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26 January 2017Trademarks

Herbert Smith conference: Relinquishing trademark rights needs careful consideration

The Karen Millen trademark case was discussed at an IP conference hosted by Herbert Smith Freehills yesterday and attendees were advised that relinquishing rights “needs careful consideration”.

Jessica Welborn, associate at the firm, discussed the trademark case involving fashion designer Millen.

In August last year, WIPR reported that Millen had lost the right to trade under her name following a judgment from the UK Supreme Court.

Millen founded the business, a women’s clothing stall, in 1983 with her partner Kevin Stanford. They opened a chain of shops that traded under the name Karen Millen.

In 2004, Millen agreed a share purchase agreement (SPA) with an Icelandic consortium.

The consortium was financed by Icelandic bank Kaupthing and led by investment group Baugur, the owner of fashion conglomerate Mosaic Fashions, which would go on to buy Karen Millen (the business) later that year.

The SPA contained a number of covenants related to Millen’s (the person) future conduct including a clause stating that Millen was not permitted to use the name ‘Karen Millen’, ‘KM’, ‘K Millen’ or any other confusingly similar names in the US and China.

In 2011, Millen said that she wanted to return to the fashion business under the name ‘Karen’ to sell homeware and accessories.

However, she ultimately lost the right to trade under her name last year.

In her speech, Welborn explained that namesake companies are relatively common, and listed names including Calvin Klein, Chanel, Walt Disney and Eli Lilly.

Namesake companies are “personal” to the founder, said Welborn, and goodwill remains in the company as a result.

Welborn said that Millen had sought negative declarations and extensive relief in her case.

A negative declaration is where a plaintiff must show a legitimate interest in the mark.

Welborn presented a slide which showed some of Millen’s negative declarations. It said: “Carrying on a business under the ‘Karen Millen’ name in the US would not breach the SPA if the name were to be used for homewares.”

But Millen’s argument was not successful. Richard Meade QC said at the time: “I am not sorry to reach this conclusion.”

He added: “In general, the claimant has acted responsibly (although largely unsuccessfully) in seeking a decision as to the parties’ rights before she begins trading.”

Welborn told attendees that the lesson is that “relinquishing rights ... needs careful consideration”.

She also said that the judge’s comments demonstrate the importance of being appropriately specific when applying for declaratory relief.

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More on this story

Trademarks
18 August 2016   UK fashion designer Karen Millen has lost the right to trade under her name following a judgment at the English High Court.