Court of Appeal Clarifies Termination of Indefinite Trade Mark Licence

The Court of Appeal has ruled that a trade mark licence agreement expressed to continue "indefinitely" may be terminated by the licensee on reasonable notice, distinguishing such arrangements from perpetual licences. The dispute concerned a 2013 agreement under which Zaha Hadid Limited was granted rights to use marks owned by the Zaha Hadid Foundation. The licence stated it would continue indefinitely unless terminated earlier by the licensor for specified reasons, but granted the licensee no express exit rights. In 2024 the licensee served notice of termination, which the licensor disputed. The High Court had sided with the licensor, but the Court of Appeal overturned that decision. It held that the wording indicated an indefinite rather than perpetual term and that commercial sense supported implying a right to terminate on reasonable notice. The court emphasised that parties should not be locked into arrangements that become impractical over time, particularly where tastes, styles and business needs evolve.

Small businesses should expressly define termination rights in any trade mark licence to avoid costly disputes over implied terms.