Millen v Karen Millen Fashions Ltd & Anor [2016] EWHC 2104 (Ch)
The case of Karen Millen, who has recently lost her legal battle to use her own name serves to demonstrate the pitfalls for designers when considering whether or not they should trade under their own name or use an alternate name.
Karen Millen and her then partner Kevin Stanford set up the well-known fashion brand in 1983 using her own name. In 2004 both sold their shares to Baugur for £95 million. One of the key provisions in the Share Purchase Agreement (‘SPA’) prohibited the use of Karen Millen using her own name in any future business ventures. Ms Millen later sought to overturn the provision for the use of her own name in the US and China for projects in different sectors.
The court had upheld the provision in the SPA. You may well ask “but why”?
The court found that the name had become synonymous with the business; when a buyer purchased such a business, the buyer would also be purchasing all of its goodwill and that included the name. The name had become part of the goodwill of the business.
Designers may either decide to work for an already established brand and be in-house or they may decide to set up on their own. If they work in- house for a fashion house, then the employer will own the intellectual property to use the name of the in-house designer if he /she allows it to be used as a trademark. Once they leave the company however such designers may find themselves in a similar position to Ms Millen where they also lose the right to use their name.
Comment
If a designer decides to set up a business, they usually use their own name, or create a unique one. If a unique name is chosen and the company is sold the loss would only be to the unique name. Alternatively, if a designer wants to set up with their own name; they should consider registering their name a trademark separately from the business.
In this way the name does not automatically just become another asset of the business. It can then be priced separately in any future sale or purchase negotiations so long as the designer is willing to sell the name.
Please note that the above does not constitute legal advice. For advice please contact Shubha Nath.
