A recent case in the press has illustrated just how important branding and intellectual property have become. There is a growing awareness among businesses and public sector organisations of the intellectual property rights that they own and the steps available to prevent other parties from infringing those rights. Intellectual property is an important asset of any business or organisation, and includes not only patents but also trademarks, registered designs and copyright.
Hackney Council, in the first case of its kind, took on sportswear company Nike in a recent copyright dispute regarding Nike’s use of the Council’s logos in one of its sportswear ranges. Nike had used Hackney Council’s logo without permission on t-shirts, trainers and footballs. Nike appears to have chosen the logo after using the Hackney Marshes football pitch as a setting for an earlier advertising campaign, and it is thought that the company was seeking to further capitalise on its association with that venue.
The Council had not protected the logo in question by registering it as a trademark. However, it claimed that copyright subsisted in the logo as it was an original artistic work which had been designed for the Council in 1965, and therefore any substantial copying of that logo without consent would amount to infringement. Copyright actions may be brought for infringement by copying of any original creative works, including artwork, written works, and even music and videos.
The difficulty for the Council was establishing its loss: as a public sector body rather than a trading business it was much harder to claim that it had suffered direct financial loss as a result of Nike’s use of its logo. However, the Council argued that if it had been approached by Nike for the grant of a licence to use the logo on products, then the Council would have negotiated a percentage royalty on sales of clothing incorporating the logo. The Council entered into talks with Nike on the basis of a 5 – 15 per cent royalty sum, and obtained a £300,000 settlement.
Although the Council in this case showed a strong awareness of the importance of its corporate identity and brand, its motivation for taking action may well have been to avoid an association with a commercial business. Generally, for a manager of a public body, or a director of a small business, protection of the brand name or other creative assets (for example through registration of trademarks) is not a high priority. As shown in Hackney’s case, however, it is possible to challenge a third party for illegitimate use of your intellectual property, and benefit from doing so, even where you do not have any registered rights.
Unregistered intellectual property rights include copyright, unregistered design rights or unregistered trademarks (to bring an action in the latter case is known as proceedings for ‘passing off’). A ‘passing off’ action may be brought against a third party where you have suffered damage to your reputation as a result of the third party using your brand name or a similar one to ‘pass off’ its goods or services as being associated with you. However, if a business has already taken steps to register its rights, this makes establishing an infringement case, and as a result enforcing its intellectual property rights, much easier.
Hackney Council has shown that it can be financially very rewarding to keep an eye on the marketplace for misuse of your intellectual property assets, even if you have not taken steps to register those assets in advance.