Unfortunately, you are incorrect. Even if she did not register the trademark, she may still have protectible trademark rights, since trademark depends on use in commerce. More importantly, if she created the design, then she may well have copyright in it, even if she never filed for copyright, since copyright inures in the first person to create an original work. (Registration makes it easier to prove a violation and increases the compensation that can be recovered for a violation; but it's not strictly necessary to have protectible trademark and copyright rights.)Clearly, she'd need to be able to prove that she created it first, she would not have copyright in it; and even if she did create it first, if she did not use it in commerce before you began selling it, she would not likely have trademark rights, since trademark is based on commercial use, not just creation.