In Alice in Wonderland, the queen wants to know who stole her tarts. In this article, we will ask who tried to steal the trademark THE QUEEN OF TARTS. This is a case that illustrates two major trade-mark principles, the importance of performing an availability search before doing business and the importance of registering a trade-mark as quickly as possible after having chosen one.
Our story begins when Ms. Stephanie Ann Pick, a shrewd queen, 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 of 2005.
She could very well have done business under a trade-name without having registered a trade-mark. Many believe that applying to register a trade-mark is useless if a trade-mark is used locally, but as we will see nothing could be further from the truth. Fortunately for Ms. Pick, she registered her trade-mark and thus secured her exclusive rights over that trade-mark throughout Canada, even if it isn't used throughout the country.
Ms. Pick was not the only person to have set her sights on the trade-mark THE QUEEN OF TARTS. A Ms. Linda Kearney ran a stand in a produce market in downtown Edmonton and another establishment in Edmonton under the trade-name Queen of Tarts. Ms. Pick was informed that a stand and store were operating under the trade-name in November of 2010, so she decided to file suit against Ms. Kearney. Ms. Kearney, however, failed to file a defence within, or even after, the prescribed timeframe. She never gave any justification for her use of the business name.
The court examined Ms. Pick's rights. The registration of the trade-mark THE QUEEN OF TARTS gave her the exclusive right to use her trade-mark throughout Canada in respect of the wares and services covered by that registration. The fact that Ms. Kearney sold, distributed or advertised baked goods created confusion with Ms. Pick's trademark.
The judge concluded that Ms. Pick's exclusive right to use the trade-mark THE QUEEN OF TARTS with respect to the wares and services covered by the trade-mark had been infringed. In fact, section 6(2) of the Trade-marks Act provides that a trade-mark can cause confusion with another trade-mark and section 20 provides that the right of the owner of a trade-mark can be infringed by a person not entitled to its use.
A consumer could be led to believe that the wares associated with Queen of Tarts came from the same source as THE QUEEN OF TARTS. The trade-mark and trade-name are virtually identical, and the wares offered are the same or substantially the same. THE QUEEN OF TARTS acquired a reputation over its ten years of use that, in the eyes of the public, is associated with the wares and services of Ms. Pick.
The court concluded that the trade-name could be confused with the trade-mark. It also noted that Ms. 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 could be construed as passing off.
Availability searches are therefore important, even for local businesses. This type of search can be used to inventory businesses or trade-marks 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 trade-mark can avail themselves of prior rights, even if they do not use their trade-mark locally.
When Ms. Kearney used her trade-name, she drew the public's attention to her own wares and services in breach of the passing off provisions of the Trade-marks 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 Ms. Pick $10,000 in compensation for missed sales and harm to her reputation.
This story reminds us that the greatest benefit of registering a trade-mark is that the trade-mark owners can then avail themselves of their rights throughout Canada, even if they use that trade-mark in a specific region. This undeniable advantage is of no little consequence to owners. Registering a trade-mark is a crucial step.