IPEC labels wine importer liable for copyright infringement and passing off

The case demonstrates how international artists can protect their rights in the UK and provides a timely warning to importers and distributors about relying solely on upstream suppliers for IP compliance.

Background

Shantell Martin MBE, a renowned visual artist known for her distinctive black-and-white line drawings, created a large-scale wall artwork in 2017 which was displayed at the AKG Museum (although the judgment refers to it as SKG) in Buffalo New York (the "Work"):

The Work as shown at the AKG Museum in Buffalo New York

In 2021, Ms Martin assigned copyright in the Work to Found the Found LLC, her New York-based company. Ms Martin's iconic designs had collaborated with major brands such as The North Face, Puma and The Financial Times.

Bodegas San Huberto (a winery incorporated in Argentina) ("BSH") the first defendant, engaged a designer in 2018 to create labels for their wine products, which would then be exported into the UK in January 2020. The original first label ("First Label") bore striking similarities to the Work in terms of the same dotted and dashed black and white lines, curves, small loops and 'humanoid faces' used. UK-based GM Drinks Limited ("GM Drinks") the second defendant, imported and sold the wine bearing the First Label in the UK in 2020. GM Drinks was run by the third defendant, Mr Marc Patch. Mr Patch represented himself and, with the court's permission, GM Drinks. BSH was unrepresented and did not attend the trial after its lawyers withdrew due to their invoices not being paid. The court proceeded with the trial giving no evidential weight to the first defendant's witness statements and ensuring the remaining defendants could still present their case.

12,600 bottles with the First Label were sold before 13 April 2020 – the total profit for the First Label sales during this period was £924.00. Ms Martin claimed that she was owed $200,000, a figure she would have made through licence fees if the brands had collaborated.

The 'Second Label' and 'Third Label' had been created as re-designs of the First Label due to complaints from the claimants to GM Drinks that there had been copyright infringement. Consequently, when it came to the judge assessing the two re-designed labels, he was to assess whether the defendants had actively sought to move far enough away from the First Label.

The claimants brought proceedings against the defendants in relation to their First, Second and Third Labels, shown here:

First label	Second label	Third Label

The key claims brought by the claimants were for:

• Copyright infringement under sections 18 (issuing infringing copies to the public), 22 (importing into the UK infringing copies), 23(a) and 23(b) (possessing or dealing with (i.e. selling) infringing copies) of the Copyright Designs and Patents Act 1988 ("CDPA");
• Infringement of moral rights (right of attribution); and
• Passing off

The claimants also sued BSH in Argentina, which produced the wines. A mediation took place, but it did not result in any settlement.

The Court’s findings

1. Copyright infringement

The claimants alleged that in relation to the three labels, there had been copyright infringement, not based on copying the whole of the Work, but rather based on the reproduction of elements of the Work. The claimants' case was that reproduction of even a small part (bearing in mind this was a large-scale wall-drawing) was a substantial reproduction if the part reproduced was the author's own intellectual creation (Infopaq).

a. First Label

The claimants had provided a side-by-side comparison of the First Label with the relevant part of the Work and colour coding was used to highlight the similarities, as shown below:

First Label (the wine case here but identical to label)	Segment of the Work

The judge found that.the similarities between the First Label and the Work were "more than sufficient to engage presumption" that there had been copying - Designers Guild Limited v Russell Williams Textiles) Limited [2000] 1 WLR 2416. The test of whether a substantial part had been copied had been satisfied, demonstrated by the highlighted features above when compared side by side and how the lines and humanoid faces had been arranged. The judge confirmed that “the First Label has taken that which conferred originality on [Found and Found's] copyright work (or a substantial part of it).”

The judge dismissed claims that the label was created by independent artist Mr Milia on behalf of BSH. It was irrelevant who originally undertook the relevant copying because the acts of infringement were said to be the issuing copies of the Work to the public and the importing, offering for sale and sale of the products.

GM Drinks was therefore held liable for copyright infringement:

• Under section 18 of the CDPA in relation to all the First Label products; and
• Under sections 22, 23(a) and 23(b) of the CDPA, but only in relation to the First Label products handled shortly after 13 April 2020 (the "Date") (this being the date that Ms Martin gave notice of her ownership of copyright to the defendants, who ceased to sell products under the First Label from this date onwards).

BSH and Mr Patch were not found to be directly liable for primary copyright infringement under section 18 of the CDPA (i.e. issuing copies to the public) in relation to the First Label products because neither had issued First Label products to the public. In relation to the other acts of infringement under sections 22 and 23, it had not been alleged that Mr Patch was liable and BSH undertook no relevant acts in the UK and was not therefore liable (although see below in relation to joint tortfeasorship).

Knowledge  of infringement – First Label

The CDPA includes a knowledge requirement for secondary copyright infringement under sections 22, 23(a) and 23(b), so the infringer must know or have reason to believe that they are dealing with an infringing copy of the work. From the Date onwards, GM Drinks knew the First Label was an infringing copy, but not before that. Therefore, GM Drinks was not found liable for secondary copyright infringement for products sold with the First Label before the Date

There was no evidence that BSH or Mr Patch knew of the claimants' Work before the Date. On that basis, BSH were only held jointly liable for copyright infringement for the First Label products released shortly after the Date (see further below on joint tortfeasorship).

b. Second and Third Labels

The claimants' counsel had said the issue to address in relation to the Second and Third Labels was "whether sufficient disguise has been donned in order to actually prevent a substantial part of the Work from being taken so as to avoid infringement?"  The Second and Third Labels were therefore evaluated based on how far removed they were from the Work and the reproduced elements in the First Label (the Second and Third labels were also designed by Mr Milia). It had been argued by the claimants that the Second Label fell under the third category identified in Laddie, Prescott & Vittoria – of 'inexact imitation'. The claimants argued the exercise of Ms Martin's expressive and creative choices in the Second and Third Labels had been clearly shown by the following 8 key elements:

1. Ms Martin's black and white graphic linear style created by, or appearing to be created by, a bold marker pen;
2.  fluid and continuous lines which overlap and interface with other sections of line;
3. expressions of figures positioned on a line;
4. dotted and dashed lines to create representations of a landscape and sky with birds in the sky;
5. line work which includes curves and small loops;
6. the ends of line work used as a feature to create shape and visual impact, sometimes accompanied with dashed or dotted lines;
7. such line-work building up to create two-dimensional abstracted drawings which reveal recognisable figurative and landscape elements; and
8.  figurative and landscape elements being without perspective or a sense of unified space.

The re-designed Second and Third labels were found to be original works that had strayed far enough away from the original Work, and did not therefore infringe copyright under sections 18, 22 and 23(a) and 23(b) of the CDPA. Though stylistically similar, they did not reproduce any substantial part of the original Work, and the judge highlighted that the claimants' pleading of the above 8 key elements showing Ms Martin's intellectual creativity, were not replicated in the Second and Third Labels. It was also highlighted that there were inconsistencies with the above 8 elements and other evidence given by the claimants as to Ms Martin's intellectual creativity (e.g. the above makes no mention of the mixing of 'humanoid faces with geographic elements' included in Ms Martin's Work and works generally, deemed an essential element in her style).

The judge emphasised that claimants putting forward their copyright case with specific artistic elements need to ensure that those elements are represented in the copied works, and those elements must be an accurate representation of the creator's style.

In relation to the Third Label, the claimants cited the same arguments as for the Second Label, but placed more emphasis on Ms Martin's loops, lines and dot-work which they considered extremely prevalent here. The judge again found the loops, lines and dot-work were not replicas of those shown in the Work – i.e. nothing had been copied exactly.

Ultimately, only the lines, dots and faces that made the First Label similar to the Work were protected, nothing more. This is a crucial nuance: inspiration does not automatically equal infringement.

Therefore, neither GM Drinks, BSH nor Mr Patch were primarily liable for copyright infringement in relation to the Second or Third Labels.

2. Passing Off

Ms Martin brought the claim for passing off because she owned the goodwill in her work and there were two bases: (i) classic passing off on the basis of false endorsement; and (ii) the inherent deceptiveness of the bottles.

a. Goodwill

The court held that there was no doubt that Ms Martin had acquired goodwill in the UK in her distinctive artistic style, when the First Label was first offered to the UK public.  Goodwill subsisted through high-profile collaborations (e.g. with Puma, Jose Cuervo, The North Face, The Financial Times, Absolut, and others), through various high-profile events showcasing her work (e.g. the Tate Modern, London) and through her online presence which attracted thousands of followers and viewers e.g. on Instagram, X (formerly Twitter), YouTube, Tumblr and LinkedIn. Her 'instantly recognisable' style described was similar to the claimants' 'eight-point feature analysis' of the labels as set out above.

b. Misrepresentation

Ms Martin had been made aware by postings on social media of instances where UK consumers had been misled and were confused between the First Label and Ms Martin's Work. The court held that the First Label was sufficiently close to Ms Martin’s work so as to create a misrepresentation that she had endorsed products featuring the First Label. The judge however held that BSH was not liable for passing off due to lack of UK activity.

The judge did not consider the Second and Third Labels to be misrepresentations, as they were not sufficiently similar to Ms Martin's work or style and there was a lack of evidence of consumer confusion. This was despite the claimants submitting that the Second and Third Labels were more likely to amount to passing off because of the possibility of appearing alongside the First Label on a retail shelf. The judge rejected this argument saying it was unlikely they would ever have appeared on a shelf together and even if they had, they were not similar enough to mislead consumers.

c. Damage

Having satisfied the first two limbs of passing off, the court concluded that the claimant suffered actual loss to her endorsement business and damage to the distinctiveness of her signature style as a result of the misrepresentation caused by the First Label. However, the court rejected the claim that her future ability to attract high-end wine endorsements was harmed, due to lack of supporting evidence and her continued industry recognition.

GM Drinks was therefore found liable for passing off in relation to the First Label, whilst BSH was not held liable for passing off because there was no evidence that BSH had undertaken any acts in the UK that would amount to passing off.

3. Moral Rights

Due to the procedural structure of the IPEC (which limits trial to predefined issues), claims of moral rights infringement were not considered at trial, as they had not been included in the List of Issues for the judge. The judge emphasised the importance of sticking to the List of Issues settled at the Case Management Conference to ensure that these points are heard.

4. Joint tortfeasorship

The judge's findings of copyright infringement and passing off had all related to GM Drinks and the First Label. The judge had to decide whether any of the other defendants were joint tortfeasors in respect of (i) copyright infringement, and (ii) passing off, so that they were jointly liable for any of the acts alleged. In Lifestyle Equities v Ahmed, the Supreme Court had held that "a defendant will only be held jointly liable if it can be established that they had actual or constructive knowledge of the essential facts which made the act of the primary wrongdoer tortious". The judge concluded that BSH and Mr Patch were joint tortfeasors only in relation to copyright infringement under sections 18, 22, 23(a) and 23(b) of the CDPA and only in relation to the First Label products dealt with from shortly after 13 April 2020.

5. Remedies and conclusions

Ultimately, as the defendants had not sold the First Label products for some years due to being notified of the suspected infringement at the Date, there was no need for an injunction. The parties were encouraged to negotiate and execute undertakings if they deemed necessary.

The $200,000 sum requested by the claimants in relation to collaboration fees Ms Martin would usually receive was not readily accepted by the judge. Only the First Label products were found to infringe, leaving the bulk of the later products to be acceptable. As there were not many First Label products, the risk was deemed to be mitigated against a reasonable royalty at that level. The judge therefore proposed a short period of time for the parties to attempt to settle the matter, failing which, it should be transferred to the Small Claims Track (IPEC) for quantum to be decided.

Comment

For Artists and Brand Collaborators:

• This case reinforces the possibility for international creatives to enforce intellectual property rights in the UK.
• Assignments of IP and careful licensing strategies remain essential tools for artists commercialising their work.

For Distributors and Importers:

• Businesses must ensure that appropriate IP clearances have been completed to avoid third party IP infringement; importers should not assume such responsibility would be passed down to the manufacturer in the supply chain.

For Global Manufacturers:

• The UK courts expect professional standards of IP compliance. The winery’s failure to attend trial, despite initial legal representation, did not shield it from judgment.

Fieldfisher Insights

At Fieldfisher, we regularly support creatives, tech platforms, and FMCG businesses in navigating the risks around visual content and IP licensing. This decision illustrates:

• The strategic advantage of choosing the IPEC: efficient, cost-proportionate enforcement with robust judgments.
• The importance of clearly delineated procedural issues at CMC stage.
• How copyright, moral rights and passing off may interact in practical commercial disputes.