For many years, CHAPMANS has been a well-known trademark in the Vancouver clothing trade. However, the mark has been used by two companies, a situation that can lead to problems, as evidenced by a recent decision of the British Columbia Court of Appeal.
In Edward Chapman Ladies’ Shop Limited v. Edward Chapman Limited the Court of Appeal upheld the trial judge’s decision in favour of Edward Chapman Ladies’ Shop Limited, permanently restraining Edward Chapman Limited from selling ladies’ clothing and accessories in association with the names Edward Chapman, Chapman’s, Edward Chapman’s Limited or similar names, except where at least equal prominence is given to the additional name, Chapy’s.
In 1959, the Edward Chapman retailing clothing business in Vancouver was divided between two corporate entities: Edward Chapman Limited to continue with the sale of men’s clothing and Edward Chapman Ladies’ Shop Limited to carry on the sale of women’s clothing. The two companies cooperated in their marketing, jointly buying advertising space and clothing labels bearing the EDWARD CHAPMAN name and a crown logo until relations soured in 1982.
In 1982, Edward Chapman Limited opened up a women’s wear division under the name CHAPY’S. Edward Chapman Ladies’ Shop Limited objected that this was contrary to the spirit of the 1959 contract that divided the two companies, but ultimately, did not pursue legal action as it understood that Edward Chapman Limited’s women’s wear business would operate under the trade name CHAPY’S. An uneasy co-existence continued until, in 2002, Edward Chapman Limited opened a new shop which sold both men’s and women’s clothing under the name EDWARD CHAPMAN LIMITED and did not use the name CHAPY’S.
In response, Edward Chapman Ladies’ Shop Limited commenced an action in April 2003 alleging that by Edward Chapman Limited using the CHAPMAN names and crown logo in association with the sale of ladies’ wear it was passing off its products and services as those of Edward Chapman Ladies’ Shop Limited in violation of section 7(b) of the Trademarks Act.
The trial judge held that Edward Chapman Ladies’ Shop Limited established the elements of its passing off action since it had developed a distinctive reputation for fine women’s clothing under its corporate name, as well as the names CHAPMAN’S and EDWARD CHAPMAN’S. Edward Chapman Limited’s decision to drop the name CHAPY’S and market women’s clothing under the name EDWARD CHAPMAN had been made primarily to take advantage of the plaintiff’s established goodwill. The plaintiff suffered damage due to the risk of harm to, and loss of control over, its goodwill or reputation.
In upholding the decision of the trial judge, the Court of Appeal held that the parties in 1959 intended Edward Chapman Ladies’ Shop Limited to receive the exclusive right to sell ladies’ wear and accessories using the EDWARD CHAPMAN and CHAPMAN’S names and Edward Chapman Limited’s dropping of the CHAPY’S name had the effect of “elbowing out” Edward Chapman Ladies’ Shop Limited or increasing the risk of confusion in the market.Â Therefore, the Court of Appeal held that Edward Chapman Ladies’ Shop Limited could properly sue for passing off and the permanent injunction was the appropriate remedy. The Court of Appeal also held that having jointly used and jointly benefited from the use of the crown logo and the notation, “Established 1890”, neither party could exclude the other from using them in association with their respective businesses.