63 pairs of jeans were the subject of the latest decision on copyright infringement from the New Zealand High Court. G-Star Raw C.V. v Jeanswest Corporation (New Zealand) Ltd is interesting from a number of perspectives, not in the least for the meagre amount of damages awarded to G-Star Raw, a mere $325. The decision demonstrates the importance that fashion houses place on goodwill and reputation in a market that is hugely competitive, and high street brands regularly “knock off” high end designers’ creations.
The case also demonstrates how an Australian company with relatively good internal Australian law processes for preventing copyright infringement was caught out by differences in copyright law across the Tasman in New Zealand.
High Court decision
G-Star Raw (G-Star) is a Dutch clothing brand specialising in jeans. It created the “5620 Elwood” jeans in 1996. The Elwood design has become G-Star’s signature piece with more than 10 million pairs sold worldwide.
G-Star claimed that Jeanswest Corporation (New Zealand) Ltd (Jeanswest) had infringed its copyright in the original drawings for the Elwood design by manufacturing and retailing a style of jeans named “Dean Biker Slim Straight” (Dean Biker Jeans). On the facts Heath J found that Jeanswest had copied a substantial part of the Elwood design when designing and producing the Dean Biker Jeans, commenting that there were “telling similarities” between the two designs.
As only 63 pairs of the Dean Biker Jeans were sold in New Zealand, G-Star was awarded damages of $325. Heath J also awarded costs to G-Star, with a slight uplift due to Jeanswest’s conduct during the proceedings.
For more information on the High Court decision, see the High Court decision in the first box below.
On the facts, the outcome of the case was a win for G-Star. However, the costs and damages awarded are unlikely to come close to covering the actual costs of pursuing what Jeanswest called “frivolous litigation”. So why did G-Star bother?
G-Star has a reputation for aggressively protecting its IP, and has previously brought cases against other fashion houses, including Tommy Hilfiger, Ralph Lauren and Benetton.
Heath J commented in the case that he “could not understand why Jeanswest would take the risk of infringement proceedings being issued by an enterprise that was well known for protecting its intellectual property rights”. By taking such an aggressive approach, G-Star consistently warns its competitors that they should think twice about using G-Star’s styles as a starting point for their own designs.
This type of uncompromising stance on copyright helps ensure that G-Star maintains its market positioning as a “denim pioneer” and keeps others out of the same sphere.
By disregarding G-Star’s track record, Jeanswest was forced to spend large amounts defending a claim over 63 pairs of jeans. Worse still for Jeanswest is that the issue could have been avoided if its internal processes had been more robust.
Jeanswest had a legal education programme in place for its design and production team. The company’s solicitor attended an annual meeting with relevant staff to discuss legal issues and processes, with the aim of alerting staff to what was and was not acceptable to use when designing a new product. The material presented by the company’s internal solicitor appears to have only covered Australian law, even though all Jeanswest products are sold in New Zealand and there are some material differences in the copyright laws of the two countries.
To decrease the risk of copyright infringement proceedings, Jeanswest could have taken a number of relatively simple steps:
- increased the frequency of the meetings between the design and production team and the company’s solicitor;
- ensured that the training provided by the company’s solicitor emphasised the need to produce a product that was compliant with copyright laws in all relevant jurisdictions;
- developed straightforward and practically focused legal guidelines for the design process that reflected the different copyright standards in Australia, New Zealand and any other countries where Jeanswest retails its garments; and
- introduced a requirement for sign off against those guidelines for all designs prior to the sample orders being despatched.
Such measures are relatively simple to establish and are cost effective when compared to the alternative. Designing garments inspired by existing trends is expected. By better educating its staff on New Zealand copyright law and putting appropriate controls in place, Jeanswest should have been able to avoid stitching itself up.
For a more detailed summary of the case, see the Analysis of infringement in the second box below.
High Court decision
Jeanswest is the New Zealand subsidiary of the Australian jeans business Jeanswest Australia. Jeanswest Australia is one of the largest specialist jeans retailers in Australasia and has 27 stores in New Zealand.
G-Star claimed that Jeanswest had infringed its copyright in the original drawings for the Elwood Jeans by manufacturing and retailing a style of jeans named “Dean Biker Slim Straight” (Dean Biker Jeans) which were a copy of the ElwoodAnniversary jeans (Anniversary Jeans). The Anniversary Jeans were designed for release in 2006, the tenth anniversary of the first date of sale of the original Elwood Jeans.
The Elwood style of jeans has five distinctive features:
- oval shaped knee pads;
- horizontal stitching running across the back of each knee;
- a straight line of double stitching coming from the hip to the crotch, diagonally across the front of the thigh of each leg;
- the circle shaped stitching on the back of the jeans (the saddle pad); and
- the heel guards at the rear of each leg.
In 2009, Jeanswest staff travelled overseas to gather ideas for new designs. It appears that the design staff brought back a number of physical samples, obtained while visiting fashion shows and the like. As a result of the research on this trip, the Dean Biker Jeans were created.
As part of the manufacturing process, a sample order for the Dean Biker Jeans was drawn up. Crucially, the sample order to Jeanswest’s Chinese manufacturer included references to an “original sample”. Heath J commented that it was clear that Jeanswest intended to use the original sample as the primary basis for the new product.
When the first specimen was received from the Chinese manufacturer, the Jeanswest staff member responsible for the design requested a number of changes, including changes to the thread colour, stitch length and “wash” details - all of which appeared to be designed to make it more like the original sample. After receipt of the second specimen, the designer was apparently pleased with its similarity to the original sample. Interestingly, only 374 pairs of Dean Biker Jeans were ever manufactured, of which 63 pairs were sent to New Zealand. Apparently this was to test the market for this type of jeans.
Analysis of infringement - was it a copy?
To determine whether Jeanswest copied the Anniversary Jeans, both sides called expert witnesses. The experts conferred and provided an agreed set of measurements for the Anniversary Jeans that could be compared to the original sample order prepared by Jeanswest. The judge also compared the jeans for the five key features of the Elwood design.
Heath J found that it was more probable than not that the Anniversary Jeans were used as the original sample because:
- four of the five key features were present, with the saddle pad being the only significant omission;
- any differences in thread colour could be explained by instructions in the sample order;
- rivet placements were identical; and
- all but one of the measurements for the original sample were within the acceptable tolerances of the measurements for the Anniversary Jeans.
To prove copyright infringement, a chain of causation needs to be established linking the copyright works with the alleged infringing copy. As four of the five key features were reproduced, and the differences in measurements could be explained by tolerances and the need to adjust to accommodate different sizes of jeans, Heath J found that the similarity between the copyright drawings and the Dean Biker Jeans was significant and it was probable that the Anniversary Jeans were the “original sample”. As a result of these “telling similarities”, Jeanswest was found to have copied a substantial part of the copyright works when designing and producing the Dean Biker Jeans.
Heath J was satisfied that relief should be granted in the circumstances and made the following orders in favour of G-Star:
- A declaration that Jeanswest had infringed G-Star’s copyright in the copyright works;
- An injunction preventing Jeanswest from reproducing, selling, distributing, manufacturing, importing, advertising, promoting, disposing or dealing with the copyright works;
- Damages of $325; and
- Costs, with an uplift of 25% reflecting aspects of Jeanswest’s conduct during the case.
The Court declined to award additional damages. Copying of this type would not infringe Australian copyright laws. Heath J was prepared to infer that when Jeanswest’s company solicitor talked to staff about infringement issues, he focused on Australian law. If that was the case, the design and production team would not have been aware of the different legal position in New Zealand. Although ignorance of the law is no excuse, the judge did not believe an award of additional damages was appropriate in the circumstances.
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