What you need to know
- Australian intellectual property legislation operates in a situation where images were uploaded to a United States server by artists overseas, but there is a capacity to engage with the website in Australia, and images are communicated to customers in Australia.
- The operators of a website, featuring images uploaded by individual "artists" overseas, have been held liable for trade mark infringement relating to the supply of those images electronically and on merchandise in Australia.
- Even though the Court would have made a finding of direct infringement, copyright was not properly assigned by the creator in writing and, therefore, the copyright claim failed.
What you need to do
- If you operate as an intermediary between buyers and sellers, it is important to closely consider this case and whether you could be regarded as a supplier and "user" of intellectual property.
- Ensure that the intellectual property in any works used in your business has been properly assigned to you to avoid any future claims being defeated on this basis.
The claim related to four products offered for sale on the Redbubble website (three t-shirts and a poster), all of which featured images similar to the Hells Angels' "death head" and some also featured the words "Hells Angels".
Hells Angels Motorcycle Corporation Australia (HAMC AU) claimed Redbubble infringed:
- copyright in two artistic works (two versions of the death head); and
- five registered trade marks (featuring the death head and/or the words "HELLS ANGELS") .
The Redbubble site allowed users to upload images identical, or very similar, to the relevant works and marks. Users in Australia could search and locate those images and then select an article bearing the work/mark. Redbubble would then arrange for a third party to print and deliver the merchandise (including with Redbubble trade marks on the merchandise and tags).
The case raised several issues including derivative works, commissioned works and authorised use for copyright purposes, trade mark non-use and Australian Consumer Law (ACL) allegations. This article focuses on copyright ownership and copyright and trade mark infringement.
Copyright
Ownership
The claim was brought by HAMC AU, which claimed that Hells Angel Motorcycle Corporation US (HAMC US) owned copyright in the death head image, and that it was an exclusive licensee and entitled to bring an action on that basis.
The Court disagreed. Although there was found to be an exclusive licence granted by HAMC US to HAMC AU, the Judge concluded that HAMC US was not the owner of the copyright in the image, because it had been created by an artist and the artist never gave a written assignment vesting ownership of the copyright in HAMC US (as required by section 239 of the Copyright Act). The copyright action failed because HAMC AU did not have standing to sue for infringement.
This case demonstrates the importance of ensuring that any works created for a business are validly assigned in writing.
Infringement
Notwithstanding the conclusion that HAMC AU had no standing to sue for infringement, the Court considered the infringement issue. HAMC AU's primary argument was that Redbubble had directly infringed the copyright by "communicating the work to the public" in Australia.
Under the Copyright Act, "communicate" means "make available online or electronically transmit… a work…". The person who makes a communication is the "…person responsible for determining the content of the communication".
The Court held that Redbubble was "…not an intermediary providing a transmission service… it owns, operates, manages and controls the website and conducts a transactional enterprise". While Redbubble did not apply the work to the purchased goods, it was responsible for organising this process and applied its own trade mark to the goods. Redbubble was found to be integral in the transaction.
The Court found that even though the works had been made available online in Australia, because each artist had uploaded the works overseas, that uploading was not an act done in Australia as required by the Copyright Act. Therefore, the artists were not liable for infringement in Australia.
By contrast, Redbubble operated the website which enabled the Australian public to view material on servers located in the US. Therefore Redbubble caused the communication to be made to the Australian public. In these circumstances, if copyright ownership had been established, Redbubble would have been found a direct infringer.
Trade Marks
HAMC AU relied on five registered trade marks of various versions of the death head design and/or the words "Hells Angels".
Justice Greenwood held that three of the four images in suit involved "use" as a trade mark and the marks used were "deceptively similar" and/or substantially identical. His Honour also held that Redbubble facilitated the supply of the products bearing the trade marks and whilst Redbubble was not the seller of the artworks it was the supplier by virtue of its business model.
Orders
The Court made declarations that Redbubble had used and infringed the relevant trade marks in Australia and ordered that Redbubble be restrained from using three of the images in suit as trade marks in relation to the goods or services in relation to which HAMC AU's trade marks are registered.
Lessons for facilitators
Although only nominal damages of $5000 were awarded (due to the low volume of infringing sales), this case demonstrates that Redbubble's business model will make it liable for copyright and/or trade mark infringement arising from images used by artists on its websites (in fact, Redbubble has also been found to infringe Pokemon's IP in Australia in separate proceedings which were reported in the March 2018 edition of IP@Ashurst). The key reason for this was the degree of Redbubble's involvement in facilitating the availability of the infringing works and enabling the supply of merchandise bearing the infringing works.
Any companies operating online or other marketplaces should consider their potential liability for intellectual property infringements arising from third party products. Businesses need to balance the commercial benefits of involvement in the production of goods and aligning their brand with those goods, against any liability issues that may arise from that involvement.
Authors: Rachel Baker, Lawyer and Nina Fitzgerald, Partner.
