On 14 May 2019, Judge Melissa Clarke handed down her judgment in a copyright dispute between ATB Sales Limited (t/a ‘Whytes Bikes’) and Rich Energy Limited, energy drink producer and title sponsor of the Haas Formula One Team, concerning the two stag logos depicted below.
In summary, Judge Clarke held that Rich Energy’s logo amounted to an infringing copy of Whytes Bikes’ logo, entitling Whytes Bikes to an injunction and damages or an account of profits at its election.
What is the background to this dispute?
ATB Sales Limited has traded as ‘Whytes Bikes’ since 1994 and is a high-end, independent bicycle retailer based in Sussex. In 2008, two of its employees designed the stag logo (as shown above left) in the course of their employment (thereby vesting copyright in Whytes Bikes), and the logo has been continuously displayed on Whytes Bikes’ website since 2010.
In May 2015, William Storey (director and sole shareholder of Rich Energy) commissioned Sean Kelly of Staxoweb Limited to design a logo for Rich Energy. After conducting extensive research into other stag logos, Rich Energy settled on and commenced use of the stag logo (as shown above right), also registering the logo as a UK trade mark in September 2015 (in the name of Storey). Subsequently, Rich Energy became title sponsor of the Haas Formula One Team for the 2019 FIA Formula One Championship, launching in London on 7 February 2019, as a result of which its stag logo featured prominently on the team car, kit and related promotional materials.
What did the judgment say?
The judge held that both logos were ‘strikingly similar’ and that any differences would ‘not… (be) noticeable on a strictly visual, side-by-side comparison’. Any differences would only be obvious on a measured analysis and there had been copying of a substantial part of the Whytes Bikes logo. In addition, the judge felt that the similarities between the logos were ‘sufficiently close, numerous and extensive to be more likely to be the result of copying than coincidence’. Consequently, the judge was satisfied that Whytes Bikes’ stag logo had been copied by Rich Energy (especially given the unreliable nature of certain evidence produced by Kelly and Storey during the proceedings), concluding that ‘I am satisfied on the balance of probabilities that both Mr Kelly and Mr Storey have lied about not being familiar with [Whytes Bikes’ logo]. I find it more likely than not that they were familiar with it, and that they directly and knowingly copied [Whytes Bikes’ logo] in designing [the Rich Energy logo]’.
In terms of remedies, Whytes Bikes was deemed to be entitled to an injunction and damages or an account of profits, together with a declaration of invalidity of the UK trade mark registered by William Storey.
Significantly, the injunction would potentially extend to all use of the Rich Energy stag logo, including on:
- the Haas team 2019 Formula One car;
- the kit and helmets of the team drivers, Kevin Magnussen and Romain Grosjean; and
- any other promotional material and merchandise bearing the Rich Energy stag logo.
What has the Haas team said?
Haas team boss, Gunther Steiner, has stated that the dispute does not concern the team and is strictly a matter between Whytes Bikes and Rich Energy. Steiner also says the team has not been told to modify its car or any other materials featuring the infringing stag logo, suggesting that some form of settlement may be under way.
Indeed, the Haas team car featuring the infringing logo recently participated in the Monaco Grand Prix on 26 May 2019, so keep your eyes peeled at the upcoming Canadian Grand Prix to see if there have been any modifications!
What happens now?
A further hearing is scheduled for 27 June 2019, at which Rich Energy may apply for permission to appeal the decision.
This dispute highlights the wide-reaching effects that copyright infringement can potentially have, particularly in respect of sponsorship and licensing arrangements, and also demonstrates the importance of undertaking thorough searches when conceiving a new brand/logo.
Although the Haas team had no hand in designing Rich Energy’s logo, subject to the terms of its agreement with Rich Energy and/or any potential settlement with Whytes Bikes, it may have to undertake alterations to its team branding (car, kit, promotional materials etc) at potentially significant expense.