International report - There can be only one queen! 04 Jul 12
Fasken - Canada
In Alice in Wonderland the queen wanted to know who stole her tarts. A recent case considered who tried to steal the trademark THE QUEEN OF TARTS. The decision illustrated two major trademark principles:
- The importance of performing an availability search before doing business.
- The importance of registering a trademark as quickly as possible after choosing it.
Stephanie Ann Pick filed an application to register the trademark THE QUEEN OF TARTS in connection with "[b]aked goods, namely tarts, cookies, cakes, cupcakes, loaves, hand-decorated gingerbread men and holiday cookies, quiches and savoury tarts; wholesale and retail store services specializing in baked goods" based on usage dating back to 1999. The registration certificate was issued in March 2005.
She could have done business under a trade name without registering a trademark. Many believe that applying to register a trademark is useless if that mark is used locally, but nothing could be further from the truth. Fortunately for Pick, she registered her trademark and thus secured her exclusive rights over that trademark throughout Canada, even though it was not used throughout the country.
Pick was not the only person to have set her sights on the trademark THE QUEEN OF TARTS. Linda Kearney ran a stand in a produce market and a shop in Edmonton under the trade name "Queen of Tarts". Pick was informed that a stand and store were operating under the trade name in November 2010, so filed suit against Kearney. However, Kearney failed to file a defence within, or even after, the prescribed timeframe. She gave no justification for her use of the business name.
The court examined Pick's rights. The registration of the trademark THE QUEEN OF TARTS gave her the exclusive right to use that mark throughout Canada in respect of the goods and services covered by that registration. The fact that Kearney sold, distributed and advertised baked goods created confusion with Pick's trademark.
The judge concluded that Pick's exclusive right to use the trademark with respect to the relevant goods and services had been infringed. Section 6(2) of the Trademarks Act provides that a trademark can cause confusion with another trademark, while Section 20 provides that the right of a mark owner can be infringed by a person not entitled to its use.
A consumer could be led to believe that the goods associated with Queen of Tarts came from the same source as THE QUEEN OF TARTS. The trademark and trade name were virtually identical, and the goods offered were the same or substantially the same. THE QUEEN OF TARTS had acquired a reputation over its 10 years of use that, in the eyes of the public, was associated with Pick's goods and services.
The court concluded that the trade name could be confused with the trademark. It also noted that Kearney had performed preliminary availability searches before she began doing business, but chose to ignore the search results and therefore deliberately committed an act that reflected her indifference or that could be construed as passing off.
Availability searches are important, even for local businesses. This type of search can be used to inventory businesses or trademarks that already exist. It is never too early to do the right thing and change names, but it can be too late. Owners of an existing trademark can avail themselves of prior rights, even if they do not use their trademark locally.
When Kearney used her trade name, she drew the public's attention to her own goods and services in breach of the passing-off provisions of the Trademarks Act. Once proof of passing off has been established, the court can award damages for loss of goodwill without actual damages needing to be proved. The judge awarded Pick C$10,000 in compensation for missed sales and harm to her reputation.
This case is a reminder that the greatest benefit of registering a trademark is that the mark owner can then avail itself of its rights throughout Canada, even if it uses that trademark only in a specific region. This undeniable advantage has significant consequences for owners. Registering a trademark is a crucial step.
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