Two questions were decided on the appeal, the first being whether the work on the T-shirt was an artistic work or a literary work – the significance being that if it was a literary work there was no copyright infringement as none of the words had been taken.  The Full Court held that it was an artistic work.  It accepted the principle that, when deciding whether a work is a drawing, the issue is whether the work can be said to have a visual rather than semiotic function.  The Full Court held there was a single artistic work on the T-shirt.

Secondly, the Full Court considered that a substantial part of the T-shirt had been taken so as to constitute an infringement of copyright.  It had taken the look and feel of the work which arose from the selection, arrangement and style of the elements of the work regarded as a whole (the text, colour, font, shape and so on).  This is significant as it may effectively extend the reach of copyright protection.

The two issues on appeal were:

1. whether the logo was a label, thereby enlivening the provisions of s 44C of the Copyright Act 1968 (Cth)
2. whether the design / copyright overlap provisions of the Copyright Act applied to the logo.

Regarding the label issue, the Court accepted the proposition put forward by Polo that “a label and the articles with which it is associated must be conceptually distinct” noting that “the situation is analogous to, although not identical with, the requirement in trade mark law that the trade mark be distinct from the article to which it is affixed”. However, the Court also concluded that:

whilst there is obvious force in the proposition that the Logo is very closely associated with the garments, we do not think that the Logo and the garments are so inextricably bound up in each other’s identity that they have ceased to be distinct. In that regard, it is not sufficient for present purposes to demonstrate that the Logo is an important element in, or an integral aspect of, the garments. It is only when the label and the labelled are conceptually indistinguishable that the former loses its quality as a label.

The Court also rejected Polo’s argument that a label was required to have a functional element, whereas the polo logo was primarily decorative, noting that:

The Logo is conceptually distinct from clothing on which it is embroidered and it identifies clothing as “emanating from the Ralph Lauren group”. We think it highly improbable that this identification is accidental or unintentional, but whatever the intention, the primary judge found the Logo in fact identifies a connection with Polo/Lauren. This functional element is sufficient to make it clear that the Logo is a label

Regarding the design / copyright overlap issue, the Court noted that the definition of corresponding design requires that the article in question embody the design, or “give a material or discernible form to an abstract principle or concept”. It was found that the logo was not relevantly embodied in the garments, such that the design / copyright overlap provisions did not apply.