News & Views

You Wouldn’t Sell Your Soul but What About Your Name?

10 November 2020

Author: Sarita Schröder

On 9 November 2020, Minna Parikka, an iconic Finnish shoe designer renowned especially for her whimsical, bunny-eared designs, shocked her fans by announcing that she would be shutting down her business indefinitely to take a creative break and to focus on her family. It has been reported (in Finnish) that Ms Parikka’s decision is unrelated to the coronavirus pandemic, as despite the challenging circumstances, Ms Parikka’s company has been having a record year.

Considering that the company has been debt-free and profitable for several years, many have wondered why Ms Parikka opted to close it down rather than to sell it. Ms Parikka has commented publicly that although there had been interested buyers, they would have required Ms Parikka to commit to staying on with the company — meaning that she would have given up control over it without achieving her goal of having the opportunity to take a breather.

It has not been disclosed whether trademark and other intellectual property law considerations also played a role in Ms Parikka’s decision not to sell the business. However, through the choice she made, Ms Parikka certainly avoided a minefield that several other designers before her have inadvertently stumbled into by selling the rights to a brand built around their personal name.

One of the most famous examples in this respect is the late handbag designer Kate Spade, who, in 1993, founded a company bearing her own name. In 2007, Ms Spade sold the company – and all rights to the Kate Spade brand – to a company called Liz Claiborne for USD 125 million. However, in 2015, when Ms Spade decided to set up a new footwear and handbag company, Frances Valentine, she was faced with the dilemma of how she could act as a spokeswoman for the company without creating a likelihood of confusion with her namesake brand. Ultimately, Ms Spade went as far as to officially change her personal name to Kate Valentine in order to avoid potential problems.

Thus, by not selling the rights to the brand bearing her name, Ms Parikka has ensured that she will have an easier time returning to the shoe design business should she one day desire to do so. The same applies to not selling the copyright and other intellectual property rights to her highly distinctive designs.

However, putting a brand on the shelf for an undetermined period of time is not entirely unproblematic, either. In particular, in many jurisdictions, trademark rights can be revoked if the trademarks in question are not put to genuine use for a certain period of time (five years in the EU). In the case of trademarks comprising a personal name, the risks associated with this may be slightly mitigated by the fact that many jurisdictions impose restrictions on who can trademark a personal name and to what extent such trademarks can be enforced against third parties with the same or similar name. Nevertheless, if in a few years’ time it looks like Ms Parikka’s sabbatical may extend beyond the five-year mark, one solution that she might consider is licensing the brand to maintain control of it while also ensuring that it does not fall prey to revocation claims.

What the Law Says

  • In the EU, a trademark can consist of any sign — including a personal name — that is capable of distinguishing the goods or services of its owner from those of others and being represented clearly and precisely on the register.
  • Finnish and Swedish trademark legislation include certain explicit restrictions on the right to register another person’s name as a trademark (at least unless that person is long since deceased). There are no similar restrictions on the EU level. However, trying to monopolise another person’s name could qualify as bad faith, which also forms a ground for refusal of a trademark.
  • In case one’s name happens to be identical or similar to a registered trademark, it is good to know that trademark legislation in many jurisdictions provides that a trademark owner cannot prohibit a natural person from using their own name in the course of trade in accordance with honest practices. However, agreements concerning the sale of brands built around a personal name may include stricter restrictions.