According to the Copyright Act of 1978, copyright generally vests in the author of the copyrighted work.  There are a few exceptions, one being where an author is in the employ of the one he creates the work for, given that the author created the copyrighted work in the scope of his/her employment.  Another is where a photograph, film, portrait or sound recording is commissioned and paid for.   But in most cases, for example where you contract with someone to create an artistic work, such as designs or logos, the copyright remains vested in the author of the design – the designer.

The risks to owners of trade marks that contain such artistic works was highlighted by a recent case in the European Union where a Community Trade Mark registration was invalidated because the owner of the trade mark was not the owner of the copyright vesting in the logo embodied in the trade mark.  The owner of the copyright, who became owner of the copyrighted work by assignment, applied to the court to invalidate the trade mark registration claiming that the owner of the trade mark was not the owner of the copyright.  Accordingly, as the argument went, any use made by the owner of the trade mark of the logo would infringe the copyright owner’s copyright.

The South African Trade Marks Act of 1993 specifically outlaws the registration of a mark where the applicant has no good faith claim to ownership of the trade mark.  If somebody else owns the copyright, then a challenge against the registration could in certain cases be brought in terms of that section. Our courts often refer to European cases when interpreting our intellectual property legislation.  This decision should therefore be a warning to all trade mark owners using copyrighted works in their trade marks.  

In many cases one would potentially be able to rely on an implicit term of the agreement between you and the designer regarding the right to use a design exclusively, even in the absence of ownership.  Such a licence however means that the extent and duration of the entitlement remain dependent on the implied terms.  If for instance the designer would be wound-up, the continued entitlement to the work could be placed in jeopardy.  

It is decidedly better to have certainty and to enter into a written assignment (transfer of ownership) agreement at the outset of the commissioning of the logo or design.  

An assignment can also be undertaken after the logo or design has been produced, but it is best to obtain this upfront, when the designer is more likely to be willing to conclude the agreement.