Fashion policing: Design protection in Australia (Part 3)

Trade mark registration for trade dress

Applying for trade mark registration can protect branding, names and ‘trade dress’ through trade mark protection—whether as registered or common law trade marks—for example, Christian Louboutin’s red sole for shoes, which is registered as a trade mark in Australia^[1], the United Kingdom^[2] and the United States^[3]. This may only be relevant where a business is committed to consistently using a design element as part of their ‘brand building’ and not simply as a seasonal feature. As reported in September 2012, the United States Court of Appeals for the Second Circuit ruled in September 2012 that Christian Louboutin SA is entitled to trademark protection for its red-soled high-heeled shoes, except when the shoe is also red. See September 2012 posting. The best course of action for Australian designers and businesses interested in protecting their intellectual property in the artistic works and designs in their products is to build awareness of the risks of infringement, particularly overseas infringement, into their ordinary business practices. This may include considering the commercial utility of design and trade mark registrations, and paying close attention to the terms of agreements with employees, suppliers and manufacturers—both in Australia and overseas—regarding use and protection of confidential/commercial information, intellectual property and the physical security of samples and products. Ultimately, designers and businesses should also remember that they operate in an industry built on the flow of ideas, inspiration and trends; in this context, copying may only ever be monitored and, to some extent, controlled, rather than stamped out altogether.

Protecting artistic works in fashion and design products

It is important to remember that importing and selling overseas sourced copies of protected artistic works in Australia will not necessarily constitute infringement by the third party importer or seller. Under sections 37 and 38 of the Copyright Act, a person that imports, sells or distributes (among other things) an infringing copy of an artistic work will only be liable for infringement if that person knew, or ought reasonably to have known, that making that copy in Australia would have constituted a copyright infringement. This means that the knowledge of a third party importer or seller in Australia would be interrogated by a court if infringement proceedings were brought by the copyright owner. In this case, the copyright owner would have to show that the importer or seller knew, or should have known, of the existence of the original artistic work. While it might be assumed that most businesses in the Australian fashion industry would keep a close eye on trends and competitors’ products, the answer to this question in any given case would rest on the circumstances of that case. Giving written notice to importers, wholesalers or retailers that may be dealing in or authorizing infringing products is a common means of alerting those parties to the existence of a copyright owners interests and requesting that the infringing conduct cease. Even if written notice does not immediately end the infringing conduct, it is a useful means of ensuring that an evidence chain is in place if questions of the other party’s knowledge and date of first notice arise later in legal proceedings. Under section 115(4) of the Copyright Act, a court may award additional damages if it sees fit, having regard among other things to the defendant’s conduct after the defendant was put on notice of its alleged infringing conduct. It may be worthwhile for lawyers drafting letters of demand in these situations to note in the letter that additional damages may be sought pursuant to these provisions if proceedings are filed. While innocent infringement is not a defense to an infringement claim, section 115(3) of the Copyright Act provides that damages are unavailable in circumstances where the defendant was not aware and had no reasonable grounds for suspecting that they were infringing copyright. As with the above question of an importer/sellers knowledge of the original artistic work in the context of sections 37 and 38, a copyright owner’s ability to show that the innocent infringer had the requisite knowledge will depend on the circumstances. Section 115(3) does provide that an account of profits may be awarded in the case of innocent infringement. There are a number of surrounding issues that will also play a role in copyright owners’ decisions about how to protect their designs and enforce that protection where infringement is suspected. These include the time and costs involved in obtaining legal advice and assistance – costs which increase substantially if litigation is contemplated. In the context of fast churn fashion products, where attempting to stay one step ahead of imitators is usual business practice, legal action may simply not be a worthwhile use of the copyright owner’s resources. There are other alternatives to relying on copyright protection alone. In Australia, designers may also be able to rely on actions in passing off or under the Australian Consumer Law in the case of misleading or deceptive conduct. Whether such alternatives are available will of course depend on the circumstances; however, the availability of these actions is unlikely to be of assistance where there is no attempt by the infringer or third party to pass off a product as that of the original designer.

Action points to consider

• Keep records of artistic works and the process of their creation, not just of reproduction of the artistic works in textiles or other materials and products.
• Consider ways to maximize control of the supply chain and the security of designs within this. This will include considering the physical security of samples and electronic devices or CDs containing images of artistic works, as well as the terms of agreements with offshore manufacturers and other contractors.
• Remember that sending designs offshore, particularly to jurisdictions with different IP laws and enforcement, is inherently risky; while local manufacturing can be more closely controlled, this will involve a question of balancing costs with the importance of IP protection.
• Consider whether an artistic work is intended for use over one season, or may become a signature for the label or brand. If the artistic work will become part of the business’s brand building, not just a seasonal feature, thought should be given to trade mark registration, or ensuring consistent use in order to build up common law protection as trade mark or trade dress.
• Consider obtaining overseas design or trade mark protection if that country is a significant market.

This three part series was prepared by Emma Bekens, associate (emma.bekens@nortonrosefulbright.com) and Sophia Christou, lawyer (sophia.christou@nortonrosefulbright.com) of Norton Rose Fulbright’s Australia Intellectual property group.