The High Court of England and Wales recently decided on a case concerning the ownership in copyright of the famous innocent smoothie logo, the cartoon depiction of a face with a halo, otherwise known as the ‘Dude’. The Court held that the owner of copyright in the logo was the owner of the Innocent smoothie brand, Fresh Trading Limited (Fresh), and not the successor-in-title to the company that designed the logo, Deepend Fresh Recovery Limited (Deepend Fresh).
When Fresh was a start-up company (over 15 years ago), it engaged the services of a company called Deep End Design Limited (Design Company) to design numerous logos (including the famous ‘Dude’ logo). At the time the parties agreed that the Design Company would design logos and branding materials in return for shares in Fresh. Some important points regarding the arrangement are as follows:
- An agreement was drafted setting out these terms and was labelled “Heads of Agreement” and “Subject to Contract”
- The agreement provided that Fresh would receive full intellectual copyright of any work presented by the Design Company, that was approved by Fresh
- There was no proof that the agreement was ever signed
- The allotment of shares was never carried out by Fresh
Since that time, the logo has been used on every product sold by Fresh. In 2001, the Design Company became insolvent and was wound up. In 2009, the successor-in-title to the Design Company, Deepend Fresh purchased all of the Design Company’s copyright interest, if any, in all works created by them for Fresh, including the Innocent design works.
Deepend Fresh subsequently brought a successful application to OHIM to invalidate the Innocent ‘Dude’ logo on the ground that it owned the copyright in that logo. Fresh appealed this decision and issued separate proceedings in the High Court to establish its ownership of the copyright.
The High Court decided that Fresh was the owner in equity of the logo. The Court held that an equitable assignment of the copyright works existed. This was despite the fact that neither party had evidence of a signed agreement, no shares had been allotted and the agreement was labelled “Heads of Agreement“ and “Subject to Contract“. In the Court’s view, the ‘promise’ to allot the shares (rather than an actual allotment) was sufficient to validate the agreement.
This case highlights the importance of obtaining and retaining a copy of any design contract providing for the transfer of IP rights which has been executed by the entity/individual providing the design services.