January 24, 2023

Small Businesses can Take a Shine to Intellectual Property Rights too


Emily Gradon is a mum of three and founder of Australian swimwear business, Tribe Tropical, which sells unique, award-winning swimwear online.

In early November, Emily was ‘gutted’ and ‘heartbroken’ to find four swimsuits that seemed remarkably and uncomfortably similar to her own designs. Those swimsuits were made by Shein.

Emily had invested considerable time and money working with an Australian artist to create patterned fabric and swimwear designs. To find that Shein was selling swimwear that was so similar to Emily’s designs was “a real kick in the teeth”, Emily says.

Unfortunately for some business owners, close imitations of their most popular products appear on the market from time to time. When copycats strike, there are several options available to Emily, and other business owners in a similar position.

Intellectual Property laws can differ between countries and because Emily (and Shein) offer swimwear for sale in multiple countries, the options available vary.

In New Zealand, Emily can rely on copyright to enforce her rights in her swimwear designs. Copyright automatically arises in New Zealand (for free) whenever a new, unique work of artistic craftsmanship is created, such as a new fabric or swimwear design. Once Emily makes more than 50 copies of her unique swimwear design (so-called “industrial application” of the design), then she can enforce her copyright against others for up to 16 years.

Relying on copyright protection, Emily could send a cease-and-desist letter to any company that she reasonably believes is infringing her copyright. The letter would typically set out her rights and demand that the company stops selling the swimwear of concern immediately. Such demands usually succeed. If not successful, then litigation is available. But small business often struggle to finance full litigation, so what are Emily’s other options?

Gus Hazel, a partner of intellectual property law firm, James & Wells, says that “one of the strongest and most cost-effective protection strategies for copyright owners is to file a copyright notice with Customs”. Notices can be in force for up to five years (renewable) and allow Customs to detain imported goods that are believed to infringe copyright. Hazel says, “A copyright notice can be a powerful weapon because it allows a copyright owner to request the equivalent of an urgent injunction to stop the detained goods getting to market and the copyright owner doesn’t have to provide an undertaking as to damages (a promise to pay the costs of the injunction) if it turns out that the injunction shouldn’t have been granted.” The strategy is not risk-free, but it certainly reduces risk and can have a very significant impact on the conduct in question.

When asked what copyright protection is available to Emily in Australia, Hazel says “Essentially nothing. New Zealand’s copyright laws are far more generous than Australia’s when it comes to products that have been commercialised.”

However, both countries have consumer protection laws that may assist in some situations and both countries also offer registered design protection, which can be used to protect a pattern applied to a product and the shape of a product. In New Zealand, it is important to keep the design confidential before applying to protect it with a design registration, but in Australia, Emily could apply to register a design for her fabric or swimwear up to one year after making the design public (with some limitations). Registered designs are not a well-known IP right, but they offer a relatively low-cost form of protection and are typically easier to enforce than copyright because it is not necessary to prove that ‘copying’ occurred.

Emily can also (to some extent) call on publicity and public sentiment to help protect her position. People tend to look unfavourably towards companies that encroach on the rights of others. Even if the conduct is not strictly speaking an ‘infringement’ under the law – negative publicity can act as an effective deterrent.

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