Firm News Alert

November 2021

HBC Trademark Troubles

A review of the Zellers trademark dispute between HBC and a Quebec retail family

The recent lawsuit initiated by the Hudson's Bay Company (“HBC”) against a Quebec retail family demonstrates how easy it can be for trademark ownership rights to slip through your fingers by simply missing a trademark renewal deadline.

Trademark registrations must be renewed every 10 years with the Canadian Intellectual Property Office (CIPO). If this is not attended to, your trademark will be expunged, and you could potentially face losing the goodwill of your brand to someone who notes your misstep.1

HBC is presently attempting to deal with this very issue: It retained a series of trademarks pertaining to the iconic Canadian department store Zellers after it sold the vast majority of the chain's locations to Target in 2011, with the remaining stores eventually being liquidated by 2013.2 It appears as though HBC's trademark registrations for the Zellers word mark and the Zellers design mark expired in 2018 and 2020, and since it failed to pay the renewal fees, these registrations were automatically expunged.3

Apparently, in 2020 and 2021, the Moniz family took the opportunity to incorporate several corporate entities using the Zellers name and in 2021 they filed various Zellers trademark applications.4 On the CIPO Trademarks Database, it looks like the following trademarks were applied for in the name of some of the Moniz family's newly incorporated companies:5

  3. ZELLERS RESTAURANT & Design; and

HBC has responded to the Moniz family's actions by continuing to use the Zellers trademark. This past summer, HBC launched a Zellers themed pop-up-shop in the HBC at the Burlington Centre in Ontario.6 It is also planning to expand its use to a new pop up in Anjou, Québec,7 which seems to be near to where the Moniz family has set up their Zellers storefront in Sorel-Tracy, Québec.8

HBC alleges that the Moniz family committed trademark infringement, depreciation of goodwill, and passing off.

According to CBC News, on October 5, 2021, HBC filed a federal lawsuit against the Moniz family and their recently established corporate entities.9 In the lawsuit, HBC alleges that the Moniz family has committed trademark infringement, depreciation of goodwill, and passing off.10 In support of these allegations, HBC claims that the entire basis of the Moniz family's actions in attempting to take over the Zellers brand was to cause confusion to consumers and potentially recover some sort of payment from HBC.11 Furthermore, HBC claims that they never abandoned the Zellers trademark as evidenced by their aforementioned pop-up locations and future plans for use of the brand in their HBC stores.12 At this time, the Moniz family has yet to respond to the federal claim.13

The CIPO Trademarks Database reveals that the various Zellers trademarks filed by the Moniz family, with their corporate entities listed as the applicants, were applied for in April and October 2021.14 Generally speaking, once trademark applications are reviewed by an examiner at CIPO, and all objections are overcome by the applicant, the trademark applications will proceed to advertisement in the Trademarks Journal, at which point third parties may oppose the registration of the trademarks.15 Accordingly, if the Zellers trademarks filed by the Moniz family were to proceed to advertisement, then HBC would have an opportunity to oppose the registrations of those trademarks in an opposition proceeding before the Registrar of Trademarks. If HBC is successful in an opposition proceeding, it could prevent the trademarks from issuing to registration, but it would not prevent the Moniz family from using the trademarks in Canada. Only the court would be able to prohibit the use of the trademarks.16

HBC may also file a Notification of Third Party Rights form with the Registrar of Trademarks, in advance of an opposition proceeding, in order to bring to its attention why the Moniz family's pending trademarks should not be registered. These notifications are limited to selecting from three available grounds and would not give HBC the opportunity to submit any written arguments or evidence of prior use.17 These notifications also do not create an obligation on the Registrar of Trademarks or an examiner to consider the notification.18 They do not replace opposition proceedings either.19

On the CIPO Trademarks Database, it looks like HBC recently refiled the following Zellers trademark applications in June 2021:20

  2. ZELLERS & Design; and

In a situation where pending trademark applications are confusing, an applicant with the earlier filing date will be the person entitled to registration.21 The only Moniz family Zellers trademark that appears to have been filed earlier than HBC's recent Zellers trademark applications was for ZELLERS DESIGN.22 This design mark seems like an exact replicate of the original Zellers design mark owned by HBC that was expunged and then recently reapplied for by HBC. The trademark ZELLERS RESTAURANT & Design, filed by the Moniz family, also uses the same stylized font for the word “Zellers,” but it includes the word “restaurant,” as well as other design elements. It will be very interesting to see how examiners respond to these pending trademark applications.

Ultimately, this matter highlights the importance of protecting and maintaining registrations on a regular basis.This means, not only continuing to use the trademark in association with its registered goods and services, but also properly keeping track of due dates and renewal notices from CIPO, so that renewal deadlines are always met. As demonstrated by this present litigation, failure to do so may lead to a lawsuit or perhaps complete loss of your longstanding trademark rights.

Main takeaway: Don't let your trademark registrations lapse if you still intend to use them!

  1. Trademarks Guide (16 August 2021), online: Government of Canada
  2. Patterson, Craig, Zellers Store-in-Store Launches inside of Hudson's Bay Location [Photos] (23 September 2021), online: Retail Insider Media Ltd.
  3. Canadian Trademarks Database (3 November 2021), online: Government of Canada
  4. Patterson, Craig, Quebec Family Nabs Zellers Trademark From HBC to Open Small-Format Zellers Stores and Restaurants (12 October 2021), online: Retail Insider Media Ltd.
  5. Supra note 3
  6. The Canadian Press Staff, Hudson's Bay sues Quebec retailer alleging trademark infringement of Zellers brand (18 October 2021), online: The Canadian Press
  7. Ibid.
  8. Supra note 4.
  9. Bundale, Brett, HBC sues Quebec retailing family for using Zellers name (19 October 2021), online: The Canadian Press
  10. Ibid.
  11. Ibid.
  12. Supra note 6.
  13. Ibid.
  14. Supra note 3.
  15. How your trademark application is processed (8 March 2018), online: Government of Canada
  16. Opposition Proceedings (28 June 2021), online: Government of Canada
  17. Notification of Third Party Rights (28 October 2020), online: Government of Canada
  18. Ibid.
  19. Ibid.
  20. Supra note 3.
  21. Trademarks Examination Manual (02 January 2019) at 3.5.2, online: Government of Canada
  22. Supra note 3.

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