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Karen Millen case reaches High Court

Further details have emerged of the legal dispute between Karen Millen and her namesake retailer ahead of a court hearing due to be held this summer.

The retailer wants to expand into new categories, such as eyewear, watches, fabrics and home furnishings, but Millen is challenging its right to use her name.

The parties outlined their positions during a High Court hearing at the end of last week, which was held to determine whether certain amendments to the case should be allowed.

The dispute centres on an agreement Millen and her then husband, Kevin Stanford, made in 2004 to sell their majority shares in Karen Millen Holdings, the business they established in 1981, to Baugur Group, with debt finance provided by Icelandic bank Kaupthing, for £95m.

The agreement prevented Millen from using her name to compete with the retail business.

Karen Millen Holdings went into administration in March 2009 following the collapse of the Icelandic banks. A new company, Karen Millen Fashions, was incorporated in 2009.

Millen is now challenging Karen Millen Fashions’ right to enforce the terms of the original sale, and is seeking clarification of the agreement and how it should be interpreted.

Karen Millen Fashions has argued that the agreement amounted to a sale of the entire right to use the Karen Millen name, including any future expansion.

But Millen disputes this, arguing that her obligations under the agreement only apply to intellectual property rights in existence at the time of signing in 2004.

“It will be interesting to see how the agreement is interpreted,” said Katie Goulding, trademark attorney for law firm HGF.

“Clearly, there is a balance to be struck between a designer’s interest, on the one hand, to be able to identify the parameters in which it might trade in the future under one’s own name and the assignee, on the other hand, who would reasonably expect to be permitted to expand the business after the date of the agreement and with the benefit of the trademarks and goodwill acquired, free of challenge from the designer.

”Namesake brands are appealing for their sense of identity and personal charm but as this case and others continue to illustrate, parting company with the trading company can mean leaving one’s name and identity at the door.

”Retaining ownership and licensing the trademarks to the trading company might be one way through the woods but when investment is needed, this option can soon hit a dead end. Designers need to weigh up the legal and commercial pros and cons to adopting a distinctive mark that is not a namesake at the beginning of the brand and, if it comes to it, post sale.”

The full hearing is scheduled to take place in the High Court over five days from June 7.

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