Leading national law firm Clarke Willmott LLP has described the legal dispute between Jo Malone and Estée Lauder as ‘a cautionary tale’, warning that selling the rights to a founder’s name can carry decades-long consequences.
Commercial contracts solicitor, Millie Bradshaw, says the case, brought by Estée Lauder over Malone’s use of her name on a Zara fragrance, highlights the tension between brand rights and personal identity long after a sale.
“Founders may underestimate the irreversibility of selling their name,” said Millie. ‘’Once assigned, a personal name can be controlled commercially for decades. In Jo Malone’s case, Estée Lauder has owned and continues to enforce the use of ‘Jo Malone’ in fragrances for over 20 years.
“Back in 1999, Jo Malone’s sale of her original business was a smart commercial move, but it left little room for flexibility. She agreed to restrictive covenants, including a five-year non-compete and limits on using her own name in fragrances.
“Even after these covenants expired, disputes can arise over how a founder’s personal identity is used commercially – this case is a clear example.
“It’s a cautionary tale for any entrepreneur whose personal identity forms part of their business.”
The claim concerns the name “Jo Malone” on fragrances from a Jo Loves and Zara collaboration, where the packaging read “A creation by Jo Malone CBE, founder of Jo Loves,” which Estée Lauder says breaches agreements and risks misleading consumers.
When a founder’s personal name forms part of a brand that has been sold, they must ensure the sale agreement sets out – unambiguously – how that name may be used in future, explains Millie.
“Without clear carveouts and strict approval mechanisms, even factual or biographical references can be construed as brand use and trigger a breach,” she added.
“Founders need to protect themselves by negotiating precise rights at the outset and by exercising extreme care in any subsequent collaborations or marketing to avoid misleading consumers or infringing the buyer’s trademark rights.”
Jo Malone is not alone in navigating the aftermath of selling her name.
“Other founders have faced similar constraints including Bobbi Brown and Kate Spade. High profile disputes continue to surface, as seen with Brooklyn Beckham, who attracted media attention recently due to the restrictions he faces in using his own name commercially.”
Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.
For more information on Clarke Willmott’s corporate and commercial law work visit Commercial Contract Law – Contract Solicitors – Clarke Willmott