The Federal Court of Australia has handed down its decision in State of Escape Accessories Pty Ltd v Schwartz  FCA 1606 finding that a neoprene bag was not a work of artistic craftsmanship, and accordingly, copyright did not subsist in the bag.
This decision provides useful further guidance from the Federal Court as to whether a work can be properly characterised as a work of artistic craftsmanship under the Copyright Act 1968 (Cth) (Act). The outcome is important for all designers of fashion accessories, and is a helpful and practical reminder of the significant limitations of seeking to rely on copyright to protect the design of mass-produced products.
The applicant, State of Escape Accessories Pty Ltd (State of Escape), is a Sydney-based designer and seller of neoprene tote bags. State of Escape alleged that copyright subsisted in its neoprene bag design (referred to in the decision as the Escape Bag) as the bag was a "work of artistic craftsmanship". In the circumstances, State of Escape alleged that similar tote bags made of perforated neoprene imported and sold by Chuchka Bags Pty Ltd (Chuchka) infringed copyright subsisting in the Escape Bag. State of Escape also alleged that Chuchka engaged in the tort of passing off and that it had contravened the Australian Consumer Law (ACL) by selling similar-looking bags.
What is a "work of artistic craftsmanship"?
The Act provides that copyright subsists (amongst other things) in an "artistic work". An "artistic work" includes a "work of artistic craftsmanship". This term is not defined in the Act but its meaning has been developed by the courts over the years, most notably in the High Court decision in Burge v Swarbrick.1 In that case, the Court held that the main consideration is whether the form of a design is unconstrained by function.
Classically, works of artistic craftsmanship are items such as pottery, wood carvings, sculpture, crochet and particular types of jewellery. Items with fundamental functional purposes, such as bags or baskets, are not typically categorised as works of artistic craftsmanship.
The issue of whether a work is a "work of artistic craftsmanship" is important, particularly for designers who have not obtained registered design rights before releasing their products to the public. This is due to the operation of section 77 of the Act, which form part of what are known colloquially as the "Copyright-Design overlap" provisions.
Broadly, under the Copyright-Design overlap provisions, a defence arises where a "corresponding design" of an artistic work has been applied industrially with the licence or permission of the copyright owner. In practical terms, this means that if a designer has embodied an artistic work (ie, a design drawing) in a 3D product (by making a 3D product in the shape or configuration of the design), and has sold more than 50 units of that product, they can no longer rely on copyright protection to prevent others from selling a product similar in appearance. Importantly, this defence does not apply if the work is a "work of artistic craftsmanship".
The legislative policy underpinning the Copyright-Design overlap provisions is a desire to encourage designers to obtain formal design registration under the Designs Act 2003 (Cth), where the maximum term of registration is 10 years (compared to term of copyright protection, being the life of the author plus 70 years). This is intended to strike a balance between the monopoly granted as a reward for the intellectual effort in creating a design, with the public's right to use the design in the future.
Was the Escape Bag a work of artistic craftsmanship?
In considering this question, her Honour Justice Davies referred to the various principles distilled in Burge v Swarbrick, which include:
- the phrase "a work of artistic craftsmanship" is a composite phrase to be construed as a whole. It is not permissible to inquire separately into whether a work is: (a) artistic; and (b) the manifestation of craftsmanship;
- a prototype may be a work of artistic craftsmanship "even though it was to serve the purpose of reproduction and then be discarded";
- the requirements for "craftsmanship" and "artistic" are not incompatible with machine production;
- a work of craftsmanship, even though it cannot be confined to handicraft, "at least presupposes special training, skill and knowledge for its production... 'Craftsmanship'... implies a manifestation of pride and sound workmanship – a rejection of the shoddy, the meretricious, the facile"; and
- in considering whether a work is one of "artistic craftsmanship", the beauty or aesthetic appeal of the work is not determinative. The Court must also weigh in the balance the extent to which functional considerations have dictated the artistic expression in the form of the work.
Her Honour considered in detail each of the design features of the Escape Bag. Her Honour also heard evidence by two independent expert witnesses, who discussed the functionality, design elements and "uniqueness" of the Escape Bag. In considering this evidence, and the above principles, her Honour concluded that the Escape Bag was not a work of artistic craftsmanship, stating that:2
Applying the principles set out in Burge leads to the conclusion that the Escape Bag is not a work of artistic craftsmanship. It is undoubtedly a work of craftsmanship but I am not persuaded that it is a work of artistic craftsmanship, notwithstanding its aesthetic and design qualities (emphasis added).
Furthermore, her Honour noted that:3
I do not regard the selection and use of perforated neoprene as the fabric for the Escape Bag or its use in combination with sailing rope as involving an act of artistic craftsmanship. Both materials were readily available commercial materials capable of being used to manufacture a carry all bag without some particular training, skill or knowledge. At its highest, the use of those materials to make an everyday bag was an evolution in styling. Whilst Ms Beale [State of Escape's expert witness] was of the view the combination of those materials made the Escape Bag "unique" she accepted in cross-examination that the uniqueness to which she referred related to "design decision" to use those materials, rather than in any contribution to the creation of those materials. (emphasis added)
Ultimately, although Justice Davies accepted that the designer of the Escape Bag had certain design aspirations in creating the bag, whether or not the Escape Bag was in fact a work of artistic craftsmanship did not turn on that evidence, nor did it turn on assessing the beauty or aesthetic appeal of the bag. It was also critical that the relevant test is not whether there were features of the Escape Bag that might otherwise be considered to be distinctive.
Rather, the fundamental consideration was the extent to which the Escape Bag's artistic expression was constrained by functional considerations. This assessment was to be made objectively while looking at the bag as a whole, and not by dissecting the design choices by reference to functional limitations. In these circumstances, it was unavoidable that, despite the intention of "beauty" motivating the designer, the bag ultimately had to be "useful" and "practical", leading to design constraints including:
- the bag had to be durable;
- the handles had to be positioned in a way that supported the structure and weight of the bag;
- the size of the handles had to be such that they would enable the bag to be carried comfortably; and
- there was a functional need to prevent the synthetic fabric fraying.
As the Court concluded that the Escape Bag was not a work of artistic craftsmanship, copyright did not subsist in it. Consequently, State of Escape could not prevent Chuchka (or other retailers) from selling a bag which copied the design of the Escape Bag.
Consumer law and passing off claims
State of Escape also failed to establish its claims of passing off and misleading and deceptive conduct under the ACL based on the alleged similarities of the Escape Bag and the Chuchka Bags. The Court was not satisfied that State of Escae had established a reputation in the features of the Escape Bag, as distinct from a reputation in the State of Escape brand. Although State of Escape led evidence as to its marketing and promotion of the Escape Bag, this advertising material was found to be generic to the State of Escape brand and its products generally, rather than specifically in relation to the design of the Escape Bag.
However, State of Escape did establish its part of its claim of misleading and deceptive conduct in respect of statements Chuchka made when promoting its bags.
The decision demonstrates the importance of obtaining registered design rights under the Designs Act 2003 (Cth) to protect the visual features of a product.
Design registration gives the owner of the registration a monopoly over the visual features of a product, including its shape and configuration. If State of Escape had obtained a design registration for the Escape Bag, it would have been able to prevent others from (amongst other things):
- making a product that embodies that design;
- importing, selling, hiring or disposing of a product that embodies the design; and
- authorising others to do any of those things.
To obtain a valid design registration, the design must be new and distinctive. Therefore, designers should ensure that they apply for a design registration before they publish details of the design anywhere or otherwise start selling or using the design publicly in Australia.
1. (2007) 232 CLR 336.
2. State of Escape Accessories Pty Limited v Schwartz  FCA 1606, .
3. Ibid .
Originally published 4 December 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.