The executive chairman of UK fashion label Karen Millen has defended the retailer against a claim by its founder that she is fighting to trade under her own name.

Executive chairman Derek Lovelock said that when Karen Millen and Kevin Stanford sold the Karen Millen business for GBP120m in 2004, they sold all rights to the use of the Karen Millen brand name or any iterations of it.

The statement follows a report in The Guardian newspaper which says the brand has warned of a trademark infringement if Karen Millen returns to business under the planned brand names of Karen or KM.

The designer is also reportedly pursuing a legal challenge to the way she lost her near 7% interest in Mosaic Fashions, now Aurora Fashions, which owns the Oasis, Coast and Warehouse brands.

From 2001, Millen and Stanford sold down their interest in the Karen Millen business, allowing Baugur to become the dominant investor. By 2008, a complex series of deals had left Stanford with an 8% holding in Baugur, a 4% stake in Kaupthing and interests in several other Icelandic investment vehicles. All failed after the crash in 2008. It is now owned by the administrators of Kaupthing Bank and the Aurora senior management team.

"Naturally, we take very seriously attempts by any third parties to trade on our name, goodwill and reputation, which would be in clear breach of our intellectual property rights. We will always take measures to protect our brand, our company and our employees, as any business would," said Lovelock.

"Whilst we would be delighted to see someone with Karen's talent back in the market, we're sure she would want any new venture to be successful in its own right and wouldn't want any confusion with the brand that she sold so many years ago."

Lovelock emphasised that since the acquisition, the Karen Millen brand has "gone on to become one of British fashion's greatest successes", operating in 45 countries around the world and employing 1,700 people, including 1,100 in the UK and Republic of Ireland.