Atelier Eighty Two Ltd v Kilnworx Climbing Centre CIC & Ors

Where a designer is commissioned to create a logo for a client, the contract will ordinarily be construed as giving the client ownership of the copyright or, at least, an exclusive licence sufficient to prevent others using the logo. A different arrangement, under which the designer retains rights or may sell the logo to another, requires very clear evidence. The usual implication follows from the commercial purpose of a logo and the client’s need to control its use. Payment by a different member of the business group does not by itself determine ownership where the contract was made by an agent for the client and repayment was expected. An assignee taking the legal copyright with notice of the client’s equitable interest takes subject to that interest.

Atelier claimed copyright in logos created for an indoor climbing centre operated by Kilnworx. The logos were designed by an employee of Purple Penguin, whose work had been commissioned by Lionel Bunting, a director of both Atelier and Kilnworx. Purple Penguin invoiced Kilnworx, but Atelier paid the invoice and later obtained a written assignment of the copyright from Purple Penguin.

Kilnworx admitted using the logos but contended that it owned the copyright in equity, alternatively that it held an exclusive licence. The central issues were which company had contracted for the design, whether the contract contained an implied term concerning copyright ownership, and the effect of Purple Penguin’s later assignment to Atelier.

1. Claim dismissed. Kilnworx was entitled to an assignment from Atelier of the legal interest in the copyrights, and none of the defendants was liable for infringement through using the logos.
2. Mr Bunting acted for Kilnworx when he commissioned the logos. The contract was therefore between Kilnworx and Purple Penguin. Its express terms required Purple Penguin to design logos for Kilnworx’s use, for the going rate.
3. Following Griggs Group Ltd v Evans [2005] EWCA (Civ) 11, the usual implication in a contract for creating a logo is that the client will own the copyright or have an exclusive licence enabling it to prevent others from using the logo. The commercial function of a logo makes it very unusual for the designer to retain rights which could permit competing use.
4. An arrangement under which the designer retained rights pending further payment, or could sell the logo to a competitor, could not be inferred without very clear evidence. The standard fee, the intended exclusive use by Kilnworx and the surrounding dealings supported ownership by Kilnworx in equity.
5. Purple Penguin held the legal copyright on trust for Kilnworx. Its later assignment transferred only the legal interest. Atelier took subject to Kilnworx’s equitable interest because it was not a purchaser for value without notice.