*Minimum purchase before taxes. Discount applied at checkout.**excludes .97 endings & clearance *Achat minimum avant les taxes. Le rabais sera appliqué à la caisse.**À l'exclusion des articles dont le prix se termine par ,97, et des articles en liquidation.A judge has temporarily blocked Sears Canada Inc. from using the marketing slogan “there is no reason to buy a mattress anywhere else” because it too closely resembles the trade-marked jingle used by specialty retailer Sleep Country Canada Inc. Sleep Country is suing Sears in the Federal Court of Canada, alleging the department store chain’s slogan infringes the specialty chain’s trade-marked catchphrase, “Why buy a mattress anywhere else?” A federal court has yet to make a final ruling on Sleep Country’s claim. But in a ruling issued in Ottawa on Feb. 9, Justice Catherine Kane granted a temporary or interlocutory injunction that orders Sears Canada to refrain from using its marketing slogan until the case is decided at trial.
Under Canadian law, a party seeking an interlocutory injunction must establish that it will suffer irreparable harm if the alleged infringement is allowed to continue until the case is finally determined on its merits. Kane concluded that Sleep Country met that standard. “For the purpose of this motion, I find that Sleep Country has established on a balance of probabilities that confusion is likely, as is depreciation of goodwill and loss of distinctiveness, between now and the determination of the infringement action, and that loss of sales and/or other damages will result,” Justice Kane writes. Sleep Country has 234 stores and 17 distribution centres across Canada. Founded in 1994, the retailer’s “Why buy a mattress anywhere else?” jingle is a ubiquitous feature of radio and TV ads. The Huffington Post once ranked Sleep Country’s ad is one of Canada’s 25 catchiest jingles, the judge noted. The jingle has even been inducted into the marketing Hall of Legends and Retail Council of Canada Hall of Fame, she added.
Sears began using the “there is no reason to buy a mattress anywhere else” as a “descriptive statement” in online ads, radio spots, and printed flyers last summer. Lawyers for Sleep Country sent Sears a cease-and-desist letter on Aug. 2. Sears denied any trademark infringement, so Sleep Country filed suit. Sleep Country argues the two marketing slogans are so “strikingly similar” they might confuse consumers into thinking Sears is now selling Sleep Country’s mattresses. Sears counters that Sleep Country has no clear evidence of confusion, depreciation of goodwill or loss of distinctiveness. A full-blown trial on the merits of Sleep Country’s claim is not likely for at least 18 to 24 months, the judge said.The federal Competition Bureau is investigating whether Canada’s two major department-store retailers have touted bogus discounts of their mattresses.Last month the bureau stepped up its inquiry into Sears Canada Inc. and Hudson’s Bay Co. sale pricing and the Federal Court has agreed to order the merchants to produce records about their price strategies within 75 days.
The bureau alleges the retailers “failed to offer certain sleep sets at the regular price or higher for a substantial period of time” and “made materially false or misleading representations to the public in relation to its clearance sales” of mattress sets, according to documents filed in court.Sears got caught about a decade ago for pitching false discounts on tires. Now the bureau is looking at mattress-set prices at Sears and Hudson’s Bay, demanding information on pricing and profit margins in a probe that could turn the estimated $1.8-billion-a year mattress-and-bed foundation business on its head.Spokespersons for Sears and Hudson’s Bay said they’re co-operating with the investigation and are in the process of providing the information required under the court orders.Sears “is committed to ensuring its advertising makes only valid claims and otherwise meets all legal and regulatory requirements,” said Sears’ spokesman Vincent Power. He added the retailer welcomes “the opportunity to work with the bureau to establish best marketing practices that are applicable to the mattress supply industry.”
Hudson’s Bay’s Tiffany Bourre said the country’s mattress retail segment is “highly competitive … Promotional pricing is common within the mattress retail industry.” She said the retailer’s process of pricing its mattresses “is in line with industry standards and, in its view, is in accordance with all Canadian laws and regulations.”Mattress retailing is an opaque sector in which it’s almost impossible for consumers to compare prices among merchants. Retailers tend to carry their own models with their own prices. But many of the products are made by the industry’s two dominant manufacturers: Tempur Sealy International Inc. and Serta Simmons Bedding LLC.“There’s continual promotion among brands, and products look very similar,” said John Williams of retail consultancy J.C. Williams Group, which estimates 2013 mattress and foundation sales rose 3.6 per cent to $1.8-billion from a year earlier. “The continual sales are confusing. You never know whether you got the best deal.”
Still, mattress retailers can generate high profit margins without the risk of having to stock much inventory, shipping products to customers directly from manufacturers, he said.Production is mostly done domestically to avoid costly overseas shipping of the bulky merchandise, said Ryan Trainer, president of the International Sleep Products Association in Alexandria, Va. Mattress companies have efficient “just in time” deliveries of customer purchases – often in just a few days compared to as many as 12 weeks in the furniture business, he said.The bureau has clamped down on retailers for misleading sale prices in the past. In 2005, the Competition Tribunal ruled that Sears Canada promoted bogus tire prices in ads, resulting in a $100,000 administrative penalty and $387,000 in costs. Less than a year earlier, sporting goods retailer Forzani Group Ltd. (now owned by Canadian Tire Corp. Ltd.) agreed to pay $1.7-million to settle allegations it misled consumers about prices. And in 2003, clothier Suzy Shier Inc. agreed to pay a $1-million penalty in a similar matter.