Considering a rebrand? The Copyright Conundrum

Have you enlisted the assistance of a third-party graphic designer to create a new logo or corporate identity for your rebrand?

Often corporates and start-ups are so excited by the prospect of bringing their corporate identity or rebrand to life, that they forget to explore the legal implications of contracting a third party to assist with the project. And unfortunately, more often than not, people discover the error of their ways far too late when there are no options available to them but for entering into costly and time-consuming litigation proceedings.

An interesting principle of copyright law to keep in mind is that when commissioning a third party to design a logo, the third-party graphic designer remains the owner of the copyright vesting in the logo.

It is often assumed that by paying a third-party graphic designer for these services, that the completed work would be the commissioner’s property. This misconception is the core issue of the copyright conundrum. Despite the fact that the ideas for the logo originated from the commissioner and that money exchanged hands for the completion of the task, the logo will remain the copyright of the third-party contractor.

Therefore, the core principle to be aware of is that it is vitally important to ensure that the logo is assigned from the third-party graphic designer to you when commissioning them to assist with a new design. This assignment must be in writing in order to be valid and should additionally make provision for the transfer of the moral rights that vest in the copyright work.

In a decided case in the South African courts, it was held that where the copyright in a logo is not transferred, the following consequences may arise and possibly invalidate latter trademark applications and/or registrations:

The third-party graphic designer can allege that you are not the bona fide proprietor of the trademark given the fact that it is able to claim an earlier IP right to the logo; and your trade mark application can or will be deemed contrary to law as use thereof is likely to be tantamount to copyright infringement of the third-party copyright work; and if you are aware that the copyright should be assigned and nevertheless neglect to, your latter trademark application may be deemed mala fide on the basis that you are aware that the graphic designer owns the copyright in the logo.

Notably, this scenario is widely referred to as the “copyright conundrum”. The reason for this is that the current position in law is deemed largely illogical and impractical in the commercial sphere where corporates regularly commission third parties to design their company’s corporate identity including logos without the knowledge that they ought to assign the copyright vested therein. One way of overcoming this is to sign a deed of assignment at the commencement of the interactions with the graphic designers in terms whereof all works created by them is assigned to the entity that instructed them.

Finally, it is important to note that a new Copyright Bill has been passed and is currently with the President for signature. If the Bill is signed, the position will be reversed and the above conundrum will become largely irrelevant resulting in copyright automatically being vested in the person commissioning the work.

In the meantime, contact your IP attorney for assistance to ensure that your IP is legally yours.