Zaha Hadid Limited v The Zaha Hadid Foundation

This dispute came from a business built around a famous founder’s name. Zaha Hadid Limited ran the architecture practice founded by Dame Zaha Hadid. The Zaha Hadid Foundation later held the trade mark rights for the ZAHA HADID name after Dame Zaha’s death.

The company wanted to keep using the ZAHA HADID name, but it also wanted to renegotiate the economics of the licence. Its main complaint was the royalty structure. Under the agreement, it had to pay 6% of net income for a broadly defined category of services, and the court noted that this was not limited to services actually using the trade marks.

That commercial tension turned a drafting point into a major dispute. The licence said it would continue “indefinitely”. It also gave the licensor express rights to terminate. But it did not clearly say whether the company, as licensee, could bring the arrangement to an end on reasonable notice.

The licence was dated 1 May 2013 and signed in 2014. Dame Zaha was the original licensor and the company was the licensee. The marks covered relevant services, and the territory was worldwide.

The Court of Appeal described the agreement broadly as a conventional trade mark licence. It included provisions on ownership of the marks, goodwill, quality control, marketing, protection of the marks, sublicensing and assignment. Those terms mattered for context, but the appeal turned on the duration and termination wording.

Clause 12.1 said the agreement would continue indefinitely unless terminated earlier in accordance with clause 12. Clause 12.2 gave the licensor a right to terminate on at least 3 months’ written notice. Clause 12.3 gave the licensor immediate termination rights for non-payment, material breach, repeated breach and insolvency-related events. There was no matching express right for the company.

Clause 13 then dealt with the effect of expiry or termination. In practical terms, rights and licences would cease, and outstanding sums would become due. So the contract clearly contemplated an endpoint. The real question was how that endpoint could be reached if the company wanted out.

The first issue was contract construction. Did this licence, properly read, allow the company to terminate on reasonable notice even though the contract only gave express termination rights to the licensor? The company said yes. The Foundation said no.

The High Court had accepted the Foundation’s reading. It held that the company had no such right and was effectively locked into the contract unless the licensor chose to terminate. The company appealed.

The second issue was restraint of trade. The company argued that if the contract gave it no right to terminate, the arrangement was an unreasonable restraint of trade and therefore void. But that was a fallback argument. Once the Court of Appeal found for the company on construction, it did not need to decide the restraint of trade point.

The appeal therefore became a close reading exercise. The court had to decide what a reasonable person, with the relevant background knowledge, would understand the contract to mean when it said the agreement would continue “indefinitely”.

The Court of Appeal allowed the company’s appeal on the termination issue. It held that the agreement was intended to last for an indefinite period, not to bind the parties perpetually. To give effect to that construction, a power to terminate on reasonable notice should be inferred.

A key point in the reasoning was simple but important. The contract used the word “indefinitely”, not “perpetually”. The court said those are not synonyms. An agreement of indefinite duration contemplates that it can be brought to an end at some unspecified future time. A perpetual agreement does not.

The court reviewed earlier authorities on contracts with no fixed term. It drew a two-step approach from them. First, decide as a matter of construction whether the agreement was intended to be perpetual or merely indefinite. Second, if it was indefinite rather than perpetual, a power to terminate on reasonable notice follows in order to make that construction work.

The court also rejected the idea that the licensor’s express termination rights in clauses 12.2 and 12.3 necessarily excluded a notice-based termination right for the company. Those provisions were not inconsistent with such a right. Clause 12.3 dealt with immediate termination for default. Clause 12.2 gave the licensor a 3-month no-fault termination right. The existence of those rights did not force the contract into a perpetual reading.

The court said the wider trade mark context did not support a one-sided perpetual lock-in either. Trade mark licences often contain controls over quality, goodwill and use because of the nature of trade mark law. That does not, by itself, show that only the licensor should have termination rights.

The court also considered the commercial setting. It was common ground that the company was expected to become more independent over time, with equity intended for Mr Schumacher and others. Against that background, the idea that an independent professional practice might one day want to change its name was not far-fetched. That pointed away from a perpetual arrangement.

The judgment is useful because it shows how a court tests rival readings of the same clause. The Foundation’s case was that “indefinitely” really meant the contract would go on forever unless the licensor chose to end it under clause 12.2 or 12.3. The Court of Appeal rejected that reading.

The court said the first part of clause 12.1 was the obvious place to find the parties’ intention about duration. On its face, the agreement was of indefinite duration. That did not mean the relationship had to last forever. It meant there was no fixed end date.

The court then tested whether the rest of clause 12 made a notice-based termination right impossible. It concluded that it did not. A right for the company to terminate on reasonable notice could sit alongside the licensor’s express rights. The licensor’s immediate rights for breach and insolvency still had work to do, and the licensor’s 3-month notice right still had work to do.

The court also noted that what counts as reasonable notice depends on the circumstances at the time notice is given. So the practical effect of a notice right may change over the life of a long-running contract. That was one reason the court did not need to decide whether 12 months was the right period here.

The judgment is useful partly because of what it did not decide. First, the court did not decide that 12 months was the correct notice period. It recorded that the Foundation accepted 12 months would be reasonable if such a right existed, but said it did not need to determine that issue.

Second, the court did not decide the restraint of trade argument. It said it preferred to leave that topic for a case where it actually mattered to the outcome. So this decision should not be read as a substantive ruling on whether this licence, or trade mark licences generally, offend the restraint of trade doctrine.

Third, the court did not create a universal rule that every contract of indefinite duration is terminable on notice. The reasoning was tied to the wording of this agreement, the structure of clause 12 and the commercial context.

This decision matters to any business that trades under a name it does not own. That includes founder-name businesses, family businesses, group companies using centrally owned brands, and businesses licensing a celebrity or designer name.

If the trading business does not own the mark, the licence is not just an IP document. It is a core operating contract. It can affect pricing, margins, branding, customer communications, investment value and even whether the business can keep its trading identity.

The case also shows how a short duration clause can carry major commercial risk. If the contract is silent or unclear on exit, the parties may end up in expensive litigation over whether one side is trapped, whether notice can be given, and how long that notice should be.

Another practical point is royalty scope. Here, the court noted that the royalty applied to a broad category of services and was not limited to services using the marks. That kind of drafting can become contentious as a business grows, diversifies or changes its service mix.

There is also a governance point. Where a founder, estate, foundation or holding vehicle owns the brand, the trading company may be commercially dependent on a relationship it does not fully control. That should be recognised early, not only when the economics become difficult.

This case was about contract wording, but the surrounding conduct still mattered. The company had actually served notice in March 2024 saying it would treat the agreement as ending 12 months later. After the High Court ruled against it, the company continued to use the marks and pay royalties while the appeal was pursued.

That sequence is a reminder that once a dispute starts, day-to-day conduct can become important. A business may need to decide whether to keep performing, whether to reserve its position, and how to manage customer-facing branding while the legal position is unresolved.

For owner-managed businesses, the practical burden can be heavy. A dispute over a licensed trading name can affect proposals, websites, social media, signage, investor discussions and staff confidence. The contract should therefore deal not only with legal rights, but also with the operational steps that follow if the relationship ends.

If your business uses a licensed name or logo, review the agreement before the relationship becomes strained. The best time to negotiate exit mechanics is at the start, not after the economics have become contentious.

Focus on the clauses that affect both day-to-day trading and long-term flexibility. Duration and termination are only part of the picture. Royalty scope, quality control, assignment, sublicensing and post-termination obligations can all affect whether the business can continue smoothly if the relationship changes.

The cleanest lesson from this case is drafting discipline. If the parties mean “ongoing unless either side gives notice”, say that. If they mean “perpetual unless the licensor ends it”, say that too. Do not rely on broad words like “indefinitely” to carry a commercial arrangement that may later be tested in court.

For founder-name businesses, the contract should also reflect identity risk. A business may spend years building goodwill in a name it does not own. If the licence ends, the business may need to change its trading name, domain names, pitch materials and customer messaging quickly. That operational risk should be priced, planned for and documented.

It is also worth checking whether the royalty model still makes sense if the business expands into new services, new territories or new channels. A clause that seems acceptable at the start can become commercially difficult later if it captures revenue that the parties did not really have in mind.

Finally, think about control rights and commercial leverage together. A licensor may need quality control and brand protection rights. A licensee may need certainty that it can exit, rebrand and keep operating. Good drafting should deal with both sides openly rather than leaving the balance to later litigation.

The Court of Appeal judgment was handed down on 27 February 2026. It was an appeal from the High Court decision of Adam Johnson J, who had ruled against the company in December 2024.

The Court of Appeal allowed the appeal on the termination issue. It held that the agreement was of indefinite duration rather than perpetual duration, and that a power to terminate on reasonable notice should be inferred to give effect to that construction.

The court did not decide the restraint of trade issue because that was unnecessary once the company succeeded on construction. For business readers, the durable lesson is about contract wording in trade mark licences and the commercial risk of unclear exit drafting.