In Ward Group Pty Ltd v Brodie & Stone Plc [2005] FCA 471, the Federal Court of Australia ruled that foreign-based websites must specifically target or be directed at Australian customers before the court will find liability or grant relief for claims of trade mark infringement or passing off.

The Ward Group, the Australian manufacturer and owner of anti-greying hair creams and lotions marketed under the ‘Restoria’ trade mark, sold the UK arm of its business in 1970. In 1996, the UK
business, including the UK trade mark registration for ‘Restoria’, was acquired by Brodie & Stone Plc.

Ward claimed that the advertising and sale of Brodie & Stone’s UK Restoria product on websites operating from the UK, which were accessible in Australia, amounted to infringement of Ward’s Australian
trade mark and to passing off of the Brodie & Stone product as the product manufactured and distributed by Ward.

The key quotes from Judge Merkel’s decision:
"There are two special features about the claims in the present case.  The first is that the advertising of the UK Restoria products, together with numerous other products, for sale on the Internet by the website proprietors was not specifically targeted or directed at customers in Australia. Rather, the advertising targeted potential purchasers anywhere in the world at large. The second feature is that the case against Brodie & Stone is not based upon it having sold UK Restoria products to any of its customers intending or knowing that those goods were to be advertised for sale or sold by a customer on the Internet.  Rather, the case was based upon the Ward Group informing Brodie & Stone that some of Brodie & Stone’s customers were selling the UK Restoria products to entities or individuals who, in turn, were selling UK Restoria products on the Internet, and that the offering to sell and selling of those products to customers in Australia on the Internet constituted an
infringement of the Ward Group’s Restoria trade marks in Australia and passing  off…

I am satisfied that the Ward Group has failed to establish … some actual or probable damage..
In the present case the trap purchases [by Ward’s solicitors] were the only sales able to be
established on the evidence. However, and importantly, the evidence also established that it was most unlikely that anyone else in Australia had searched on the Internet for, and then purchased, the UK Restoria products instead of, or in preference to, the Australian Restoria products.  I would add that, as the UK and Australian Restoria products have a common origin and are not materially
different in quality or standard, any sale of UK Restoria products in Australia is unlikely to harm the goodwill attaching to the Australian Restoria products…

On the facts of the present case the first occasion on which the website proprietors would be considered to have intended to use and used the Restoria mark in Australia was when they accepted the orders placed by the trap purchasers in respect of the UK Restoria products in terms that used the
Restoria mark. The reason I have arrived at that conclusion is that prior to that time the trap purchasers were downloading a representation made on the Internet to the world at large, and not a representation intended to be made to, or directed or targeted at, them in Australia. Thus, I do not accept the
contention made by the Ward Group that the use of the Restoria mark by the website proprietors on the Internet, without more, was a use of the mark by them in Australia.

Although Dow Jones v Gutnick was relied upon by the Ward Group, that case was concerned with whether an alleged defamation published on the Internet, which was downloaded by subscribers to that publication in Victoria, occurred in Victoria. Unlike the present case, where the focus is on when the
website proprietors’ infringing use of the Restoria mark occurred in Australia, the focus of the alleged defamation was on where the damage to reputation occurred: see Dow Jones v Gutnick at 606-608. As the allegedly defamatory publication was made available to subscribers in Victoria on the Internet, no issue arose about the publication of that material in Victoria.  Therefore that case is of no assistance to the Ward Group.

In summary, the use of a trade mark on the Internet, uploaded on a website outside of Australia, without more, is not a use by the website proprietor of the mark in each jurisdiction where the mark is downloaded. However, as explained above, if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded. Of course, once the website intends to make and makes a specific use of the mark in relation to a particular person or persons in a jurisdiction there will be little difficulty in concluding that the website proprietor used the mark in that jurisdiction when the mark is downloaded.’