Worldwide: Employee Created Rights And Commissioned Works In The Field Of Trademarks

Last Updated: 12 June 2018
Article by Gowling WLG

This is our fourth international article featuring our trademark expert teams from across the firm in Canada, China, France, Germany, Russia, Singapore, the UK and the UAE.

In this article, we will address the topic of employee created rights or commissioned works in the field of trademarks, such as logos, stylised marks, or non-traditional marks such as packaging, get-up, icons, user interfaces, etc.

In such a situation, the trademark owner will need to consider the position under the relevant country law, in order to determine whether the copyright work is automatically owned by the trademark owner, or whether the ownership of the underlying copyrights or design rights have to be transferred to it through a more formal mechanism, such as a written assignment. Where rights are not automatically transferred, then steps should be taken to regularise the ownership as soon as possible and before trademark applications are made so as not to compromise the company's ability to take action (such as opposition or enforcement action against a third party) and to also avoid the right holder being held to ransom by the other rights holder.

This article looks at the rules which relate to the initial ownership of copyrights and transfer of copyrights in employee created rights and in commissioned works in the countries in which we have offices. The table below provides a snapshot.

Who automatically owns? Employee created work Commissioned works
Canada Employer Commissionee
China Employee (the employer having a priority right to exploit the work within the scope of its professional activities).

There exists opaque exceptions under which the employer is the initial owner of copyrights in employee created works.
Commissionee
France Employee Commissionee
Germany Employee (but limited implied license granted to the employer) Commissionee (but limited implied license granted to the commissioner)
Russia Employee Commissionee
Singapore Employer Commissionee (but there exists an exception for photographs, portraits and engravings, in which case the first owner of the rights is the commissioning party)
United Arab Emirates Employee Commissionee
United Kingdom Employer Commissionee

It is therefore important for brand owners to know how they can ensure that they capture and own the underlying copyrights, before filing a trademark.

UNDERLYING COPYRIGHTS BY COUNTRY

Canada

As in most jurisdictions, subject to exceptions, the author of a work is considered to be the first owner of copyright in the work under Canada's Copyright Act. An exception exists where a work is created for an employer by an employee in the course of employment, in which case the employer is deemed to be the first owner of copyright in the work, absent an agreement to the contrary. By contrast, if an author is self-employed, or did not create the work in the course of employment, the author would typically be the first owner of copyright in that work. In this regard, the case law draws a distinction between a contract of service (i.e., an employment contract) and a contract for services (i.e., a consultancy agreement).

Where a work is made outside the employment context and the author remains the first owner of copyright, the Copyright Act provides that copyright may be assigned by the author in whole or in part. To be effective, the assignment must be in writing, and signed by the owner of copyright in the work. Such an assignment must be specifically addressed: The mere transfer of physical possession of a work is insufficient to constitute an assignment of copyright therein. A retroactive assignment is not effective unless it confirms an earlier assignment that actually occurred, so written assignments should be obtained proactively, wherever possible.

The Copyright Act also provides for the subsistence of intangible, non-economic rights in copyrighted works. These "moral rights" include the right to be associated with the work as its author and the right to the integrity of the author's work. Moral rights remain with the author and ownership of such rights may not be assigned or otherwise transferred.

The author can seek remedies including injunctive relief against activities that infringe upon its moral rights. Accordingly, absent a waiver of such rights, an author may be able to restrain the copyright owner or others from infringing the author's moral rights, for example by reproducing the work without attributing it to the author or modifying the work in a manner considered prejudicial to the author.

The Copyright Act expressly provides that such moral rights may, however, be waived in whole or in part. Such a waiver should be expressly addressed in writing. An assignment of copyright in a work, without more, does not constitute a waiver of moral rights and there is no waiver implied by virtue of an author's employment. Where waived in favour of an owner or licensee of the copyright, such a waiver may be invoked by any person using the work under authority of the owner or licensee of the copyright.

Therefore, where a trademark consists of a copyrighted work, it is important for the company to obtain a waiver of the author's moral rights in order to be able, for instance, to modify the copyrighted works as it deems fit, without the risk of the author enforcing his moral right of integrity in such work.

Particular considerations apply where an owner purports to assign copyright in a work that does not exist as of the date of the assignment, for example, where an author prospectively assigns copyright in a work later created in the course of his/her consultancy. Because the work and the copyright therein do not exist as of the date of assignment, case law suggest that the assignment cannot be effectuated at law, but rather the assignment takes place at equity and vests equitable title in the assignee.

As with any assignment at equity, the assignee's equitable title is subject to the equities, and may be vulnerable to an assignment by the author to a bona fide purchaser that does not have notice of the assignee's prior equitable title. A confirmatory assignment executed after the creation of such a work may protect against a subsequent assignment defeating an owner's equitable title to a work.

Canadian law also provides for a reversionary interest in favour of an author's estate, where the author was the first owner of copyright (i.e., where the author created the work independently or otherwise outside of the employment context). In such a case, the Copyright Act provides that no assignment or grant of interest (other than by will) is effective to grant any rights in the work beyond the expiration of twenty-five years from the death of the author. Any Canadian rights granted by the author then revert to the author's estate. This reversion occurs automatically.

Copyright owners and assignees should be aware that the reversionary interest may serve to limit their title to copyright in works where the author was the first owner of copyright. The reversion cannot be varied by agreement, as the Copyright Act provides that any agreement entered into by the author as to the disposition of such reversionary interest is void. It may be possible to subsequently contract with the author's estate for an assignment of or license to copyright in the work for the remaining term, where appropriate.

China

The Copyright Law of the People's Republic of China (in force from 1 April 2010) (the "Law") is the main law governing copyright works in China. Given that China is a signatory to the Berne Convention, copyright protection automatically arises when an original work is created. However, the default position in most cases is that copyright belongs to the author, being the party who created the works.

Copyright holders include authors, and other individuals, legal entities or organisations that may enjoy copyright under the Law. "Copyright" includes multiple moral and property rights, as listed in Article 10 of the Law.

In view of the rules applicable to copyright ownership in China, employees and commissioning parties in China shall ensure that contractual measures have been taken before filing a trademark comprised of a copyrighted work created by an employee or a service provider. According to Article 16, "a work created by a citizen in the fulfilment of tasks assigned to him by a legal entity or other organisation shall be deemed to be a work created during employment". In principle, the copyright in the work shall be owned by the author, whilst the legal entity or other organisation (the "Employer") shall only retain a priority right to exploit the work within the scope of its professional activities and, for a period of two years from completion of the copyright work, the author shall not, without consent, authorise a third party to use the copyright work in the same way as the Employer does.

There are two exceptions to this broad principle where the employer will effectively gain ownership of the copyright in the work (except for the right of authorship i.e. the original author shall retain the right to be named in connection with the copyright work):

  1. Drawings of engineering designs and product designs and maps, computer software and other works created in the course of employment mainly with the material and technical resource of the Employer and under its responsibility; or
  2. Works created in the course of employment where the copyright is, in accordance with laws, administrative regulations or contracts, enjoyed by the Employer.

In practice, the Law is sufficiently opaque to result in uncertainty about whether, and in precisely what circumstances, the original author or the Employer will own the copyright in the relevant work. For this reason, it is recommended that clear and precise contractual arrangements are entered into between the employer and employee setting out the position in relation to copyright (and other intellectual property (IP) rights) created whilst the employee is carrying out work duties.

Ownership of copyright of a commissioned work must be agreed through a contractual agreement. According to Article 17 of the Law, in cases where ownership is not expressly set out contractually, the default position is that the copyright will belong to the commissioned party. This can be commercially problematic. Therefore, in order to ensure that the commissioner owns any such copyright, and by extension protects the validity of any trademarks comprising the copyright, it is essential that a written contract is executed containing a clear provision assigning ownership to the commissioning party.

In this respect, Article 25 of the Law stipulates that an assignment agreement must be in writing and include various clauses including the category of the right, the geographic area, the standard of remuneration for an effective assignment.

A copyright holder may assign or licence others to exercise some or all of the rights contained within their existing or future copyright. However, the right of publication (i.e. the right to decide whether a work is made public); the right of authorship (i.e. the right to be named as author); the right of revision (i.e. the right to revise or authorise another to revise a work); and the right of integrity (i.e. the right to protect a work against distortion or mutilation), as moral rights, cannot be licensed or assigned under the Law.

It is important to retain evidence of the creation and publication of any copyright work, as well as of any assignment, in case proof is required to assert that creation took place ahead of another's claim, to tackle any bad-faith copyright recordals, and to prove authorisation to exploit the copyright.

Copyright recordal with the Copyright Protection Centre of China (CPCC) is not mandatory, but should be carefully considered. Copyright recordal certificates are helpful in demonstrating ownership before a court in China (although not necessarily determinative).

Such recordal certificates may also be valuable tools in tackling bad-faith trademark applications, where certificates may demonstrate evidence of prior rights in opposition or invalidation procedures. Online platforms may also accept copyright recordal certificates when applying for takedowns of infringing e-commerce listings.

To conclude, the best way for an Employer (and only way for a commissioner) to ensure their copyright ownership, is to conclude a contract which stipulates their ownership of the copyright.

Businesses should also retain evidence of creation and publication of copyright works as well as assignments, and it is advisable to register copyrights with the CPCC: providing prima facie evidence in disputes, helping enforcement of copyrights, and by extension, protecting trademarks utilising the underlying copyright works.

France

Under French law, authors are granted exclusive rights including economic and moral prerogatives by the mere fact of the creation of a work of the mind[1] provided that the requirement of originality is met.

In this respect, it should be noted at the outset:

  • First, that in the field of brand design, notably logo or stylised marks, the test for originality i.e. the works must express the imprint or expression of the author's personality, which may be difficult to pass.

    For instance, French judges denied any originality to the following logo (fig 1) and held that the sign which combined two initials, a number and the word elevators was lacking "any personal creative effort"[2].
    Fig 1
  • Second, in the event that the company or the employer has given detailed instructions during the creative process it could be argued that, the author has not been able to express his personality, or that the resulting creation instead qualifies as a collective work[3].

    • For instance, in a decision dated February 14, 2017, Paris Court of Appeal rejected the infringement action brought by two freelance workers on the ground that they had participated among other team members in a promotional campaign later disclosed under the name of the company and that they failed to establish an independent and original creation[4].
    • Likewise, Paris Court of First Instance held that the employee worked under the supervision of the Portuguese Bank Caixa Geral following a collaborative process and was therefore unable to create any original work in which she could claim exclusive rights[5].
    • Conversely, if the worker can demonstrate an independent and original contribution, French courts will usually grant him author's rights, thereby preventing the employer or the commissioner from exploiting the creation without being duly authorised.

      For instance, in a decision dated November 19, 2015, Paris Court of First Instance recognised the exclusive rights of the former marketing director of the perfumer ULRIC DE VARENS in the logo (fig 2) on the ground that she had independently conceived the original design later reused by the company[6].
      Fig 2

      More recently, Paris Court of Appeal also held that:
    • the logo "The Hype Noses (Fig 3)" and the candle design (Fig 4) as well as the logo (Fig 5) and the vaporiser design (Fig 6) were original;
      Fig 3 Fig 4 Fig 5 Fig 6
    • the claimant established his authorship in these creations in particular by means of email exchanges, minutes of a meeting and evidence of the supervision of the manufacturing process;
    • their exploitation without any valid transfer of rights and due payment amounted to copyright infringement[7].

Under French law, the existence of a prior agreement does not impact entitlement and ownership of author's rights and all rights in the work created are vested in the author[8].

This principle applies whether the work created belongs to fine arts or applied arts and independently of the nature of the agreement, including employment or commission agreements.

Compliance with the applicable rules of author rights law is thus of utmost importance as a sign cannot be registered and used as a trademark if it infringes earlier author's rights[9].

As a consequence, companies and employers looking to secure their rights in the different communication elements of their brand and, notably to register a logo as trademark, shall ensure first that they benefit from a valid transfer of rights from the author.

Articles L. 131-2 and L.131-3 of the Intellectual Property Code (IPC) specify the strict rules that apply to the transfer of authors rights:

  1. the assignment must be in writing[10]
  2. the assignment must identify the work(s) covered by the transfer

    This second requirement derives from the prohibition of general assignment of all author's rights on any future works[11].

    In practice, doctrine and case-law tend to consider that, provided that the scope of the author's missions is defined with sufficient detail, rights in future works created in execution of his duty can be assigned in a general way.
  3. the assignment must mention each right assigned

    Pursuant to this third requirement, the assignment may exclusively concern the economic rights (i.e. the right of communication[12] and the right of reproduction[13]) granted to the author[14]:

    It should be noted that each economic right assigned must be mentioned as the transfer of the right of communication does not imply the transfer of the right of reproduction, and vice-versa[15].

    Furthermore, under no circumstances may the assignment cover the author's moral rights[16].

    In this respect, it must be emphasised that under French law, waivers of moral rights are prohibited. However, case-law and doctrine have recognised the validity of limited and detailed disclaimers pursuant to which, for instance, the author authorises future adaptations of his work or recognises that, under specific conditions of exploitation, he will not be systematically credited as the author.
  4. the assignment must specify the applicable territory and duration it being specified that a transfer worldwide and for the entire term of author's rights is valid under French law.
  5. the assignment must indicate each field of exploitation

    Each field of exploitation of the right assigned must be defined as to its scope, purpose, place and duration.

    In this respect, it should be noted that the French Supreme Court held that, absent from any mention in the assignment agreement, the registration as a trademark of a design created by an employee amount to infringement[17].

As a conclusion, when it comes to trademarks comprised of a copyrighted work created by an employee or a service provider, it is of primary importance to

  • secure evidence of the detailed instructions that may have been provided to the employee/service provider and of the result of the creative work delivered;
  • verify whether the employment or commission agreement contains detailed provisions regarding the transfer of the author rights and if needed, entering into confirmatory deeds of assignment.

Germany

Contrary to German design law, which provides that where the right to a design has been developed by an employee in the execution of his duties or following instructions given by his employer shall belong to the employer unless contractually agreed otherwise, German trademark law does not contain a similar provision. The employer thus needs to make sure that any rights in a logo or other creative parts of a trademark which have been developed by an employee vest with the employer, which will usually be a question of copyright protection. This applies all the more in the light of the fact that German courts have in the past few years lowered the threshold for copyright protection in Germany, in particular for works of applied art. For example, German courts have ruled that the graphic design of a logo lettering can enjoy copyright protection, since even in the case of works of applied art, it is no longer necessary that the work is superior to the average design.

German copyright law does not recognise the concept of works made for hire, but follows the droit d'auteur system according to which the copyright remains with the author to the broadest extent possible, unless anything has been agreed to the contrary.

As a result, under German Copyright Act, the initial owner of the copyright is always the author/creator of the work.

In an employment relationship or in a service agreement, this means that the employee/the service provider is entitled to the work result and the employer/the commissioning party is not automatically entitled to works created by the employee/service provider.

This also applies to creative works and any rights pertaining to such works.

Accordingly, where an employee has created a work in performance of his duties under a contract of employment or service, unless the content or the nature of the employment contract requires otherwise, there is a very vague stipulation in German copyright law which at the end of the day requires the employee to transfer ownership to the employer.

To a certain extent, even if an employment contract does not contain any express assignment of rights, there is thus an argument that the employment relationship provides for an implied license.

However, even if it is possible to rely on an implied license, the general rule is that the copyright remains with the author to the broadest extent possible. Also, under the so-called theory that only those rights necessary for fulfilment of the contract are granted (Zweckübertragungslehre), a license, including an implied license, will only cover the types of uses required for the purpose of the contract. Apart from the fact that it is always more burdensome to rely on an implied license, there is thus also the risk that the license may contain gaps, e.g. may not cover uses unknown at the time of the agreement.

Similar considerations apply to commissioning contracts and contracts with service providers: If, when granting rights, the individual rights of exploitation are not expressly mentioned, the purpose of the contract is relevant for determining the rights that are covered. The same applies mutatis mutandis to the question as to whether an (implied) exploitation right is granted, whether it is non-exclusive or exclusive, what the scope is and potential restrictions. In each case, the general principle is that (only) those types of use are assumed to be granted which are necessary to achieve the purpose of the contract. Again, however, the rights will remain with the author respectively creator of the work to the broadest extent possible according to the theory that only those rights necessary for fulfilment of the contract are granted.

Employers and commissioners should therefore conclude as part of their employment agreement and commissioning or service agreements an assignment of rights, in particular with employees/service providers whose performance under the contractual relationship will foreseeably include the creation of works.

However, the copyright in created works cannot be assigned in its entirety but can only be licensed.

In Germany, the transfer of rights of use in future copyright is possible. A contract by which an author agrees to grant exploitation rights in future works which are in no way specified or which are only specified as to their type shall be made in writing. The contract may be terminated by either party five years following the conclusion of the contract. The period of notice shall be six months unless a shorter period of notice has been agreed upon. The right of termination may not be waived in advance.

If exploitation rights in future works have been granted as part of the performance of the contract, the provision of the contract that led to the granting of the rights shall, upon termination of the contract, become invalid with regard to those works that have not been handed over by that point in time.

Also, in general, the author cannot dispose of his/her moral rights. Individual authorisations which affect the moral rights, e.g. the publication of the work or the reference to the author, may, however, be granted.

As an example, the right to be acknowledged as author cannot be waived in its entirety, the author can, however, to a certain extent waive the right to invoke such claims. In certain industries, it may also not be common to name the creator. This is for instance relevant where a logo is filed as trademark since as it is uncommon to ever name the creator of a logo mark.

The best way for an Employer (and only way for a commissioner) to ensure their copyright ownership, is to conclude a contract which stipulates their ownership of the copyright.

In general, employers and commissioners in creative industries should have as part of the employment agreement/service agreement a comprehensive assignment of rights, which would usually include an assignment of rights and, as a fall-back solution, a comprehensive exclusive license to any and all rights which cannot be assigned at all or cannot be assigned on a worldwide basis. The license under copyright law would usually expressly list all types of use in all works now and in the future, would include a license to rights of use unknown at the time of concluding the agreement, and, within the boundaries of copyright law, waivers of moral rights.

Singapore

The starting point for analysis about the ownership of artistic copyright under Singapore Copyright law is that the original author of the work is the first owner of the copyright therein. However, this 'general rule' can be modified by written agreement between the parties.

For instance, in situations where the author is an employee and the relevant work was made pursuant to the applicable terms of employment (and in the course of the said employment), pursuant to Section 30(6) of the Singapore Copyright Act (Cap. 63), the employer would generally be the first owner of the copyright in the work.

In cases where the author (who is not an employee) is engaged to create the work, the 'general rule' will apply unless ownership of the copyright is assigned by the author to the other party. For instance, in Real Electronics Industries Singapore (Pte) Ltd v Nimrod Engineering Pte Ltd [1995] 3 SLR(R) 909, the designer of the artwork was a consultant of the plaintiff, and not an employee. Accordingly, the special rule governing ownership of copyright in the course of employment did not apply.

For completeness, it should be noted that there is a specific exception under Section 30(5) of the Copyright Act pertaining to photographs, portraits and engravings, pursuant to which the first owner of copyright in the work is in fact the commissioning party, rather than the author of the work. Having said that, this exception is unlikely to be applicable in the context of logos and trademarks, unless non-traditional marks like an aspect of packaging are contemplated.

Nevertheless, the key consideration that resonates is whether the copyright in the relevant work is specifically dealt with contractually, be it within the confines of employment or otherwise. It is therefore crucial that the relevant clause(s) that deal with the rights concerned are as tight and well-drafted as they can possibly be to ensure that the particular rights in the marks are indeed owned by the company, assuming that the company is intended to be the Applicant for the respective trademark right(s) in question. Hence, should there be any doubt as to the efficacy of the relevant clause(s), a standalone assignment agreement can be additionally entered into so as to cater for the intended transfer of rights accordingly.

There can be the assignment of 'future copyright' in an artistic work but this must be via written agreement signed by or on behalf of the Assignor, in line with the assignment (or licensing) of any other forms of copyright under Singapore Copyright law. In such circumstances, when the copyright in question comes into existence, it shall vest in the Assignee or successor in title accordingly without further assurance. If the Assignee is no longer alive at the relevant juncture, the copyright shall devolve as if it had subsisted immediately before the Assignee's death and the Assignee had then been the owner of the copyright.

It should also be borne in mind that, under the Singapore Trade Marks Act (Cap. 332), a trademark shall not be registered if its use in Singapore is liable to be prevented by virtue of the law of copyright (see Section 8(7)). On this basis, the lawful owner of the relevant copyright in a trademark can thus potentially file an Opposition to impede the progress of the particular application, thereby posing an obstacle to the registration of the trademark in Singapore. This therefore makes it imperative that the Applicant for a trademark application in Singapore ensures that it owns the artistic copyright in the mark itself before the filing of the application takes place.

There is no protection for 'moral rights' under the current Copyright law regime in Singapore. Despite being a member of the Berne Convention, Singapore does not officially recognise the 'right of paternity or attribution', or the 'right of integrity', both of which are concept that may be present in the relevant legal regimes of other jurisdictions. Nonetheless, the Courts in Singapore may potentially still be influenced by morality-based considerations when hearing matters that pertain to Copyright law.

United Arab Emirates

In the UAE, and more generally in the wider Middle East, an employer or a commissioning party does not automatically own the copyrights in the works made by an employee in the course of his/her employment or commissioned to an independent contractor. Ownership of copyrights initially vests in the author of the work, until the copyrights are assigned in writing (to the employer or the commissioning party).

As a result, companies must include in their standard employment contracts an express assignment in their favour in respect of the copyrights in the works created by their employees in the course of their employment. They should also ensure that their agreements instructing third party contractors and governed by UAE law contain the relevant assignment clauses allowing the copyrights in the deliverables ordered to be transferred to the company (such as a logo, a packaging, etc.).

A clause merely referring to the assignment of all the rights in the works as works 'made for hire' would be irrelevant and ineffective.

But, for a copyright assignment to be valid under the UAE Copyright law, it must satisfy a number of conditions, including that the assignment should: be in writing, expressly specify the rights assigned, and include statements of the purpose for which the rights are assigned and the geographical area in respect of which the rights are assigned.

However, even if the employment or the service agreement provides for the express assignment of the rights to the employer or the commissioning party, and fulfils the above mentioned conditions, this provision on its owns is not always sufficient to transfer the rights to the employer or the commissioning party.

The reason is that, under UAE law, an assignment of copyrights in more than four future works is null and void. But if, for example, an employee or consultant is employed/hired in a creative role, this could mean that his/her five works are completed within a few hours of signing any agreement.

In order to overcome such restrictions, companies should put in place a system of confirmatory assignments that should be completed and signed by the employee(s) once any work has been created and delivered in the context of his/her employment agreement.

If, for practical reasons, this process cannot be implemented each time the employee creates and finalises works, companies may adopt systems where the rights are captured on a regular basis, i.e. on a quarterly basis where the rights created in the last quarter are identified and transferred to the company.

The same applies to service providers once they have created any deliverables in the context of a service agreement (involving the delivery of more than four works during the term of the agreement), and have been paid for such deliverables in accordance with the service agreement. That would, for instance, apply in the case of a service agreement between the company and a design/brand agency, which generally involves the delivery of multiple copyrighted works.

This means that the employee or the design agency does not assign rights in all future works created in the course of the employment or service contract but assigns the rights as and when a particular work is completed.

The above mentioned steps should be taken as soon as possible since, without a proper assignment of the underlying copyrights in a trademark, it would jeopardise the position of the trademark owner when trying to enforce its trademark rights. For instance, when opposing a trademark application on the basis of an earlier trademark, there is a significant risk that the defendant could be successful in challenging the opponent's ownership of such intellectual property rights, which would result in the dismissal of the opposition. Also, it puts the trademark owner at risk of defending an infringement claim from the owner of the underlying copyrights that were not transferred to it, on the basis of the unauthorised use of the corresponding trademark.

Another watch out when it comes to copyrighted works likely to be filed as trademarks relates to the moral rights of the author of the copyrighted works at issue.

The company would ordinarily seek a waiver of the author's moral rights in order to be in a position, for instance, to modify the copyrighted works as it deems fit in its absolute discretion, without the risk of the author enforcing his moral right of integrity in such work.

However, one should note that, in the UAE, general waivers of moral rights would ordinarily be unenforceable. As a result, our recommendation is for the company securing ownership in the copyrights to obtain a detailed undertaking from the author that he/she will not exercise his/her moral rights in relation to specific works and specific uses to be specified. The more detailed the undertaking is, the greater the likelihood that it will, if challenged, prove valid and enforceable in court.

If the copyrights are assigned to the company by a design/brand agency (and not by the author directly), the company shall obtain from the agency a warranty that it may exercise any rights regarding the copyrighted works, without identifying any person as the individual responsible for creating any particular material comprising the works, and that it may modify, alter, adapt, distort or otherwise change the works as they deem fit in its absolute discretion.

United Kingdom

The Trade Marks Act 1994 (section 5(4)(b)), which is applicable to UK trademarks, provides that: "A trademark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented ... (b) by virtue of an earlier right ... in particular by virtue of the law of copyright, design right or registered designs." The effect of this is that if a business does not own all of the intellectual property (IP) rights in a trademark that it uses, it could be prevented from obtaining a UK registration for the mark. Even if it has achieved registration, a third party claiming ownership of the copyright or design right in the trademarked image could seek invalidation of the registration (subject to acquiescence). EU trademarks may be invalidated post-grant on similar grounds (Article 60(2) of Regulation (EU) 2017/1001), although earlier copyright or design rights do not provide grounds for opposing EU trademarks pre-grant.

Possibly more important than the scope for a trademark registration to be blocked, a third party copyright or design right owner could prevent the business from using the mark. It is therefore important for businesses to own all of the relevant rights in the logos and stylised marks which they may use. The issue could also extent to slogans, which may also be subject to copyright protection.

The Copyright Designs and Patents Act 1988 (CDPA) provides that the first owner of copyright in literary and artistic works is the author, unless created in the course of employment, in which case copyright is owned by the employer (CDPA, section 11). The position is the same for design rights (CDPA, section 215). This is the position in law, even if not stated in an employment contract. Whilst it is possible to agree otherwise, it is very rare that an employer would agree that an employee could own IP in the materials they create in the course of their employment.

If a business commissions anyone other than an employee (a branding agency, for example) to devise a logo, there is no automatic assignment of the copyright in the logo even if the work has been paid for. The business needs to ensure that it has a written and signed agreement prior to the work being commenced that states that the IP rights in any works created will vest in the business. If this is not done then an agreement will need to be executed after the creation of the works transferring all IP rights from the agency to the business. It is possible under UK law to make an assignment of future copyright, in which case copyright is owned by the assignee upon creation (CDPA, section 91). Again, the assignment must be in writing and signed by the assignor.

It is also important to check that the agency itself has carried out the work. Some agencies contract out elements of design work to third parties who may well then have authorship rights which will also need assigning to either the agency or direct to the business. It is worth noting that copyright and design right assignments are ineffective if not in writing and signed by the assignor (CDPA, sections 90(3) and 222(3)).

In practice, we find that IP assignments are not always put in place, and even if they are drafted, they may not be fully executed, or the consideration under the agreement may not have been paid. The effect of this may be that there is no valid assignment of the IP rights, leaving a business exposed to ransom demands and potentially prevented from using its marks, and from taking action against others using similar marks.

If, for whatever reason, the business does not own the rights in a logo which will be the subject of a trademark registration (for example, if it is a mere licensee), it is prudent to get the right owner's consent to any trademark registrations.

In addition to copyright and design right, moral rights may also present an issue. For example, if the author of literary or artistic works has asserted their right to be identified, their name must be included each time the work is published or communicated to the public (CDPA, section 78) - which is unlikely to be practicable in relation to a logo.

Authors also have other moral rights, which arise without the need for them to have been asserted. For example, the right not to have the author's work subjected to derogatory treatment (CDPA, section 80).

In the UK, moral rights cannot be assigned, so taking an assignment of copyright does not provide any protection from the risk of a claim for infringement of moral rights. There are some exceptions in certain scenarios, but the safest approach is to ensure that authors waive their moral rights by written agreement. It is possible under UK law to waive future moral rights (CDPA, section 87), and typically brand owners should include in an assignment of copyright, confirmation from the assignor that all moral rights have been waived.

CONCLUSION

There are many occasions where there is a cross-over between trademarks and copyright, where in ensuring the copyright ownership issues are sorted, it could strengthen your position in what may be seen as a trademark dispute.

Often in sending a letter of demand against a lookalike product for example, you may find that copyright in the artistic works on pack, or another design element, provide a stronger basis than your registered trademarks, as often the brand name differs for a lookalike.

In countries where it is well known that the costs of trademark protection are very high, such as the UAE, you could help to manage protection costs by securing registration for word marks, then relying on copyright for logo elements.

This article also shows the importance of ensuring you obtain underlying IP rights when you are "localising" your trademarks. For example, you may have a trademark which is an English word in a logo format, but in expanding across the globe, you may need to obtain adapted versions of your logo so that it contains the local language branding, such as the Arabic, Cyrillic or Chinese versions of your branding. Each such adaption may give rise to new copyrights. So it is important to ensure that you not only own the initial copyright, but that you secure ownership of any local language adaptations of the copyright works.

By ensuring that your stable of IP rights are in order and owned by your company, it gives you the greatest chance to take successful action against infringements and lookalike products, or in opposing potentially conflicting marks.

Footnotes

[1] Article L.111-1 of the Intellectual Property Code (IPC)

[2] Paris Court of First Instance, July 6 2017, n°16/00670

[3] Under French law, rights in a collective work i.e. "a work created at the initiative of a natural or legal person who edits it, publishes it and discloses it under his direction and name and in which the personal contributions of the various authors who participated in its production are merged in the overall work for which they were conceived" are vested in the natural or legal person under whose name the work has been disclosed (Articles L.113-2 and L.113-5 of the IPC)

[4] Paris Court of Appeal, February 14, 2017, n°15/09758

[5] Paris Court of First Instance, November 20, 2014, n°13/10238

See also: Aix-en-Provence Court of Appeal, April 13, 2018, n° RG 16/10122 ; Supreme Court, September 22, 2015 n°13-18.803

[6] Paris Court of First Instance, November 19, 2015, n°14/11106

[7] Paris Court of Appeal, March 10, 2017, n°15/09974

[8] The IPC only provides with little exceptions under which ownership in programs created by employees and journalistic works is automatically assigned to the employer (Articles L.113-9 and 132-36 of the IPC)

[9] Article L.7111-4 of the IPC

[10] This first requirement was extended to all contracts by law on July 7, 2016.

[11] Article L.131-1 of the IPC

[12] the right to authorize the communication of the work to the public by any means or process

[13] the right to authorize or the fixation of the work by any means or process to allow its communication to the public in an indirect way

[14] Article L.122-1 to L.122-12 of the IPC

[15] Article L.122-7 of the IPC

[16] the right of disclosure i.e. the right to divulge the work created, the right of paternity i.e. the right to have his name mentioned as the author of the work; the right of integrity i.e. the right to oppose to any modification or alteration of the work; the right of withdrawal i.e. the right to request that the work be returned provided that the assignee is duly indemnified.

[17] Supreme Court, February 16, 2010, n°09-12.262

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