The Hells Angels Motorcycle Corporation has won concessions in its trademark infringement claim against an online marketplace, with the case hinging on whether enabling infringement amounts to engaging in such conduct.
Action was taken by the Hells Angels, an international motorcycle club with chapters in a number of countries including Australia, in the Federal Court of Australia against ASX-listed online marketplace Redbubble.
The retailer — which, according to its website, was established in 2006 as a platform for independent artists to sell their works, including on clothing — was found to have infringed a series of registered trademarks in Australia relating to the use of the following designs and slogans:
- “a Unisex T/shirt Hells Angels MC Virginia”
- “1st Hells Angels T November 2015”
- “Death before Dishonour Design”
Redbubble was ordered to restrain from using all three trademarks. Costs were reserved, with both given seven days from the date of the ruling (Thursday, 30 May 2019) to lodge their submissions in relation to costs.
The judgement was made around two weeks after the hearing on 13 May.
Enabling v engaging in trademark infringement
A key part of the dispute revolved around what was described as Redbubble’s “moderation” protocols designed to address trademark concerns.
Redbubble’s user agreement, provided on its website, suggests that individual sellers hold the obligation to respect trademarks and copyright.
“To make this online destination for creativity available, it is essential all Redbubble users respect the intellectual property rights of others, including copyright and trademarks. You must only upload content you have created yourself and have permission to use and authorize others to use,” the agreement states.
“If you are a customer or browser, please respect the copyright and trademarks of all the works you see or buy on Redbubble. Respecting other people’s intellectual property is an essential principle of Redbubble’s community.”
The court noted that products, including the trademarks under dispute, are transacted through Redbubble’s own website.
“Redbubble asserts that deploying these moderation protocols is a mechanism by which allegations of infringing use of a trademark might be addressed. The applicant [Hells Angels] says that its entitlement to a remedy is conditioned by having established infringing conduct on the part of Redbubble,” it said.
“Although, as a question of remedial law, the grant of an injunction involves the exercise of a discretion, the applicant says that it should not be deprived of a remedy simply because Redbubble wants to operate its website (and its business model) on the footing that the applicant should be brought within Redbubble’s moderation protocols which, in effect, would become the defining features of the scope of the applicant’s right to prevent continuing infringement of its trademarks.”
The court went on to state that “apart from these matters, it should be noted that at no point has Redbubble offered an undertaking to the applicant not to use, as a trademark in Australia, any of the Australian registered trademarks of Hells Angels Motorcycle Corporation (HAMC) or a sign that is substantially identical with or deceptively similar to any of those trademarks” without licence or permission to do so.
“Redbubble has not offered that undertaking because it says that giving effect to it would be particularly burdensome having regard to the vast number of items uploaded to the Redbubble website comprised of names, titles, logos and images,” the court said in its judgement.
“It also says that its moderation protocols are apt to quickly deal with any contentions of infringement or other improper use of a party’s trademark, and that the applicant, in effect, can find its utilitarian remedy by engaging with Redbubble’s moderation protocols.
“It also says that being restrained from using the applicant’s trademark or a sign that is substantially identical with or deceptively similar to any of the applicant’s trademarks, as a search tag in interrogating the website, would make it very difficult to find, on the website, any name, title or device which might give rise to a concern on the part of the applicant as to the use of its name, title, logos or signs.”
The court denied Redbubble’s defence, stating that its business model — in essence a retail marketplace with a multitude of suppliers — came with such a risk that trademarks could be infringed, and implied that it should have taken appropriate steps to mitigate these risks.
“There is no particularly good reason why entities or individuals enjoying rights, according to law, should have those rights reduced to the business methodologies adopted by the entity enabling the conduct and, where relevant, engaging in conduct which infringes the rights of others.”
It noted that “Redbubble ultimately does not oppose the making of an order framed in terms of restraints upon Redbubble from using particular examples of signs and images complained about by the applicant, as a trademark, in relation to goods or services with respect to which the trademarks are registered”.
Redbubble won principal hearing on copyright, consumer law
Despite last month’s trademark win, the court ruled against the Hells Angels in relation to “copyright causes for action” claims it had pressed in the principal proceeding held on 15 March this year.
At the time, Redbubble issued a statement to the ASX noting the Federal Court had ruled in its favour.
“The Federal Court Judge found in Redbubble’s favour and dismissed all of Hells Angels’ claims in relation to the copyright and consumer law causes of action. The Judge made findings of technical trademark infringement, awarding nominal damages of $5,000 whilst declining to award exemplary damages,” it said.
Redbubble said that it would “consider its position in relation to a possible appeal once final orders have been made”.
The statement included comments from the retailer’s chief legal officer, Corina Davis, who said the court proceedings demonstrate “that collaboration is a better approach for all parties”.
“Since our founding in 2006, the Redbubble marketplace platform has provided over 800,000 independent artists with access to economic opportunity via an innovative model that supports user-generated content (UGC). We have helped these artists earn over $100 million to date,” Ms Davis said.
“In parallel, we have worked constructively with content owners to manage the challenges that UGC on the internet creates, following the helpful guidelines of the US Digital Millennium Copyright Act. We have had very few instances of litigation in our history because we work to find pragmatic and low-cost solutions for parties to collaborate together to address infringement.
“The outcome of this case demonstrates that collaboration is a better approach for all parties. Since the 2015 filing of this case, Redbubble’s processes have become more sophisticated and this remains an area of investment.”
She continued: “Importantly, our relationships with rights holders have progressed to a point where we now are entering licensing partnerships to utilise the UGC of independent artists to create fan art that our mutual customers love.”
Both Redbubble and the Hells Angels Motorcycle Corporation have been approached for comment on the ruling.
The full ruling can be found on the Federal Court’s website.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
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