Copyright Safe Harbour and Pokémon, Hells Angels v Redbubble - Legalwise Seminars

Intellectual Property Barrister Dimitrios Eliades discusses potential pitfalls with Australia’s Copyright Safe Harbour Regime in an article series for Legalwise News. Below is Part 2, the conclusion, which focuses on cases where well-known brands Pokémon and Hells Angels took action against Redbubble Marketplace. Read Part 1 here. To hear more about this area of law, Dr Eliades will present a seminar on the topic, Patent Area ‘Best Method’ in s.40(2)(aa) of the Patents Act 1990 (Cth) at the 10th Annual Trade Marks and Patents Symposium on 12 June.

Introduction

The critical question will be, whether the onus will shift from the site controller (Moorhouse and statutory provisions in the Copyright Act reflecting Moorhouse), to make sure they are not authorising infringing conduct on the site/s they control or whether the copyright owners will have to attribute resources to checking infringements online, corresponding and following up on claimed infringements.

Pokémon v Redbubble

The facts of the case of Pokémon[1] provide an example of business model to which a wider application of safe harbour recommended by PC, would be likely to include.

Relevantly, as to the service provided online, the then CEO of the Respondent described the driving force behind the Redbubble business model as stemming from the idea of an online marketplace where designers could upload and sell their designs.[2]

The business model had as its primary platform for the “Redbubble Marketplace”, the website at www.redbubble.com (“the website”). Pagone J noted that an aspect of the business plan of the Redbubble Marketplace involved the means to fulfil the sale of products bearing an image or design uploaded onto the website by the designer or artists.[3]

In general terms, the Redbubble Marketplace, operated by enabling artists and designers, after joining as an “artist” on specific terms, to upload work onto the Redbubble website which could then be applied by other providers (referred to as fulfillers), arranged and organised by Redbubble, to fulfil the artistic work on products such as t‑shirts, mugs and other such consumer items for sale.[4]

Initially the fulfillers of the orders were in Australia, but later this extended to other parts of the world, particularly the United States. Redbubble conceded that one of the risks identified from the development of the business plan was that those uploading material on the Redbubble Marketplace might infringe copyright or might upload illegal material and that Redbubble sought to mitigate those risks by requiring those uploading material to agree to Redbubble’s terms of service before uploading content to the Redbubble website by terms which included:

• explicitly acknowledging that copyright protected, or illegal material would not be uploaded to the Redbubble marketplace; and
• providing an indemnity to Redbubble for any copyright infringement or other illegal activity.

Redbubble’s evidence was that they could implement keyword blocking to avoid infringement but that this would unduly inhibit creative content. Redbubble also established other procedures and policies which Pagone J considered in the context of whether or not, for the purpose of s.36(1A)(a), Redbubble authorised the doing in Australia of any act comprised in the Pikachu work without the licence of owner.

Initially, the applicants pleaded copyright infringement by reproduction of the works on the Redbubble server to be displayed on the Redbubble website and thereby reproducing the Pikachu work, but that was not pressed because the applicants accepted that the evidence of Redbubble was that its servers were in America and therefore that no reproduction had taken place in Australia.[5]

In Pokémon, the applicants claimed Redbubble had infringed its copyrights:

• By unauthorised communication of the works within Australia (the “communication claim”).[6]
• By unauthorised reproduction on the Redbubble website which amounted to infringements by sale or other dealings under s.38 of the Copyright Act (the “sale claim”).[7]
• The third claim of infringement was that Redbubble authorised the reproduction of the Pikachu work, or a substantial part of it, when it arranged for the fulfillers to make in Australia items bearing each of the identified artworks (the “authorisation claim”).[8]

Pagone J considered in respect of:

• The communication claim, that communications may have originated from Redbubble from outside Australia, but the infringing communications occurred in Australia.[9]
• The sale claim, it was determined that Redbubble knew, or ought reasonably to have known, that its exhibiting of articles in public by way of trade would have constituted an infringement on the hypothesis contemplated by s 38(1).[10]
• The authorisation claim, the primary infringement, included the sale in Australia of two stickers and a t-shirt bearing an infringing work made in Australia by Australian fulfillers.[11] Pagone J considered each of the grounds:
  • the power to prevent infringement under s.36(1A)(a).[12]
  • the nature of any relationship existing between the person alleged to have authorised the infringement and person, or persons, who did the act complained of, under s 36(1A)(b).[13]
  • whether Redbubble took any reasonable steps to prevent or avoid the infringements as required by s 36(1A)(c).[14]

His Honour was of the view that Redbubble had taken “many reasonable steps … directed to preventing infringement.  Chief amongst those was the considered, and publicly available, IP policy.”[15]

Relevantly however, his Honour noted that Redbubble could have prevented the infringements by taking other steps but for business reasons Redbubble chose to deal with the risk of infringement by a process that enabled the infringements to occur.  Such infringements were embedded in the system which was created for, and adopted by, Redbubble.  There may have been a sound commercial basis for Redbubble to manage the risks of infringement as it did, but in doing so it authorised the infringements which occurred.

 Appeal

Redbubble has appealed the primary judge’s decision and on 20 March 2018, Kenny J made orders by consent staying the appeal proceedings in Pokémon until:

• determination of Federal Court of Australia Proceeding No. QUD902 of 2015 (Hells Angels v Redbubble); and
• the expiration of the time fixed by r 36 of the Federal Court Rules 2011 (Cth) for any party to file any appeal and/or cross-appeal in that proceeding;

with the intent that if any such appeal and/or cross-appeal is filed in the Hells Angels proceeding, the Pokémon appeal proceedings and any appeal in the Hells Angel proceedings be listed together for further directions as to their conduct.

On 15 March 2019, Justice Greenwood handed down judgment in Hells Angels (Australia) v Redbubble.[16] In very general terms, his Honour found:

• the copyright claim failed.
• The trade mark case succeeded in respect of three of the four images pressed at trial.
• The cross-claim for revocation of the trade marks in suit on the basis of non-use failed, save in respect of one category, sporting goods, to which his Honour applied the discretion under s.101(3) to have the mark remain on the register.

The applicant had made an Australian Consumer Law claim, but it was not seriously put forward at trial.

In respect of copyright, although the claim failed on the basis that legal title had not been obtained from the author of the design, his Honour determined that there was a communication by Redbubble because the allegedly infringing work was made available online by Redbubble and that the author was a person who could on reasonable inquiry be ascertained.

Dr Dimitrios G Eliades holds a Bachelor of Theology, a Bachelor of Laws from Sydney University, and a Master of Laws from the University of Queensland concentrating on IP and IP related subjects. In 2008 he was awarded a doctorate by the Queensland University of Technology in the area of patent entitlement. Recommendations made in his doctoral thesis were adopted by the Government in the Intellectual Property Laws Amendment (Raising The Bar) Act 2012, by the insertion of a new s.22A and s.191A into the Patents Act 1990. Dimitrios answered a call to the Brisbane Bar in October 1998 where he is now a barrister in private practice exclusively in the field of intellectual property. He has been for many years, the author of the update publications in the areas of copyright, trade marks, patents, designs, confidential information and related rights, within the LexisNexis publications, entitled ‘Lahore – Copyright and Designs’ and ‘Lahore – Patents Trade Marks and Related Rights’. Dimitrios also co-authors with Professor Anne Fitzgerald, the Thomson Reuters’ publications ‘IP Nutshell’ and ‘Introduction to Intellectual Property’.

In addition, Dimitrios contributes comments and articles to a range of IP publications including the IP Bulletin, Internet Law Bulletin, ‘Hearsay’ – the Queensland Bar Association publication, the Queensland Law Society’s publication ‘Proctor’ and the IPSANZ publication ‘IP Forum’. He has been an adjunct lecturer in IP at the Queensland University of Technology to undergraduate and masters level students coordinating and presenting an IP intensive for a week on ‘IP Litigation’. Dimitrios presents nationally and internationally on IP issues at conferences and legal education seminars. In his practice, Dimitrios has been briefed to advise various State Government departments in the area of intellectual property and has made numerous submissions to Commonwealth advisory boards in relation to developments in IP and been specifically invited into the consultation process by the Commonwealth Government. Contact Dimitrios at deliades@qldbar.asn.au or connect via LinkedIn .

[1] Pokémon Company International, Inc. v Redbubble [2017] FCA 1541 (“Pokémon”).

[2] Pokémon [4].

[3] Pokémon [5].

[4] Pokémon [5].

[5] Pokémon [45].

[6] Pokémon [49].

[7] Pokémon [50].

[8] Pokémon [55].

[9] Pokémon [49].

[10] Pokémon [54].

[11] Pokémon [55].

[12] Pokémon [58] – [59].

[13] Pokémon [60].

[14] Pokémon [61].

[15] Pokémon [63] – [64].

[16] Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Limited [2019] FCA 355