The Full Federal Court’s February 2024 decision in Redbubble Ltd v Hells Angels Motorcycle Corporation (Australia) Pty Limited [2024] FCAFC 15 is, at first glance, a victory for neither side in any clean sense. Hells Angels walked away with $100 in damages, no injunction in general form, and a sharply reduced remedies package. Redbubble, despite that apparent win on quantum, received no exoneration on liability, faces a qualified injunction with active compliance obligations, and now operates under precedent that squarely places user-generated content platforms within the reach of s 120(1) of the Trade Marks Act 1995 (Cth) for third-party infringements facilitated through their ordinary commercial architecture.
The commercial significance of the decision for platform operators is that, the judgment confirms that running a print-on-demand or user-generated content marketplace does not immunize a business from trade mark infringement liability when third-party uploads slip through content moderation filters. At the same time, the Full Court drew a firm line against using trade mark remedies as an instrument to compel a lawful business to cease operating merely because its filtering technology has not yet caught up with the demands placed on it. This proportionality reasoning, and the structured notice-and-takedown injunction the majority of justices endorsed as the appropriate remedy, will reframe how brand owners and digital platforms negotiate IP compliance in Australia.
Background of the dispute
Redbubble operates a print-on-demand marketplace through its American subsidiary. Creators upload graphic designs, consumers select designs for printing on merchandise (T-shirts, caps, mugs, and the like), and third-party manufacturers produce and ship the finished goods. As of September 2021, the platform was receiving upwards of 90,000 image uploads per day. The scale is is central to every argument about what content moderation is feasible.
The friction point is that Redbubble does not pre-screen uploaded images for trade mark infringement through visual similarity assessment. It scans titles, tags, and descriptions against keyword watchlists, and it performs exact-image fingerprint matching against reference images provided by rights holders. What it cannot do, on the current state of the technology, is detect images that are deceptively similar (but not identical) to registered marks. That gap is precisely where infringement occurs.
Hells Angels US is the registered proprietor of five Australian trade marks covering the words “Hells Angels” and various death-head skull device marks, registered in classes 16 (printed matter) and 25 (apparel). Hells Angels Motorcycle Corporation (Australia) Pty Ltd holds the exclusive Australian license. This was not the parties’ first encounter in court: an earlier proceeding commenced in 2015 resulted in the 2019 judgment, [2019] FCA 355, in which infringement was found against Redbubble on related grounds. The second round of litigation, which generated the two first-instance decisions appealed here ([2022] FCA 190 and [2022] FCA 837), concerned eleven distinct upload examples. The trial judge found infringement on all eleven, awarded $8,250 in nominal damages and $70,000 in additional damages, and granted permanent injunctive relief.
Scope of Settlement Releases
Before the second trial concluded, a significant procedural issue occured. In 2018, Redbubble had acquired TP Apparel LLC, which operates the TeePublic print-on-demand platform at www.teepublic.com. Hells Angels US had separately complained to TP Apparel about infringing content on TeePublic’s website, and that dispute resolved in May 2021 through a settlement agreement. The agreement’s release clause, drafted broadly, purported to release “all actions… arising from or related to the Disputes or any other matter”, binding not only TP Apparel but its corporate parent (Redbubble) and extending, on its terms, to licensees of Hells Angels US (including Hells Angels Australia).
Redbubble sought to deploy this release as a complete defence to the claims arising from Examples 1 to 7 on its own website, www.redbubble.com. Jagot J, at first instance, rejected the argument. The Full Court unanimously upheld her Honour’s conclusion.
The legal mechanism is the prima facie canon of construction for releases, which has deep common law roots tracing to London and South Western Railway Co v Blackmore (1870) and the High Court’s exposition in Grant v John Grant and Sons Proprietary Limited (1954) 91 CLR 112. The principle is that general words in a release are taken to be limited to matters actually in the contemplation of the parties at the time the release was executed. Breadth of language does not equal breadth of coverage; the question is always what the parties were actually settling.
On the evidence, the parties to the TeePublic settlement had one discrete dispute in mind, i.e. the presence of infringing content on www.teepublic.com, as detailed in two cease-and-desist letters identifying specific items on that site. The correspondence, the operative clauses (including specific moderation obligations tied to the TeePublic platform), and the payment all pointed in the same direction. The Redbubble main domain, its operations, and Examples 1 to 7 were nowhere in the picture. The Full Court described Jagot J’s conclusion as “as orthodox as it is self-evidently correct.” Redbubble’s argument that the literal width of the release language should carry the day was precisely the kind of submission the prima facie canon exists to reject.
That said, the settlement releases in IP disputes must explicitly address each platform, each domain, and each set of identified infringing acts if a party wishes to obtain comprehensive protection across affiliated entities.
Trademark Use, Trap Viewings, and the “Ordinary Course of Trade” Online
The challenge to Examples 8 to 11 turned on a different question, i.e. whether images that were very difficult to locate and were only ever viewed in Australia by Hells Angels’ own trade mark officer, Mr Hansen, could be said to have been made available by Redbubble “in the ordinary course of its trade” for the purposes of establishing use under s 120(1).
Mr Nelms, a director of Hells Angels Australia based in Slovenia, spent roughly 4.5 net hours scouring the Redbubble website and eventually located the images by combining the search term “Hells Angels” with the platform’s “Newest” and “Most Recent” upload filters. He then sent the direct URLs to Mr Hansen in Australia, who clicked through, viewed the pages, took screenshots, and searched further using the same filters. Examples 9 and 11 were served up to Mr Hansen automatically by Redbubble’s “Similar Designs Carousel” after he had located Examples 8 and 10.
Redbubble submitted that the extraordinary effort involved in finding these images, combined with the fact that only 1.8% of all website searches were conducted using the “Newest” filter, meant the images were not available to ordinary consumers in the ordinary course of trade. The Full Court rejected this at every level.
First, as a factual matter, the evidence could not support the claim that a sufficiently motivated consumer would never have found the images. No evidence established how the platform’s search algorithm ranked results in August 2021, so the Court declined to assume that a “Hells Angels” search would have required scrolling through thousands of results before the relevant images appeared. The carousel function, in particular, meant that at least two images were suggested to Mr Hansen with almost no effort of his own.
Second, and more fundamentally, the Court invoked the “projection” principle from the High Court’s decision in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 116 CLR 254. A trader who projects goods bearing a mark into the Australian course of trade uses that mark in Australia, even without local sales. Redbubble’s entire business model was built around making designs discoverable and purchasable through its search and browse architecture. That architecture was the mechanism of trade mark use, not merely its backdrop. As the Full Court put it, it sits uncomfortably in a platform’s mouth to argue that because its own search tools could not easily surface particular images, those images were not being offered for sale in the ordinary course of its business.
On the trap-viewing question specifically, the Court expressly reserved for future decision whether a viewing by a trade mark officer (as opposed to an actual purchase) can itself constitute infringing trade mark use in Australia for an overseas-hosted website. The reasoning around s 8(1) authorized use, s 122(1)(e) defenses, and the exhaustion provisions in s 122A was flagged as undetermined and potentially complex. For the purposes of this appeal, the ordinary-course-of-trade framing provided sufficient basis for liability on Examples 8 to 11 without needing to resolve those extra-territorial questions.
Defining “Nominal” and Rejecting Additional Damages
The trial judge’s $8,250 nominal damages award was calculated at $750 per example. The Full Court found this figure legally indefensible as a “nominal” sum.
The function of nominal damages is to vindicate a proved infringement of a property right where no actual loss has been demonstrated. They are, by definition, a token. The authorities trace a gradual inflation from historical awards of a few pounds to, by the turn of the 21st century, sums around $10 to $20. The New South Wales Court of Appeal in New South Wales v Stevens [2012] NSWCA 415 set aside a $10,000 nominal damages award and replaced it with $100. Current authorities treat $100 as an accepted upper bound for a nominal sum.
The Full Court also rejected any suggestion that the $8,250 could be saved as a “largely nominal” figure with an unspoken compensatory component. The trial judge had carefully examined and rejected every available head of compensable loss. A nominal damages figure cannot silently make up for the failure to prove losses that were not established. The discretion awarded $20 per registered trade mark, across five marks, for a total of $100.
On the de minimis argument, the Full Court was firm: the principle de minimis non curat lex has no application to the remedies discretion in s 126(1). The word “may” in that provision does not confer a power on the Court to withhold relief entirely because infringements were trivial. Section 20(2) of the Act states that a registered trade mark owner has “the right to obtain relief” upon infringement. That right, on proof of infringement, is actual, not merely aspirational. The discretion in s 126(1) operates at the level of remedy selection, not the threshold question of whether any remedy issues at all. De minimis reasoning may bear on what remedy is appropriate (nominal damages rather than compensatory ones, for instance), but it cannot justify refusing relief altogether.
The $70,000 additional damages award was also set aside, principally because it was mathematically anchored to the legally incorrect $8,250 nominal damages figure. But the Full Court went further. Working through the five s 126(2) factors, it found that four of them pointed against any award of additional damages: the infringements were not flagrant; Redbubble had removed the content promptly on notification; it derived no meaningful benefit from the infringements (trap purchases totalled $133.65); and Hells Angels had itself failed to notify Redbubble of discovered infringements for months, depriving the platform of the opportunity to take them down.
On specific deterrence under s 126(2)(b), the Court identified three conceivable deterrent goals: prompting Redbubble to conduct regular manual audits like Mr Nelms; prompting it to implement automated impressionistic image matching; and prompting it to close the business. The first would reduce the duration of infringements but not prevent their occurrence, meaning it does not actually deter infringing acts. The second is technologically unavailable. The third, the Court said, would be entirely inappropriate as a deterrent goal where a lawful business has not been shown to be delinquent in its approach to content moderation and where the claimant has suffered no proven loss. Awarding additional damages to coerce a commercial shutdown is not what s 126(2) is for.
Disproportionate Restraints and the Safe Harbor
The injunction question exposed the most significant divergence within the five-judge bench, though the bench ultimately converged on a workable outcome.
Perram and Downes JJ rejected the trial judge’s two injunctions on the ground that both captured conduct that did not constitute trade mark use (the restraint was not limited to badge-of-origin use, meaning artistic depictions of the marks that no reasonable observer would understand as indicating commercial origin were caught), and both assumed Redbubble could continue operating its website while in practical terms preventing it from doing so. An order that permits in form what it prohibits in substance is not a coherent order.
Nicholas, Burley and Rofe JJ disagreed with Perram and Downes JJ on the “prima facie entitlement” point (endorsing the position that a registered trade mark owner who proves infringement has a prima facie entitlement to a permanent injunction, as a standard describing the risk-of-repetition inference rather than an expansion of statutory rights), but agreed that a general injunction restraining infringement of the marks would be grossly disproportionate in this case.
On the central remedy question, the consensus outcome was that a general injunction cannot stand because complying with it would require Redbubble to shut down its website. That result, said the Court through different analytical routes, is oppressive in the Shelfer v City of London Electric Lighting Co [1895] sense: the injury to Hells Angels is small; no goodwill damage was proven; no trade diversion was established; nominal damages are the appropriate compensatory measure; and the practical effect of the remedy would be wholly disproportionate to the right protected.
Nicholas, Burley and Rofe JJ, however, endorsed the qualified injunction appearing in the Appendix to the judgment, which Redbubble itself had proposed as an alternative. This injunction operates on a 7-day safe harbor model:
- Redbubble is restrained from infringing the five registered marks in relation to classes 16 and 25 goods.
- Redbubble will not be in breach if it maintains its proactive moderation system (as it existed in August 2022) and removes any identified infringing image from its website within seven days of detection by any party.
- Notwithstanding that safe harbor, Redbubble will be in breach if, after Hells Angels sends a compliant notification to legal@redbubble.com (with subject line “Hells Angels Complaint,” the URL of the infringing work in the specified format, and a statement of alleged breach), Redbubble fails to remove the image within seven days.
This structure is significant because it does not immunize Redbubble’s existing content moderation procedures or endorse them as legally sufficient across the board. It provides a mechanism under which Redbubble can comply with an injunction without shutting down its business. And it places a prompt takedown obligation on Redbubble once a verified brand owner provides proper notice.
Key takeaways from the dispute
For digital platform operators:
Firstly, liability under s 120(1) is available against user-generated content platforms for third-party uploads, even where the platform has not itself originated the infringing content. The ordinary-course-of-trade analysis looks at the platform’s commercial architecture, not the ease with which any individual infringing item can be found.
Secondly, search tools, carousel functions, and browse filters are not neutral: they are the machinery of trade mark use, and their existence points toward (rather than away from) “use in trade”.
Thirdly, the technological inability to perform impressionistic image matching is a relevant factual consideration that limits both additional damages awards and injunctive relief, but it must be properly evidenced. A bare assertion of cash on hand does not mount an attack on the adequacy of moderation investment. Financial evidence needs to be granular.
Fourthly, cooperative engagement with rights holders, including prompt notification of identified infringing content and equally prompt takedown on receipt of compliant notices, is not merely a business goodwill gesture. It is a structurally significant factor in the additional damages analysis under each of s 126(2)(a), (c), and (e).
Lastly, the 7-day notice-and-takedown structure in the Appendix is now part of the settled record. Platforms should consider adopting a similar framework as a baseline compliance measure, not merely because a court may order it, but because it provides a clear safe harbor against injunction liability.
For brand protection teams:
Firstly, settlement agreements must explicitly enumerate the platforms, domains, and IP rights being released. Silence on the main platform when only a subsidiary platform was in dispute will not save the release.
Secondly, proving infringement is not enough to secure substantial damages against a platform operating at scale if you cannot also prove actual loss, including goodwill damage or trade diversion. An absence of proven loss produces nominal damages, and nominal damages of $100 will not support a large additional damages award under s 126(2).
Thirdly, if you want an additional damages award that reflects specific deterrence, you need to put on evidence, i.e. how much is the platform spending on its moderation infrastructure? What does a commercially feasible enhancement look like? What does it cost? The Court in this case explicitly identified the evidential gap that prevented a larger award.
Fourthly, the safe harbor injunction available under the Appendix framework is a valuable enforcement tool for verified brand owners. A compliant email notification triggers a seven-day removal obligation backed by contempt jurisdiction. For brands experiencing repeat infringement on large platforms, this is a materially more useful practical outcome than a general injunction that the platform could only comply with by ceasing operations.
Lastly, sitting on discovered infringements without notifying the platform is counterproductive. The Court counted Hells Angels’ silence on Examples 1 to 7 (including nearly eight months for Example 1) as a factor against any additional damages award. Prompt notification is both an ethical and strategic obligation for rights holders who wish to maximize their remedial outcomes.
Conclusion
The Full Federal Court’s decision serves as a landmark rebalancing of online marketplace accountability, striking a pragmatic middle ground between platform responsibility and commercial reality. By ruling that a website’s internal search tools and recommendation carousels constitute trademark use, the court made it clear that digital platforms cannot hide behind user-generated content to escape liability when infringing items slip through filters. At the same time, the judiciary firmly refused to weaponize legal remedies to crush a legitimate business just because its automated content moderation technology has not yet caught up with demand.
Instead of leaving both sides at a standstill, the ruling delivers a highly practical industry blueprint through its court-endorsed, seven-day notice-and-takedown framework. This structure gives brand owners a fast, legally backed mechanism to quickly scrub infringing items while granting platforms a reliable, clear path to protect their daily operations. Moving forward, the ultimate takeaway for both digital marketplaces and brand protection teams is that active cooperation, objective technical evidence, and swift, transparent communication will always be far more effective than ignoring compliance blind spots or sitting on legal grievances.
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