Rights in intellectual property allow for creativity and innovation to be owned in the same manner as physical property. However, in contrast to the ownership of physical property which is often clear cut, it is often more difficult to determine who is the owner of an idea. This is particularly true of ‘logo’ (figurative) trademarks. Often the trademark owner may differ from the company or person that is deemed to be the owner of any copyright in a logo. For example, if a trademark has been created by a design company, there may be a possibility that copyright resides in the design company. In this situation, an assignment may be required to transfer the copyright. As illustrated by the case below, the Courts are unwilling to imply assignments.
Background
The design company Deepend Fresh Recovery Limited (Deepend) was approached by Fresh Trading Limited (Fresh) to create a brand for its smoothie products (the well-known Innocent brand). In 1998, the two companies had drawn up Heads of Terms whereby it was stated that Deepend would be remunerated for its work by receiving shares in Fresh. There is some dispute between the parties as to whether a binding agreement was concluded.
When Deepend went into liquidation in 2001, it received no payment for the design work for Fresh Trading nor did it receive any shares in the said company. Under an assignment dated 10/10/2007, the copyright in “halo” logo was assigned from Deepend to Mr Andrew Chappell, who in 2009 validly assigned the copyright to Deepend. Deepend applied to cancel two of Fresh’s CTM Registrations for the “halo” logo on the grounds that they had copyright in the original design and therefore use of the trademarks could be forbidden.
OHIM’s decision
The case was heard in OHIM’s Cancellation Division. OHIM found that copyright subsisted in the “halo” logo and that since it was created by an employee of Deepend, without any agreement to the contrary, the first ownership of the copyright belonged to Deepend. Although the issue of assignment was addressed in the ‘Heads of Term”, the document was never signed, hence, assignment of copyright was not effective.
Deepend relied on Art. 53 (2)(c) of Council Regulation (EC) No 207/2009 (CTMR) “A Community trademark shall also be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings where the use of such trademark may be prohibited pursuant to a copyright under the Community legislation or national law governing its protection.” OHIM held that both Fresh’s trademarks therefore infringed the “halo” design prima facie.
In its defence, Fresh, tried to rely on the case Griggs v Ross Evans where the Court of Appeal was willing to impose an implied term within the existing commissioning agreement, requiring assignment of the copyright in the DR MARTENS AIRWAIR logo from the designer to Griggs. The Court held that the implied term was essential in order to give commercial effect to the original agreement to design a logo for Griggs.
This approach was not followed by the Cancellation Division. The court found that unlike Griggs, there was no written agreement and therefore they would need to infer an implied contract between the parties containing a term to assign the copyright to Fresh. Furthermore, a factor highlighted by the Court of Appeal in Griggs was that the designer had been remunerated for his work whereas Deepend had not been paid for its work.
Summary
From the above case it can be seen that if a trademark is the product of a design company, and copyright resides in the work, it is imperative to obtain an express assignment of the copyright in that work. Failure to do so, may result in cancellation of your trademark should the proprietor of the copyright work raise objections to use/registration of your trademark.
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