The summer proved a testing time for the relationship between the Rich Energy Haas Formula One team and its title sponsor, Rich Energy. First, the team was forced to remove Rich Energy's stag antler logo from its cars. Then, in July, Rich Energy's CEO purported on Twitter to terminate the sponsorship deal. It subsequently emerged that the CEO had just been ousted from his position, and so was not speaking on Rich Energy's behalf. At the time of writing, Rich Energy remains Haas's sponsor; however, the stag's antler logo is gone for good.
This is because, in May 2019, the English High Court found that Rich Energy had deliberately copied its logo from ATB Sales Limited (trading as Whyte Bikes), and so infringed the copyright in Whyte Bikes' logo (case: ATB Sales Limited v Rich Energy Limited  EWHC 1207 (IPEC)).
Rich Energy denied that its logo infringed the copyright in Whyte Bikes logo. It claimed that it independently designed its logo in 2015 without reference to, or knowledge of, the Whyte Bikes logo, when Rich Energy’s director and sole shareholder, William Storey, commissioned a digital marketing company, Staxoweb, to design a brand identity for Rich Energy.
In order for copyright to be infringed, a defendant’s work must:
- reproduce a substantial part of the claimant’s work. This is assessed qualitatively, not quantitatively – i.e. one considers what the key parts of the claimant’s work are, not just how much of that work has been reproduced in the defendant’s work; and
- have been copied from it. If the defendant’s work has been produced entirely independently of the claimant’s work, it cannot infringe copyright in it, even if it happens to be identical.
Where two works are highly similar (as these logos clearly are – "strikingly similar" in the judge's words), and the defendant had access to the claimant's work (for example, because it was publicly available), there is a presumption that the defendant copied the claimant's work. The copying can be direct, indirect (copying a different work to the claimant's work which was itself based on the claimant's) or sub-conscious (the defendant may not realise it is copying the claimant's work, but nonetheless has it in the back of its mind). The defendant can rebut a presumption of copying by proving that it designed its work independently of the claimant's work – typically by producing the design history for its work.
Rich Energy purported to produce such evidence – in the form of a "Brand Guidelines" document showing how its logo had been created independently of Whyte Bikes’s logo. However, under cross-examination at trial, Staxoweb’s founder admitted that key parts of this document had been created after the proceedings were issued, for the purposes of defending the claim.
The court found not only Rich Energy liable for copyright infringement, but also its director and sole shareholder, William Storey, and the design agency, Staxoweb. Mr Storey and Staxoweb were joint tortfeasors in Rich Energy's copyright infringement, having knowingly co-operated in the copying of Whyte Bikes’s logo.
Given the high degree of similarity between the logos, Rich Energy was always facing an uphill struggle to prove that it had created its logo independently. It is very hard to imagine, when comparing the logos, that one was not based on the other. When Rich Energy's evidence of an independent design process for its logo fell apart, a finding of copyright infringement became inevitable.
The Court granted an injunction preventing Rich Energy from using the stag logo on any products. It has also cancelled Rich Energy's UK trade mark for the stag's head logo, as that logo infringes Whyte Bikes' copyright. Further, it ordered Rich Energy to pay Whyte Bikes' legal costs of £35,416. The next stage in the litigation will be an enquiry to determine the damages Rich Energy must pay to Whyte Bikes in respect of its historic use of the logo, or, alternatively, an account of its profits arising from that use. That said, IP cases usually settle following a finding of infringement, with the parties agreeing an out-of-court deal about the amount of money the defendant will pay. Given questions over Rich Energy's financial state, and its failure to pay Whyte Bikes' costs by the required date, Whyte Bikes may decide not to spend further money on the litigation.
In the event that a work is created independently, but is later found to be objectively similar to a pre-existing work, being able to produce evidence of an independent design history may be the only way to prove to the Court that it was not copied from that earlier work. It is therefore important that anyone involved in creating logos or designs keeps accurate, dated, records of when their design was created, and its evolution into the final product.
This article was first published in Intellectual Property Magazine (subscription only).