MINNEAPOLIS — American chain Target Corp. has reached a deal with Fairweather Ltd. under which the Canadian fashion retailer has agreed to stop using the Target name.

Target said Wednesday the pact ensures that Fairweather Ltd. and its owner, Isaac Benitah, will cease using the Target name by Jan. 31, 2013. It declined to disclose details of the agreement.

"This agreement will eliminate any potential confusion among Canadian consumers regarding Target Corporation's branding elements, store experience and merchandise assortments as it opens its first stores in Canada in 2013," the company said in a statement.

Fairweather Ltd., which operates a group of clothing outlets in Canada under the name Target Apparel, could not immediately be reached for comment.

Target (NYSE:TGT) filed a trademark infringement claim against Toronto-based Fairweather in 2010. In June, a judge blocked that injunction request.

Fairweather shot back with its own $250-million counterclaim and its own injunction in an effort to block Target from selling clothing in Canada once the American chain begins operations in this country.

The case had been scheduled to go to trial this year.

Toronto-based Fairweather has owned the Canadian rights to the name since buying assets from now-defunct Dylex Ltd. 10 years ago.

Dylex, a Canadian company that once had numerous retail chains, registered the "Target Apparel" name in 1981. Dylex was eventually split up.

Target, known for offering designer fashion collaborations at discount chain prices, plans to open its first Canadian stores in 2013.

Fairweather has been operating a Toronto clothing store under the name "Target Apparel" since 2005 and in the last few months started opening new stores across Canada with the name.

It temporarily lost ownership of the Target trademark in 2005 after the U.S. retailer moved to have it cancelled. Industry Canada said the trade mark was expunged, but the Federal Court of Appeal later ruled Fairweather's ownership should be reactivated.

Fairweather had claimed the American retailer's entry into Canada would lead to a loss of customers, the devaluation of the Target Apparel name, and loss of control over its trademark and reputation.

Fairweather also owns discount menswear chain International Clothiers and department stores Les Ailes De La Mode in Quebec.

The U.S. retail giant announced in January it would spend $1.83 billion to take over the leases of as many as 220 Zellers stores from the Hudson Bay Trading Co. It recently doubled its renovation budget from about $1 billion to as much as $2.3 billion to convert Zellers stores to its brand and integrate them into its retail network.

Target said Monday it plans to have pharmacies in its Canadian stores operated by independent pharmacists under a franchise model when it opens its doors next year in former Zellers locations.