In what is a decade long business dispute fought in the arcane arena of copyright law, a Court of Appeal ruling over the importation and sale of pirated furniture provides a measure of protection for retailers unwittingly importing and selling products previously sold overseas but manufactured in breach of copyright.
Australian-owned ESR Group (NZ) Ltd trades in New Zealand as Early Settler. Ian Burden alleged ESR Group sold in 2014 furniture imported from Vietnam pirated from his Irish Coast design. He claimed copyright to Irish Coast. He complains that a former colleague set up manufacturing operations in Vietnam, deceitfully ripping off his design.
In New Zealand, the High Court was told ESR Group’s furniture importations from Vietnam were ordered from a published catalogue. It was unaware that the imported design was pirated, until later challenged. ESR then placed no further orders. A 2016 court ruling found the product sold in New Zealand by ESR Group as the Roseberry Collection breached Mr Burden’s claimed Irish Coast copyright.
A subsequent High Court ruling that ESR Group pay $221,000 damages was overturned by the Court of Appeal. Legal argument centred on Copyright Act rights of ‘circulation,’ better known as ‘distribution rights.’ These rights are allied to Copyright Act provisions allowing reproduction of a copyrighted design.
The High Court ruled ESR Group breached Mr Burden’s distribution rights in New Zealand by importing and selling the pirated product without his approval. The Court of Appeal subsequently ruled the fact that distribution of the pirated Vietnam product had previously occurred elsewhere in the world was relevant. This meant the copyrighted product was already ‘in circulation’ and no direct liability lay with ESR Group for extending that ‘circulation’ to New Zealand.
ESR Group however remains liable for its net profit on sales made from the point it was aware that the furniture was pirated – a figure assessed at $9316.
An earlier appeal decided Mr Burden personally did not hold copyright in the pirated furniture; copyright is held by two overseas companies: PGT Reclaimed (International) Ltd and Plantation Grown Timbers (Vietnam) Ltd.
ESR Group (NZ) Ltd v. Burden – Court of Appeal (31.07.23)
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