The High Court has ruled that Fresh Trading Ltd, which ran the INNOCENT smoothie business, was the equitable owner of copyright in its main brand logo, known as ‘the dude’.
Fresh Trading Ltd (Fresh) was founded in 1998 and the founders engaged a design agency called Deepend to do the design work for the new brand. Under the terms of the agreement between Fresh and Deepend, of which no executed copy could be found, Deepend would receive 3 instalments of shares by way of payment and Fresh would receive “full intellectual copyright of any work, creative ideas or otherwise, presented by the agency and then subsequently approved by Fresh”. Deepend would retain copyright in unapproved work.
Deepend duly created the dude logo, which has appeared on INNOCENT products ever since.
No shares were ever allotted to Deepend under the agreement but Deepend did not chase this matter and the parties remained on friendly terms. In 2001, Deepend went into liquidation, which concluded in 2009. In the meantime, Fresh also assigned the IP rights to another company in the group.
Prior to the conclusion of the liquidation, a friend of the designer of the dude logo called Mr Chappell bought from the liquidators Deepend’s interests in the copyright works it had created for Fresh and assigned these rights to a company called Deepend Fresh Recovery Ltd (Deepend Fresh).
In 2009, as a result of proceedings brought by Deepend Fresh, the Office for Harmonization in the Internal Market (OHIM), declared Fresh’s Community trade mark registration of the dude logo invalid on the grounds that Deepend Fresh owned the copyright in the logo.
Fresh appealed the OHIM decision, seeking a declaration in the High Court that Fresh was the legal owner of the copyright; or it was the equitable owner of the copyright; or that Fresh had an implied exclusive licence under the copyright.
The High Court granted Fresh’s declaration that it was the equitable owner of the copyright in the dude logo but rejected its claim for legal ownership of the copyright.
The judge found that the parties had never actually executed the 1998 agreement and so could not have legally assigned the existing or future copyrights under ss. 90 and 91 of the Copyright, Designs and Patents Act 1988 (CDPA).
Despite the fact that the agreement had never been signed, the conduct of the parties indicated that they accepted the agreement and were operating under its terms.
The judge rejected Deepend Fresh’s claim that copyright would only vest in Fresh when the shares were allotted finding instead that the obligation to transfer copyright and the obligation to allot shares were concurrent, not conditional on each other. The failure to allot shares did not indicate that Fresh had refused honour the agreement.
The judge added that were he unable on the facts to find an express assignment, he would have been minded to find, as a matter of commercial common sense, an implied assignment, rather than a licence which could be terminated by Deepend at any time.
Finally, the judge concluded that had he been unable to find neither ownership of copyright nor a licence to use it, he would not have granted injunctive relief to Deepend Fresh as a long time had passed since the creation of the logo and Fresh has built a substantial business using it. Deepend were obviously aware of this and had made no previous claim.