Australia

This is an informal case summary prepared for the purposes of facilitating exchange during the 2024 WIPO IP Judges Forum.

Session 6

Federal Court of Australia [2024]: Redbubble Ltd. v Hells Angels Motorcycle Corporation (Australia) Pty. Limited, [2024] FCAFC 15

Date of judgment: February 23, 2024

Issuing authority: Federal Court of Australia

Level of the issuing authority: Appellate instance

Type of procedure: Judicial (Civil)

Subject matter: Trademarks; Enforcement of IP and Related Laws

Appellant/Cross-Respondent: Redbubble Limited ACN 119 200 592

Respondents/Cross-Appellants: Hells Angels Motorcycle Corporation (Australia) Pty Limited ACN 123 059 745 and Hells Angels Motorcycle Corporation

Keywords: Trademarks, Trademark infringement, Forms of relief available for infringement, Declaration, Quantification of damages, De minimis, trifling or technical infringements, Prima facie canon of construction, Applicability of de minimis non curat lex principle of statutory construction, Injunction, Prima facie entitlement to final injunctions

Basic facts: This case concerned the infringement of five registered trade marks.

Redbubble (the respondent) operates a website hosted on servers in the United States, allowing creators to create graphic designs on merchandise (such as on T-shirts, caps and mugs). The created designs can be sold on the website.

Redbubble has moderation procedures to prevent trade mark infringement, but these procedures are not perfect or instantaneous.

A U.S.-based Hells Angels company, which owned five Australian trademarks, licensed them to an Australian Hells Angels Motorcycle Corporation (Australia) Pty Limited (the plaintiff), which sued Redbubble for trademark infringement.

At first instance, it was held that third parties had uploaded substantially identical to, or deceptively similar marks to, those registered by Hell’s Angels. A total of 11 infringing designs were identified.

Having found infringement, Redbubble was liable to pay nominal damages of $8,250 and additional damages of $70,000, as well as declaratory and permanent injunctive relief.

The injunctions that the trial judge granted were as follows:

·      Redbubble, whether by itself, its officers, servants, agents, or otherwise, is restrained from using the sign "Hells Angels," or any sign substantially identical to, or deceptively similar to, a sign bearing the words "Hells Angels," on the website operated by Redbubble in relation to trade in goods to which the sign can be applied, where such goods are those in respect of which trade marks are registered.

·     Redbubble, whether by itself, its officers, servants or agents or otherwise howsoever, is restrained from using the device, or any sign substantially identical to, or deceptively similar to, a sign consisting of the device, on the website operated by Redbubble in relation to trade in goods to which the sign can be applied, where such goods are goods in respect of which the device trade marks are registered.

Redbubble subsequently appealed the decision.

Held: The majority (Nicholas, Burley and Rofe JJ) ultimately held that:

·         A general injunction against Redbubble should not be granted (in line with Perram and Downes JJ); and

·         A further Appendix should be added to the injunction that:

o   restrains the use of 11 trade marks;

o   restrains Redbubble from infringing the marks in Australia in relation to the goods or services in which they are registered;

o   states that the Appellant will not be in breach of the above if it maintains a system of surveillance of its website, removing images that may infringe and removing infringing images within 7 days of identification; and

o   states the Appellant will be in breach if failing to notify the respondents and not subsequently removing the infringing marks from the website within 7 days of identification.

Relevant holdings in relation to permanent injunction:  The judgment concluded that upon a finding of infringement, the injunction would ordinarily cover the scope of the trademark rights. Nonetheless, this judgment was split (with regards to the injunction) but was mostly in agreement.

Perram and Downes JJ held the following concerning damages:

·         nominal damages should be set at $100. Whilst they agreed with the trial judge that damages should be nominal, they believed that the trial judge’s quantification of these damages was too high (paras. [116]-[127]).

·         additional damages were reassessed, and no additional damages were awarded. This was due to following factors:

o   Hells Angels’ cooperation with Redbubble (i.e., not notifying Redbubble of infringing content and therefore depriving them the opportunity to take it down);

o   Redbubble’s procedures for detecting occurrences of infringing content, even if they were not effective;

o   Redbubble’s conduct in removing infringing content, either before being informed by Hells Angels Australia or after being informed by them;

o   deterrence was not seen to be feasible, except to the extent that Redbubble may be deterred from conducting its business at all (paras. [128]-[175]).

Regarding injunctive/declaratory relief, Perram and Downes JJ stated the following:

·         Generally speaking, an appropriate remedy on proof of infringement or apprehended infringement is a final injunction;

·         A final injunction is a remedy that is always discretionary;

·         Whether a final injunction should be awarded depends on whether it would be granted in equity;

Regarding prima facie entitlements to injunctions, Perram and Downes JJ emphasized the following:

·         they did not think it appropriate to create a prima facie entitlement to injunctive relief upon proof of infringement; and

·         they believed the creation of a prima facie entitlement would distract courts from the discretionary nature of the remedy.

Moreover, Perram and Downes JJ had the following concerns regarding the trial judge’s injunctions:

·         the injunctions went beyond the use of signs substantially identical to or deceptively similar to the trade marks “as a trade mark”;

·         the way in which the injunctions were framed meant that Redbubble could not comply without ceasing to operate its website.

They further argued that:

·         engaging someone to review any content that infringes the trade marks would not prevent infringement from occurring, but only reduce its duration;

·         Redbubble cannot be ordered to implement an impressionistic image matching system when they do not have the capability to do so;

·         it was not feasible for Redbubble to engage sufficient content moderators to check for infringement the more than 90,000 images uploaded each day;

·         it would not be appropriate to order Redbubble to comply with their own moderation protocols; and

·         it would not be appropriate to order that if Redbubble complied with its moderation protocols, it would not infringe the trade marks in question.

Perram and Downes JJ held that, given these complexities, ultimately no injunctions should be granted (paras. [176]-[236]). They further held that declaratory relief would be of no utility, as the conduct did not involve using the marks as badges of origin, and the infringement had already been acknowledged by the award of nominal damages (para. [237]).

Nicholas, Burley, and Rofe JJ argued that:

·         There is no doubt that a permanent injunction is anything other than a discretionary remedy.

·         Unless the court is persuaded that there is no significant risk of further infringement occurring, or there is another discretionary reason for refusing the remedy, a final injunction will usually be granted against a party that is found to have infringed.

·         The scope of the monopoly is defined by the Act rather than by the scope of the relief granted, and a final injunction should not extend the rights owner's protection beyond what is entitled under the Act.

·         They agreed with Perram and Downes JJ that it would not be appropriate to grant a general injunction restraining Redbubble from infringing the registered marks.

·        With regards to the alternative form of injunction proposed by Redbubble, they argued that: a) this required Redbubble to maintain its surveillance system to monitor for, and detect, potentially infringing content; and b) there are clear advantages to Hells Angels in requiring Redbubble to take prompt steps to remove infringing material that escapes its surveillance system, once brought to their attention by Hells Angels.

·         As a further note, they reserved for future consideration the question of whether use of a trade mark to indicate membership of a club is capable of constituting trade mark use (paras. [242]-[256]).

Relevant legislation:

·         Copyright Act 1968 (Cth), ss. 31, 43A, 43B, 85-88, 111A, 111B

·         Federal Court of Australia Act 1976 (Cth), ss. 37AF(1)(b), 37AG(1)

·         Patents Act 1990 (Cth), s. 13

·         Trade Marks Act 1995 (Cth), ss. 20, 120(1), 122A

·         Trade Marks Registration Act 1875 (UK)