Polo Unhorsed on Copyright Infringement

Designer clothing giant, Polo Ralph Lauren, attempted unsuccessfully to use copyright to stop importation of genuine goods into Australia (Polo/Lauren Co LP v Ziliani Holdings Proprietary Limited [2008] FCAFC 195 (18 December 2008)).

Small retailer Adam Ziliani imported genuine Polo Ralph Lauren garments into Australia and sold them in his "Brands 4 Less" stores in Sydney. He was able to buy last season's garments and offer them at a substantial discount. Polo objected to the sale of garments at a discount price. Initially heard by single judge of the Federal Court, the case went on appeal to the full Court.  

The imported garments were embroidered with the well-known logo of a polo player on a horse and had various tags and labels bearing the Polo trademark. Because they were genuine goods Polo could not sue for trademark infringement (see Fast facts below). As the owner of copyright in the logo, Polo contended that importation of the garments infringed copyright. This was not straightforward as one of the exclusions from copyright infringement is where a copyright work is incorporated into an accessory such as a label on an imported article. Was the embroidered logo on the garments a label? Polo argued that a label has a functional role such as identification of a garment whereas the logo on the garments was primarily decorative, the logo and the garments being inextricably linked so as not to constitute a label.  

Ziliani contended that the logo on the surface of the garments was a label and thereby excluded from infringement. He also argued that sale of the garments had destroyed copyright in the logo. Copyright is effectively lost if an artistic work is embodied as a three-dimensional design in commercially produced articles. In contrast copyright is retained in an artistic work if it is applied as a two-dimensional design to commercially produced articles such as garments.  

The full Court found that the logo affixed to the garments was a label and therefore copyright was not infringed. It also found that there was no reason why a label cannot be or contain a trademark. Despite Polo’s arguments to the contrary the court said of the logo “its purpose is to label the goods; it is a label”. This was in line with the previous decision.  

Given this finding it was not strictly necessary for the court to consider the other arguments on copyright. The court, however, in effect commented that because the logo was not embodied in the garments in the sense required by the legislation copyright was not destroyed by commercial production of the garments.  

The decision confirms current understanding that copyright cannot be used by trademark owners and distributors to control importation of genuine goods into Australia in the circumstances outlined above.  

Fast facts  

Copyright is the exclusive right of an author, designer or copyright owner to reproduce an artistic or literary work.  

Copyright infringement is unauthorised reproduction of an artistic work covered by copyright. Importation into Australia of a copyright work without the permission of the copyright owner may in some circumstances be an infringement. Commercial production of an article bearing an artistic work may destroy copyright in certain circumstances.  

A trademark is a sign such as a logo or word used in the course of trade to distinguish the goods or services of one trader from the goods or services of another trader.  

Genuine goods are goods manufactured by or under the authority of the trademark owner. It is not an infringement of an Australian trademark registration to import genuine goods into this country. Section 123 of the Trade Marks Act 1995 specifies that a person who uses a registered trade mark in relation to goods ... in respect of which the trademark is registered does not infringe the trademark if the mark has been applied to, or in relation to, the goods by, or with the consent of, the registered owner of the trademark.  

© 2009 Julie Harkins