What if a marketing agency fails to check a client IP risk?

General Case Law

The marketing agents of a disused cinema allowed a potential purchaser’s architect to inspect the property. The architect turned off the alarm and entered by a door which he shut behind him, but did not lock. On leaving, he relocked the door and reactivated the alarm. However, in the meantime some vandals had gained access while the door was unlocked, and subsequently started a fire that caused substantial damage. The owner sued the architect for £6.5 million, alleging negligence.

The architect was “involved directly in the activity which allowed the intruder to enter the property”. The exclusion of liability for “pure omission” did not cover cases where a failure to do one thing (lock the door) was part of a wider activity that gave rise to the loss.

Liability is created when one party causes a situation that leads to a predictable client loss.

Marketing advisors are aware that trademark and design infringement is a predictable risk and causes loss. When creating brand names, websites, logos, domain names, pictures and narratives for clients marketing advisors are aware of the basic principles to check copyright and IP ownership. If no checks are made and the client is sued for infringement the client is entitled to sue the marketing advisor who contributed to the loss.

The Intellectual Property Office reports that one in three SME’s now suffer IP infringement claims. Many of these claims arise from marketing advisors failing to search and check IP registers and ownership.

Last year court cases for infringement cost infringers up to 40% of past profits and over £100,000 per claim