For 30 years Tableware Distributing Co. had been the exclusive Canadian distributor of all fine china produced by the Regal China Company of England. At the beginning of the commercial relationship, Tableware advised Regal that it believed from information obtained by its sales staff that there was a large potential market in Canada for a new china pattern with a delicate floral design. A number of estimates and projections were sent to Regal to support this suggestion.

Regal decided, on the basis of this information, to request one of its designers, Reynolds, to attempt such a floral pattern. Reynolds, an artist employed by Regal, designed a pattern consisting of groupings of spring wildflowers. Regal then sent the pattern to Tableware for its impressions. Tableware made several suggestions to modify the design, which Reynolds did. Satisfied with the design, Tableware then placed a first order to a value of $50,000 for the new china, which Regal had named "April Showers." Regal then geared up for production of several hundred place settings and ordered the preparation of the necessary lithograph sheets required to transfer Reynolds' design to the china pieces. Each piece was backstamped with the name of the pattern and the manufacturer. Sales of April Showers took off in Canada and represented a major portion of Tableware's sales.

After two years, Regal's sales volume in Canada grew to the extent that it became necessary for Regal to open its own subsidiary office in Canada. Shortly after the new office was established, the Regal China Company of Canada gave notice to Tableware that it intended to take over the distributorship of April Showers in Canada. Tableware attempted to persuade Regal to reverse its position on this matter. When Regal refused to do so, Tableware informed Regal that it had registered "April Showers" as a trademark and the pattern as an industrial design. Tableware then sent a letter offering to license Regal Canada to use the mark and design, setting out the fees it would expect to be paid in return.

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Discuss the legal position of the parties involved in this situation and the argument that may be used to support those positions. What remedies are available?

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Legal Positions of the Parties Tableware Distributing Co Arguments Established Business Relationship ... View the full answer