A recent case in which the High Court found a UK company liable for copyright infringement and passing off after distributing wine bottles featuring labels supplied by an Argentinian winery acts a salutary lesson for all UK importers
Background
The case of Martin v Bodegas involved the first claimant, Martin, an internationally recognised artist who has collaborated with large brands throughout her career. The copyright for one of her designs was assigned to the second claimant, Found the Found LLC (Found).
Found brought claims of copyright infringement against the following parties:
- Bodegas San Huberto (BSH): an Argentinian winery that produced the wine.
- GM Drinks: a UK importer that distributed wine supplied by BSH.
- Mr Patch: a director of GM Drinks.
Martin also brought claims in her personal capacity against all three parties for infringement of her moral rights and passing off.
The dispute involved three wine bottle labels produced by BSH. Martin and Found claimed that these labels featured designs substantially similar to Martin’s work and therefore infringed their rights.
Copyright Infringement
Whether copyright has been infringed depends on whether the part of the original work which has been copied contains elements that reflect the author’s intellectual creation. Intellectual creation is the expressive and creative choices that were made during the production of the work.
The judge found that the first label was very clearly a copy of Martin’s original work, even though some parts had been modified. However, no infringement was found in the second and third labels. This was because although the second label imitated the style of Martin’s original work, it did not contain any of the key features. Similarly, the third label did not bear any clear resemblance to Martin’s original design.
The fact that BSH had hired an independent designer to create the labels did not matter because under the Copyright, Designs and Patents Act 1988 (CDPA) the following acts are prohibited:
- Issuing copies of the infringing work to the public.
- Importing or possessing, a product which is known or believed to be an infringing copy.
- Selling, hiring or offering for sale/hire a product known or believed to be an infringing copy.
GM Drinks were found liable for importing and distributing bottles bearing the first label.
Although BSH and Mr Patch were not found to be primarily liable, they were held jointly liable for the on-going infringement after Martin complained about the labels being used.
Although this hearing did not deal with calculation of the damages to which Martin was entitled, the judge commented that any damages would be significantly limited because the defendants did not know – or have reason to believe – copyright existed until they were notified by Martin, which was after the majority of wine with the first label wine had been sold.
Passing off
To succeed in a passing off claim, a claimant must show that they have goodwill in the product. This is a high threshold to meet as the claimant must provide evidence of their reputation and show that:
- Customers associate the product with the claimant.
- The defendant has misrepresented themselves by circulating a product which is similar to the claimants.
- The misrepresentation has caused loss to the claimant.
The judge found that it was very clear that Martin had goodwill in her design as she had a global reputation and collaborated with large brands. The similarity between her work and the first label was such that consumers were likely to assume she had endorsed or was connected to the wine. This was supported by messages Martin had received from individuals who believed her art was being used on the wine bottles. However, the judge did not think the second and third labels were sufficiently similar to Martin’s work or that they would mislead customers as to their origin.
Comments
By highlighting that UK importers can be held responsible in the UK, for IP infringement by parties based outside of the UK, the case is a reminder of the care which importers need to take. They cannot assume that responsibility for IP infringement is nothing to do with them, and that it is a problem for the overseas manufacturers. Instead, they should undertake their own due diligence and ensure that their contracts for purchasing the products contain suitable protection in the event of infringement by the manufacturer.
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