State of Escape Accessories Pty Limited v Schwartz [2022] FCAFC 63

30 Jun State of Escape Accessories Pty Limited v Schwartz [2022] FCAFC 63

Normally, if a design is capable of being registered under the Designs Act 2003 (Cth) (“Designs Act”) and is industrially applied as per s 77(1)(b) of the Copyright Act 1968 (Cth) (“Copyright Act”), i.e. more than 50 copies of it are made, it loses any copyright protection it otherwise would have had. An exception to this is s 77(1)(a) of the Copyright Act which specifies that you lose copyright protection if a design is not registered unless it is a ‘…building or a model of a building, or a work of artistic craftsmanship’. This case is an example of an application of these principles.

Facts

State of Escape Accessories Pty Ltd (“State of Escape”) claimed that it owned the copyright in a “perforated neoprene” tote bag, and that the import of a similar object by Ms Schwartz was the importation of an infringing item of s 38 of the Copyright Act. State of Escape claims that copyright exists on the basis that the Escape Bag is a work of artistic craftsmanship. The primary judge found that the Escape Bag was not a work of artistic craftsmanship, and as such, had lost copyright protection.

State of Escape appealed this finding to the Full Federal Court, continuing to assert Ms Schwartz had infringed the copyright of the Escape Bag. They alleged the primary judge erred in finding that the Escape Bag was merely a work of ‘craftsmanship’ and not a work of artistic craftsmanship pursuant to s 10(1) of the Copyright Act, due to the ‘beauty or aesthetic appeal of the Escape Bag’, ‘artistic effort in designing the Escape Bag’, and the ‘artistic quality of the Escape Bag’ [at 22].

Policy

The Copyright Act generally protects artistic works including photographs, paintings, drawings, sculptures, engravings and works of artistic craftsmanship as per s 10. The Designs Act protects visual features in a product including the ‘…shape, configuration, pattern and ornamentation of the product’ in a ‘new and distinctive’ design as per s 7 and s 15 of the Designs Act, respectively.

The interaction between the Copyright Act and the Designs Act is not well understood. It works as follows. S 75 of the Copyright Act provides that copyright will not be infringed if the work in which copyright subsists is reproduced in a three-dimensional form. This applies when a corresponding design has been registered under the Designs Act. Further, s 77(2) specifies that copyright will not be infringed even if the design has not been registered, if the design is applied industrially. The exception is in s 77(1)(a), which provides that s 77 applies to artistic works other than a ‘…building or a model of a building, or a work of artistic craftsmanship’, and that copyright protection is lost when a design is not registered. Consequently, works of artistic craftsmanship can enjoy copyright protection ‘even if it is capable of protection by registration under the Designs Act, and even if a corresponding design has been industrially applied’ [at 8].

The purpose of the overlap provisions is to attempt to ensure that functional works planned for mass production do not receive copyright protection and are instead protected via registration under the Designs Act, thus avoiding dual protection. The special status provided to works of artistic craftsmanship was justified by Justice Drummond in Coogi Australia Pty Ltd v Hysport International Pty Ltd (1998) 86 FCR 154 who stated, ‘Real artistic quality that is an essential feature of such works and the desirability of encouraging real artistic effort directed to industrial design is sufficient to warrant the greater protection and the accompanying stifling effect on manufacturing development that long copyright gives, in contrast to relatively short design-protection’ [at 10].

Although a definition of a work of artistic craftsmanship has not been included in legislation, case law has largely filled in the gaps of what is required. In Burge v Swarbrick [2007] HCA 17 (“Burge”), a two stage test was developed. Firstly, it must be established that a work of craftsmanship exists, and secondly, the craftsmanship must hold artistic quality, namely in relation to being unconstrained by functional considerations.

Decision

The Full Court of the Federal Court of Australia comprising of Justices Greenwood, Nicholas, and Anderson, examined the Escape Bag with regards to its ability to be protected by copyright. In doing so, they were required to analyse whether the artistic manifestation of the Escape Bag was constrained by its functionality, and the role of Ms MacGowan as the maker. The more functional aspects there are in a work, the more these aspects override its artistic qualities as highlighted in Burge. The Court evaluated the Escape Bag and concluded that the perforated neoprene material used in the body of the bag demonstrated the strength and durability required for a functional carry bag. Therefore, the Escape Bag was largely constrained by functional factors which prevailed over its artistic and aesthetic appeal.

Furthermore, the Court noted that Ms MacGowan as the maker of the Escape Bag did not hold the necessary training, skill, and knowledge for the work to be classed as artistic craftsmanship. This is because ‘A work of craftsmanship, even though it cannot be confined to handicraft, at least presupposes special training, skill and knowledge for its production…’ [at 61]. Ms MacGowan did not meet this requirement as she did not have relevant experience in bag design. The materials used in making the bag also play a significant role in determining its artistic craftsmanship. Here, the Court agreed with the primary judge’s finding that using perforated neoprene and sailing rope to create the bag did not constitute artistic craftsmanship as these materials are readily available, commonly used, and do not need to be utilised with reference to special training, skill, and knowledge. The Court additionally agrees with the primary judge’s assertion that the Escape Bag amounts to an evolution in styling as opposed to a work of artistic craftsmanship.

The Court concluded that the appeal should be dismissed.