The charities and social businesses we work with often run into difficulties when they engage external designers to produce logos.  They often fail to appreciate that where a self-employed consultant creates a copyright work for them the copyright will be owned by the consultant unless there is an agreement that copyright will be owned by the client organisation.  The organisation may not own the design even though it paid for it.

In some cases, the situation is made better because although there is no express agreement about the ownership of copyright in the design, an agreement can be implied by the court.  However, the scope of the implied agreement will not go further than is necessary in the circumstances.  This will often leave the client organisation with no more than a licence to use the copyright work (rather than an assignment of the copyright).

Problems also arise where new opportunities for exploiting the copyright work arise after it is created.  The implied licence will not extend to such new opportunities.  For example, a number of charities were forced to pay their designers additional fees for the right to use logos on their websites because the design had been created before the internet was widely used, the copyright in the design had never been assigned to the charity and the charity could not prove it had the right to use the design for purposes that were not contemplated when the designer was engaged.

A number of these issues are highlighted in a recent case involving a Community Interest Company in Stoke on Trent:-

Atelier Eighty Two Ltd v Kilnworx Climbing Centre CIC and others [2015] EWHC 2291 (IPEC), 30 July 2015 (Bailii).

In this case, the situation was further complicated because the designer had assigned the copyright in the logos concerned in writing to another company.  However, the other company was owned by a former director of Kilnworx (the CIC referred to above) and had notice of the CIC’s claim to the copyright. As a result, it took the legal interest subject to the CIC’s equitable rights to use the copyright work.

Another interesting aspect of the case is that it arose in the context of a dispute between the founders of the CIC.  As is not unusual the individuals involved sought to use any available legal lever to achieve their ends or, as Judge Hacon put it (at para 31):

“I think the reality is that Atelier's current claim to the unencumbered ownership of the copyrights in the Logos is borne of the unfortunate and bad tempered split between the individuals who thought up the Kilnworx project and a wish on the part of Mr Bunting to hold Kilnworx and its remaining directors over a copyright barrel in order to recover some of what he believes to be the £45,000 or so owed to him. There is nothing intrinsically wrong in that, but the barrel has to be there. In my view it is not.”

For more information

For further information on the issues raised by this briefing note please contact Shivaji Shiva. We have produced a toolkit on Intellectual Property for charities and social businesses and Shivaji or Emma Young would be delighted to discuss that with you.

Is £400m enough?
Is £400m enough?

The government announced on 16 May that it will provide a fund of £400m to cover the costs of removal and replacement of cladding to high rise residential blocks which have failed tests.

The problems with co-owned properties and attorneys
The problems with co-owned properties and attorneys

Whilst some people are under the impression that preparing a Lasting Power of Attorney (LPA) is simply a case of completing a form and ticking a few boxes, it is about far more than this.

What's mine is (not) yours!
What's mine is (not) yours!

A big fear for some people facing divorce and the inevitable carving up of the matrimonial assets. They seek assurances that such assets will be “ring-fenced” and retained for them.

How to avoid the PET trap
How to avoid the PET trap

When an individual is thinking about making a gift to another individual, consideration needs to be given to the Potentially Exempt Transfer (PET) trap.

Fictitious divorces
Fictitious divorces

Arising from the recent Family Division announcement, people who think they are legally divorced may in fact still be married.