G-Star Raw C.v v Jeanswest Corporation (New Zealand) Ltd

• Jurisdiction: New Zealand
• Judge: Heath J
• Judgment Date: 15 October 2013
• Neutral Citation: [2013] NZHC 2679
• Docket Number: CIV 2011-404-3243
• Court: High Court
• Date: 15 October 2013

BETWEEN

G-Star Raw C.V.

First Plaintiff

and

G-Star Australia Pty Ltd

Second Plaintiff

and

Jeanswest Corporation (New Zealand) Ltd

Defendant

[2013] NZHC 2679

CIV 2011-404-3243

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

Claim of copyright infringement in relation to drawings said to have been used to manufacture a particular type of jeans – plaintiff claimed ownership of copyright in original design and manufacturing drawings for a denim jean (“the Elwood jean”) – design was created by freelance designer to plaintiff – plaintiff alleged defendant had imported, possessed, offered for sale and distributed a style of jeans (“DB jeans”) which infringed the plaintiff's copyright G in the original design works for the Elwood jean as they were a copy, or a copy of a substantial part of the Elwood jean – whether plaintiff owned the copyright of the pleaded original design and manufacturing drawings for the Elwood jean – whether the plaintiff's jean was derived from the drawings in relation to which copyright existed – whether the defendant had used the plaintiff's jean as its sample for the purpose of producing the defendant's jean – whether the defendant's jean infringed the plaintiff's copyright in the drawings – whether defendant was liable as a primary or secondary infringer – appropriate relief

Counsel:

D L Marriott and I Finch for Plaintiffs

C L Elliott QC and A W Johnson for Defendant

C Elliott QC, Auckland

D Marriott, Auckland

JUDGMENT (NO. 4) OF Heath J

The claim in outline	[1]
The issues	[12]
The Dean Biker jean – the design process	[22]
Jeanswest NZ's involvement	[42]
Pre-proceedings correspondence Analysis	[46]
(a) Issue 1: Does G-Star own the copyright of the pleaded original drawings for the Elwood jean?	[55]
(b) Issue 2: Was the Anniversary jean derived from the original drawings?	[61]
(c)Issue 3: Did Jeanswest use the Anniversary jean to produce the Dean Biker jean?	[65]
(e) Issue 4: Did the Dean Biker jean infringing G-Star's copyright in the drawings?	[80]
(f) Issue 5: Is Jeanswest NZ liable as a primary or secondary infringer?	[85]
(g)Issue 6: What relief should be granted?	[102]
(h) Issue 7: Was this proceeding unjustified?	[117]
Costs	[118]
Result	[125]

The claim in outline

1 Denim jeans are a popular item of clothing. Some people will buy them for comfort, others because of their functionality. Jeans are also regarded as fashion items, for which some people might pay more than $500 per pair. This case is about the “biker” fashion trend, one that was created to combine fashion with the functionality of motocross trousers. 1 At issue is whether a New Zealand based retailer has infringed copyright in drawings said to have been used to manufacture a jean of that type.

2 G-Star Raw C.V. (G-Star) is a Dutch enterprise. It claims ownership of copyright in the original design and manufacturing drawings for a denim jean, known as “5620 Elwood” (the Elwood jean). The design was created by Mr Pierre Morisset. Until 1 January 1994, Mr Morisset worked as a designer for his own company, DepÈche Hommes BV (DepÈche), and provided freelance services to G- Star. By an agreement dated 23 May 1995, G-Star recorded that DepÈche had agreed to make Mr Morisset available to G-Star on an exclusive basis, as a

“designer/stylist” with effect from 1 January 1994. Mr Morisset was to design “ready-to-wear” goods to be marketed under the G-Star brand. The agreement went on to record that intellectual property rights in any designs from 1 January 1994 were the property of G-Star. 2

3 G-Star licences companies to distribute its products in various geographical regions. G-Star Australia Pty Ltd (G-Star Australia) has exclusive distribution rights for “G-Star” branded products in Australasia. It has been joined as a plaintiff in the proceeding as its financial interests are directly affected by the allegations of copyright infringement that G-Star has made.

4 G-Star alleges that since (at least) 2 July 2010, Jeanswest Corporation (New Zealand) Ltd (Jeanswest NZ) has imported, possessed, offered for sale and distributed through its “Jeanswest” chain of retail stores a style of jeans named “Dean Biker Slim Straight” (Dean Biker jeans). Those jeans were sold under the “Jeanswest” mark. The Dean Biker jeans were designed by Jeanswest Corporation Pty Ltd (Jeanswest Australia). Jeanswest Australia and Jeanswest New Zealand are associated companies, though Jeanswest NZ is not a subsidiary of Jeanswest Australia. 3

5 G-Star asserts that the Dean Biker jean infringes its copyright in the original design works for the Elwood jean. It contends that the Dean Biker jean is a copy, or a copy of a substantial part, of (what is known as) the Elwood Anniversary jean (the Anniversary jean). The Anniversary jean was designed by Mr Morisset for release in 2006, the tenth anniversary of the time at which the original Elwood jean was put on the market.

6 G-Star pleads that the design and manufacturing drawings for the Elwood jean constitute the copyright works. The drawings said to constitute the work were annexed to its most recent Statement of Claim. They comprise a “workdrawing”, a

drawing of the front and back of the jean, showing the prominent features, “style details”, size specifications (with measurements taken after washing) and pictures of jeans alleged to have been manufactured from those drawings

7 There are said to be five distinctive features in the original drawings for the Elwood jean. G-Star says that the Anniversary jean was derived from those designs and contains the following five “key” features:

• (a) the oval shaped knee pads;

• (b) the horizontal stitching running across the back of each knee;

• (c) the straight line of double stitching coming from the hip to the crotch, diagonally across the front of the thigh of each leg;

• (d) the circle shaped stitching on the back of the jeans (the saddle pad); and

• (e) the heel guards at the rear of each leg.

8 The collocation of design features on which G-Star relies are depicted in the drawings annexed to the current Statement of Claim. They depict a front and back view of the Elwood jean:

9 G-Star claims that, with the exception of the saddle pad, those features are present in the Dean Biker product. Further, it says that each of those four features appears in the Dean Biker in the same position, and in the same relative proportions as are shown in the original drawings for the Elwood jeans. That coincidence of features, coupled with the similarity of their arrangement, is said to amount to an infringement of copyright.

10 No comparable drawing of the Dean Biker jean, during the course of its development, has been put into evidence. However, an expert witness called by Jeanswest NZ, Ms Gregory, prepared similar drawings to establish measurement points for the purpose of comparing the Dean Biker jean with the Anniversary jean. Ms Gregory's drawings also depict a front and back view of the jean:

11 Jeanswest NZ's position may be summarised as follows:

• (a) While the drawings are sufficiently original to attract a limited copyright interest, G-Star has not proved that Mr Morisset was the author of those drawings.

• (b) Even if copyright in the original design were established, it did not know, or ought not reasonably to be taken as knowing, that the Dean Biker jean infringed it.

• (c) The Dean Biker jean was not manufactured from the original design of the Elwood jean. Rather, it emerged from an extensive review of fashion trends, existing designs and different product features; and the review did not take into account the Elwood design.

• (d) Jeanswest NZ's review involved consideration of its own previous designs, its adopted design trends, product features, materials and finishes from a range of other pre-existing designs from around the world.

The issues

12 It is agreed that, as a citizen of France at relevant times, Mr Morisset was, if proved to be the author of the alleged copyright drawings, a person whose skill and labour may be protected under New Zealand law. 4 However, virtually all other elements that G-Star must prove are in dispute.

13 In my view, the issues for consideration in this case may be grouped under seven broad headings:

• (a) Does G-Star own the copyright of the pleaded original design and manufacturing drawings for the Elwood jean?

• (b) If so, was the Anniversary jean derived from the drawings in relation to which copyright exists?

• (c) If so, did Jeanswest Australia use the Anniversary jean as its sample for the purpose of producing the Dean Biker jean?

• (d) If so, did the Dean Biker jean infringe G-Star's copyright in the drawings?

• (e) If so, is Jeanswest NZ liable as a primary or secondary infringer?

• (f) If Jeanswest NZ were liable on either basis, what relief should be granted?

• (g) If Jeanswest NZ were not liable, is it entitled to a declaration that this proceeding was unjustified and an inquiry into any damages suffered as a result?

The Elwood design drawings

14 The original Elwood design drawings have been lost. That being so, it is necessary for G-Star to prove copyright in the original artistic work through the person who designed the product. G-Star called Mr Pierre Morisset. He is currently resident in France. At the time of the trial, he was unable, for health reasons, to travel to New Zealand to give evidence. Mr Morisset's evidence was taken from Amsterdam, by video-link to Auckland, with the assistance of a French language interpreter.

15 Mr Morisset said that his inspiration for the Elwood design came while he was sitting in a restaurant, in the south of...