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Judge Hacon in the Intellectual Property and Enterprise Court found that Mr Bunting had entered into a contract with Purple Penguin for the creation of logos on behalf of Kilnworx, and in his capacity as director of that company. An oral agreement was made between Mr Bunting and Mr Kirk (on behalf of Purple Penguin) on the express terms that Purple Penguin would design logos for use by Kilnworx and that Kilnworx would pay Purple Penguin the going rate. Payment was later made for the logos.
The Judge held that it was also an implied term of the contract that Kilnworx owned the copyright in the logos (as is usual in such contracts). Purple Penguin was the owner of the legal interest in the copyright at the time they created the logos and it held the copyright on trust for Kilnworx.
This decision seems reasonable, as Kilnworx had commissioned the logos for their use and therefore had an equitable entitlement to them. Purple Penguin initially owned the legal interests, having produced the logos, but they had in fact assigned these through their agreement with another company, Atelier, which was wholly owned by Mr Bunting. Payment of the invoices by Atelier did not entitle them to the equitable interests. The principles of Robin Ray v Classic FM plc [1998] are therefore relevant to commissioned work and achieve a fair balance between the rights involved.
However, each case is determined on its own facts: while it may not be easy to argue that the author of a commissioned work is free to do with the work whatever he/she wishes, there may be circumstances where that was the manifest intention of the parties. In Robin Ray, Mr Justice Lightman referred to the terms of the RIBA contract, and quite rightly so, since it is the architect and not the client who has an interest in preventing unauthorised reproduction of his designs. The architect suffers loss, namely a second commission and opportunity to earn another fee, when his/her design is unlawfully copied. In the case of a logo, the parties' interests are reversed: it is the client and not the author who will use the logo as a trade mark, or seek damages for loss of sales if the mark is infringed.
This action concerned the ownership of the copyright in three commissioned logos. Kilnworx commissioned the logos from Purple Penguin Design under an agreement made between Lionel Bunting (a director of Kilnworx) and Rik Kirk (employee and director of Purple Penguin). The payments made to Purple Penguin were made by Lionel Bunting’s other company, Atelier (of which he was the sole director and shareholder). Kilnworx agreed to reimburse Atelier for the costs, but never did. Atelier then went to court, claiming that since the payments had been made by them, they owned the copyright in the logos and that Kilnworks and the other defendants had infringed them through its use. The issue was whether Kilnworx had the benefit of an assignment of the rights, had been licensed to use them, or did not have any claim on the logos at all.
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