Zellers™ is Back… or is it?

Zellers, the fondly remembered Canadian department store, is back in the spotlight: this time, for trademark troubles instead of its discount prices. 

Founded in 1931, the Zellers department store chain was acquired by Hudson’s Bay Company (HBC) in 1978, and reached its peak in the 1990s, with 350 stores across Canada.  In 2011, HBC announced that it was planning to sell most of its Zellers leases and, in 2020, the last Zellers store closed.

Trademark Conflicts

Conflict surrounding the iconic Zellers trademark is the reason for the recent surge of interest in the brand.  Recent activity related to the Zellers trademark on the Canadian Trademarks Register provides a helpful background:

On October 5, 2021, HBC launched an action in the Federal Court against members of the Moniz family, who own Zellers Inc., alleging trademark infringement, passing-off, and depreciation of goodwill.  The statement of claim filed by HBC said that at least one Zellers store was opened by Zellers Inc. in a city outside of Montreal, and there are indications another store is set to open. 

Importance of Maintaining Trademark Rights

The Zellers matter highlights the importance of maintaining trademark rights.  The conflict over the Zellers trademark began after HBC’s Zellers mark was expunged from the Register.  It is unlikely that this timing is coincidental. When a mark is expunged, all rights the trademark owner held in that mark are forfeited and can potentially be claimed by another party.  Zellers Inc. applied for the Zellers mark several months after HBC’s mark was expunged.

Decisions with respect to the Zellers trademark applications are unlikely to be made anytime soon, due to significant delays at the Canadian Trademarks Office.  As for the lawsuit, the Moniz family has yet to file a statement of defense, so we do not know what approach they might take.  Alternatively, the parties could settle outside of court, which is less costly than pursuing formal legal action.  A settlement would likely require one of the parties to abandon their Zellers trademark application(s) or transfer ownership of their Zellers trademark application(s) to the other party.  No matter how the matter is resolved, HBC seems resolved to retain rights to the Zellers mark.

If you own a registered Canadian trademark, be careful of deadlines for renewals to ensure that your registration does not lapse!  For more information on registering trademarks or maintaining trademark registrations, please contact our experts at Brion Raffoul LLP.