Helme & Ors v Maher & Anor

A licence to use a trade name, logo and copyright photograph may be construed broadly where the parties’ relationship and dealings show that the rights-holder gave the other party free rein to promote a joint enterprise. The scope is assessed objectively by reference to purposes which the licensee might reasonably consider advanced that enterprise. A licence is not narrowed retrospectively by the rights-holder’s later regret or loss of trust. Unless earlier termination or restriction is clearly communicated, the licence persists until terminated. A licensee may grant a sub-licence where that is within the scope of the original licence. Subsequent advertising by the sub-licensee may remain licensed even after termination of the original licence, absent an obligation or request to terminate the sub-licence.

The claimants operated a jewellery business under the “Hidden Gem” name and owned copyright in its logo and a product photograph. They negotiated with the defendants to develop a related franchising venture. During that period the defendants used the name, logo and photograph in websites, advertising and proposed franchise promotion. The venture failed, and the claimants alleged passing off and copyright infringement.

The defendants relied on a licence. They also argued that the dispute had been settled at a later meeting, although that submission was not pursued in closing. The central issues were the scope and duration of the licence, whether the defendants’ uses and sub-licensing to an advertising business were covered, and whether accord and satisfaction had occurred.

1. Licence. The claimants had granted the defendants a licence to use the “Hidden Gem” trade name, logo and photograph. It was not limited to individually authorised acts. Objectively construed in light of the parties’ friendship, trust and co-operative conduct, the licence covered any purpose which the defendants might reasonably consider advanced the joint enterprise, including direct sales and promotional activity. ([32])
2. Duration. The licence was terminable and ended no later than 9 April 2010, when the letter before action was sent. There was no sufficient evidence that it had terminated earlier or that its scope had previously been narrowed. The claimant’s later dissatisfaction did not retrospectively alter the licence. ([33])
3. Application. The website uses, the flyer promoting franchises and the advertisements arranged before termination fell within the licence. The defendants were not directly responsible for the advertisements arranged by Timscris. Sales of jewellery to Timscris before April 2010 were licensed, and the resulting advertising and sales were covered by a sub-licence. The original licence included authority to grant that sub-licence, and the claimants neither pleaded nor established an obligation to terminate it after 9 April 2010. The complained-of uses therefore did not constitute unlawful passing off or copyright infringement. ([35]–[43])
4. Accord and satisfaction. No settlement was agreed at the 8 September 2010 meeting because there was no meeting of minds. ([45])
5. Disposition. The claim was dismissed. ([46])