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Posted on March 16, 2015

Who owns your logo? A question of IP (intellectual property) law not rights

Innocent logoImagine briefing a professional design firm to create a brand new logo, you hold many creative and briefing meetings then watch the birth of your new logo. After approving the design work, you pay all of their invoices then spend millions of pound developing your business and building your own brand. Then you find out that you have missed one important step in the process and because of that you do not actually own the copyright to your own logo, not yet anyway. How can this happen? If it was not assigned to you then it belongs to the creator, 99% of the time. Before you read further consider are you asking who owns the logo design, the trademark or the patents as they are all different things, sticking a (R) or (C) sign on does not actually guarantee you ownership.

The other 1% is the case of Innocent, it is not unique but is complicated by the payment arrangement which it appears was not completed. It is a very an interesting and costly case and highlights a point of law that many experienced business and marketing people have not fully understood that regardless of payment method that the owner of the copyright for original work created is that creator – not automatically the client, even when fully paid for until ownership has been assigned or transferred over. As an agency we promise to automatically assign the ownership of the design copyright and any intellectual property (IP) rights to our Client upon payment of outstanding invoices – we even state that on our website on the Logo Design page. But not every agency or creative does this so buyer beware. These IP rights have little real value when the company or brand is created but after time and cash investment the brand equity can soar and become real asset value on your balance sheet and this is not the time to start arguing over it’s ownership.

InnocentRedLogoThe Innocent logo saga starts in 1998 when Fresh Trading owner of fledgling drinks brand Innocent signed a deal with brand design firm Deepend to cover the design costs for it’s new logo via sweat equity instead of cash.  Innovative but not unique the contract stated that Innocent would pay the Deepend 4% of the shares of Fresh Trading, at which point copyright ownership for the logo would transfer to Fresh, but the agreement was never signed. The logo was completed but Fresh never paid Deepend the shares and has continued to use the ‘dude’ logo since. This was a huge failing on both sides and the agency did not pursue the issue until 3 years later and had not been resolved 6 years after that when they went into liquidation in 2009. Impossible to say which side stalled on completing the deal, but a close friend of the Deepend designer who actually created the logo bought the IP from the liquidators for the copyrighted works created for Fresh via a shelf company called Deepend Fresh Recover. The ownership of the logo has been going through the courts ever since, until recently. Importantly how could Fresh have sold it’s Innocent brand without full legal ownership of its own logo together a dispute over its own trademark?

As recently as November 2012  the Office for Harmonisation in the Internal Market (OHIM – the body that oversees trademark registration across the EU) sided with Deepend Fresh Recover  ruling that they owned the copyright, not Innocent.  But last month Innocent was finally found innocent of copyright infringement over the historical use of its ‘dude’ logo, with the High Court judgement that overturns the previous decision that Fresh Trading owns the haloed-fruit icon. When innocent had not paid for the logo it seems an odd ruling. So who wins, the side with the deepest pockets?

The saga harks back to 1998, when Innocent owner Fresh was set up and hired a design agency called Deepend to create a logo for Innocent. While the originators Deepend and Fresh both agreed via a “heads of terms” agreement that the agency would be paid 4% in Fresh shares, at which stage copyright for the logo would transfer to Fresh, the agreement was never signed. Fresh never paid Deepend the shares but has continued to use the ‘dude’ logo since.  According to Richard Kempner of law firm Kempner & Partners, which represented Deepend Fresh during the most recent, High Court, case, “clause 5 of the agreement said that copyright would belong to Deepend until Fresh approved the work”, with the law firm arguing that clause 5 was “clearly intended to be conditional on clause 4” (i.e. payment). Deepend Fresh successfully brought proceedings before OHIM, which declared Fresh’s community trademark registration of the ‘dude’ logo invalid. But at the trial the judge decided that “these were separate, non-conditional obligations.”

Deepend Fresh will no longer pursue the issue. Kempner said that there was an important lesson for branding and marketing agencies. “What the outcome of this case highlights is that people need to be careful in structuring contracts in very precise terms, and it’s a devastating case for designers who think they’re protecting their right to be paid. I think it shows that sometimes there can be a difference between law and (at least my view of) justice, because there might be a case for saying that Innocent got something for nothing here.”

Was it worth years of legal disputes? Innocent have remained silent on the issue but must be pleased and relieved. To read more go to the Marketing Magazine website.

No comment has been made by Innocent on this case.   In February 2013 Coca-Cola increased their company stake to over 90%. The Innocent logos here are freely available on the company website here > http://www.innocentdrinks.co.uk/us/press/photos-and-logos/photos-and-logos/logos

If you want something designed for you without any IP issues visit our Logo Design page.

To read how and why Evolution registered our own trademark see this post > Trademarking practicalities

UK Government IP website: Copyright, patents, designs and trade marks are all types of intellectual property protection. You get some types of protection automatically, others you have to apply for.

See the 2015 brand value of the Top 100 global brands by Interbrand research

posted by Neale Gilhooley (updated 18 March 2016)