Posted by Stephen Welfare, Partner
On 1 September 2016 Withy King LLP merged with Royds LLP. The trading name for the merged firm is Royds Withy King. All content produced prior to this date will remain in the name of the firms pre-merger.
Jewellery Business loses Copyright Case
IPEC rules on implied licence in joint venture negotiations.
Last month (November 2015), the Intellectual Property Enterprise Court ruled on the scope of an implied Licence following joint venture negotiations. The court rejected a claim for copyright infringement and passing off by the owners of the jewellery business; Hidden Gem, finding that the acts complained of were within the scope of the implied Licence granted to the Defendants during joint venture negotiations.
Mrs Helme bought a jewellery business in 2007 for £1,000, from a friend who was emigrating. Not long afterwards, her daughter joined her in the business and it operated as a partnership. Much of the jewellery offered for sale was placed in display cabinets which were located in hair salons and beauty parlours in the North West of England. Customers could select items and pay into a cash box. The relevant premises were regularly visited to check the receipts, empty the cash box, and restock the jewellery. Sales were also made through a website, private parties, wedding fairs and charity events. The business had its own logo and Mrs Helme owned the copyright in it. The business had been operating under the trade name and logo by late 2008 and goodwill subsisted in the name and the logo.
In late 2008/early 2009, Mrs Helme entered into negotiations with Richard Maher and Michael Green of Healthcare – Europe Limited (a business at that time selling healthcare products). The nature of the intended joint enterprise would be the creation of franchise arrangements and preparatory steps were taken by the parties to that end during 2009, but the joint venture never came to fruition, the parties fell into disagreement and in April 2010, the Claimants sent a letter of claim to the Defendants.
The Claimants complained that the Defendants had used their logo in breach of copyright and the use of the trading name amounted to passing off. The Judge disagreed.
The Judge found that the Claimants had granted the Defendants a Licence to use the “Hidden Gem” trade name, the logo and a photograph for any purpose which they might reasonably consider to be for the advancement of the joint enterprise. Although the friendship that initially existed between the parties had diminished, that could not retrospectively terminate the existence of the Licence. The Judge held that the Licence continued until receipt of the Letter of Claim in April 2010.
Among the specific acts complained of, were the placing of advertisements about the proposed joint enterprise in the National Press and online. The Judge found that those placed before April 2010 were within the ambit of the Licence; Mrs Helme had participated in general discussions about advertising, even if she had not been told in advance about all of the advertisements. The Judge also found that advertisements and sales by another party after April 2010 came within a sub-Licence by the Defendants; the granting of the sub-Licence was within the scope of the broad Licence granted by the Claimants to the Defendants. The claim was dismissed and it is to be expected that the Claimants will be ordered to pay the Defendants’ costs.
- The lesson to be learned by any business entering into negotiations with a third party, is to be clear what Licenses and permissions are being mutually granted, if any, and if possible, a Licence Agreement should be entered into to make this perfectly clear, and where appropriate, the parties should always use Non Disclosure Agreements.
For more information about this case and advice on all aspects of Intellectual Property Law, contact Stephen Welfare at Royds Solicitors, firstname.lastname@example.org.