Ten years on from Customs seizure of imported furniture, Early Settler was ordered to pay $221,000 after selling product held to be in breach of copyright.
Controlled by Australian interests, ESR Group (NZ) Ltd trades as Early Settler. The High Court ruled ESR made a net profit in New Zealand of $221,000 selling furniture pirated from the Irish Coast design where copyright is held by Australian Ian Burden.
What might have been an open and shut case of copyright infringement developed into nearly a decade of litigation. It was accepted that ESR acted unwittingly in breach of copyright. ESR ordered the furniture from a catalogue issued by a Vietnam company. Mr Burden held a controlling stake in this company. He claimed copyright in the furniture and sued personally to recover profits made in New Zealand by ESR.
Copyright law is territorial. Each country’s rules apply only in that country. There is no such thing as world-wide copyright. Justice Downs ruled the New Zealand Copyright Act gives overseas copyright holders the exclusive right to ‘first circulation;’ that is, the right to first bring their product to market in New Zealand. It does not matter that the product may have been offered previously for sale elsewhere in the world. Same rules apply to pirated copies of an original; copyright in a pirated product lies with copyright holder of the original.
ESR was first to import the disputed product line, doing so without consent of the copyright holder. This was in breach of Mr Burden’s right of ‘first circulation.’ ESR protested. This ruling would harm businesses, leaving all at risk of ruinous legal consequences whenever they unwittingly imported products, pirated or otherwise, in breach of first circulation rights. Importers selling infringing copies can damage both the sales and the reputation of copyright holders, Justice Downs pointed out. Importers unwittingly acting in breach of copyright are not liable for damages, he said. But they do have to hand over their net profit on sales.
At a prior court hearing it became apparent the copyright dispute was in part a legal wrangle between former business associates, Ian Burden and Craig Morrow.
Burden v. ESR Group (NZ) Ltd – High Court (29.07.22)
22.133