Licence and trade mark infringement

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Licence and trade mark infringement

Our client entered into an oral licence agreement with a bespoke Ceramics Company. Sometime later, the Ceramics Company claimed trademark infringement. Due to our intellectual property/licencing expertise, the judge dismissed the Ceramics Company’s claim.

How we defended the intellectual property claim

On behalf of our client, we:

  • Collated the evidence to support our client’s defence and rebut the claims of the Ceramics Company.
  • Won the case at trial, showing that there was a licence agreement, and therefore no infringement committed by our client.
  • Secured our client its full costs.

The “licence agreement”

Our client agreed to work alongside the Ceramics Company, to enable the Ceramics Company to franchise its business. During the negotiations, both parties agreed our client would:

  • Create a separate company;
  • Register a domain name incorporating the Ceramic Company’s trade name.

Our client would use the Ceramic Company’s trade name, logo, and photography:

  • On the website;
  • For advertising and promotional features.

Using an agency to promote business and cut costs

Our client and the Ceramics Company agreed a marketing agency would also promote the business. The agency would place online and press advertisements. Later the agency sold ceramics, alongside the website’s sales.

Note everything was orally agreed. There was no written licence agreement. Had there been a written licence agreement, the whole dispute would have likely been avoided.

Franchising fails

The Ceramic Company’s franchising strategy failed, and the company abandoned it. However, they didn’t tell our client.

Our client’s first indication the Ceramics Company had abandoned franchising was the letter before action. Until this letter arrived, our client worked according to the licence terms agreed during the discussions.

Ensuring written terms record the relationship

The Ceramics Company provided our client with full access to the website. Access enabled our client to fulfil their agreed obligations. Our client developed this website, and enabled the website to sell ceramics direct to consumers.

The Ceramics Company’s allegations against our client comprised:

  • Unauthorised transfer of website hosting,
    • and website development for direct sales;
  • Unauthorised flyer featuring their trading name and company logo;
  • Unauthorised use of their trading name and logo in advertisements and promotional material.

Gannons counter arguments

The court first decided if the parties had a licence agreement. If there was no licence agreement, then our client would have infringed the Ceramic Company’s trade mark. Our client was given permission to use the company’s trade name and logo, e.g.

  • On the website;
  • In advertising and promotional features.

However:

  • The permission’s scope was not defined;
  • There was no formal written agreement.

Oral licence agreement established

We proved the discussions constituted an express grant of a licence. We then successfully argued that under the collaboration terms, our client could use the trade name and company logo for any purpose to:

  • Fulfil their website development duties;
  • Promote the Ceramics Company.

The sub-licence agreement

We demonstrated a sub-licence existed between our client and the direct marketing agency. This existed under the terms discussed for the collaboration. Consequently, the agency’s acts, e.g. press and online advertisements, fell within the sub-licence’s terms.

The judge concluded:

  • The agency had a licence to sell the ceramics;
  • Hence the agency had a licence to advertise the ceramics.

The Court decision on the intellectual property dispute

The judge regarded our client’s acts as within the licence’s scope. The Ceramics Company had conferred this licence on our client during their discussions. The acts were lawful.

The judge dismissed the Ceramic Company’s trade mark infringement claim.

John Deane is a partner in the commercial team. Licence agreements can work well. One party receives royalties, the other the chance to build a business. However, when things don’t work out a resolution is required. Please do not hesitate to get in touch with John if we can be of assistance.