Article by Stephen Clune, Cameron Harvey and Kristen
In dismissing an appeal by Polo/Lauren against an unauthorised
importer who was selling its genuine brand label clothing at
discount prices, the Full Federal Court has recently underscored
the difficulty that brand owners face controlling the secondary
channels of distribution for their genuine goods.
While consistent with the generally accepted position that a
brand owner's rights are exhausted once it sells its goods, the
Court's decision leaves unresolved what protection, if any,
copyright affords with respect to clothing designs.
Ziliani had been purchasing genuine Polo clothing at wholesale
prices in America and selling them at below retail prices in
Australia, without Polo's permission. As the owner of the Polo
brand in Australia, Polo commenced proceedings against Ziliani
claiming (among other things) that Ziliani had infringed its
copyright by importing, offering for sale and selling the articles
of clothing which had the Polo player logo. What was legally
significant in this matter was that the logos were slightly raised
from the rest of the fabric, making them three dimensional.
Ziliani successfully defended the claim on the basis that the
embroidered logo was a label, and was therefore a
'non-infringing accessory' to the articles of clothing, as
provided for in the Copyright Act.
While the label defence was enough to defeat Polo's claim,
the Court at first instance also agreed with Ziliani's second
defence that the logo was of such shape and configuration when
embroidered so as to be of three dimensions. This meant Polo could
not use copyright to protect its rights in the shirts. In that
respect, the Copyright Act provides that artistic works which are
commercially exploited as three dimensional products will not have
copyright protection. Instead, protection should be sought by
registering what is known as a 'design' under the designs
Polo appealed the decision.
The Full Court agreed with the original decision on the label
defence, finding that the embroidered logo was separate from the
shirts themselves and therefore a 'label' under the Act,
meaning that the importation or sale of that clothing could not
infringe Polo's copyright.
While this was enough to defeat Polo's appeal, the Full
Court did not agree with the original finding on the
design/copyright defence. It is hard to discern any clear direction
on this complex topic from the Full Court's ruling.
Polo has sought leave to appeal the Full Court's decision to
the High Court.
What Does it Mean?
Brand owners and distributors still have the full range of legal
remedies available in respect of counterfeit goods and against
those who misappropriate their brand.
However, the vexed issue of copyright protection for clothing
designs remains unresolved in many respects. This is despite the
clear intent of the Commonwealth Parliament to do so in 2004. It
will be interesting to see whether the High Court wants to hear the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
As a licensor or a licensee, here are some tips you should consider when negotiating your next licence agreement.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).