The Federal Court recently considered the parallel import provisions in the Copyright Act 1968 (Cth) (‘the Act’) in The Polo/Lauren Co L.P v Ziliani Holdings Pty Ltd.
The case confirmed that the local owner of copyright in the packaging or labelling of goods is not able to stop other people from importing those goods when the goods themselves are not protected by copyright.
Polo
The Polo/Lauren Co L.P (Polo) is the owner of copyright in Australia of a signature artistic work, being an image of a polo player swinging his mallet while astride a polo pony (‘Polo Logo’). The Polo Logo is a well known trade mark in Australia, featured on many garments manufactured by Polo.
Ziliani
Ziliani Holdings Pty Ltd and its principal Adam Ziliani (together ‘Ziliani’) purchased authentic Polo clothing at a heavily discounted price from the ‘off-price’ market overseas and from various wholesale and outlet stores in the USA.
Ziliani imported the Polo clothing into Australia and sold it at its Chatswood store, at a substantially reduced price compared to the price available at mainstream retail outlets. Ziliani was aware that Polo had authorised distributors in Australia and that it was able to sell authentic Polo garments more cheaply than those authorised distributors.
Polo’s Allegations
Polo alleged that its copyright in the Polo Logo had been infringed by Ziliani importing and selling items of clothing which had the well known Polo Logo embroidered on them. As the owner of copyright in the Polo Logo, Polo has the exclusive right to reproduce the Polo Logo in Australia and it argued that Ziliani had breached sections 37 and 38 of the Act.
Section 37(1) of the Act provides that a copyright owner’s exclusive rights in an artistic work are infringed if a person imports a reproduction of the artistic work without the licence of the copyright owner and the importer has actual (or imputed) knowledge that if the reproduction had been made in Australia, it would have been an infringement of copyright.
Section 38(1) of the Act provides that these rights are also infringed if the goods are sold (or offered for sale) when the vendor knows (or ought to have known) that if the imported goods had been made by the importer in Australia, it would have infringed copyright.
Section 44C of the Act
Ziliani argued that the Polo Logo embroidered onto the garments was a ‘label’ and therefore that the importation and sale of the Polo goods did not infringe Polo’s rights due to section 44C of the Act.
Section 44C of the Act (introduced in 1998) provides that the copyright in an artistic work will not be infringed by importing a reproduction of an artistic work if the reproduction is embodied on a ‘non-infringing accessory’ to an article such as a label attached to or incorporated onto the surface of an article.
The court held that the Polo Logo was a ‘label’ under the Act, which was used to label the garment as being an authentic product manufactured by Polo – noting of course that the garments in issue were authorised Polo items and were thus ‘non-infringing’. As the Polo Logo was reproduced as a label, Ziliani had not infringed Polo’s copyright in the Polo Logo by importing or selling clothing with the embroidered Polo Logo.
Section 77(2) of the Act
Ziliani also argued that the importation and sale of the Polo clothing did not infringe Polo’s copyright in the Polo Logo due to section 77(2) of the Act. Section 77(2) provides that copyright in an artistic work will not be infringed if the work is reproduced in a ‘corresponding design’, that is, the artistic work is reproduced by being woven into, embodied in or worked into a product.
The court held that the reproduction of the Polo Logo on the garments was a ‘corresponding design’. It followed that the importation and other activities by Ziliani where not conducted in respect of reproductions which infringed copyright in the Polo Logo.
Summary
This case emphasises that the provisions in the Act which prohibit parallel importing of copyright material can not be used to stop someone from importing goods when the goods themselves are not protected by copyright. It is not enough to own copyright in the packaging and labelling of the goods.
The court held that the Act should only be used to protect articles which truly are copyright works (such as original artistic works) and that the claim by Polo was an inappropriate attempt to make use of the protection granted by the Act.
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Alistair Little
Partner
Phone: 61 2 9228 9217
Alistair_Little@tresscox.com.au
Emma Talbot
Solicitor
Phone: 61 2 9228 9216
Emma_Talbot@tresscox.com.au
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