Toys “R” Us Canada is battling tech giant Acer Inc., a Calgary swingers club and a Russian business over trademarks the struggling retailer says will cause confusion with its own branding.
The toy chain is opposing applications the three businesses filed in hopes of registering as trademarks a backwards R, the phrase “Club R” and the word “Wonderlab,” respectively, in their products or marketing.
It’s handling the cases even as the retailer remains in creditor protection and searches for investors for the business or buyers for assets, like the trademarks, which could be sold to help the company with its severe cash crunch. It owes at least $120 million to suppliers alone and says its landlords are also out “substantial” amounts.
Toys “R” Us Canada has said in its creditor protection filings that it is opposing the use of names and symbols linked to its brand to “protect its proprietary rights and goodwill.” Its lawyer did not respond to The Canadian Press’ requests for comment on the cases.
Furthest along in the process is the case over Wonderlab, the indoor playground and crafting space that Toys “R” Us Canada started experimenting with in 2013. It recently renamed the concept Playlab.
A Russian company known as Biomicrogeli wants permission to use the Wonderlab name on a wide range of products including lactose food products, toiletries like shower gel, soap and shaving cream, as well as diaper rash ointments, documents filed with the Canadian Intellectual Property Office (CIPO) show.
Because Toys “R” Us Canada’s Wonderlab trademark covers food, beverages, diapers, medicine and skin, hair and bath products, the retailer’s lawyers say letting Biomicrogeli use Wonderlab would be “confusing,” especially because the Russian company’s products “would target the same consumers and would be sold in the same channels of trade.”
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The argument was bolstered by an affidavit from a director of store planning worried there could be a “serious safety concern” if a child were to assume that a Wonderlab product from Biomicrogeli — which could contain chemicals — is safe to try out as they would in the toy store’s Wonderlab.
A lawyer for Biomicrogeli did not respond to a request for comment.
Many of the trademark applications Toys “R” Us Canada is opposing were made in the four years leading up to the company entering creditor protection in February but are still ongoing because it can take years to get permission to use a symbol when there is opposition.
No matter the circumstances a company is in when a fight comes to fruition, “you don’t want somebody else infringing on your rights,” said Erin McEwen, a trademark agent at Nelligan Law in Ottawa.
“It dilutes your brand, really, because consumers could think that that other brand is associated with your brand.”
She found 162 active trademarks registered to Toys “R” Us Canada but said it’s not unusual for companies to have that many, nor for them to pay lawyers to identify and oppose every application that has any shred of similarity to a company’s own trademarks.
Businesses are so aggressive in defending them because trademarks allow companies to tamp down on competitors and remain one of the most lucrative assets companies have.
“They could sell them. They could license them,” McEwen said. “There’s so many things they could do with them.”
For example, when Hudson’s Bay filed for creditor protection and closed all its stores last year, it made $30 million by selling intellectual property, including the company name and rights to its iconic stripes, to Canadian Tire Corp. Ltd.
Among the trademarks Toys “R” Us Canada has are a reversed R — it says it’s had rights to that for at least 45 years. In addition to the main brand’s logo, the backwards letter is found in the Babies “R” Us name. The company also has trademarks for Puppies “R” Us and Bruin, the chain’s toyline which uses a reversed R.
However, Acer Inc. now wants to use a backwards and capitalized letter R with an arrow on electronics and accessories.
Acer and its lawyer did not respond to a request for comment, but Toys “R” Us Canada has said letting the company use the logo on electronics and accessories would be “confusing.”
A letter Toys “R” Us Canada’s lawyer filed with the CIPO says it will eventually make the same point in a tussle with Club Rendezvous Inc., a Calgary swingers club looking to use “Club R.”
If the Alberta business can use the name, it would affect the distinctiveness, strength, level of protection and value that Toys “R” Us’s Club R trademark has, the retailer’s lawyer says.
Club Rendezvous’ owners, who The Canadian Press agreed not to name because their families are unaware of their involvement in the business, said they “do not believe there is any realistic likelihood of confusion” between their business and Toys “R” Us Canada because they operate in “a completely different industry and market segment.”
“We have built the Club R brand in good faith and remain confident in our position,” they said in an email. “At this stage, given the matter is ongoing, we are limited in what we can comment on publicly but will continue to co-operate fully with the process.”
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