Copyright - Commissioned Works, Ownership and Assignment

The Intellectual Property Enterprise Court ("IPEC") has recently made a judgement, which established that an individual who commissioned logos to be designed for their business was entitled to have the legal interest copyright assigned to them – despite the fact that the legal interest had already been assigned, in writing, to a different company.

The case in question, Atelier Eighty Two Ltd v Kilnworx Climbing Centre CIC and others, revolves around a dispute between two companies regarding the ownership of copyright and use of specially-commissioned logos. Briefly, the details of the case were:

Mr Bunting was director at two separate organisations; Kilnworx Climbing Centre CIC and Atelier Eighty Two Ltd.
On behalf of Kilnworx, Mr Bunting commissioned Mr Kirk of Purple Penguin Design to create logos for Kilnworx to use.
The logos were designed, but Kilnworx never made the £300 payment to the designer. Instead, Atelier, the other company of which Mr Bunting was director, made the payment. Atelier also paid further bills concerning the Kilnworx business. It was decided that Kilnworx would reimburse Atelier for all the expenses it had incurred, including for the logos.
Mr Bunting later resigned as director of Kilnworx and subsequently wrote to the his former business partners, setting out his belief that Kilnworx could not use the logos they had commissioned, as the copyright in the logos actually remained with the designer, and Atelier, having paid the designer's bill, held an exclusive licence to use the logos.
He offered to transfer the ownership of copyright to Kilnworx for £5,000. Kilnworx maintained that they were entitled to use the logos and so refused the proposal, making clear that they were not in a position to pay Atelier's bills.
Atelier brought the case to court, claiming that by continuing to use the logos, Kilnworx had infringed the copyrights in them.
The court considered whether Kilnworx had the benefit of an assignment of the rights in the logos, whether they were licenced to use them or whether they did not possess any rights in them whatsoever.

The decision was that Kilnworx was indeed entitled to use the logos, in spite of the fact the logo designer had already assigned (in writing) the legal interest in the copyrights to Atelier.

The basic principles of ownership of commissioned works were set out in Robin Ray v Classic FM plc and clarified in R Griggs Group and others v Evans and others. The principles set out in these cases were that the copyright in a commissioned work would vest in the commissionee unless an implied or express term stated otherwise in which case it would vest in the commissioner.

Although no details of copyright ownership were expressly stated in the oral contract made between the designer and Kilnworx, the court found that there was an implied term that Kilnworx would own the copyright in the logos. The designer would own the copyrights initially, as the creator of the work, but would hold the copyrights on trust for Kilnworx.

This meant that when the designer subsequently made a written agreement with Atelier, to assign to them the legal interest in the logos' copyright, the legal interest could only be taken subject to Kilnworx's equitable interest. The court ruled that, in this case, payment of the designer's invoices by Atelier did not automatically entitle them to the equitable interests, and since Atelier was certainly not ignorant of the equitable interest held by Kilnworx, it failed to claim any rights under equity.

Kilnworx was entitled to an assignment of the legal interest in the copyrights from Atelier and the court found that copyright of the logos had not been infringed.