Seafolly Pty Ltd v Fewstone Pty Ltd  FCA 321
April Fools Day 2014 was an inauspicious day for Fewstone Pty Ltd (the owners of the City Beach brand) but an auspicious day for the fashion industry as the Federal Court handed down clear instructions as to how copyright infringement should be assessed.
The decision follows the earlier decision of the Full Federal Court in Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd  FCAFC 197 which was summarised in our earlier article. In that case, Cotton On and its designers had used the Elwood Clothing designs as a reference to create a product with "the same look and feel" but which, it was hoped, would have sufficient differences not to constitute an infringement of the copyright of Elwood Clothing in the particular designs.
In the Seafolly case, City Beach took a similar approach in relation to three designs created by Seafolly and its designers. The importance of both the Elwood and Seafolly cases is that infringement was held to have occurred because the design elements were taken (in particular, the layout, selection, arrangement and style) notwithstanding that there were many differences between the visual elements in each of the competing designs.
The relevant artworks
The relevant artwork taken from the Seafolly judgment appears below. The relevant Seafolly designs were called English Rose, Covent Gardens and Senorita and the corresponding City Beach designs were called Rosette, Sienna and Richelle, respectively. The Seafolly artwork appears on the left hand side of the page and the corresponding infringing City Beach artwork appears on the right.
Click here to view images.
City Beach took a "substantial part" of the Seafolly designs
As can be seen from these examples, there are many differences between the genuine and the infringing design. This was acknowledged by the Court. However, the Court held that the design elements in the particular combination and internal relationship of the visual elements which were taken by City Beach were, cumulatively, a substantial part of the Seafolly work in a qualitative sense. In the case of the English Rose design, these elements included the impressionistic rendering, the broadly similar shaped, styled and sized roses with similar positioned variations of colours and highlights and the similar placement of groups of a similar mix of differently sized but larger roses against similar clusters of a variety of smaller roses. Furthermore, both the original and the infringing work used shades of pink for the roses set against either a white or black background.
In the case of the Covent Garden design, the same types of flowers are depicted in an impressionistic style with a similar mixture of tints, tones and shades and which featured the colours blue and yellow. Furthermore, each of the designs had "...a base colour appearing through a melange of flowers, leaves and fronds."
In the case of the Senorita design, which is an embroidered design, there is a similar combination of elements with minor differences. The evidence in respect of this design was that the Chinese manufacturer had been asked to copy the Seafolly design and the Court had little difficulty in finding that this had been done.
The "inspiration" for the infringing designs
In the Seafolly case, as was the situation in the Elwood case, the people responsible for creating the infringing design had access to the genuine design and were instructed to take inspiration from it. Perhaps unfortunately in retrospect, in one instance, City Beach referred internally to its design as the "Seafolly Knock-off – Rose Print". The evidence also showed that some effort was taken by City Beach and its designers to change the visual elements of its Rosette and Sienna designs to look sufficiently different from the Seafolly artwork so as to give a sufficient degree of comfort that its designs were defensible. What City Beach failed to appreciate was that the test which would ultimately be applied was not a comparison of the visual elements but rather an enquiry as to whether, in qualitative terms, a substantial part of the design elements of the Seafolly works were represented in its works.
The copyright/design overlap defence did not apply to the Senorita design
In relation to the Senorita design, the case also contains an interesting discussion on what constitutes a 3-dimensional work for the purposes of the copyright/design overlap defence. This defence is found in section 77 of the Copyright Act 1968 (Cth) and in brief terms takes away the right to sue for copyright infringement of an artistic work where a "corresponding design" has been industrially applied. The critical issue here was whether it could be said that the embroidered or smocked Senorita design was embodied in the garment in the sense that it was woven into or worked into the garment. Suffice it to say that an embroidered work which is not in itself a 3-dimensional product in the shape or configuration of the underlying artwork will not constitute a corresponding design for the purposes of that defence. In other words, features of shape or configuration can only be embodied in a product by making a product in that shape or configuration. On the other hand, features of pattern or ornamentation applied to the surface of a product will not qualify as corresponding designs.
In the final analysis, Seafolly was awarded damages for lost profits, damages for loss of reputation and additional damages totalling $250,333.06.
Lessons for fashion designers
Once again, the Federal Court has made it clear that there are considerable dangers in riding on the coat tails of successful styles in the fashion industry. The Court has sent a salutary message to fashion houses for Fashion Week.