FEDERAL COURT OF AUSTRALIA
QUD 902 of 2015
Date of judgment:
21 August 2019
COPYRIGHT – consideration of the disposition of the costs of the principal proceeding
TRADE MARKS – consideration of the disposition of the costs of the principal proceeding
Federal Court of Australia Act 1976 (Cth), s 43
Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52
Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Limited  FCA 355
Kazar v Kargarian  FCAFC 136; (2011) 197 FCR 113
Northern Territory v Sangare  HCA 25
Oshlack v Richmond River Council (1998) 193 CLR 72
Pokémon Company International, Inc. v Redbubble Ltd (2017) 351 ALR 676
26 July 2019
Date of last submissions:
26 July 2019
National Practice Area:
Copyright and Industrial Designs
Number of paragraphs:
Solicitor for the Applicant/Cross Respondent:
Solus IP Pty Ltd
Counsel for the First Respondent/Cross Claimant:
Mr R Cobden SC with Ms E Bathurst
Solicitor for the First Respondent/Cross Claimant:
HELLS ANGELS MOTORCYCLE CORPORATION
DATE OF ORDER:
21 AUGUST 2019
THE COURT ORDERS THAT:
2. The first respondent pay the costs of the applicant of and incidental to the cross-claim by the first respondent.
3. The applicant pay the costs of the first respondent of and incidental to the applicant’s application for summary judgment, limited to those costs thrown away by reason of the application.
4. There be no order as to costs in relation to the application by the first respondent for an order for security for costs.
5. Pursuant to s 23 and s 37P of the Federal Court of Australia Act 1976 (Cth), rule 1.32 and rule 1.36 of the Federal Court Rules 2011, these orders and the reasons for judgment in support of these orders are made and published from Chambers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1 These proceedings are concerned with the resolution and disposition of the outstanding question of costs of and incidental to the principal proceeding. These reasons are to be read in conjunction with the orders and reasons for judgment made in the principal proceeding (the “principal judgment”): Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Limited  FCA 355. In these reasons, I will continue to use the abbreviations adopted in the principal judgment.
2 In the principal proceeding, HAMC Aust, the applicant, asserted a number of causes of action and a right to relief of a particular kind in relation to those claims.
3 The first claim concerned claims of copyright infringement made, obviously enough, under the Copyright Act 1968 (Cth). As to that matter, HAMC Aust initially contended that the respondent had infringed the copyright subsisting in three copyright works. The first work was the HAMC Membership Card: see , principal judgment. The second was a work called the Current Death Head design otherwise known as the “Fuki” Death Head: see , principal judgment. The third work was a work described as the Death Head ¾ view design. Ultimately, a fourth work was introduced into the proceeding and that work was called the Larger Barger Death Head. The applicant ultimately abandoned any reliance upon the Death Head ¾ view design and the Larger Barger Death Head work. Accordingly, the only two works in suit were the HAMC Membership Card and the “Fuki” Death Head.
4 I will return to some aspects of the questions in issue in relation to those works shortly. However, for present purposes, it is sufficient to note that the applicant was ultimately unsuccessful in the copyright claims. The fundamental difficulty confronting the applicant was an inability to establish a chain of transactions commencing with the author of the 1954 artistic work constituting the HAMC Membership Card leading ultimately to ownership of the copyright in that work in HAMC US.
5 HAMC Aust derived its title to sue as the exclusive licensee in Australia of the copyright in works owned by HAMC US.
6 The history of the relevant clubs, associations and entities engaged in aspects of the arrangements concerning the origination, ownership and use of that work is set out extensively in the principal judgment.
7 The difficulty concerning the Fuki Death Head was that its author, Mr Fukushima, described it in his declaration of 2 February 2016 as something he “created as a derivative work intended to up-date” the pre-existing HAMC Membership Card design or work. The applicant was unable to demonstrate any independent copyright subsisting in the Fuki Death Head design. Moreover, the applicant placed very little weight or emphasis on this work as a source of rights said to have been infringed: see  to , principal judgment.
8 The second set of claims concerned contentions that the respondent had derived a right to bring claims of trade mark infringement against Redbubble (or for that matter, any other person) as an “authorised user” of HAMC US. As to that matter, see  to  of the principal judgment. In that capacity, the applicant asserted that five trade marks of HAMC US had been infringed by the respondent: trade marks 526530, 723219, 723463, 1257992 and 1257993; see , principal judgment. As to the contended infringements of those trade marks by Redbubble, the applicant initially relied upon the examples set out below of artists uploading images to the Redbubble website and offering for sale products (goods) to which the uploaded image might be applied. As to the formulation of the statutory integers said to give rise to infringement of each relevant trade mark by that conduct for the purposes of the Trade Marks Act 1995 (Cth), see  to  of the principal judgment as elaborated in the judgment. The initial examples of trade mark infringement relied upon by the applicant were these:
Unisex T-shirt Hells Angels MC Virginia
526530, 723219, 723463, 1257992, 1257993
T-shirts & hoodies – Hells Angels Maths Club
T-shirts and hoodies – Hells Angels Movie
Poster – Angel with Angel
526530, 723219, 723463, 1257992, 1257993
T-shirts and hoodies – Hells Angel November 2015 (1st Hells Angel T-shirt)
T-shirts and hoodies – Hells Angel (2nd Hells Angel T-shirt) November 2015
Death’s Head Birthday Greeting Card – 19 January 2016
The Hells Angels – Death Before Dishonour Design – para 29A, third further amended statement of claim
723219, 723463, 1257992, 1257993
The Hells Angels on Wheels design, para 29B, third further amended statement of claim
9 Ultimately, the trial was concerned with four contended examples of infringement of the relevant trade marks and they were the examples in the above schedule at N1, N4, N5 and N8. Those four examples of contended trade mark infringement were called at  in the principal judgment, Examples 1, 2, 3 and 4. In the result, the applicant succeeded in establishing its claim as an authorised user and succeeded in establishing infringement of particular trade marks concerning Examples 1, 3 and 4. The applicant was unsuccessful in relation to Example 2. Declarations were made that HAMC Aust is an authorised user for the purposes of the Trade Marks Act of HAMC US of four of the trade marks in suit (having regard to the examples) and that Redbubble had infringed nominated trade marks of HAMC US by engaging in particular conduct as explained in relation to Examples 1, 3 and 4. The Court also made injunction orders restraining Redbubble from engaging in nominated conduct referable to Examples 1, 3 and 4.
10 The third aspect of the principal proceeding concerned a cross-claim by Redbubble for revocation and removal from the Register under s 92(3) of the Trade Marks Act of all of the registered trade marks of HAMC US in respect of all of the goods and services for which those marks were registered. That part of the proceeding involved examining all of the contentions of non-use in the relevant periods and an assessment of the evidence in answer: see -. In the result, Redbubble’s cross-claim for orders for removal of the HAMC US trade marks from the Register was unsuccessful.
11 The fourth aspect of the principal proceeding concerned a claim by the applicant that the impugned conduct of Redbubble in relation to all four of the examples of uploading, offering for sale and sale (being the four trade mark examples) also involved conduct in contravention of the relevant provisions of the Australian Consumer Law (“ACL”). In the principal judgment, the Court observed that the applicant “barely addressed” the contentions in closing submissions. Redbubble went so far as to say that the applicant had abandoned the claim. The claim was unsuccessful.
The overall result
12 The fifth aspect of the case concerned the applicant’s claim that Redbubble and the artist were, in respect of all examples in suit at trial both as to the contended copyright infringements and the trade mark infringements, engaged in a common design as joint tortfeasors. Because no copyright infringement had been established, there could be no common design to infringe that right. For the reason given at  (and by reference to the authority at ), there was no “common design” between Redbubble and the artist concerning the trade mark infringements as found. Thus, the applicant was unable to establish that part of the case.
13 In the overall result, the applicant was unsuccessful on its copyright claims. It succeeded on three of the four trade mark claims. It succeeded in resisting Redbubble’s cross-claim for removal of all of HAMC US’s trade marks. It was unsuccessful on the ACL claims and unsuccessful on the claims of common design and conduct engaged in as joint tortfeasors as between the artist and Redbubble. It should also be noted that in relation to the remedies, the applicant made a claim for damages under s 115(4) of the Copyright Act and (or alternatively) a claim for damages under s 126(6) of the Trade Marks Act. As to the question of exemplary damages, the Court found that no basis had been made out for exemplary damages.
14 Two other aspects of the overall proceeding should be noted before turning to some specific matters.
15 First, a large part of the case was concerned with examining the Redbubble model, its business methodology and the mechanisms Redbubble had in place for monitoring the Redbubble website and addressing the contended use of a claimant’s intellectual property undertaken potentially without the owner’s consent or approval: see the discussion of the notions of the Content & Suspension Policy; the Community Guidelines and the role of the Content Team. These protocols are extensively discussed in the principal judgment: see - and particularly -.
16 These matters were the subject of extensive evidence in support of a proposition that these protocols were said to demonstrate a basis on which the discretion to grant an injunction ought not be exercised in all the circumstances assuming, for the purposes of that evidence, that the applicant’s contentions on either copyright or trade mark infringement were made good. The evidence generally went to Redbubble’s overall case theory in defence of the claims for relief.
17 Second, Redbubble could have, but did not, offer an undertaking not to engage in the conduct complained of and in respect of which, as to trade mark infringements, the applicant was successful.
Some specific matters
18 It is now necessary to mention some specific matters.
The HAMC Membership Card
19 The applicant contends that notwithstanding that it failed to establish its claims of copyright infringement, it nevertheless substantially succeeded on the copyright claims because the suit based on the HAMC Membership Card was a complicated matter which involved many steps along the way to success almost all of which were made good by the applicant, but for being able to establish the vesting of legal title to the copyright in the work in suit in HAMC US. The applicant says that Redbubble contested many of the elements of the copyright case that could and should have been conceded. It says that Redbubble contested and failed to succeed on issues arising under ss 29, 34(1) and 34(2) of the Copyright Act (publication and whether the author was generally known or able to be ascertained by reasonable inquiry); Redbubble unsuccessfully contested the applicant’s standing to bring the proceeding as the exclusive licensee of HAMC; Redbubble unsuccessfully contested the notion that if the artist was a primary infringer, Redbubble, having regard to its business model, was engaged in authorisation of infringements by the artist (a question examined on the facts notwithstanding the finding on ownership); Redbubble unsuccessfully challenged the acts of infringement relied upon by the applicant (again on the assumption as to a finding of ownership).
20 The applicant’s point in relation to these various matters is that many of these questions on which Redbubble was unsuccessful need not have been put in issue and could have been conceded saving time and cost, simply leaving extant the real question of whether HAMC US had “got in” title to the work authored by “Sundown”, Mr Robert D. Kestner (also sometimes spelt “Kistner”), by securing a sequence of assignments in writing ultimately vesting the legal title to the work in suit in the entity from which the applicant derived its standing to sue.
21 The applicant says that these matters remain relevant to the question of costs notwithstanding that ultimately the applicant was unsuccessful on the claim.
22 As to the question of ownership of the work in suit, there are two aspects of the ownership question that need to be mentioned. The first is the applicant’s failure to make good a sequence of written assignments ultimately vesting the legal title to the copyright in the 1954 work in HAMC US. The second concerns the applicant’s reliance upon a United States Copyright Office registration of that work.
23 By its second further amended reply (“SFAR”) to Redbubble’s second further amended defence, the applicant denied Redbubble’s contention that the United States Copyright Office registration of the work constituting the image on the HAMC Membership Card (visual work number: VAu001214935), did not constitute proof of ownership of the copyright in HAMC US. The applicant said that it was entitled to rely on the presumption of ownership in s 126B(3) of the Copyright Act: see para 7(b) of the SFAR. The applicant also said that it was entitled to rely on s 126B(5) or, in the alternative, s 126B(6) of the Copyright Act having regard to a number of factual matters at para 7(c)(i) to (vi) of the SFAR.
24 However, by letter dated 18 September 2017 (Exhibit 14), the applicant’s solicitor gave notice to Redbubble that the applicant no longer relied upon para 7(b) of the SFAR and thus reliance upon s 126B(3) fell away. By force of that concession, s 126B(5) also fell away (because s 126B(3) did not apply; see s 126B(5)(a)). Section 126B(6) remained alive up to the date of trial as a matter of pleading only. In any event, it rested upon the sequence of factual matters being made good as pleaded at para 7(c)(i) to (vi) and none of those matters resulted in any assignments in writing vesting ownership in HAMC US. More fundamentally, at the trial the applicant did not rely upon the United States Copyright Office registration at all. The applicant, in its costs submissions, notes the observation in the principal judgment that HAMC Aust did not rely at trial upon, as proof of ownership, registration of the image entitled “Hells Angels Membership Card (1954)”, with the United States Copyright Office. No reliance was placed on the United States Copyright Office registration at trial and no reliance was placed on it as a “document” engaging s 126B(6). Again, Redbubble says that any reliance on the registration was abandoned.
25 The applicant, however, says that submissions were ordered to be put on concerning a decision of the Federal Court of Australia, Pokémon Company International, Inc. v Redbubble Ltd (2017) 351 ALR 676 (“Pokémon”), Pagone J (a decision published after reserving the decision in this matter for consideration). In those submissions, the applicant contended that it had not abandoned the pleaded presumptions in s 126B(5) and (6) (at para 7(c), SFAR). However, the trial was conducted on the basis that the applicant had abandoned any reliance on the United States Copyright Office registration as the principal judgment reflects at . The applicant, in its submissions arising out of the Pokémon decision sought to revive its concession on s 126B(3) (which, in any event, had brought the application of s 126B(5) to an end).
26 However, the submissions ordered to be made concerning the Pokémon decision were required for the purpose of enabling the parties to determine whether any discussion of the authorities would bear on the questions in issue in the present case to be decided. They were not a mechanism for the purpose of seeking to put in issue by a side-wind things conceded and abandoned in the conduct of the trial and no longer in issue nor the subject of reserved decision-making, having regard to the way the case was conducted by the parties at trial. Had the applicant sought to resile from its concession about s 126B(3) or, for that matter, seek to rely upon any aspect of presumptions arising or not arising in relation to the United States Copyright Office registration, it would have been necessary for the applicant to bring on an application to re-open the case.
27 In the result, the applicant failed to make good HAMC US’s title to the work in suit for all the reasons identified at  to  of the principal judgment. See also T, p 340, lns 5-47; T, p 341 and T, p 342, lns 1-7. This problem also led to the applicant’s unsuccessful application in the course of the trial for leave to rely upon the construct discussed at  to  of the principal judgment concerning the notion that the work is properly characterised as a portrait.
The Fuki Death Head work
28 As to the Fuki Death Head, that work was conceded by Mr Fukushima to be a “derivative work” and suffered from the difficulties identified at - of the principal judgment. It too was the subject of a United States Copyright Office registration. However, no reliance was placed on the registration as proof of ownership of copyright in HAMC US. In any event, the Court found that no independent copyright subsisted in HAMC US in respect of that work.
The other outcomes
29 As to the trade mark claims, the applicant says that it fundamentally succeeded in its trade mark contentions. It says that it made good its claim to be an authorised user and made good its claims to trade mark infringement in respect of three of the four examples in suit at the trial. It says that the detailed forensic examination of the Redbubble business model and its various governance protocols proved not to be an answer to a right to relief in respect of the trade mark infringements. It also says that it was required to prosecute the proceedings to establish the infringements of its trade marks in respect of three of the four examples relied upon at trial.
30 The applicant says that it was entirely successful in answering the cross-claim for removal of the HAMC US trade marks.
31 It says that whilst it was unsuccessful in relation to the ACL claims and the claims of common design giving rise to contended liability as joint tortfeasors, these were causes of action which relied upon conclusionary assertions based upon the matrix of fact which was in controversy by reason of Redbubble’s contest on the trade mark issues and, to some degree, also by reason of the contest on the copyright issues.
32 Very extensive submissions on costs have been put on by the parties including reply and responsive submissions. I have considered all of the written submissions. The applicant says that Redbubble ought to be ordered to pay 80% of the applicant’s costs of the principal proceeding. It says that Redbubble ought to pay the applicant’s costs of defending the cross-claim on an indemnity basis. Redbubble, in its submissions, draws attention to a number of features of the conduct of the case by the applicant which it says ought to inform the question of costs. For example, it says that notwithstanding the submissions of the applicant, the simple fact is that the applicant was unsuccessful on its copyright claims, the ACL claims and the notion of a common design. It says that the applicant was only partially successful on the trade mark case and although the applicant successfully defended Redbubble’s cross-claim, the issues in relation to the cross-claim consumed a much smaller portion of the case. Redbubble also says that the applicant brought on, unsuccessfully, an application for summary judgment and Redbubble ought to have the costs of that application. It also says that it successfully brought on an application for security for costs (with costs reserved) and it ought to have the reserved costs of that application.
33 Redbubble also says that it needs to be kept in mind that by the time of the trial, the applicant had filed five different versions of its statement of claim and amended versions of its originating application which, for example, introduced new works in which copyright was said to subsist which were later abandoned. It also says that the applicant abandoned reliance upon either of the United States Copyright Office registrations (the first relating to the HAMC Membership Card and the second relating to the Fuki Death Head) which meant that the evidence of Dr Oman in relation to aspects of United States Copyright Office registrations became irrelevant. Redbubble attaches to its submissions a schedule in which it identifies the various changes to the versions of the applicant’s pleading.
34 Having regard to all of the matters reflected in Redbubble’s submissions, it contends that the applicant ought to pay Redbubble’s costs of the copyright case and the ACL case. It says that the applicant ought to pay Redbubble’s costs of the failed summary judgment application and Redbubble’s successful application for security for costs. Redbubble also says that the applicant ought to pay Redbubble’s costs incurred in the period between the conclusion of the trial and publication of the judgment. Redbubble says that following completion of the trial, the applicant continued to attempt to change its case which resulted in Redbubble incurring substantial costs in terms of correspondence and submissions. It says that on 31 October 2017, the applicant proposed to send draft final orders to the Court and sought Redbubble’s consent to a further amended originating application which required Redbubble to conduct a comprehensive review of the case advanced by the applicant at trial in order to properly understand the extent to which the proposed amendment raised any new arguments or sought to revive any abandoned arguments. Redbubble says that the proposed amendment did in fact seek to do just that. Redbubble’s observations about that matter are contained in its written submissions in respect of final relief dated 5 April 2019. In the result, the applicant did not seek leave to file the proposed amendment. Additionally, Redbubble says that on 29 January 2018, the applicant, by its submissions in relation to Pokémon, sought to resile from the position it had adopted in relation to s 126B of the Copyright Act (and arguments based upon s 38 of the Copyright Act) which had been abandoned at trial.
35 Redbubble also says that each party should bear its own costs of the trade mark case and the cross-claim for removal of the HAMC US trade marks from the Register. It also says that each party ought to pay its own costs incurred following publication of the judgment. As to that latter matter, Redbubble says that after the Court delivered judgment, the applicant again sought to change the relief it had sought at trial including by seeking declarations not sought at the trial, and injunctive relief contrary to the form of final orders submitted to the Court on 29 November 2017. Additionally, Redbubble says that the relief granted to the applicant was narrower than that which had been sought by the applicant. Redbubble says that the applicant sought a range of declarations in relation to matters concerning its copyright claims and the Court would not accede to those declarations on the footing that there was no utility in making declarations about those matters.
36 In these reasons, I have summarised the various positions of the parties and the essential thrust of the outcomes of the trial. I have taken into account all of the submissions in relation to the costs issues.
37 As to the principles to be applied in determining the question of costs in a proceeding such as this, there is no doubt that s 43 of the Federal Court of Australia Act 1976 (Cth) gives the Court a wide discretion in awarded costs. Nevertheless, the discretion is exercised according to settled principle. Much has been said about the way in which those principles have evolved. In particular, the principles have been discussed in Oshlack v Richmond River Council (1998) 193 CLR 72 (“Oshlack”) particularly having regard to the observations of the majority Gaudron, Gummow and Kirby JJ; Brennan CJ and McHugh J, dissenting. The essential principles emerging from Oshlack were the subject of re-examination nine years later in Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 in which Gleeson CJ, Gummow, Hayne and Crennan JJ sought to identify some important principles guiding the exercise of the discretion in a unifying judgment: see  to . In that judgment, their Honours observed that the award of costs is discretionary but generally the discretion is exercised in favour of the successful party. The High Court has recently examined again, in Northern Territory v Sangare  HCA 25 published on 14 August 2019, the principles relating to the statutory discretionary power to award costs: see - in the judgment of the Court, Kiefel CJ, Bell, Gageler, Keane and Nettle JJ. These observations of their Honours ought to be noted (footnotes omitted):
24 It is well established that the power to award costs is a discretionary power, but that it is a power that must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation. Whilst the width of the discretion “cannot be narrowed by a legal rule devised by the court to control its exercise”, the formulation of principles according to which the discretion should be exercised does not “constitute a fetter upon the discretion not intended by the legislature”. Rather, the formulation of principles to guide the exercise of the discretion avoids arbitrariness and serves the need for consistency that is an essential aspect of the exercise of judicial power.
25 A guiding principle by reference to which the discretion is to be exercised – indeed, “one of the most, of not the most, important” principle – is that the successful party is generally entitled to his or her costs by way of indemnity against the expense of litigation that should not, in justice, have been visited upon the party. The application of that principle may be modified or displaced where there is conduct on the part of the successful party in relation to the conduct of the litigation that would justify a different outcome. For example, a successful defendant may be refused its costs on the ground that its conduct induced the plaintiff to believe that he or she had a good cause of action. …
27 … In point of principle, it is basic justice that a successful party should be compensated for expenses it has incurred because it has been obliged to litigate by the unsuccessful party. That consideration of basic justice does not lose its compelling force simply because the successful party happens to be wealthy: the successful party, whether rich or poor, did not ask to be subjected to the expense of unmeritorious litigation. …
38 Importantly, costs are compensatory. They are designed to provide some degree of restitution to the successful party for the costs that party has been put to in asserting its rights. An award of costs is a recognition that a party has been put to expense which taking account of the merits as ultimately found on the trial of the action, might otherwise have been avoided. That consideration does not infuse the award of costs with any sense of penalty or punishment but simply recognises the compensatory nature of an award of costs in context and according to principle: see Kazar v Kargarian  FCAFC 136; (2011) 197 FCR 113 at -.
The exercise of the discretion
39 I am satisfied having regard to the overall conduct of the proceeding that the applicant found itself in a position where it incurred expenses because it found itself obliged to litigate against Redbubble. It sought to do so on primarily two fronts. The first represented the claims made in relation to the copyright said to subsist in the 1954 work. The second concerned the protection of the trade marks. The litigation in relation to the copyright work concerned the artistic work the subject of some of the trade mark registrations. Because the applicant contended that Redbubble had engaged in conduct which constituted an infringement of its trade marks which contained a reproduction or substantial reproduction of the 1954 work, the applicant elected to join the copyright causes of action with the trade mark infringement claims. I am satisfied that had Redbubble given an undertaking in relation to the conduct concerning the infringement of the three trade marks, it is very likely that the litigation would not have occurred at all. It is unlikely that the applicant would have brought proceedings for copyright infringement independently of having satisfactorily achieved a commitment in relation to the impugned conduct engaging the trade marks.
40 Secondly, I am satisfied that the essential point of principle is that the applicant as the successful party in relation to a number of matters is entitled to some degree of compensation for the costs incurred in being brought to trial.
41 It is, of course, true that the applicant was ultimately unsuccessful on the copyright claims. It is also true that there was a certain degree of “untidiness” in the proceeding. It engaged five different versions of a statement of claim and the causes of action in copyright involved works which were introduced by amendment and then abandoned and one of the two works in suit at trial was not really pressed at all, no doubt in light of Mr Fukushima’s declaration and the other matters I have already mentioned, cross-referenced to the principal judgment. These matters of untidiness might properly be described as aspects of conduct to be weighed in the balance in deciding the extent to which the applicant ought to be compensated for being brought to trial on the matters in respect of which it succeeded. As to the untidiness issue, I accept that the costs ought to be discounted to broadly take account of some of these factors.
42 As to the applicant’s failure to establish its cause of action in copyright, I propose to weigh in the balance the notion that had Redbubble given an undertaking in relation to the impugned conduct concerning the trade marks in suit, it is unlikely that the applicant would have brought the litigation in order to vindicate the contended rights in copyright. Those rights were asserted in vindication of the contended copyright in the artistic work contained within the trade mark and had undertakings been given about the contended trade mark infringements, those undertakings would, in all probability, have addressed any question about the unauthorised use of the copyright work.
43 As to the trade mark case, the applicant was successful on the authorised user point and substantially successful in the trade mark infringement claims. The applicant was successful in terms of resisting the proposition that the Redbubble business model represented an answer to any remedial orders that might otherwise be made arising out of the trade mark infringements. The matter of the Redbubble business model and the governance protocols adopted by Redbubble surrounding it consumed a lot of attention and time. The applicant was also entirely successful in answering Redbubble’s cross-claim. As to the ACL claim and the common design claims, these were conclusionary matters arising out of facts otherwise in controversy, in the main. It is true that the applicant was unsuccessful on those claims. However, they consumed little time, effort, energy or cost.
44 I am satisfied that the appropriate discount to take into account in seeking to make an order for costs that serves the interest of justice having regard to all of the factors relating to the conduct of litigation and the degree of success of the parties is that the applicant ought to have 65% of its costs of the principal proceeding and all of its costs of the cross-claim.
45 As to the costs of the security for costs application, I accept that the application was prudently made by Redbubble at the time. It asserted a right to protect its position in the interim in the event that the applicant was unsuccessful in the principal proceeding and would be ordered to pay Redbubble’s costs of answering the claims. The costs, of course, were reserved to enable the Court to weigh in the balance the ultimate result. As it turns out, the applicant was successful to the extent already described and obtained an order for costs as just described. In exercising a discretion now about that earlier matter, the Court needs to take into account the ultimate result. Having regard to the result, the proper order is that there ought to be no order as to the costs of that application.
46 As to the application for summary judgment, the questions in controversy and the matrix of fact which needed to be examined to resolve the rights of the parties meant that an application for a judgment summarily would be unlikely to succeed. As to that application, Redbubble should have its costs limited to the costs thrown away by reason of that application. I assume that some of the costs involved in analysing the claims of the applicant were not wasted (such as reading affidavits ultimately relied upon at trial etc).
47 As to the costs after reservation and the costs after pronouncement of judgment, I am satisfied that the costs incurred after reservation are adequately accommodated by the discount. As to the costs after judgment, I am satisfied that these classes of costs are inevitably incurred when parties are seeking to determine the scope of orders which adequately reflect the reasons for judgment and inevitably there will be caucusing between parties about the scope and breadth of orders where views will differ about those matters. To the extent that the applicant sought orders which were thought by Redbubble to be more expansive than they ought to have been, these contested positions are not uncommon in trying to sort ought the final form of orders giving expression to a judgment in a complicated matter.
48 It is true that the applicant did not seek declarations but, rather, sought injunctions. The question of whether declarations ought to be made was raised by the Court on the footing that making the declarations would logically be explanatory of the injunction orders. Accordingly, the Court will make orders as to costs as indicated in these reasons.
Dated: 21 August 2019