EWHC and copyright ownership – there’s nothing wrong with holding people over a barrel, as long as the barrel is present
25 Aug 2015 |
3 minute read
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A recent Intellectual Property Enterprise Court ("IPEC") case has confirmed that where there are no express terms relating to the assignment of the intellectual property rights in an agreement to commission work a term to that effect can be implied, giving the commissioner of the work an equitable interest. The case also confirmed that if a term is implied there will be no copyright infringement from the party that commissioned the logo.
From a commissioner's point of view, it can seem strange that despite commissioning and paying for a logo to be designed the commissioner does not own the copyrighted work.
Legally, the author of the work is the first legal owner (unless the work is created during employment in which case the employer is the owner). The commission agreement should provide for the copyrighted work to be assigned and legal ownership transferred, but this is often overlooked, and the resulting lack of legal ownership is only discovered further down the line.
The basic principles were laid out in Robin Ray v Classic FM Plc [1998] and confirmed in R Griggs Group Ltd and Others v Evans and Others [2005]. Here a term was implied into the contract stating that the equitable interest did belong to the commissioner, on the basis of business efficacy i.e. the term should be implied into the agreement in order to make the contract work
The current case had a convoluted sequence of events whereby the logos were commissioned by Kilnworxs but paid for by Atelier, who were meant to be repaid by Kilnworxs. Re-payment did not occur and following a souring of the relationship, Atelier requested payment for the assignment of copyrighted logos. There were no express terms relating to the ownership of the copyright in the logo or assigning the copyright to Kilnworx's as the commissioner. Furthermore the legal interest in the copyrights had already been assigned by the designer of the logos to Atelier.
Thus the court had to determine what term should be implied to make the agreement work. In this case as the designer of the logos, being the first legal owner, had already assigned the legal interest to Atelier, it seemed that Atelier had Kilnworx over a barrel as Kilnworx had to prove both ownership of the copyright and that they had not infringed Atelier's copyright by using the logos.
Judge Hacon of the IPEC stated that as a starting point there would be a presumption that the client had either ownership of the copyright, or an exclusive licence. This presumption provided an implied term in the agreement giving Kilnworxs an equitable interest.
As to the assignment of the legal interest, Judge Hacon found that because Atelier were aware of the original intentions of the parties i.e. that Kilnworx had commissioned the designer to create a logo for Kilnworx, 'Atelier took the legal interest in the copyright subject to Kilnworxs equitable interest.'
As Judge Hacon stated 'there is nothing intrinsically wrong in that [holding someone over a barrel] but the barrel has to be there.' In this situation, it was shown that the intentions of the parties were both clear and apparent, and therefore Kilnworxs had an equitable interest and had not infringed copyright.
In determining copyright ownership the author/employer will be the first owner of the legal interest. However, the courts have shown that while copyright ownership matters will be considered on a case by case basis, without an express term the starting point will follow Griggs i.e. 'in order to give business efficacy to the contract it will be presumed that the client can prevent others from using the logo', thus giving equitable ownership to the commissioner. However, to remove any uncertainty and unnecessary expense, it is advisable for anyone commissioning work to ensure the copyright of the work is clearly assigned at the earliest possible stage.
If you have any queries in respect of the above or need support in respect of commissioning agreements or otherwise dealing with Intellectual Property in commercial transactions please contact Martin Cuell, partner and head of Foot Anstey's IP practice on +44 (0)117 915 4933 or email [email protected], or Hannah Batten, associate on +44 (0)117 915 4975 or email [email protected]
