Possible Consequences of the Unauthorised use of Third Party Logos

Sturgeon Ventures (Sturgeon) contacted Womble Bond Dickinson to discuss the possible consequences of the unauthorised use of third party logos in the advertising and promotion of a UK business or its goods/services.

Sturgeon Academy is Sturgeon’s in-house training school which has been running courses for 20 years during which time, its trainers have helped hundreds of individuals including those moving to the United Kingdom from overseas with advice on financial services compliance and procedures, specifically for the financial services industry which is regulated by the Financial Conduct Authority.

Sturgeon has also trained SMEs, their directors and/or partners in corporate governance including due diligence practice and procedures. In the last decade with the investment and corporate worlds focused on ESG, the enhanced sharing of good governance practices has led to bespoke editorials such as this, with Womble Bond Dickinson.

An introduction to Womble Bond Dickinson

Womble Bond Dickinson is ‘…the transatlantic law firm close to home…’. We are a forward thinking practice with the energy, drive and determination to keep pace with our clients and a focus on delivering the relevant services they need. To find out more, please visit our website.

The issue

It is natural, when referring to a competitor or a third party, to want to use its logo but there are considerations to be had before such use should be made. If a decision to proceed with such use is taken, certain measures should be implemented.

The primary issue to consider when using a third party’s logo without the owner’s consent, is the risk of trade mark infringement, copyright infringement, design right infringement and/or a misrepresentation that could amount to passing off.

Examples of Common Usage

In particular, it may be appealing to use a third party’s logos and brands to illustrate:

current or previous clients;
experience in a relevant industry or sector; and
competitors who offer the same or similar services.

Trade Mark Infringement & Passing Off

In the UK and EU, the unauthorised use of a third party’s logo trade mark may constitute trade mark infringement and/or passing off if the logo:

is used in relation to identical goods/services for which the trade mark is registered;
is used in relation to similar goods/services for which the trade mark is registered and there is a likelihood of consumer confusion;
has a reputation and the unauthorised use of the trade mark would take unfair advantage of or be detrimental to the distinctive character or repute of the trade mark; and/or
has goodwill and its unauthorised use would result in the public being deceived into believing there is a connection with the owner of the logo.

Exceptions

Where one of the above grounds is established, it may be a defence to trade mark infringement and passing off if it can be demonstrated that the unauthorised use is as a comparison, provided that the presentation complies with the Comparative Advertising Directive 2006 (Directive 2006/114/EC). It will not comply if, amongst other things, the presentation is misleading and the use of a competitor’s logo will often be construed as being misleading in suggesting falsely an association with the competitor.

Copyright Infringement

A third party’s logo may be protected by copyright as an artistic work. The owner of the copyright in the logo has the exclusive right to, amongst other things:

copy the whole (or substantial part) of a copyright work (e.g. in creating presentations);
issue the copied work to the public (e.g. distributing promotional materials); and
show the copied work to the public (e.g. in the course of a presentation).

Exceptions

Whilst there are a number of exceptions including where use of the logo is made as a parody, for research or private study, or for criticism, review and news reporting, it is unlikely that these exceptions will apply where the logo is used within a commercial context.

Design Right Infringement

A third party’s logo may also be protected by UK or EU registered designs or under the EU’s unregistered design right regime (together, Design Right). It may be possible to identify any UK or EU registered designs upon a search of the registers but it may not always be clear whether a design is protected by EU unregistered design right.

Where a logo is protected by one or more Design Rights, it may be an infringement if:

use is made of the protected design (or any similar design which does not produce on the informed user a different overall impression); and
for EU unregistered design right, the design is copied.

Exceptions

There are limited exceptions for when use of a third party’s Design Right will not be infringing, including where use is made privately for non-commercial purposes, for experimental purposes or for reproduction for teaching purposes. However, these exceptions are unlikely to apply in a commercial context.

Remedies for Infringement

In the event that the rights holder brings infringement and/or passing off proceedings it may be granted, amongst other things, injunctions (restraining the ongoing use of the logo), financial compensation and costs. In respect of copyright infringement, the financial compensation awarded may be enhanced if the infringement is deemed to be “flagrant”.

Under certain circumstances the unauthorised use of a third party’s logo may constitute a criminal offence.

Best Practice

On any given occasion it can be challenging to determine whether any of the exceptions set out above will apply. The absence of an express (or implied) licence may leave you exposed to avoidable financial and reputational harm.

Accordingly, before using a third party’s logo it is advisable to obtain express permission to use any third party logos form the rights holder. This should be demonstrated either by: