Copyright - The Smoothie Maker Who’s Not That Smooth!

06 March 2015

Author: Dawn McKnight
Practice Area: Commercial Law

D_mcknight

Life could have been so much smoother for Fresh Trading Limited (Fresh) if it had only taken a moment to make sure it had a signed copy of the contract it had spent time agreeing with Deepend Fresh Recovery Limited (Deepend) when it commissioned Deepend to produce the Halo logo for the marketing campaign around its Innocent Smoothie range.

It was accepted by both parties that the contract had been agreed but neither party seemed to have a signed version and couldn’t produce any evidence of it having been signed. 

The contract said that Fresh would “receive full intellectual copyright of any work, creative ideas or otherwise, presented by the agency and then subsequently approved by Fresh.” In return for its design services, Deepend was to be allotted shares in Fresh.

To summarise the lengthy and costly court battle which then ensued:

·  Deepend designed the logo which Fresh went on to register as a community trademark.

·  In 2009 Deepend launched invalidity proceedings against the mark on grounds that Deepend was the actual owner of copyright in the logo.

·  Deepend’s challenge was upheld but Fresh lodged High Court proceedings seeking a declaration that it owned copyright in the logo.

·  Earlier this year, the High Court granted Fresh its declaration.

Without evidence of a signed contract, the Court couldn’t conclude that there was a valid legal assignment of the copyright. However it did find there to have been an equitable assignment of copyright in the logo to Fresh. In reaching his decision, the Judge said there was no doubt that the parties had intended to be legally bound by the contract and acted and regarded the contract as binding on them. Deepend argued that copyright could only vest upon Fresh allotting shares to Deepend and as this had not occurred Fresh could not be an equitable assignee of the copyright. However it was found that Fresh’s consideration for the assignment of the intellectual copyright was the promise to allot shares rather than actual allotment.  The logo had been created specifically for Fresh and was to be used specifically for Fresh marketing purposes.

Conclusion

Without clear agreement from the outset as to who will own copyright in works created, the cost (both in time and money terms) to sort it out is extensive.

Whilst equitable remedies may be available as was the case here, such remedies are entirely discretionary and by no means guaranteed.

When engaging third party designers, be a smooth operator – make sure you get it in writing from the designer that you will own all copyright resulting from his work. This is the only way to transfer legal ownership of copyright and remove the risk of the designer claiming rights in the material in the future.

For more information about this update or advice on commercial law, please contact Dawn McKnight.

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