When is an Importer of Goods liable for copyright Infringement?

A decision of the U.K. Intellectual Property Enterprise Court deals with the copyright in a label of a bottle of wine and an importer’s liability for infringement. Martin v Bodegas San Huberto SA [2025] EWHC 1827 (IPEC)

The Facts

The plaintiff designs, sells and endorses products which feature her artwork. These are advertised and sold around the world, including in the United Kingdom. She has an online shop where she sells original artworks, prints, books, t-shirts and tote bags. She has an extensive online presence.

In early 2018, the first defendant, a winery based in Argentina (the Winery) instructed an individual to design a label for wine bottles to be exported from Argentina and imported by the second defendant (the U.K. Importer) into the United Kingdom. The design of the label as shown below was a copy of part of the plaintiff’s work.

 About 18,480 bottles of wine bearing the infringing design were imported by the U.K. Importer into the United Kingdom. 

The plaintiff wrote to the U.K. Importer on April 12, 2020, and advised it of her rights. The Winery had its labels redesigned.

The Action

The plaintiff sued for copyright infringement and other claims against both defendants and the director of the U.K. Importer. The Director ordered the wine from the Winery not expecting the bottles to infringe third party rights. He did not do an intellectual property clearance search and rarely does so in relation to wine to be imported. He expects the winery to deal with that. He had never heard of the plaintiff or her Work before she contacted him.

When the plaintiff complained to him, he handed the matter over to the Winery and expected them to deal with it. The Winery said they would protect him. However, the Winery defaulted in defending the claim at trial.

The Trial

The Trial Judge found that copyright subsisted in the plaintiff’s Work.

In the U.K there is liability for the secondary infringement of copyright. The copyright in a work is infringed by a person who, without the licence of the copyright owner, 

1. sells or offers or exposes for sale an article which is, and which he knows or has reason to believe is, an infringing copy of the work.
   

2. imports into the United Kingdom, otherwise than for his private and domestic use, an article which is, and which he knows or has reason to believe is, an infringing copy of the work.

   
   

Liability for secondary Infringement for depended on whether the U.K. Importer knew, or had reason to believe, that the label bearing the infringing design infringed. The director’s evidence that he had not heard of the plaintiff and was not aware of the Work, before she brought it to his attention was not challenged in cross-examination and accepted by the Trial Judge. 

The U.K. Importer admitted that the plaintiff gave notice of her ownership of copyright on April 13, 2020. The law provides a short period of time to enable a defendant to evaluate the facts that have been presented to it. Given the similarities between the label and the Work, the U.K. Importer from shortly after that date, knew or at the very least had reason to believe that the label was an infringing copy of the Work.

The Trial Judge found that the defendants were liable for secondary infringement of copyright but that no damages will likely be available for infringement before shortly after 13 April 2020, by which time the vast bulk of the wine had been sold by the U.K. Importer. This was to be further considered on a subsequent hearing to deal with damages.

There were other claims about the revised versions of the labels which were dismissed. In addition, there were other copyright claims for which there are no Canadian equivalents and a claim for passing off.

The Canadian Position

The Canadian law is broadly similar to that of the U.K with some differences. Section 27(2) provides that it is an infringement of copyright for any person to

(a) sell or rent out,

(b) distribute to such an extent as to affect prejudicially the owner of the copyright,

(c) by way of trade distribute, expose or offer for sale or rental, or exhibit in public,

(d) possess for the purpose of doing anything referred to in paragraphs (a) to (c), or

(e) import into Canada for the purpose of doing anything referred to in paragraphs (a) to (c),

a copy of a work, that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it.

Canadian law is different concerning importation. Subsection 27(3) provides In determining whether there is an infringement under subsection (2) in the case of an activity referred to in any of paragraphs (2)(a) to (d) in relation to a copy that was imported in the circumstances referred to in paragraph (2)(e), it is irrelevant whether the importer knew or should have known that the importation of the copy infringed copyright. An importer in Canada may be liable for all infringing sales not just those after notice.

Comment

When goods are imported into Canada there is the potential liability for copyright infringement. In this situation the importer should obtain an indemnity from the exporter. The financial viability of the exporter should also be considered. A clearance search for copyright is typically ineffective since there is no obligation to register.

If you have questions, please contact me at mckeown@gsnh.com 

John McKeown

Goldman Sloan Nash & Haber LLP

480 University Avenue, Suite 1700 

Toronto, Ontario MSG 1V2

Direct Line: (416) 597-3371

Fax: (416) 597-3370

This article is of general nature and is not intended to provide specific legal advice as individual situations will differ. Specialist advice should be sought about your specific circumstances. 

A version of this article originally appeared in the Law360 Canada published by LexisNexis Canada Inc.n the Law360 Canada published by LexisNexis Canada Inc.