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Logan J has granted injunctions against International Hair Care UK’s  use of AFFINAGE (and other trade marks) on its global website for (in effect) infringing International Hair Care Australia’s trade marks registered in Australia. The facts throw up the interesting question of what happens when 2 different people own the same trade mark in different countries and try to use it on the internet.

Facts

IHC UK is the owner of the registered trade mark AFFINAGE for hair care products in the UK and 20 other countries throughout the world, but not Australia.

In 1992, Mr Barry, the principal of IHC UK, set up IHC Australia with Mr Jolly. At that time, Mr Barry owned a majority of the shares.

IHC Australia applied for and registered AFFINAGE under the Australian trade marks act for hair care products.

In 2002, Mr Barry sold his then remaining shareholding in IHC Australia to Mr Jolly (and his wife) for $480,000. IHC Australia kept its registered trade marks and, under the terms of the sale, the parties divided up the global rights between themselves. IHC Australia got the rights to AFFINAGE in China, South-East Asia, Australia, New Zealand and the South-West and Western Pacific to the International Date Line; IHC UK had the rights to the rest of the world.

Sometime after this, Mr Barry or IHC UK incorporated a new Australian company, Affinage Salon Professional Pty Ltd, to sell hair care products under the brands A.S.P. and KITOKO.

In August 2010, the parties started legal action in Australia against each other. That litigation was compromised by a deed of settlement the terms of which, amongst other things, included Affinage Salon Professional agreeing to change its name so that it did not include AFFINAGE and IHC UK and its subsidiary undertaking:

not to use AFFINAGE … as a sign in connection with the importation, marketing, sale or manufacture in Australia of hair care products including hair colours and dyes.

In January this year, IHC Australia’s solicitor did a Google search and went to the link for IHC UK’s website at www.affinage.com. At that link, he was presented with a banner AFFINAGE and beneath it in smaller script SALON PROFESSIONAL. There was a “country box” with a drop down list of countries. When he selected “Australia”, he was taken to a page headed “ASP”. Under the “Profile tab” for Australia, there were the following passages:

In 1996 [IHC UK] conceived, created and lunched the premium hair care brand AFFINAGE. Originated as a line of hair colour, the AFFINAGE brand grew rapidly to include [reference to other types of product]… Now we are introducing our exciting new hair care brand, ASP, to the Australian and Asian markets. Having already signed distribution agreements with a number of companies we look forward to fantastic success in 2011.

….

Today our products are sold in over 50 countries – across Europe, Africa, the United States, South America and the Asia Pacific. Our brands are marketed globally by [IHC UK] and through it’s associated companies in the USA and Australia. Global distribution is achieved through a worldwide network of wholesalers and specialist distributors

A map of the world showed markers ASP Australia, ASP USA and identified the UK as Worldwide HQ. If the UK or the USA were chosen, the same information was displayed, but the landing pages were headed AFFINAGE and AFFINAGE, not ASP, was used to mark the countries.

IHC Australia re-commenced proceedings for breach of the undertakings.

Following service of the court documents (no other notice of complaint having been given), IHC UK amended its website.

The landing or home page now looked like:

and Australia no longer appeared in the drop down box for countries under AFFINAGE, only under A.S.P.

Findings

Logan J found that the website in both its unmodified and modified form breached the undertaking in the deed of settlement and granted injunctions, amongst other things, requiring the A.S.P. component of IHC UK’s website to be removed from www.affinage.com. In contrast, the Facebook and Twitter links on the home page did not breach the undertakings.

On its true construction, the undertaking required IHC UK not to use AFFINAGE in Australia as a trade mark (at [61]). This required that IHC UK not use AFFINAGE as a trade mark in a way which targeted Australia.

IHC UK’s use targeted Australia

His Honour recognised that IHC UK was perfectly entitled to use its trade mark in, for example, the UK where it was the registered owner. The problem was to reconcile that entitlement and the global nature of the internet with IHC Australia’s territorial rights in Australia.

At [59]:

… the reconciliation to which I have just referred is achieved, in terms of the undertaking given in this case, by an approach that finds a use of the nominated words in connection with “marketing” in Australia if the words as so used are downloaded in Australia and there is evidence that the use was specifically intended to be made in, or directed or targeted at Australia.

Unlike the Ward & Brodie case, that targeting was effected by the country selection box: that was its whole purpose. In the case of the unmodified website (at [60]):

that global web site is, inter alia, directed to or targeted at Australia. That is the whole purpose of the “Australia” option in the drop down box selection offered on the global landing page.

This was also true of the modified website. At [62]:

…. That Australian targeted use on the global landing page controls all that follows when one selects, as did Mr Bennett, the “Australia” option in the drop down box.

It was use as a trade mark

While IHC UK could legitimately say it introduced the brand AFFINAGE into Australia as a matter of historical fact. Its usage of the term went much beyond that.

On the first or unmodified form of the website, the purpose of the profile page or tab in the Australia” section was to persuade people to buy IHC UK’s, “and materially” its Australian distributor’s, products by reference to the AFFINAGE trade mark. At [67], his Honour explained:

When one reads the language of the “Profile” page in context, the repetition of AFFINAGE and the repeated use of “our brands” in conjunction with “worldwide” and “are marketed globally by IHC UK and through its associated companies in the USA and Australia”, the reference to Affinage is not just to a matter of foreign history but part of a current promotion that our goods worldwide, including those offered in Australia, include goods with the AFFINAGE brand. ….

No doubt, part of that context included the fact that one landed on a home page emblazoned with the AFFINAGE banner. But, his Honour, as in the Mantra case, was troubled by the repetitive use of the trade mark and, particularly, the representation that “Our goods “are marketed globally … in the USA and Australia”. His Honour also made the point that nothing on the profile page made it clear that IHC UK no longer held the rights to AFFINAGE in Australia.

The modified version of the website, featuring both the AFFINAGE and A.S.P. trade marks, was much closer to the line. Despite the separation between the 2 marks and the removal of Australia from the drop down box for AFFINAGE, however, Logan J considered it was still using AFFINAGE to target Australia in a trade mark sense. At [70]:

The “setting” for the viewer of this global landing page has undoubtedly changed and changed in a way that seeks to create a discrete Australian “target”. What remains though is a determined endeavour to place AFFINAGE in the mind of the viewer who has an interest in reading further in relation to Australia. The Australian “target” remains on the global landing page as a fixed feature. A connection between the AFFINAGE brand product and the ASP brand, each formulated by IHC UK is promoted and promoted to an Australian viewer. What the global landing page does not say is that IHC UK has no connection with the AFFINAGE brand in Australia. Instead, the overall “setting” is that there is an Affinage world brand in which the Australian province is known as “A.S.P.”. This, in my opinion, remains a use of that sign in Australia in connection with marketing contrary to the terms of the undertaking.

Accordingly, IHC UK was ordered to remove :

1. Australia from the drop down country box;
2. the A.S.P. pages from its website
3. any references to Australia from its website; and
4. any links between any new A.S.P. website and the AFFINAGE website.

FCR O35 r11(2)

For those interested in procedural matters, Logan J refused to follow the Ucorp ruling and concluded that FCR O35 r11(2) conferred a power only; there was a discretion whether or not to award an injunction once it was shown the terms of the undertaking had been breached.

International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339