Saturday, May 07, 2005

May 7, 2005. 01:00 AM
Future of Radio Shack store name in dispute in Canada
U.S. retailers duke it out over legal right to use name

Name-use ban doesn't free up rights: InterTan

DANA FLAVELLE
BUSINESS REPORTER

The future of the Radio Shack name in Canada and a third of the retailers that bear it is up in the air as two U.S. consumer electronics giants battle it out for a stake in the Canadian marketplace.

InterTan Inc. of Barrie shot the latest volley yesterday saying it has the exclusive right to the Radio Shack name in Canada until 2009 even though a Texas court ruled in March that InterTan can no longer use it.

The court gave InterTan until June 30 to stop using the Radio Shack name on its more than 900 stores across Canada. InterTan responded by announcing the stores would change their name to The Source by Circuit City. No sooner had InterTan abandoned the name than its former parent company, RadioShack Corp., of Fort Worth, Tex., announced it planned to open its own chain of Canadian stores under the Radio Shack banner. Radio Shack is two words on Canadian while the U.S. company and its stores spell it one word. RadioShack Corp. said it would open the first 20 to 30 corporate owned stores before the end of this year, most in the Greater Toronto Area.

Yesterday, InterTan said Radio-Shack U.S. can't do that. Even though InterTan can't use the RadioShack name after June 30, InterTan said neither can any one else until its licensing agreement with RadioShack Corp. expires in 2009.

RadioShack in the United States disagrees.

InterTan said it plans to defend its right in court, though a specific strategy has yet to be worked out.

In the meantime, RadioShack Corp. has begun courting the 360 independent retailers that use the RadioShack name under contract with InterTan hoping to persuade them to switch allegiances so they can keep the well-known name over the stores. The stores, mainly in smaller markets, would be in addition to the corporate owned stores in the larger centres, RadioShack Corp. said.

InterTan is fighting back by vowing to double its advertising budget this year to raise awareness of the Circuit City name. It opened the first of the renamed stores in downtown Toronto's Eaton Centre two weeks ago to showcase the new design and format. The stores will carry more digital products and benefit from Circuit City's greater buying power, Levy noted.

The cross-border dispute began after Circuit City Corp., America's second largest consumer electronics chain, gained a foothold in Canada last year through the purchase of InterTan. InterTan used to be owned by RadioShack Corp., America's third-largest chain, and still had a licensing agreement with the company giving it the right to use the name in Canada.

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