The recent case of Review Australia Pty Ltd v Innovative Lifestyle Investments Pty Ltd [2008] FCA 74 looks set to pave the way for fashion labels keen to protect their most valuable assets – their designs. Now a registered design can be a powerful tool against infringement in the marketplace.
In the past, clothing designers alleging infringement of their designs found recourse under the Copyright Act 1968 and the copyright in their dressmaking patterns. This case shows that designers can now rely on registering their designs under the (still fairly new) regime of the Designs Act 2003 (the Act).
Review, a popular women’s Australian clothing brand, sells its label in its own stores and in Myer stores nationwide. In June 2005 Review lodged a design application pursuant to s21 of the Act which included the design for the dress at the heart of this case. In November 2005 Review requested registration of the design under s35 of the Act, and was notified it had been accepted and given a filing date of 24 June 2005. Quantities of dresses were despatched to stores and outlets from late June 2005 and shortly after placed on display for sale.
In early May 2006, a Review employee attended a 'Charlie Brown' store and purchased a dress branded 'lili,' made by the respondent (lili) and very similar to the Review dress. Evidence suggests this dress started being manufactured in September 2005, passing into production in late January 2006 and first sold in March 2006.
In June 2006 solicitors for Review wrote to lili drawing attention to Review’s design registration, and if a certificate of examination were issued by the Registrar of designs, that the continued sale of the lili dress would be an infringement of Review’s design. In July 2006 the Registrar certified, pursuant to s67 of the Act that an examination of Review’s design showed it was enforceable as at June 2005.
Review commenced proceedings in the Federal Court in September 2006, seeking a declaration of infringement, an injunction and damages.
Review structured its arguments around s71(1) of the Act which deals with the infringement of a design. Under the section, a person infringes a design if, during the term of registration of the design, and without the licence or authority of the registered owner of the design, the person contravenes one of the following five grounds: making or offering to make a product embodying a design identical or substantially similar in overall impression, importing such a product, selling the product, using the product in trade or business or keeping the product for selling or using in trade or business. Lili denied its dress was identical to Review’s dress, but otherwise admitted it sold it, used it in trade/business and kept the product. There was no evidence of importing.
2.1 Identical
A further issue was whether, in addition to being substantially similar in overall impression, the lili dress was identical to the Review dress. It was admitted the dress was substantially similar in overall impression to the Review dress, but Jessup J said he would not go to the extent of finding it was identical. There were points of difference which precluded this.
It was found, however, the striking visual similarity between the two dresses, together with the timing of the commencement of production of the lili dress after the appearance of the Review dress on the retail market, justified the inference that the lili dress was a copy of the Review dress.
2.2 'Making' the dress
Lili suggested because the dress was made by subcontractors, it was not actually the maker of the copy (under s71(1)(a)). The Court did not accept this distinction, and considered that a person who 'makes' a product includes a person who directs, causes or procures the product to be made by another, whether or not an employee of that person.
Overall, it was found that by the commercial development, production, distribution and sale of the lili dress, the respondents had:
(a) made a product, in relation to which the applicant's design was registered, which embodied a design substantially similar in overall impression to the applicant’s design;
(b) offered to sell and sold such a product;
(c) used such a product for the purposes of trade or business; and
(d) kept such a product for the purposes of offering to sell it, of selling it, and of using it in trade or business.
Review sought compensatory damages under s75(1)(b) of the Act. The Court held lili’s course of conduct, which involved each of the infringements above, resulted in a product with the potential to cause loss or damage to Review. The potential arose because both parties sold similar products in much the same market.
The Court commented it would be obvious for Review to demonstrate the distribution and sale of the lili dress had a detrimental impact upon the sales of its own dress, however Review never submitted such details. In lieu of this, Jessup J was prepared to find that the market presence of the respondent’s dress did bring about some minor dilution of Review’s reputation for originality, and accordingly awarded $7,500.
The fact that lili continued to trade in its dress after having been directly informed of Review's registered design attracted a further $10,000 damages under s75(3) of the Act, under which the court is entitled to award additional damages having regard to the flagrancy of the infringement. Review was also awarded costs.
The Court held there was little value in making a declaration or in granting injunction relief.
This case shows designers there is real merit in registering their designs under the Act. While registration alone will not guarantee enforcement, it does allow the design to be examined where necessary to cement the registration and enforceability (back dated to the filing date).
The case demonstrates that a registered design can be a powerful tool against infringement in the marketplace, and designers may recover damages against those who copy their works.
For advice on registering your design or enforcing your design rights, please contact Nicole Stevens-Warton on +61 3 9608 2264 or n.stevens-warton@cornwalls.com.au or Anna Smits on +61 3 9608 2103 or a.smits@cornwalls.com.au.
