A federal court judge has dismissed an injunction request by American retail chain Target Corp. that would have blocked Fairweather Ltd. from using the name "Target Apparel" in its stores.
In a decision late Thursday, Justice Leonard Mandamin ruled that Target did not prove it would suffer "irreparable harm" during the months leading up to a trial over alleged trademark infringement.
The trial is set to begin next year.
The ruling means that Fairweather may continue to use the "Target Apparel" name at its clothing stores until another judge takes a look at the case.
"In my view the issue of control over trade-marks covering the word 'Target' is a matter that must be left for trial," he wrote.
"The outcome of this lawsuit and corresponding counterclaim aside, I have not heard any evidence that Target will be prevented or delayed from opening Target stores in Canada."
The flashy American retailer, which is known for designer fashion collaborations at discount chain prices, plans to open up to 150 Canadian stores beginning in 2013 — taking over the leases for the majority of Zellers stores.
The American retailer filed a trademark infringement claim against Toronto-based Fairweather in 2010, and Fairweather shot back with its own $250-million counterclaim and its own injunction.
Fairweather wants to block Target from selling clothing once the American chain enters Canada. The Canadian chain's request will be heard when the trial begins.
INC Group, which owns womenswear chain Fairweather and menswear chain International Clothiers, claims it has owned the Canadian rights to the "Target" name for 10 years, when it bought assets from former Biway owner Dylex Ltd.
Dylex, which no longer exists, had registered the "Target" name in Canada in 1981.
Minneapolis-based Target had requested an injunction for the months leading up to the trademark dispute trial, which is scheduled to begin in November 2012.
INC has been operating a Toronto clothing store under the name "Target Apparel" since 2005 and has ramped up the number of stores in Canada bearing that name in the last few months.
As part of its lawsuit, INC wants ownership of the website targetapparel.com. Users who type that address into their web browser are currently redirected to the U.S. chain's website.
INC temporarily lost ownership of the Target trademark in 2005 after the U.S. retailer moved to have it cancelled. Industry Canada said the trade mark was expunged, but the Federal Court of Appeal later ruled Fairweather's ownership should be reactivated.
Depending on the outcome of the trial, the American chain may have to choose between using a different name in Canada, or buying the Canadian rights.
Earlier this month, Target Corp. and Canada's Fairweather Ltd. failed to reach a settlement in a legal dispute over who has the right to use the Target name in Canada, after meeting in a mediation session in Federal Court.