In International Hair Cosmetic Group Pty Ltd v International Hair Cosmetics Limited  FCA 339 (IHC Case), Justice Logan of the Federal Court held that the use of an Australian registered trade mark on the website www.affinage.com which was operated by a United Kingdom-based business, constituted use of the trade mark in Australia.
This result means, in certain circumstances, trade mark owners in Australia can potentially enforce their rights against the proprietor of an overseas website where their Australian mark has been used without permission.
International Hair Cosmetics Group Pty Ltd (IHC Aust), an Australian company, is the owner of the registered Australian trade marks AFFINAGE and AFFINAGE INFINITY. International Hair Cosmetics Limited (IHC UK), a company incorporated in the United Kingdom, is the owner of the trade mark AFFINAGE, which had been registered in the United Kingdom and several other countries.
IHC Aust was established in 1992 as a corporate vehicle for the distribution of products bearing the AFFINAGE mark in Australia. It was initially owned jointly by Mr Bailey and Mr and Mrs Jolly. In 2002 Mr and Mrs Jolly acquired Mr Bailey's interest in the company. The acquisition included an agreement between the parties to split geographically the distribution of AFFINAGE marked products. IHC Aust was allocated distribution rights across China, Australia, New Zealand, South-East Asia and the Western Pacific, with Mr Bailey's company, IHC UK, retaining the balance of worldwide distribution rights.
After this agreement had been reached, the second respondent, Affinage Salon Professional Pty Ltd (Salon), was incorporated to sell products using the marks A.S.P. and KITOKO. IHC UK held 35% of the shares in Salon.
Disputes arose between IHC Aust and IHC UK in 2010 concerning the parties' use of various of the AFFINAGE trade marks. As a result, the parties entered into a deed of settlement. Under the deed, IHC UK and Salon undertook not to use AFFINAGE, INFINITY, AFFINAGE INFINITY or AFFINAGE SALON PROFESSIONAL as a sign in connection with the importation, marketing, sale or manufacture in Australia of hair care products including hair colours and dyes (the Undertaking).
IHC UK breaches the Undertaking
As a result of a Google search of the word 'Affinage', in January 2011 ICH Aust's solicitor discovered a web page entitled 'Affinage Salon Professional' at http://www.affinage.com/. On the website's landing page, 'Affinage' appeared as a banner in large font with 'Salon Professional' in subscript. The landing page also included a 'country box', with the statement 'Select Australia for information on Australasia and Asian Pacific countries.' When consumers selected "Australia" on the drop down menu in the country box, they were led to a page headed 'ASP'. The ASP page contained a 'Profile' tab which included the following statement:
In 1996 [ICH UK] conceived, created and launched the premium hair care brand AFFINAGE. Originated as a line of hair colour, the AFFINAGE brand grew rapidly to include [various other products] ... 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.
The ASP page also included a heading 'World Class, Wordwide' [sic] along with a statement that "our products are sold in over 50 countries - across Europe, Africa... and the Asia Pacific. Our brands are marketed globally by [IHC UK] and through its associated companies in the USA and Australia."
A world map at the bottom of the page indicated that the United Kingdom was the worldwide headquarters of ASP with Australia designated as 'ASP Australia'.
Consumers were unable to purchase goods over the website, which was purely for the purpose of corporate information and marketing.
IHC Aust commenced proceedings seeking orders restraining IHC UK and Salon from breaching the Undertaking.
Justice Logan held that IHC UK and Salon had breached the Undertaking. An injunction was granted which required IHC UK and Salon to substantially alter the website. In reaching this conclusion, Justice Logan divided his reasoning into two issues:
- whether the use of the marks on the website was use 'in Australia'; and
- whether the marks had been 'used as signs'.
Whether the use of the marks on the website was use 'in Australia'
Justice Logan considered that use of IHC Aust's marks on the overseas website constituted 'use in Australia'. Justice Logan drew an analogy between the concept of 'use in Australia' in the Undertaking and the meaning of 'use in Australia' in trade mark infringement cases. He emphasised the following statement of Justice Merkel in Ward Group Pty Ltd v Brodie & Stone plc (2005) 143 FCR 479 (Ward Group Case):
Australian internet users could easily download the marks and the presence of the 'Australia' option in the drop down box plainly indicated that the website was targeted at Australians.2
Whether the marks had been 'used as signs'
Justice Logan considered that when the parties included the phrase 'use as a sign' in the Undertaking, they contemplated that phrase having the same meaning as 'use as a trade mark' in Australian trade mark law.3 As the website was patently a means of marketing ICH UK's and Salon's products,4 Justice Logan found that the use of the AFFINAGE marks on the website did constitute use as a trade mark.
In their defence, IHC UK and Salon argued that the marks were not being used in Australia as trade marks, but rather as a reference to the history of the Affinage brand, which ICH UK originally created. However, the problem with the 'historical use' argument was that ICH UK and Salon failed to make it clear that the current commercial origin in Australia of AFFINAGE-branded goods was neither IHC UK nor Salon.5 Having failed to emphasise that it was purely an historical use, IHC UK and Salon were still using the brand as a sign in Australia in connection with marketing, in breach of the Undertaking.6
It is also important that, after proceedings had been commenced, amendments were made by IHC UK and Salon to the website. 'Australia' had been removed from the drop down box for AFFINAGE. However, this was not enough to avoid breaching the Undertaking. The website still targeted Australian consumers by way of a fixed, albeit discrete, link on the global landing page.7 Furthermore, the global landing page did not say that IHC UK had no connection with the AFFINAGE brand in Australia.8 Instead, the page suggested that there was an AFFINAGE world brand which is known as ASP in Australia.9 AFFINAGE was still being used in breach of the Undertaking on the website, despite modification.
Where to from here?
The decision draws attention to the difficulties the Internet presents when two or more parties are entitled to use the same trade marks in different jurisdictions. Parties to distribution agreements, for example, should ensure that their agreements expressly deal with the use of any relevant trade marks online. Agreements should also provide for ongoing monitoring of online use of the relevant marks.
Australian trade mark owners should also be aware that unauthorised use of their marks on an overseas website may now constitute use of the mark in Australia, for the purposes of enforcing their rights as registered owners. It will be necessary to show that the overseas website is directed or targeted at Australian consumers by way of a 'drop down' country box or some other more discrete fixed link.
Australian companies and website proprietors should also be mindful of potential difficulties in using marks online in a manner that suggests that their products or services are targeted at foreign markets or consumers in jurisdictions in which they do not have marketing or distribution rights.
The assistance of Alec Bombell, Clerk, of Addisons in the preparation of this article is noted and greatly appreciated.
1 Ward Group Case at -.
2 IHC Case at .
3 ICH Case at .
4 ICH Case at .
5 ICH Case at .
6 ICH Case at .
7 IHC Case at 
8 IHC Case at .
9 IHC Case at 
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.