QLD Intellectual Property Law - Can I Charge Payment for Use of Logo?

[prosurfer]

Hi,

I designed a logo for a friend's business, which I allowed my friend to use free of charge. Other people have now taken over the lease on this business and are continuing to use the logo I designed without discussing it with me.

Am I within my rights under intellectual property law to send them an invoice for the use of my logo? And can I force them to pay?

 

[Rod]

It may be possible. However, it may then be possible for the new leasee/owners to sue your friend for selling something he had no right to sell.

It will depend on detail that you haven't provided here. eg: what license did you agree to with your friend? Did your friend advise the new owners of any conditions attached to the use of the logo? How important is the logo to the business? What discussions did you or your friend have with the new leasee pre-sale about the logo, etc?

A small business logo is worth $100-$500, medium-sized business typically $500-$2,000. Is it worth chasing?

 

[Kim Walters]

If there was any form of consideration for the logo, you have likely granted the party who paid for the work an implied licence to use it. Notwithstanding, you own the copyright in the logo as the creator of an artistic work if you did not assign or transfer in writing the ownership of the work.

As such, you own certain exclusive rights as the copyright owner. An option to consider is for you to negotiate with the business an agreement to transfer the IP in the logo ('IP Assignment Agreement') in return for payment. That is, you give them ownership of the logo and those exclusive rights in return for a fee. In my view, you would have a better result if you approach this commercially rather than sending an invoice without prior discussion or trying to "force them to pay".

 

[Rod]

In the absence of anything in writing, can the implied licence be transferred with the sale of the business?

 

[@thelawbundle]

I would add that section 115(3) of the Copyright Act 1968 (Cth) (Act) may be relevant here.

That section says that:

"(3) Where, in an action for infringement of copyright, it is established that an infringement was committed but it is also established that, at the time of the infringement, the defendant was not aware, and had no reasonable grounds for suspecting, that the act constituting the infringement was an infringement of the copyright, the plaintiff is not entitled under this section to any damages against the defendant in respect of the infringement, but is entitled to an account of profits in respect of the infringement whether any other relief is granted under this section or not."

In practice then, if you try to make a claim against the new business owner for breaching your copyright, and that person is a bona fide third party purchaser (i.e. he/she bought the business and had no idea that they were infringing your copyright in the logo, and just assumed that your friend owned that copyright (because your friend probably warranted that they did in whatever business sale agreement they entered into with the new business owner)) then I would expect that new business owner to tell you that you had no claim against them, for any compensation.

Pursuant to section 115(3) of the Act, you can still be entitled to an "account of profits" but given that you made this logo for free, and were not profiting, you won't be able to establish any "loss of profit" and so I don't expect you to be owed anything for that either.

Also, I would also heed section 202 of the Act. It is not relevant yet but it might be, if you start trying to "force them to pay". That section provides that persons who make groundless threats of legal proceedings for copyright infringement can be liable for damages themselves.

Next time you design a logo, I would recommend that you enter into a licence agreement or deed (for your intellectual property). This document can set out exactly how, when and by who you want your work to be used.

Best wishes.

 

[Kim Walters]

Yes, depending on the circumstances, an implied licence can be transferred with the purchase.The High Court in Concrete Pty Limited v Parramatta Design and Developments Pty Limited [2006] HCA 55 affirmed that where an architect prepares drawings for a development, the implied licence extends to subsequent purchasers of the land. The case flags the importance of agreeing the ownership of intellectual property rights at the time of engaging a consultant.