Fashion Follies

In the recent decision of Seafolly Pty Limited v Fewstone Pty Ltd [2014] FCA 321, Justice Dodds-Streeton in the Victorian Division of the Federal Court fired a “shot across the bow” at fashion designers attempting to cash-in on the successful styles developed by trend-setting manufacturers.  The decision has further advanced the law surrounding infringements of copyright, defences to copyright claims and the remedies available to successful plaintiffs.

Background

Seafolly, the applicant, is a prominent Australian manufacturer of bathers and beach apparel, with a strong national and international presence.  Fewstone, the respondent (known as City Beach), is also an Australian swimwear manufacturer with a strong national presence.

Seafolly decided for its 2011 swimwear range that it would use, amongst others, three artistic fabric prints, known as “English Rose”, “Covent Garden” and “Senorita”.

Seafolly sued City Beach, alleging that they had contravened ss 14, 31(1)(b), and 36 of the Copyright Act 1968 (Cth) (Copyright Act) by reproducing without a licence, in a material form, corresponding prints, which were used to manufacture City Beach products.

Seafolly alleged that City Beach had replicated its textiles by purchasing items of clothing and instructing its (external) designers to copy its artworks, without a licence.  That infringement was exacerbated by City Beach manufacturing garments in China, with actual or constructive knowledge that it was an infringement of copyright.  It was common ground that City Beach had purchased Seafolly garments so that its designers could take inspiration from them.

Seafolly sought compensatory damages, damages for damage to reputation, additional damages, declarations, injunctions and orders for delivery up.

Summary of findings

Justice Dodds-Streeton found that City Beach had infringed Seafolly’s copyright in three artistic works for the purposes of s 36 of the Copyright Act, which provides:

(1)…the copyright in… artistic work is infringed by a person who, not being the owner of the copyright, and without licence of the owner of the copyright, does in Australia, or authorise for doing in Australia, of any of the act comprised in the copyright.

Her Honour held that:

• there must be a causal connection between the copyright work and the infringing party’s work, as the latter must be derived from the former whether directly, indirectly, consciously or unconsciously [234];
• copyright protects the “look and feel of a work” only to the extent that is represented by elements of expression in a material form [236]; and
• whether or not copyright has been infringed in a substantial part is a qualitative question of fact [240].

In determining whether there was an infringement of copyright, Justice Dodds-Streeton drew attention to the fact that (for example in relation to the “English Rose” design infringement), the designer at City Beach had been shown the “English Rose” artwork, so that they could convey their look which the fabric should produce [291].  Indeed, there was evidence produced that the designer had referred to the fabric as a “Seafolly knockoff”.  The designers had alerted City Beach to the fact that they should add more features which would distinguish it from the Seafolly artwork but they were instructed not to. 

Justice Dodds-Streeton held (in relation to the “English Rose” infringement) that:

City Beach reproduced the selected arrangement of detailed individual elements in the Seafolly English rose artwork which cumulatively expressed, in a material form, its look and feel.  It was both a quantitatively significant part of the English rose artwork and an essential and material part relevant to the work as a whole which, on the evidence, entailed the labour, skill and judgment of the designers [353].

In all, Seafolly was awarded the sum of $250,333.06.  A large proportion of this figure was made up by an award of additional damages.

Additional damages can be awarded pursuant to s 115(4) of the Copyright Act in cases where the Court is satisfied that an infringement of copyright has been established and it is minded to make such an award having regard to factors such as the flagrancy of the infringement, deterrence value, conversion, whether the defendant has derived a benefit from the infringement or any other relevant factors.

In this case, her Honour made an additional damages award of $150,000, because:

• City Beach had intended to make use of and imitate Seafolly’s designs;
• the designers had been instructed to copy the designs as a matter of substance which in effect was an instruction to copy the artwork outright;
• the designers had identified the product as knockoffs;
• City Beach continued to sell the infringing garments after they had been put on notice of the copyright claims;
• City Beach derived a considerable benefit of sales from the infringing garments; and

this sort of behaviour needed to be generally deterred within that specific industry.

Lavan Legal comment

This case serves as a stern warning to anyone engaged in the creation of “artistic works”, but especially to clothing manufacturers (and potentially even importers).  It is not acceptable to ride on the “coat tails” of other, trendy designers, because the consequences could be extremely costly.  Indeed, given the clear need for deterrence, manufacturers should be mindful of inadvertent infringement of copyright in their business dealings.