04 October 2017

St Olave's head caught up in school trademark ownership row

An unexpected twist in the recent coverage of St Olave's grammar school, provided a timely reminder of the risks facing even long-established brands. The Guardian (5 September 2017) reported that the head teacher and bursar of the school set up a private company to own the school's trade marks without notifying the school's governors that they would be its owners.

Registering a trade mark in itself is not unusual, as increasing numbers of charities use trading subsidiaries as a means of generating revenue. A formal trade mark is a valuable asset for an organisation to own, and an effective means to control and protect prestigious brands.

However, this case also highlights the risks of filing trade marks in the name of a third party without appropriate arrangements in place. St Olave's was founded in 1571, and the governors might reasonably expect that some 446 years later, its rights in the name and imagery are unassailable. This is not necessarily the case, and without proper advice, an organisation can quickly and unexpectedly lose control of its brand.

Registration of a new trade mark has the effect of creating a separate set of rights in a name (even for an established brand). Without a background structure in place to unite the old and new rights, and account for their associated 'goodwill', this creates a legal risk. Over time, parallel use of unregistered trade marks by one entity, and of registered trade marks by another, can have the effect of 'splitting' the name in two – creating a twin set of independent rights.

An invisible split in an intangible asset may seem purely academic, but it can have very real impact. For example, in a situation like this, where a school does not appear to own or control the second set of rights, a third party could use them to sell unauthorised merchandise, or even in a worst-case scenario, to set up rival establishments with the same name. Whilst there is no suggestion that this was the intention here, the key point is that competing rights will be generated automatically through use, and this needs to be considered and dealt with at the outset.

Appropriate advice should be taken to protect and maintain any core brand.

Category: Article

Client types: Charities and non-profit