Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Limited

1. The dates allocated for the hearing of the applicant's summary judgment application of 29 and 30 May 2017 be vacated.
2. The proceeding be listed for a case management hearing on a date to be nominated by the Court.
3. The costs of and incidental to the application to vacate the dates allocated for the summary judgment application be reserved.
4. The costs of and incidental to the summary judgment application be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GREENWOOD J: 1 These proceedings are concerned with an application by the first respondent to vacate the hearing dates for the applicant's summary judgment application presently set down to be heard for two days commencing on 29 May 2017, in favour of allocating dates for a trial of the action. 2 In these reasons, I have adopted the use of the following terms: Hells Angels Motorcycle Corporation (Australia) Pty Ltd ("HAMCA" or the "applicant"); Redbubble Limited ("Redbubble"); Hells Angels Motorcycle Corporation United States ("HAMCUS"); the image at Trade Mark 526530 (the "530 image"); the image at Trade Mark 723463 (the "463 image"); the image at Trade Mark 1257992 (the "992 image"); the image at Trade Mark 1257993 (the "993 image"); the image at the top of Attachment "C" to the third further amended statement of claim, being the Larger Barger "death-head design" ("the "Larger Barger design"); John Makato Fukushima ("Fuki"); the Fukushima "current death-head design" at the bottom of Attachment "C" to the third further amended statement of claim (the "Fuki design"); the "winged skull image" appearing on the Membership Card depicted at Attachment "B" to the third further amended statement of claim (the "MC image"); Scott Eaton ("Eaton"); the "¾ death-head design" at Attachment "D" to the third further amended statement of claim (the "Eaton design"); third further amended statement of claim (the "pleading"); the Copyright Act 1968 (Cth) (the "Copyright Act"); the Trade Marks Act 1995 (Cth) (the "TM Act"); the Australian Consumer Law (the "ACL"). 3 In the principal proceeding, the applicant relies upon a third further amended statement of claim filed by leave pursuant to an order made on 20 April 2017. In that pleading, the applicant relies upon five trade marks and asserts infringement of them in particular respects by Redbubble. The applicant relies upon the copyright said to subsist in certain works and asserts infringement of the copyright in those works by Redbubble. The applicant also relies upon contraventions of the ACL. 4 In the principal proceeding, the applicant asserts that HAMCUS is the registered owner of the trade marks. It asserts that it has an exclusive licence of the registered trade marks. 5 It asserts that copyright subsists in the MC image as an original artistic work and that the owner of the copyright is HAMCUS. It says that the MC image was to be used solely between HAMCUS members and was not otherwise available or supplied by sale to the public. 6 It says that the Larger Barger design was authored in 1959 in the United States by Sonny Barger and Johnny A Palomar and that prior to making the Larger Barger design it was agreed between the two authors and the "Oakland Hells Angels" that the work "was to be created for and on behalf of the Oakland Hells Angels, at its expense, under its supervision and subject to its approval". 7 It says that Fuki, with the permission of HAMCUS, created in 1983 enhancements to the MC image giving rise to the current death-head design and that prior to the making of the design, Fuki and HAMCUS agreed that the copyright subsisting in the Fuki design was owned by HAMCUS. An agreement was made between Fuki and HAMCUS on 16 September 2015. Corrections were later made to the assignment document. 8 It says that the Eaton design is an original artistic work made in 1994 and HAMCUS is the owner of the copyright in it. 9 As to the copyright, it says that it is and was at all relevant times the exclusive licensee of the copyright subsisting in the MC image and the current death-head design which seems to be the Fuki design and the Larger Barger image. It also says "to avoid misunderstanding" that the MC image "appears and is substantially identified" in the 530 image. It says that the current death-head design (which seems to be the Fuki design) "appears and is substantially identified" in the 530 image, the 463 image and the 993 image. It says that the Larger Barger design "appears and is substantially identified" in the 530 image, the 463 image and the 993 image. 10 As to the copyright claims, the applicant says that since 18 November 2014, Redbubble has "by making available online through the Redbubble website or further or in the alternative electronically transmitting the design, instructions for the manufacture, importation, sale or offering for sale" of identified products, "reproduced or authorised the reproduction" of the MC image and/or the current death-head design being substantially identified in Registered Trade Marks 526530, 723463 and 1257993 being the 530 image, the 463 image and the 993 image. It says that Redbubble has infringed the copyright in those images by communicating or authorising the communication of the MC image, the 530 image, the 463 image and the 993 image. It asserts infringement by reproduction or authorising reproduction of the Eaton design. It asserts infringement by importation into Australia or authorising importation of articles that reproduce the 530 image, the 463 image and the 993 image and the Eaton design. Particular products are identified in respect of those contentions. 11 At a case management hearing, the applicant foreshadowed its intention to bring on an application for summary judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011, for judgment in its favour against Redbubble for parts of the proceeding in which it was said that the applicant's title or standing to bring the proceeding was clear and the conduct of the respondent involved infringing conduct having regard to s 36(1) of the Copyright Act and s 36(1A) of that Act and infringing conduct having regard to s 120(1) and s 120(3) of the TM Act. 12 That being so, the Court made orders on 8 March 2017 in relation to the proceeding generally which contemplated that the applicant would file its application for summary judgment and that all affidavits-in-chief would be put on by a certain date. Evidence in answer was to be filed by another date. Evidence-in-reply by another date with submissions due by particular dates. The matter needs to be heard on 29 May 2017 for two days. 13 There are a number of considerations which go to the question of whether there is utility and efficiency in proceeding with the summary judgment application rather than vacating those dates and taking up the submission pressed by Redbubble that the matter should simply be listed for trial. Redbubble urges the allocation of trial dates. 14 The first consideration is that Redbubble seeks to forensically test the chain of title to the copyright works in suit and wishes to cross-examine deponents giving evidence going to that matter. Redbubble seems not to be in a position to adduce affirmative evidence in relation to the factual contentions concerning authorship and the chain of title to the copyright works and ultimately the applicant's standing as the exclusive licensee of those works but, nevertheless, it seeks to test the probative value of the applicant's evidence by cross-examining the relevant witnesses. Plainly enough, it is entitled to do that. It says that this is a forensic matter for trial and not properly a forensic matter for a summary judgment application. 15 Second, the applicant seeks to counter that difficulty by inviting the Court to assume for the purposes of the summary judgment application that title and standing is made good and that the real question in issue is whether the conduct by Redbubble and its system of operation, through its website, engages infringement or the authorisation of infringing conduct for the purposes of the Copyright Act. 16 The applicant says that the real or central forensic question is whether the way in which Redbubble conducts and operates its website involves conduct which is infringing conduct for the purposes of the Copyright Act. 17 Redbubble says that that is a large forensic exercise and Redbubble would wish to put on a substantial body of evidence about its method of operation and would wish to call expert evidence. Again, there seems to be a substantial controversy between the parties which would require findings of fact to be made in order to determine the question of whether the conduct and operation of the Redbubble website engages infringing conduct in the manner contended for by the applicant. 18 It seems to me that there is little utility in making the assumption the applicant urges so as to enable a summary judgment application fundamentally confined to the question of whether Redbubble's method and conduct of operation engages a finding of infringing conduct for the purposes of the Copyright Act. 19 Third, even if the applicant makes good its contentions of infringement, it would then be necessary to turn around and have a further hearing on the question of whether the applicant has made good the chain of title to the copyright works and its standing as exclusive licensee of the relevant works. 20 It is one thing to identify questions or issues which might usefully be separated for preliminary determination, by trial, such as questions of liability on the one hand going to issues of infringement of the Copyright Act and the TM Act, and questions going to quantum and quantification of loss on the other hand. There seems little utility in separating out one aspect of liability directed to Redbubble's system of operation of its website on the one hand and then another question of liability of whether the applicant has made good the chain of title and standing to the works in suit on the other hand. In any event, the applicant's proceeding is an application for summary judgment. 21 It seems to me that rationally these two questions should be dealt with together and would not normally be separated out for independent determination even at a trial. I am persuaded that the resolution of the two questions in issue is not properly adapted to an application for summary judgment. 22 Fourth, the orders the applicant seeks in its summary judgment application are those orders set out in Attachment "A" to the application. By Order 1, the applicant, in effect, seeks a declaration that Redbubble has infringed the copyright subsisting in the 530 image and the 463 image for the purposes of s 36(1) of the Copyright Act by communicating to the public the two images in question, or a substantial part of them, in the form of a "Unisex T-Shirt Hells Angels MC Virginia" which appears at Attachment "E", the pleading, p 47, the "Poster - Angel with Angel", Attachment "E", the pleading, p 50, and "Hells Angels - Death Before Dishonour design", as depicted at para 29A of the pleading. 23 The pleading pleads facts going to the evolution of the MC image in 1954 which leads to the Fuki design in 1983 which leads to the image in Attachment "C" to the pleading. The pleading describes the evolution of the Larger Barger design which leads to the other image at Attachment "C". The precise origin of the 530 image is not entirely clear. That image appears to be different (although there are similarities) to the MC image, the Fuki design and the Larger Barger design. The difference between the Fuki design and the Larger Barger design seems to be simply that in the Fuki design there are nine feathers adorning the side and rear part of the skull (death-head) followed by another eight features, whereas in the Larger Barger design there are eight feathers adorning that part of the death-head followed by a further eight feathers. There can be little doubt that the image transposed to the T-Shirt at Attachment "E", p 47 of the pleading, is an identical reproduction of the Fuki design. Nevertheless, there are likely to be not insignificant forensic questions alive in relation to the evolution of the title to the work. 24 By Order 2, the applicant seeks a declaration, in effect, that Redbubble has authorised infringement of the copyright subsisting in the 530 image and the 463 image within the meaning of s 36(1) and s 36(1A) of the Copyright Act by authorising the communication to the public of those works through the conduct and operation of its website, in relation to the three articles earlier mentioned. 25 Other orders are sought in terms of Orders 3, 4 and 5 of Attachment "A" to the application. 26 Judgment is also sought in relation to infringement of Trade Marks 723463 and 1257993 on the footing that Redbubble has used the device contained within each trade mark on its website in the Unisex T-Shirt, the Poster and the Death Before Dishonour design. Infringements of the Trade Marks 723219 and 1257992 is asserted in respect of the three articles and also on the footing that the words "Hells Angels" have been used as a key word or tag in connection with those three articles and other articles on the Redbubble website with the result that that conduct falls within the meaning of s 120(1) of the TM Act. 27 Judgment is also sought on the footing that Redbubble has infringed Trade Mark 526530 by using the device contained within that trade mark in the Unisex T-Shirt, the Poster and the Death Before Dishonour design within the meaning of s 120(3) of the TM Act. 28 These contentions under the TM Act raise statutory integers which are likely to engage significant factual contention. 29 Fifth, in the event that the applicant is unsuccessful on the summary judgment application, the proceeding will nevertheless proceed to trial in any event on all issues. That is the applicant's position. The summary judgment application leaves outstanding other aspects of the claims made by the applicant and notably they seem to involve issues in relation to the Eaton design and the ACL. 30 Sixth, thus, whatever happens in the summary judgment application the issue of the title and standing of the applicant to the works in suit will require a separate hearing. The separate claims in the remaining part of the pleading will require a separate hearing and, in the event that the applicant is unsuccessful on the summary judgment application, a trial on all issues will proceed in any event. Apart from these considerations, there plainly enough will be a significant controversy on factual questions going to many integers engaged by the Copyright Act provisions and the TM Act provisions which ought to be the subject of fact-finding at trial and not the subject of summary judgment determinations. 31 Accordingly, the dates for the hearing of the summary judgment application will be vacated. A date will be nominated for a case management hearing at which the future conduct of the matter can be dealt with. The costs will be reserved. I certify that the preceding thirty-one (31) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.