A company’s intellectual property can often be one of its most valuable assets. Take Nike for example. The 'Nike' name and its famous ‘swoosh’ logo is a large part of what draws a consumer into purchasing Nike goods and services. Some consumers will purchase Nike trainers simply because they bear the Nike ‘swoosh’. It is not surprising that Forbes ranks Nike’s brand value at nearly $40 billion.
However, many businesses fail to put the correct contractual arrangements in place to ensure they own all relevant intellectual property rights when commissioning an independent third-party designer to create a new brand logo. The failure to do so not only means there is uncertainty as to what rights the business owns, but also makes it harder to be able to take legal action against third-parties who produce counterfeit goods, or who wish to use a confusingly similar brand logo.
When a business commissions an independent third-party to design a new brand logo, the starting point in law is that the commissioned party will have legal title to any copyright which vests in the design of the logo. Thus, the commissioning party needs to make sure all such rights are assigned to it in the contract terms entered into with the designer. If a business fails to do so then it will be left to the Courts to decide what rights the business has in respect of the design.
In the case of Griggs Group v Evans, the first defendant was commissioned by the claimants to design a new logo for their Doc Martens range of footwear. The first defendant fulfilled the commission, but subsequently assigned copyright in the design for the logo to an Australian rival of the claimants. On the facts, the court held that a mere ‘licence to use’ the design would not provide the claimants with sufficient rights to prevent the design being used by a rival. It held that it must have been the intention of the parties that equitable title to the copyright belonged to the claimants. An order was thus made that legal title to all the copyrights in the world in the design be assigned to the claimants - even though a third-party had thought it had already bought legal title to the new Doc Martens logo from the first defendant.
Whilst the claimants were ultimately successful, they had to incur significant legal costs (and management time) to achieve what could have been achieved at the outset if they had addressed the issue at the time they commissioned the independent third-party designer. It is always best to ensure that legal title and full ownership of all copyright is assigned, so as to avoid uncertainty and unnecessary litigation further down the line.
If you have any queries regarding intellectual property and contract arrangements please contact our Intellectual Property team.