Can you terminate an “indefinite” trade mark licence even if there’s no express right to do so?

Earlier this year the Court of Appeal handed down a judgment which assessed the role of intention behind commercial contracts, particularly when determining parties’ termination rights. As the Supreme Court has recently refused to hear appeal, this article will look at the implications of the Court of Appeal’s decision for the construction of termination provisions in commercial contracts.

Background 

In this case, the contract in question was a licence between two organisations founded by the late, famous architect Dame Zaha Hadid for the use of various trade marks of her name. The appellant, Zaha Hadid Limited (the “Company”) is an international architecture practice and the licensee. The respondent, The Zaha Hadid Foundation (the “Foundation”) was set up to preserve Dama Hadid’s work and legacy and, when her intellectual property rights passed to the Foundation upon her death in 2016, became the licensor of the trade marks to the Company. The dispute arose when the Company wanted to renegotiate the licence fee and continue using the trade marks, thereby arguing it had the right to terminate the contract on reasonable notice. The Foundation disagreed based on the terms of the contract and so the dispute turned on the effect of the contract’s termination clause. 

Legal Foundations  

The termination clause of this contract crucially stated that the agreement would continue “indefinitely” and thereafter provides express termination rights for the licensor, but none for the licensee (although it did not specifically deny such powers to the licensee):

“12.1 This agreement shall commence on the Effective Date and shall continue indefinitely, unless terminated earlier in accordance with this clause 12.”

The central issue before the courts, then, was whether the licensee could terminate on reasonable notice, despite the absence of express terms.

In November 2024 the High Court held in favour of the licensor and took a literalist approach to decide that the absence of express rights did not allow the licensee to terminate, effectively locking the parties into the agreement forever. 

In January 2026, the Court of Appeal disagreed, finding in favour of the licensee. In arriving at this decision it first questioned whether the licensee had the right to terminate the agreement on reasonable notice. The court endorsed a two-part framework from the House of Lords decision in Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173:

1. Did the parties intend for the agreement to stand for an indefinite period or in perpetuity
2. If “indefinite”, then a power to terminate on reasonable notice should follow as part of the exercise of construction.

The second question was, if the answer is “no”, is it an unreasonable restraint of trade that therefore leaves the contract void? Since the court allowed the appeal, it only addressed the first question, which is explored in greater detail below.

Legal Reasoning 

Applying the above framework, the court found that, in answer to part one of Winter Garden, there was nothing on the facts to suggest that the contract lasted in perpetuity and, as a result, part two was confirmed (that a power to terminate on reasonable notice follows as a matter of construction). The court laid out four key reasons behind this.

Commercial Context

Taking the contract as a whole, the court noted that trade mark licences are commercial relationships that do not typically require parties to be locked into a relationship of perpetuity. Indeed, Sir Birss noted that, “while no doubt it was envisaged to be a long-term relationship, from either party’s point of view [such a commitment] would not make business sense”[1]. Any number of issues might arise in the future that would be so detrimental to the brand as to make it disadvantageous for the Company to continue using the trade mark. The fact that the trade marks were valuable assets to Dame Hadid and that, as owner, she would want to carefully control their exploitation, supports the idea that both parties would have powers to terminate.

Word Choice 

Turning to the clause itself, the word “indefinitely” was chosen and is used to describe the position in the absence of express termination rights for the licensee, which is made clear by the word “unless”.  If this instead read as “perpetually”, this would mean that the contract was intended to go on forever unless terminated by Dame Hadid or her successor in title. On the face of it, the duration is therefore indefinite but not forever.

Reasonable Notice 

What amounts to reasonable notice depends on the circumstances of when that notice is given. Between the date of signing the contract (2014) and the date Dame Hadid’s rights passed to the Foundation (2016), reasonable notice could have been interpreted as being a long time (especially given the fact that Dame Hadid founded both organisations and they maintained a friendly commercial relationship). Furthermore, the royalties from the license were intended to provide her with income during her lifetime, which naturally left a commercial juncture upon her death. 

Conceptual Consistency

The Foundation argued that the express powers of termination granted to them as licensor undermined the interpretation of “indefinitely”. The court disagreed, however, stating that such an argument only works if the power to terminate on reasonable notice would be inconsistent with these clauses, but it is not.

The court concluded that the commercial context and construction of the termination clause meant that it made more sense to hold that the parties intended the contract to last for an indefinite period, without clear limits, rather than forever. As a result, the licensee was deemed to have the power to terminate on reasonable notice.

Intention

It seems that, when the terms of a contract are silent regarding one party’s express termination rights, the court will look to the common intention of the parties at the time of drafting. In this case, Dame Hadid controlled both organisations and, coupled with the commercial unpredictability of trade mark rights, meant Sir Birss found it extremely unlikely she would want to bind them forever.

Construction 

The Court of Appeal was particularly influenced by the commercial reality of this fact pattern and unwilling to accept an interpretation that would lock a business into the promotion of a brand identity, even if future events made it seriously disadvantageous to do so. Indeed, where architectural styles and branding will likely change over time, it seems very unlikely that the parties intended to lock themselves into commercial obligations forever. This suggests a broader judicial reluctance to adopt constructions that produce commercially unrealistic outcomes (particularly in brand-driven sectors where flexibility is essential). 

When drafting contracts, then, it appears that the word “indefinite” has no fixed end yet does not mean forever, whereas “perpetual” can take the natural meaning of forever. The starting point may therefore be that an agreement expressed to last indefinitely is capable of being terminated by either party on reasonable notice; and if it states a perpetual duration, then without express terms there is no room to infer that a party can terminate on reasonable notice. Clearly, “no fixed end” does not necessarily mean “forever”.

This decision represents a departure from a long history of strict contract interpretation towards a more forgiving approach and so brings hope to parties who, on the face of it, appear to be bound by an unfavourable agreement and wish to see their original intentions protected.

[1] Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192, [52].