Dear Doctor, Do I need to own the rights to my name and brand?
Caroline Sherrington says...
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What do Jose Mourinho, Jo Malone, Karen Millen and Elizabeth Emanuel all have in common? They do not own the rights in their own name and brand!
My colleague Helen Burt, senior counsel at Ignition Law, talks us through a few high profile cases where things didn’t go quite right for the individuals involved and gives her thoughts on what you should look out for if you want to use your name as part of your branding.
“Names are not always what they seem.” – Mark Twain
Jose Mourinho’s name and signature have been trade marked and registered with the European Intellectual Property Office across a wide range of goods and services, including – would you believe it – aftershave, calculators and cigarette holders. However, it is not ‘the Special One’ who owns the rights in these trade marks, they are owned by and belong to his former employer, Chelsea Football Club!
This twist in the tale put a significant spoke in the wheel in the negotiations and discussions between Mourinho and Manchester United. As a result of Chelsea’s trade mark registrations and ownership of the trade mark rights in ‘Jose Mourinho’, Manchester United could not sell merchandise under, or use, the trade mark ‘Jose Mourinho’ without Chelsea’s consent – consent or endorsement from Mourinho himself was meaningless.
The eponymous Jo Malone brand and trade mark do not belong to their namesake either. The acquisition of Jo Malone London by Estée Lauder in 1999 resulted not only in Jo Malone selling her company to the Estée Lauder Group but also the rights in and ability to use her own name in relation to perfumes, fragrances, skincare products. To add insult to injury, the sale agreement included an aggressive ‘lock-out’ clause which effectively barred Ms Malone from creating, and becoming involved in, any business involving a new fragrance or skincare brand for a period of five years.
Elizabeth Emanuel, famous for creating Princess Diana’s wedding dress, also lost the rights in and ownership of her name when, following this initial success, she entered into a partnership, forming the company Elizabeth Emanuel Plc (“EE Plc”) to which she assigned and transferred across her design business and all its assets, which included all rights in her name and rights in the trade mark application for ‘Elizabeth Emanuel’ (which was subsequently registered in 1997).
EE Plc unfortunately went into administration and, after a series of assignments, the rights in the name, and the trade mark registration for, ‘Elizabeth Emanuel’ were acquired by a company, Continental Shelf 128 Limited. Despite taking the matter all the way to the European Court of Justice, Emanuel ultimately lost her battle to reclaim her trade-marked name – the ECJ holding that the registered trade mark and the rights in and use of ‘Elizabeth Emanuel’ had been validly assigned and as a result, Emanuel was prohibited from using as a trade mark, and designing under, her own name.
Another unfortunate casualty is Karen Millen who, after establishing and building a highly successful eponymous fashion label (together with her then-husband), sold her business in 2004 to the Icelandic Group Baugur for £95m. The acquisition, however, involved and required the transfer and signing away by Millen of all rights in and use of her own name and also, as in the case of Jo Malone, included very restrictive ‘non-compete’ clauses, effectively prohibiting Millen from using her name in any future ventures, even if not in or related to fashion design.
In 2011, Millen sought recourse to the UK courts in an attempt to reclaim the right to use her name, ‘Karen’ and ‘Karen Millen’, in relation to a range of products in the homeware market. However, she lost the battle, with the High Court finding that the sale agreement was valid and that Millen had assigned away, and no longer had, the right to use her name under the terms of that agreement, even if use was in relation to an unrelated and different market sector.
What you need to know
So, what can new businesses and entrepreneurs learn from the mistakes of these celebrities and renowned designers?
It must be remembered that your name, when used as the brand and/or the trade mark of your business, becomes a valuable commercial asset of your business, independent of you as a person, and which can be used, assigned, licensed or commercialised just like any other business and commercial asset. If you sell and assign away the rights in this commercial asset, you risk losing not only the rights to that asset (and all the goodwill and reputation built up in relation to your brand) but also the rights, in the future – should relationships go sour or partnerships break down, to use your own name in another venture (even if not necessarily, as the Millen saga shows, a competing business).
Retaining ownership over the use of your name, your brand, means that you retain the ability to control its use and how it is used, and importantly, retain the ability to commercialise and generate a potentially lucrative revenue stream for you and your business through the licensing of the use of your name.
If your name is to be used as the brand and trade mark of your business, consider applying for trade mark protection of your name in all your key and potentially key markets. This should ideally be done prior to entering into any discussions with, or executing any partnership or other agreements with, any third parties.
If retention of the rights in your name (and any trade mark registrations you have secured for it), is not a possibility, consider carving out and having clear parameters in relation to which sectors, countries and markets any joint venture, partnership etc you may enter may use your name and, therefore, which sectors, countries and markets are still available for you to use your own name (in the event of a parting of ways in the future). Also, avoid, as much as possible, agreeing to any aggressive and restrictive non-compete obligations which could, as the Millen and Jo Malone examples above illustrate, significantly curtail and even prevent you from using your own name in any manner and for any purpose.