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Top tips for commissioning work from suppliers

19th

May

19th

May

Mike Shaw, Partner and Registered Trade Mark Attorney based at the Manchester office of intellectual property specialists Marks & Clerk, outlines his top five tips to avoid possible pitfalls when commissioning work from independent agencies and consultancies.

Mike Shaw, Partner and Registered Trade Mark Attorney based at the Manchester office of intellectual property specialists Marks & Clerk, outlines his top five tips to avoid possible pitfalls when commissioning work from independent agencies and consultancies.

The recent case involving Fresh Trading, the company that markets smoothies and other juice drinks under the INNOCENT brand, is a timely reminder of the risks involved when commissioning a piece of work from an outside agency or consultancy. Under English law, if you commission a work from a third party, the copyright in that work will not be owned by you, but rather by the agency or consultancy that creates the work. It is therefore important to ensure that, when commissioning the work with the agency or consultancy in question, you both sign a document transferring the copyright to you or your business

Fresh Trading was first set up in the late 1990s. At that time, the company agreed with an independent design agency, Deepend, that Deepend would provide design services for Fresh Trading, including the design of a logo to accompany the trade mark INNOCENT.  Deepend subsequently created the recognisable “Dude” logo that has been used by Fresh Trading ever since, as set out below:

Fresh Trading and Deepend had discussed the terms on how they would work together, and an agreement was prepared. In return for shares in Fresh Trading, all copyright in materials created by Deepend would be transferred to Fresh Trading.

Several years later, the successor of Deepend brought proceedings against Fresh Trading claiming the trade mark registration for the Dude logo was invalid on the basis that Fresh Trading did not own the copyright in the logo. Unfortunately, both parties were unable to locate a copy of the signed agreement and so Fresh Trading could not clearly establish its ownership of the copyright.

As a result of this action, Fresh Trading was forced to incur substantial costs before the UK courts seeking confirmation that the issue in question was unfounded and that it was entitled to continue to use the Dude logo.

Having considered the case, the UK courts decided that Fresh Trading was in fact the equitable owner of the copyright in the logo, thereby defeating any potential copyright infringement claim that Deepend’s successor was considering.

Whilst this case was eventually decided in favour of Fresh Trading, the legal costs incurred in order to reach this decision were extensive. The costs could have been avoided if Fresh Trading had addressed the copyright ownership position at the very beginning of their relationship with Deepend, by finalising the terms of their agreement and retaining a signed copy of the agreement.  

To avoid encountering similar difficulties as Fresh Trading, we have set out below some advice for commissioning work from independent agencies and consultancies:

  1. Be as specific as possible about the work that is being commissioned, so that at a later date there is no room for argument about what work was created during the commission.
  2. Always agree a specific fee for the work undertaken, and ensure that this fee is paid promptly.
  3. Check the small print of the standard terms and conditions of the agency or consultancy before any work is undertaken. If you are not happy, seek to agree alternative terms or appoint a different agency or consultancy.
  4. On completion of the work, ensure that the agency or consultancy provides you with full details of the individual designer(s) that created the work and when.
  5. Ensure that the agency or consultancy provides you with a written signed document that transfers to you all copyright in the work created, together with all original materials recording the work. It is important that the document and the original materials are kept securely – these documents may well be needed at some point in the future if you ever wish to enforce the copyright.

It is recommended that you address matters such as these as early as possible, to avoid the uncertainty and the expense of being forced to deal with them in court proceedings at a later date.

For more information on how to protect and manage your trade marks contact mshaw@marks-clerk.com. Marks & Clerk advises start-ups and SMEs on all aspects of intellectual property, from patent and trade mark protection, to helping young companies secure and leverage investment through strong IP.

 

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