The High Court of England and Wales recently held that the owner of copyright in the Innocent ‘Dude’ smoothie logo was the brand owner, Fresh Trading Limited (“Fresh”), and not the successor-in-title to the designer of the logo, Deepend Fresh Recovery Limited (“Deepend Fresh”). It held this despite the fact that there was no signed written agreement between the parties and an alleged absence of consideration. In making this finding, the High Court held that an equitable assignment existed and that the unsigned agreement between the parties was binding.
When Fresh was a start-up company (over 15 years ago), it engaged the services of a company called Deep End Design Limited to design numerous logos (including the famous ‘Dude’ logo). At the time the parties agreed that Fresh would commission Deep End Design Limited to design logos and branding materials and in return Deep End Design Limited would be allotted shares in Fresh. Some important points regarding the arrangement were:
- the allotment of shares was never carried out by Fresh;
- the agreement was never signed; and
- the agreement was labelled “Heads of Agreement“ and “Subject to Contract”.
Since that time, the logo has been used on every product sold by Fresh. In 2001, Deep End Design Limited became insolvent and was wound up. In 2009, the successor-in-title to Deep End Design Limited, Deepend Fresh Recovery Limited (the defendant in this case), purchased the intellectual property rights of Deep End Design Limited 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 and that the use of the mark by Fresh infringed the copyright of this logo. Fresh appealed this decision.
The Court held Fresh was the owner in equity of the logo and other copyright works. The Court determined an equitable assignment of the copyright works existed in the absence of a signed agreement. This was despite the fact that neither party had evidence of a signed agreement, that no shares had been allotted and that 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 amount to consideration.