Make it crystal clear

Posted: November 17, 2015

A claim for copyright infringement and passing off from the owner of a jewellery business has been dismissed by the Intellectual Property Enterprise Court on the grounds that the acts complained of were covered by an implied licence granted during joint venture negotiations: Helme v Maher [2015] EWHC 3151 (IPEC), 2 November 2015.

Facts

Mrs Helme sold jewellery through display boxes sited in hair salons and beauty parlours across the North West of England as well as through a website under the name “Hidden Gem”.  In August 2008, Mrs Helme commissioned the creation of a logo for the business and photographs of the products which, pursuant to an assignment from their respective creators, are owned by Mrs Helme.  By late 2008 there was goodwill in the business associated with the “Hidden Gem” name and logo.

In early 2009, Mrs Helme entered into negotiations for a joint venture with Mr Maher, a local business man whom she had known for several years and trusted, and Mr Green who ran a business with Mr Maher.  The purpose of the JV was to run alongside the existing business and grant franchises conducting similar business elsewhere in the UK under the “Hidden Gem” trade name.  All three of them would be fully involved in the development of the business and each hold an equal share.

Several meetings were conducted on a friendly basis between the parties throughout 2009.  Mrs Helme and the defendants enthusiastically agreed to incorporate a company for this purpose and increase publicity for the business through newspaper advertising using the “Hidden Gem” name.  Preparations by the defendants included the incorporation of a company called “The Hidden Gem Jewellery Company Limited”, the registration of a domain name (thehiddengemjewellerycompany.co.uk) and promoting the “Hidden Gem” products through national advertisers, Timscris Readers Offers Ltd, using the logo and photographs owned by Mrs Helme.

Mrs Helme was not informed about the incorporation of the “Hidden Gem Jewellery Company Limited” until later but did not object when she found out and was content with the franchise business being conducted under the “Hidden Gem” trading name. In July 2009, Mrs Helme emailed the password for the hidden gem website she had been developing to Mr Maher to facilitate in further development.  Shortly after this time, enthusiasm for the franchise project waned and the parties were no longer talking to each other regularly although the national advertising continued.

On 9 April 2010 Mrs Helme sent a letter before action to Mr Maher and Mr Green complaining of ten acts including copyright infringement and passing off over the use of the “Hidden Gem” trading name, logo and photographs used by the defendants.  Mrs Helme also complained about what she regarded as the hijacking of the website as she had no control over it following a change of password by the defendants.

Judgment

Hacon J found that Mrs Helme had given the defendants fairly free reign over the “Hidden Gem” IP and had granted a licence to the defendants to use the “Hidden Gem” trade name, logo and photographs for any purpose which they might reasonably consider to be for the advancement of the joint enterprise.  The licence was terminable and Hacon J could not find any evidence of Mrs Helme having notified the defendants that their use of the “Hidden Gem” trade name, logo or photographs should come to an end or be restricted or modified.  As such the licence persisted until 9 April 2010 when the claim before action letter was received by the defendants.  Advertisements and sales conducted by Timscris Readers Offers Ltd after April 2010 came within a sub-licence which was within the scope of the broader licence granted by Mrs Helme to the defendants.  On this basis Hacon J dismissed the claim.

Conclusion

This case highlights the importance of retaining control over intellectual property assets and ensuring that, where there may not be a formal licence issued at the start of business relations, there is a clear termination of the licence and any sub-licences.

Andrew Wyllie, Paralegal, Michael Simkins LLP