English Court of Appeal finds licensee could terminate 'indefinite' trade mark licence on reasonable notice

The Court of Appeal, in Zaha Hadid Limited v The Zaha Hadid Foundation [2026], overturned the High Court's conclusion that a trade mark licence agreement, expressed to "continue indefinitely", could not be terminated by the licensee.

A licence with no exit

Under an agreement, dated 1 May 2013, Zaha Hadid Ltd, the licensee, was granted rights to use the Zaha Hadid trade marks owned by the licensor, the Zaha Hadid Foundation, following the death of Dame Zaha in 2016. The agreement stated that it would "continue indefinitely, "unless terminated earlier" by the licensor, who had the right to terminate for convenience on three months' notice and immediately for material breach, repeated breach, non-payment or insolvency of the licensee. The licensee had no express termination rights. 

In March 2024, the licensee served 12 months' notice purporting to terminate the agreement, but the licensor denied that any right to terminate existed. The licensee issued proceedings seeking a declaration entitling it to terminate on reasonable notice. 

At first instance, the High Court found against the licensee. The licensee appealed.

'Indefinite' does not mean forever

Reviewing the authorities, particularly the decision in Winter Garden Theatre v Millennium Productions Ltd [1948] the Court of Appeal reached two conclusions.

On the issue of construction, the court held that the question was whether the parties intended the agreement to run in perpetuity, or merely for an indefinite period. An agreement not intended to be perpetual, and with no other express duration, is one of "indefinite" duration, which is different to "perpetual" duration: the two terms are not synonyms of each other. A perpetual agreement leaves no room for an inference of a right to terminate. An indefinite agreement, however, necessarily contemplates that it can be brought to an end at some unspecified point in the future.  

The court further held that, if both parties intended the agreement to last for an indefinite period, rather than in perpetuity, the only way to give effect to that intention was to recognise that either party may bring it to an end on reasonable notice, whether the right arises from construction of the agreement or is implied into the agreement. As a matter of principle and logic, and absent of any other factors, where the parties' intention is that the agreement is indefinite, a right to terminate on reasonable notice necessarily forms part of that intention.

Court of Appeal's findings 

The Court of Appeal held that, as a matter of construction, the agreement was of indefinite not perpetual duration. The duration clause used the term "indefinitely", not "perpetually". While the former can sometimes mean the latter, the court observed that it was not "a promising start" for the licensor's argument. On the face of it, therefore, the clause did not purport to bind the parties together forever, meaning that a right to terminate on reasonable notice could be inferred. 

The court also found that it made no commercial sense to construe the agreement as locking in the licensee forever. While the relationship was envisaged as long-term, the parties could not sensibly have intended that the licensee would be obliged to promote Dame Zaha's architectural style in 100 years' time because tastes and styles change. 

Although the licensee was owned by Dame Zaha when the agreement was first entered into, she had intended it to be an independent entity, and an independent entity might reasonably wish to change its name in future. This militated against finding a perpetual licence. 

The trade  marks had been assets of great value to Dame Zaha, who, as the proprietor, would have wanted to exercise close control over them. However, that did not support the notion that only the licensor was entitled to terminate the agreement. 

Trade mark licences can often appear one-sided, in favour of the licensor, who has a natural interest in ensuring the marks are used appropriately; that goodwill accrues to the licensor; and that the marks are used across the whole territory, in order to avoid the marks being declared invalid or revoked due to non-use. This does not demonstrate, however, an intention to bind the licensee forever.

Osborne Clarke comment

The Court of Appeal decision makes it clear that there is a difference between an indefinite contract term and a perpetual term and serves as a reminder that establishing the parties' true intentions as to term and termination rights before signature is important. 

If the parties genuinely intend the arrangement to last forever, the agreement should expressly state that it shall continue "in perpetuity". However, where one party has rights to terminate and it does not make commercial sense that the other party be bound forever, the court may still imply a term into the agreement providing for termination on reasonable notice. Equally, contracts without express termination rights that are expressed to be for an "indefinite" term are, depending on the particular facts and circumstances, likely to be interpreted as allowing either party to terminate on reasonable notice.

Setting out the termination rights of each party, whether they are mutual or whether one party has additional rights over the other, is best practice and reduces the risk of disputes over termination and the inference of a right to terminate on reasonable notice.