Kmart boss misled cargo pants maker in IP spat, court told
Intellectual Property May 30, 2018 4:01 pm By Cat Fredenburgh | Melbourne

Kmart CEO Guy Russo gave false assurances that the department store had revamped designs for a line of cargo pants and shorts after being warned that it was infringing on the copyright of workwear brand FXD, a new suit alleges.

Workwear manufacturer Globe International sued Kmart on May 25 for alleging infringing its copyright for designs for slim-fit cargo pants and shorts sold under its FXD Workwear brand. Kmart also faces consumer law claims for Russo’s allegedly misleading conduct.

Kmart said Wednesday it would defend against the allegations.

“Kmart Australia was served with the Federal Court proceedings by Globe International Limited, yesterday and the matter will be vigorously defended. Kmart will not be making any further comment,” a spokesperson said.

Kmart engaged in misleading and deceptive conduct in violation of the Competition and Consumer Act when Russo assured Globe that Kmart’s new designs for cargo pants and shorts were “fresh designs” that included significant changes, Globe claims in the suit.

Globe CEO Matt Hill sent a letter warning of alleged copyright infringement to Russo on October 27, 2017 and received a letter in return from Andre Reich, Kmart general manager for appeal, beauty and footwear on November 11.

On December 18, Globe took its complaint higher up the corporate chain, sending a letter to Westfarmers chairman Bob Avery.

About a month later, a letter was sent by Russo to Hill. Russo sent another letter to Hill on December 17, 2015, in which he allegedly told Hill that Kmart had been selling newly designed versions of the cargo pants and shorts since March 2015.

Globe claims the newly designed pants and shorts continued to substantially reproduce Globe’s design and says it would have taken action to protect its intellectual property sooner if not for Russo’s alleged misrepresentations.

“Acting in reliance upon the Russo representations, Globe refrained from taking further steps against Kmart to restrain Kmart from infringing copyright in the works,” Globe said.

Since 2014, Kmart has been importing for sale cargo pants and shorts that resemble Globe’s copyright-protected designs for slim-fit cargo pants and shorts, Globe claims.

The design for the Kmart pants and shorts reproduces in whole or a substantial part Globe’s designs for its cargo pants and shorts, it claims, including the colour palate, which features a khaki base and contrasting charcoal, the placement and look of the charcoal panels, the doubled lines of stitching, the belt loops, the charcoal-colored contrasting internal waistband, and the look and placement of the ruler, utility and cargo pockets, among other design features, according to Globe.

Globe says its design for the pants and shorts was made in 2012 by a contractor it employed, while Kmart’s design drawings were made in 2014 by its senior menswear designer Rick Graven, who included the drawings in a work portfolio posted on his LinkedIn profile.

Globe claims Kmart has knowingly engaged in copyright infringement and that it has refused to comply with its demands.

The workwear apparel maker says it has suffered loss and damage as a result of the alleged design copying, including lost sales of FXD garments, and that the reputation and goodwill of FXD has taken a blow as a result of Kmart’s actions.

“The integrity, exclusivity and popularity of the applicants’ brand have been earned due to innovative and exclusive designs, and the quality of materials and method of manufacture,” Globe said.

Globe claims Kmart’s conduct has been “deliberate, wilful and in flagrant and knowing breach of [Globe’s] rights”.

It seeks an order that Kmart immediately stop selling the cargo pants and shorts; that it recall all stocks and samples of the allegedly infringing garments; and that it hand over the allegedly infringing designs and garments.  Globe also asked the court to award damages for the alleged copyright and consumer protection violations.

Globe is represented by Justin Lambert of K&L Gates.

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Cat Fredenburgh

Cat Fredenburgh has been covering legal news for 12 years. She was previously Editor-in-Chief at US legal news publication Law360. She is the Co-Founder of Lawyerly.