 2001, Fairweather purchased the registered trademark “TARGET APPAREL” and in the years following, 15 Target Apparel stores selling discount clothing  were opened across Canada. While their signage involves a predominantly red “Target” in larger letters than “Apparel”, a Canadian maple leaf within a circle accompanies the words instead of the bullseye. Target then announced plans in January 2011 to open 100 to 150 Target stores in Canada in 2013 and 2014. And thus this lawsuit was born.

The Federal Court considers three factors when deciding whether to grant an interlocutory injunction, and a failure to succeed on any one of these questions will result in a denied motion.

1. Is there a serious issue to be tried?
2. Would the applicant suffer irreparable harm if the injunction is refused?
3. In whose favour does the balance of convenience lie?

The Federal Court found that there was indeed a serious issue to be tried, as the case involved two large businesses with similar trade names selling similar products. The Court then dismissed Target’s claims that its ‘brand equity’ would be damaged when consumers who confused the stores would not find the same quality of service as promised, as Target currently already licenses the “Target” word to other smaller stores in Canada. And on the balance of convenience, there was no evidence that Target would be delayed from opening its stores in Canada in 2013 without an injunction, yet allowing the injunction would mean substantial costs to Fairweather to remove and replace its signage from all its stores. As such, the motion was denied.