Copyright – ownership of key designs

by legal | May 30, 2019 | Uncategorized |

Copyright – ownership of key designs

Many businesses will have key copyright works that are central to their operations. Perhaps the most central is a logo that identifies their brand or is otherwise a key part of their business.  Think the Nike swoosh logo or the coca-cola stylised name.

A very large amount of these business’ marketing expenditure and brand awareness are built around these key pieces of intellectual property.

It is critical that the business owns, and can demonstrate that it owns, copyright in these logos.  The key logos may also get registered as trademarks, but at the beginning, if they are an original artistic work, then copyright will subsist first.

Initially, the copyright in any artistic work will be owned by the artist/designer who created the work.

If an employee creates the copyright work in the usual course of their duties, then the employer automatically becomes the owner of the copyright (Copyright Act s35(6)).  For employees who create copyright, it is prudent to have a term in their employment contract recognising this too.  The business should track which employees created what copyright and when.  If this is a common part of their business, such as a fashion brand, then it is recommended that a register of copyright be maintained.

However, if a business engages an outsider person, a contractor, to create the artistic work, copyright is not automatically transferred to the business.  That sounds counter-intuitive, because that is what the outside person is being engaged, and paid, to do.  But to transfer copyright a written assignment is required.[1]  It is therefore critical that whenever a business engages a contractor who is involved in developing IP, for the business to enter into a written and signed agreement with the contractor which provides that all IP developed by the contractor is the contractor’s own original work and is transferred to the business.[2]

Two recent cases demonstrate the necessity to do this (but in the second case saved ay an ironic twist.

In the first, the Hells Angels motorcycle club in San Francisco engaged a tattoo artist known as “Sundown” in 1954 to create a skull image used on membership cards. The tattoo artist apparently frequented the pool hall where the San Francisco chapter met.  The tattoo artist came up with the death head design.

Pool halls and characters like the Hells Angels and Sundown are not the type of people who worry about the niceties of a legal assignment in writing.  Indeed, there was none.  So when the Hells Angels sought to sue Redbubble who allowed people to print various images onto various products (such as coffee mugs), the Hells Angels could not establish that they owned copyright in the death head logo and lost their case on this basis (but succeeded based on trademarks).

In the second case, Racing Victoria wanted commemorative medals based on famous jockeys or trainers struck for annual awards.  Racing Victoria provided historical photographs of the jockeys and trainers and a Melbourne jeweller provided sketches of proposed medals.  Mr Douglas was engaged to make the medals and was paid accordingly.  Mr Douglas then engaged a die maker Mr Forwood to create the actual medals based on Mr Douglas’ sketch, but gave to the die maker the original photographs.  Over time, Racing Victoria moved away from Mr Douglas in providing the medals and appointed a new supplier.  Mr Douglas claimed that he was the owner of the copyright in the medals, that his copyright had not been assigned to Racing Victoria and that Racing Victoria was breaching his copyright by continuing to strike the commemorative medals.  Although Douglas had been paid for his work, arguably he was being opportunistic and was just seeking another pay day.  It was true that there was no assignment from Douglas to Racing Victoria.  But in an ironic twist, the person who ultimately created the medals, Mr Forwood, had not assigned his copyright to Mr Douglas.  So, the court held Mr Douglas did not own the copyright which he alleged Racing Victoria had breached!

The bottom line is that, particularly if a business engages a graphic designer to create their key logo, ensure that the contract with the graphic designer includes an express assignment of copyright in the work created.  But the same principle applies to a business engaging:

• photographers, whether for an advertising shoot or a model/action/athlete shoot;
• filmmakers;
• designers for products;
• graphic design studios who design point of sale catalogues, etc.; and
• IT software writers.

 In all situations, written contracts with appropriate IP assignment and indemnity clauses should always be used.

Fabric Designs and Copyright

by legal | Mar 11, 2019 | Uncategorized |

Copyright in fabrics

A recent Federal Court case examined the breach of copyright in fabric designs (in the case, the design being applied to quilt covers and pillow cases).  The Dempsey Group Pty Ltd (“Dempsey”), originally designed three unique fabric patterns, and hence owned copyright in those patterns.  Dempsey sold these products under its Morgan & Finch brand.  Spotlight used the same supplier in China as Dempsey and was shown samples of the designs owned by Dempsey.  Spotlight then used the Dempsey fabrics to create similarly designed and competitive products.  The three original Dempsey designs and the three copies by Spotlight are set out in Annexure D (towards the end) of the court judgement (http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca2016).

Once viewed, the original products and the Spotlight versions are certainly not identical, and there are significant differences.

The Court nonetheless found that Spotlight’s products breached Dempsey’s copyright in its fabric designs as Spotlight copied a substantial part of it.  About one of the products, the Court reasoned:

“There are differences of detail, colouring and design between the products but, in my opinion, the KOO Jarvis product reproduces a substantial part of the Rimona artistic work. As Dodds-Streeton J observed in Seafolly at [345], it is unnecessary that the two works bear an overall resemblance to each other nor is it appropriate to dissect the copyright work piecemeal and focus on the differences. If similarities are identified, the question is the qualitative significance of such similarities. Reproduction does not strictly require a complete and accurate correspondence to a “substantial part” of the work. The artistic quality of the Rimona work consists of the colour, layout and shaping of the designs in the centre and the colour, layout, structure and integers of the border, the cumulative effect of which created the desired “look and feel” sought by Ms Norris in designing the product. Whilst the bird motifs and floral background are absent from the central design of the KOO Jarvis product and the overall effect is not as “busy”, the use of teal as the dominant colour in the KOO Jarvis product and the similarity of the shaping of the designs in the centre and border design, structure and integers have sufficient objective similarity and qualitatively reproduced, in a material form, the look and feel of the Rimona product”.

Key take-aways from this case:

·       Once again, courts have blown away the myth of the 10% rule (change 10% of someone’s copyright and you are ok).  If a designer is using another artistic work as inspiration, that designer needs to apply their own creative effort to come up with something new and not recreate the look and feel of the original work;

·       It is important as soon as you are aware of someone else infringing your rights, put them on notice by way of a letter of demand (after which they will be allowed a short time to take advice and make a decision (in the end Spotlight undertook a recall)).  However, in this case damages didn’t start to run until Dempsey had not just put Spotlight on notice but also provided some proof that they created the original artwork.  So ensure your internal records can quickly be marshalled to provide this; and

·       Emphasise with your factories that you own copyright in your works and insist that they not showcase those designs to other customers or potential customers.