Just do it – but next time, ask first

The Hackney v Nike case made legal history because it was the first time a public sector body has tackled a corporate on IP issues. It has also made the sector think carefully about the value of its branding.

Nike’s use of Hackney’s logo on a range of sportswear came to light when the borough’s head of law was shopping in Niketown on Oxford Street. He saw the range, bought a T-shirt and brought it into the town hall saying: “I don’t remember authorising this!” It was immediately clear to us that Nike were trying to capitalise on the image of Hackney Marshes, Europe’s biggest grassroots football venue. Nike’s ‘Parklife’ advertising campaign, featuring Eric Cantona, was one of the iconic ads of the 1990s and Nike was seeking to recapture that spirit with a Hackney range of clothing. The trouble was, they didn’t ask for our permission to use our logo.

Nike had used the corporate identity of Hackney and our name. They had created an unsought and unapproved brand association. We thought that the public would assume a commercial agreement between Hackney and Nike had taken place and we were clearly concerned about any negative reputational impact this might have.

The Council approached Nike, but it soon became clear that we were no match for the global giant, which is world renowned for its fierce protection of its own IP rights. We needed expert advice and went to George Hamer of 8 New Square Chambers. Infringement of trademark action was not an option as, like many public bodies, we had not trademarked our logo. We looked into passing off but as a non-trading organisation it could have been hard to establish a case. We needed to go down the route of copyright infringement but, as Hamer advised us, we would need to establish that we owned the copyright.

Copyright for an original work, which is valid for 70 years after the death of the author, usually resides with the person who created the work. In cases of logo design, however, it is often assigned to the organisation that commissioned it. If the work is created by an employee as part of their duties, copyright usually belongs to the company. We needed to find out who had designed the ‘H’. A trip to Hackney archive showed that the logo had been designed in 1965 for the council by Alec Davis who was the founding editor of Design Magazine and who also designed for household names such as John Lewis and Lloyds Bank. Having established the logo’s provenance, we needed to establish how much it was worth in terms of damages. This was a unique case because we were not trading and had not suffered financial loss. Any perceived damage to our reputation would be hard to prove. We took advice from a commercial agreements specialist on the percentage royalty we could have expected had we licensed our logo to Nike and entered talks on the basis of a 5 to 15 per cent royalty. We achieved a good percentage settlement of the sales revenue, a contribution to our legal costs and an apology. The case gave Hackney a real boost in PR terms and got us a reputation as giant-slayers.

The other win for us as lawyers was how much we learned. All legal teams should build up some in-house IP knowledge, although you should consult the experts if in doubt. When fighting a case, work closely with your media team, especially if you are punching above your weight. Our press and legal strategies were closely interlinked; a rare case of lawyers and the PR department working in perfect harmony. Be clear about your objectives from the outset and, most importantly, if you know you are in the right, stick to your guns.

Local authorities that have a strong association with a famous venue or sports team should certainly learn from Hackney’s experience. In our case, the combination of Hackney Marshes and a great logo proved too much for Nike to resist. Venues such as the Marshes add real value to an area’s local brand and the public sector should learn from our experience and protect their own branding using IP legislation.