A cautionary tale of implied licences

Broadly speaking a licence gives permission to do something that would otherwise be unlawful. Licences do not need to be explicitly agreed (they can be implied) and can be revocable. However be warned, if an implied licence is not revoked, as in this instance, it can result in terms which the parties did not intend to be within the scope of the licence. It was the existence of such an implied licence which led the Intellectual Property Enterprise Court (IPEC) to dismiss a claim by Helme & Others for copyright infringement and passing off.

Claims of copyright infringement can often result from a business relationship that has gone sour.

Background

Helme & Others v Maher and Another [2015] EWHC 3151 (IPEC)

• Mrs Janet and Laura Helme owned a jewellery business, Hidden Gem, in partnership
• In 2009 the Helmes entered into negotiations with Mr Maher and Mr Green (the "Defendants"), to begin a joint enterprise; the aim of which was to expand the business through franchises
• The Defendants created the company name 'Hidden Gem Jewellery Company' and registered the associated domain name
• In March 2009 the Defendants informed Mrs Helme at a meeting of all the parties that the third party Timscris would be used for the marketing and advertising of Hidden Gem
• However, by April 2010 the relationship between the parties had disintegrated and Mrs Helme sent a letter before action to the Defendants

The dispute

Mrs Helme sued the Defendants for copyright infringement in relation to the advertising of 'Hidden Gem' using the trade name, logo and a photograph. That Mrs Helme owned the copyright was never in dispute. The key questions (which the Defendants argued in the affirmative) was:

1. Had the Defendants been licensed by Mrs Helme?
2. Did this licence cover all things complained of?

What is notable, is that when discussions were first entered into Mrs Helme and the Defendants enjoyed a relationship of 'friendship and trust'. There was also clear evidence that Mrs Helme enthusiastically endorsed the work of the Defendants to promote the joint enterprise. Considering this and in answer to the first question, Judge Hacon found that an implied licence for 'any purpose which they might reasonably consider to be for the advancement of the joint enterprise', had been created by the conduct of the parties. And although the relationship between the parties changed over time, this did not alter the licence granted.

In answer to the second question, Judge Hacon also found that while any advertisements before the letter of action were under the original implied licence, those after 9 April 2010, (when Timscris were advertising) were also within the scope of the original licence through the granting of a sublicence to Timscris at the meeting in March 2009, which was effective as the original implied licence was so broad. When the letter before action was sent, there was nothing within it to suggest that the Defendants should have also terminated the sublicence. This meant that the work done to promote the joint enterprise aftertheinitiation of legal proceedings, but under the sub licence, was permissible and did not infringe copyright.

Conclusion

While the finding that there was no breach of copyright is not a particularly ground-breaking revelation, this case does re-affirm that implied licences are effective, and successfully provide an innocent party with protection. It was believed that the real complaint here was that Mrs Helme had misplaced her trust, but this does not make what the Defendants did unlawful.

What can be learnt from this judgement?

1. Licences cannot be changed retrospectively
2. Ensure the terms of the licence are in writing, both to protect your work and to make sure the licence does not include unintended terms (which may need to be explicitly terminated, as was the case here in relation to the sublicence)

If you would like any further information please contact Martin Cuell, partner on +44 (0)117 915 4933 or email [email protected] or Hannah Batten, associate on +44 (0)117 915 4975 or email [email protected]