Fresh Trading Ltd v Deepend Fresh Recovery Ltd, High Court
In 1998, Fresh Trading engaged Deep End (a design agency) to help with the design for its new brand of INNOCENT smoothie drinks. The electronic version of the agreement between them (although there was no evidence of a physical signed agreement) said “Fresh Trading receive full intellectual copyright of any work, creative ideas or otherwise, presented by the agency and then subsequently approved by Fresh. Work not approved by Fresh remains under the ownership of Deep End.” Deep End created the “dude” logo, which Fresh Trading adopted and used since. The design agency later went into liquidation and a Mr Chappell decided that there may be some value in acquiring the intellectual property rights from the company entering liquidation. He assigned those rights to Deepend Fresh Recovery.
Deepend Fresh Recovery later successfully managed to get Fresh Trading’s European Community Trade Mark for the logo declared invalid on the basis that Deepend Fresh Recovery owned the copyright. Fresh Trading sought to obtain a declaration of invalidity in the High Court on the basis that it was the legal and equitable owner of the copyright in the logo or at least had an implied exclusive licence.
The High Court has ruled in favour of Fresh Trading. Even if there was no legal assignment of copyright (as this would need to have been signed by Deep End to have been effective), there was an equitable assignment. Although the draft agreement had been labelled “heads of agreement” and “subject to contract”, the conduct of the parties suggested that they had been operating under the terms of the agreement.
The Court said that even if there was not an express assignment of copyright, he would have granted an implied term as to assignment rather than a mere licence. As a matter of commercial common sense, it would have been unrealistic for Deep End to use works intended for Fresh Trading. A licence that could be terminable would not have been sufficient.
Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP, comments: “The result of this case was not surprising. The attempt to claim ownership of the logo that had been designed for a client seems to have been a try-on. The judge in this case is not only applying business common sense, but this is also in line with the decision about 10 years ago in the Dr Martens case, where the famous shoe company was also deemed to have an implied term assigning ownership in the copyright in its logo.”
