Alannah Hill, Collette Dinnigan, Leona Edmiston, Carla Zampatti. It is common practice for fashion designers to use their own names as their brand or trade mark. It is also common for designers, after establishing a reputation in their name and brand, to sell these assets – including the rights and goodwill in the brand name – to a third party.
But as Peter Morrissey recently discovered, this practice can lead to some uncommonly tough issues in future.
The recent decision of the Trade Marks Office (TMO) in refusing to allow the well-known designer to register his own name as a trade mark, demonstrates the risks associated with selling a brand linked to your own name. And it could happen to anyone.
In 1997 Peter Morrissey started the MORRISSEY label and operated the label for a number of years before selling the brand, which eventually came to be owned by M Webster Holdings Pty Ltd. In selling the brand, Morrissey also sold the registered trade mark for the MORRISSEY name, and associated goodwill.
M Webster continued to operate a label under the MORRISSEY mark until early 2009 and is still licensing the MORRISSEY mark for use on sunglasses and leather goods. Morrissey (via his company Peter Morrissey Pty Ltd) then filed trade mark applications to register PETER MORRISSEY for a range of goods and services to use in relation to the designer’s new brand for retail chain Big W. The applications were opposed by M Webster as the current owner of the MORRISSEY fashion label, registered in respect of clothing, footwear, headgear, jewellery and handbags.
M Webster claimed that its earlier filed MORRISSEY trade marks had acquired a reputation in Australia and that if Morrissey was successful in his trade mark applications for PETER MORRISSEY, the use of the trade mark by Morrissey would be likely to deceive or cause confusion amongst consumers. Following a hearing, the TMO held that M Webster was successful in its opposition and Morrissey’s applications to register his own name as trade marks were therefore refused.
Morrissey argued that after selling the MORRISSEY label he had retained goodwill in his name and his reputation as a leading Australian fashion designer and that therefore no deception or confusion was likely to result from the use of his PETER MORRISSEY marks. This argument was rejected and the TMO held that due to the substantial reputation of the MORRISSEY mark, a significant number of consumers would at the very least experience a reasonable doubt as to the existence of some sort of connection between the earlier MORRISSEY mark and the PETER MORRISSEY marks.
The TMO noted that Morrissey had been responsible for establishing a considerable reputation within the fashion industry in the MORRISSEY branded goods, and then sold his MORRISSEY label and the trade marks and goodwill associated with it to the predecessors of M Webster.
The TMO suggested that allowing the PETER MORRISSEY trade marks to become registered would undermine M Webster’s purchase of the business, including the rights in the MORRISSEY brand. Morrissey unsuccessfully argued that M Webster had abandoned its rights when it ceased operating the label in 2009. This argument was rejected as M Webster continued to license the mark and in any event mere non-use does not amount to the abandonment of a trade mark.
This decision therefore demonstrates that where a designer has sold a brand incorporating their own name, there is a real risk that the new owner of the earlier brand could prevent the designer from obtaining trade mark protection in the future for any brand which incorporates their name. The earlier brand can prove to be a barrier to registering new trade marks, even after the purchaser has ceased operating the label.
As a registered trade mark is a strong business asset that provides the owner with the rights to exclusively use and to prevent others from using the mark or a similar mark in relation to the goods and services specified in the trade mark registration, not being able to register trade marks for a new label could seriously compromise the designer’s capacity to protect those brands.
While Morrissey’s trade mark applications have been rejected (a decision which Morrissey is currently appealing), it is worth noting that the Trade Marks Act provides a defence to trade mark infringement where a person has used their own name in good faith.
Therefore, it is likely that Morrissey could still use his own name, notwithstanding that he does not have a registered trade mark. However, it is possible that even “good faith” use by a designer of their own name could amount to a breach of other laws, such as passing off or misleading and deceptive conduct.
It is therefore important that designers who have sold the rights to a brand incorporating their own name take care that any future use of their name does not amount to a representation that the later label or its goods or services are in any way connected to or affiliated with the earlier label. If not, the designer may be opening themselves up to the risk of being sued.
If designers starting up new labels do not want to limit the ways in which they are able to deal with their label in the future – including selling the label and associated trade marks – the safest route is therefore to select a brand that does not incorporate the designer’s own name.
The designer would still be free to use their name in association with the label, but by building up a brand that does not incorporate their own name they are also building up an asset that may be sold at a later date, without the risks and restrictions involved in selling the rights to a brand that incorporates the designer’s own name.
Lisa Egan is a partner at Middletons law firm.