Jelly-sy – A Warning to e-Commerce Retailers About the Risks of Infringing Copyright
It seems only fitting that with “Schoolies Week”[1] around the corner, the Federal Circuit Court has delivered judgment in the matter of Weller & Anor v Smith [2016] FCCA 2827 which relates to intellectual property rights and commercial reputations in the jelly wrestling products industry.
The matter relates to a dispute between the partnership of John Weller and Jake Weller trading as “Crazy Town Parties” and Ian Smith.
The Wellers trade in the party supply and party hire industry. One aspect of their business is the sale of a range of products, including a substance sold in crystalline form, that are used for jelly wrestling. The Wellers utilise a number of photos for marketing purpose in both digital and hardcopy formats including on the packaging of their jelly wrestling products.
In 2013, the Wellers became aware that one of their photos was being used by a trader with the name “crazytownbrisbane” on eBay. The Wellers sent an email to this trader (who turned out to be Mr Smith) requesting that the trader stop using the photo and the “crazytownbrisbane” name. While no response was received to the email, the trader stopped using the photo.
In May 2014 the Wellers commenced trading on eBay under the seller ID “crazytownpartiesstore”. In October 2014 they received a notification from eBay alerting them to a complaint about the store name by Mr Smith (who was still operating as “crazytownbrisbane”). At the Wellers’ instigation, one of their friends contacted “crazytownbrisane” seeking information about the products that they sold and eventually purchased a sample of the products. They subsequently discovered that one of the Wellers’ photos was being used on the packaging of Mr Smith’s products.
The Wellers commenced proceedings in November 2014 against Mr Smith alleging copyright infringement and alternatively that Mr Smith had engaged in the tort of passing off and/or misleading and deceptive conduct and made misrepresentations under the Australian Consumer Law.
Judge Jarrett found that Mr Smith had infringed the Wellers’ copyright in the photos and awarded compensatory damages of AUD350 for lost sales and AUD7,000 for loss of reputation (on the basis that Mr Smith was selling an inferior product). However, the Wellers also sought additional damages subject to section 115(4) of the Copyright Act 1968 (Cth).
As noted by Judge Jarrett at [137]:
Downloading or copying images from webpages on the internet is an easy thing to do. There is a need to send a clear message that doing so and using the images so obtained for commercial gain is to adapt the words of Burchett J in Autodesk[2] at 394 “piracy” and that an infringer ought to be treated accordingly. There is a clear need for deterrence to prevent similar infringements of copyright.
AUD20,000 in additional damages arguably sends a (jelly) crystal clear message that using a third party’s photos without permission is not permitted under Australian copyright law. The matter is set to return to court at a later date so that the question of costs and interest on the damages awarded pursuant to the judgment can be resolved.
[1] “Schoolies Week” has become somewhat of a traditional rite of passage for school leavers in Australia. Many school leavers travel to holiday destinations where they engage in various forms of partying to celebrate the end of their secondary education.
[2] Autodesk v Yee (1996) 68 FCR 391.
By: Jaimie Wolbers