Gone are the days where a copy of Photoshop was sufficient to create business stationery and logos, business owners and marketing departments now need to have more sophisticated designs and logos and will use external design agencies to create them, often investing a significant amount of time and money in the process. If this is something you have in mind for your business then you will want to be sure that you own the logo and can fully exploit its potential value. Below are some key intellectual property issues to be mindful of.
So you've got your business idea, you've done your research, you've looked into any applicable industry laws and now the fun part... designing your logo! You want the image in your mind to be positively conveyed to the public and you want your logo to be successfully synonymous with your brand and to achieve this many businesses will approach a design agency.
Who Owns Your Logo
BEWARE - as without a written agreement in place, if you engage a design agency to create your branding and logo, the legal owner of that branding or logo will be the creator of the design, in this case the design agency. This will be the case regardless of how much you paid for such logo and design to be developed.
So if the design agency owns my logo, can I use it?
Not necessarily.
Aside from the fact that you have paid for it, you will want to own the logo so you can use it freely without restriction and on various platforms including stationary, websites, advertising, social media and vehicles. Imagine if you have rolled your logo out across these platforms and your design agency then claims you have infringed their rights as they are legal owners of the logo! Whilst you may consider this is a farfetched example, it is technically possible if you do not have the legal right to use your logo, or have ownership of it.
The ability to defend your logo from misuse or copying will also be restricted, as only the owner (or in limited circumstances, the licence holder) of intellectual property rights can claim an infringement of those rights. It is important for businesses to be able to prevent the unauthorised use of their logo and protect their brand identity, and as such it is critically important that businesses have the right to take legal action, which is only achievable if they own their logo.
Your logo may hold a lot of value as a business asset and there is a risk that it could cost your business dearly, if you cannot enforce your rights in it effectively. For example, if you decide to sell your business you will want to ensure you have the right to sell your logo and branding with the business. If your logo is synonymous with your business a prospective buyer may view this as possibly the most valuable asset you have and this may jeopardise a sale if there is any doubt as to ownership.
John Stuart, the former chairman of Quaker once famously said, "If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trademarks, and I would fare better than you."
So how can you ensure that you own your own logo?
The key provisions to consider in your contract with the design agency will be intellectual property. Often design agencies will state that all the rights in intellectual property will only transfer or pass to the business upon receipt of full payment and whilst this is fairly standard you will want to ensure that you know the point when ownership will transfer to you.
As a minimum, you should ensure the following issues are included in the contract:
Seek a transfer of the ownership in writing and ensure the document evidencing the transfer is signed. Whilst copyright is likely to be the predominant intellectual property right capable of protection, you may also have designs and unregistered trade-marks being developed. It is preferable to ensure a blanket assignment of intellectual property rights is obtained.
Assurances re: the work from the agency. In order for the work to have the protection of copyright via the Copyright, Designs and Patent Act 1988 (CDPA) the work must be regarded as original, and a degree of labour, skill or judgement to create the work must be exhibited. A warranty that the design agency has used such efforts (and that such design is not similar to anything else it has created) should be sought.
Third party protection
In addition to the warranty above, you should also seek assurances that any design the design agency have created, does not infringe the intellectual property rights of a third party. Given that a third party is likely to contact you in the first instance if they spot an infringement, you should seek an indemnity (a promise to pay) from the design agency for any third party infringement, which results in you paying sums by way of loss and damage as a result of the
infringement to the third party. Waiving moral rights of the author. In addition to an assignment, you should ensure that any moral rights in the creation are waived. Moral rights are set out in the CDPA and they protect the rights of an author or a creative artist, allowing them to protect the integrity and ownership of their work. These can be waived in writing and ultimately if an employee of a design agency/sole designer is being commissioned to produce such work for you, such rights should be waived after payment and transfer.
Restricting future use by the agency
Ensure that your agency has no right to use any of the intellectual property after assignment, unless such rights, for example via a licence to use your work in a portfolio, are limited.
Protection of your logo
After your logo has been developed you may be able to register it as a trademark. You can register your logo in the UK with the UK Intellectual Property Office website.
In summary, it is very important to ensure that the intellectual property rights in your logo are transferred to you on completion of your logo design project. Doing this will ensure that you have the freedom to use your logo as and when you want, as well as enforcing intellectual property rights claims should anyone copy or infringe the design. Intellectual property claims can become contentious, complex and expensive to pursue, so it is advisable to ensure you get appropriate legal advice regarding intellectual property rights early in the stages of the logo design project.
