Seven Network (Operations) Limited v 7-Eleven Inc

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FEDERAL COURT OF AUSTRALIA

Seven Network (Operations) Limited v 7-Eleven Inc [2024] FCAFC 65

Appeal from: Application for leave to appeal:  Seven Network (Operations) Limited v 7-Eleven Inc [2023] FCA 608
File number: NSD 598 of 2023
Judgment of: BURLEY, JACKSON AND DOWNES JJ
Date of judgment: 27 May 2024
Catchwords:

TRADE MARKS - non-use - Trade Marks Act 1995 (Cth) s 92(4)(b) - whether primary judge erred in finding that registered trade mark owner had not established use during relevant period - use in relation to particular goods and services alleged to have occurred by display of mark on website - use partially established for one category of goods and services - use not established for remaining categories of goods and services

TRADE MARKS - non-use - Trade Marks Act s 101(3) - discretion to permit mark to remain on the Register in relation to remaining categories of goods and services - discretion not exercised in favour of trade mark owner

Legislation:

 Trade Marks Act 1995 (Cth) ss 7, 17, 92, 100, 101, 104, 120, 195

Cases cited:

Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; (2018) 261 FCR 301

Anchorage Capital Partners Pty Limited v ACPA Pty Ltd [2018] FCAFC 6; (2018) 259 FCR 514

Anheuser-Busch, Inc v Budějovický Budvar, Národní Podnik [2002] FCA 390; (2002) 56 IPR 182

Austin, Nichols & Co Inc v Lodestar Anstalt [2012] FCAFC 8; (2012) 202 FCR 490

Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107

Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397

E & J Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15; (2010) 241 CLR 144

Halal Certification Authority Pty Limited v Flujo Sanguineo Holdings Pty Limited [2023] FCAFC 175; (2023) 300 FCR 478

House v The King [1936] HCA 40; (1936) 55 CLR 499

Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326

Mark Foys Ltd v Davies Co-op and Co Ltd (Tub Happy case) [1956] HCA 41; (1956) 95 CLR 190

McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 537

PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128; (2021) 285 FCR 598

Pepsico Australia Pty Ltd v Kettle Chip Company Pty Ltd (1996) 33 IPR 161

RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2024] FCAFC 10

Registrar Of Trade Marks v Woolworths [1999] FCA 1020; (1999) 93 FCR 365

Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8

Sensis Pty Ltd v Senses Direct Mail and Fulfillment Pty Ltd [2019] FCA 719; (2019) 141 IPR 463

Seven Network (Operations) Limited v 7‑Eleven Inc [2021] ATMO 58; (2021) 164 IPR 370

Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407

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Details
Case
[2024] FCAFC 65
Decision Date

CaseChat Overview and Summary

The case of Seven Network (Operations) Limited v 7-Eleven Inc involved a dispute regarding the non-use of a registered trademark, specifically the 7NOW mark, and the application of the Trade Marks Act 1995 (Cth). The primary issue before the court was whether Seven Network had established use of the 7NOW mark in relation to various goods and services during the relevant period, and if not, whether the court should exercise its discretion under section 101(3) of the Trade Marks Act to remove the mark from the Register in relation to those goods and services. The categories of goods and services in question were divided into four groups, with Seven claiming use of the 7NOW mark during a specific period on its website.

The court had to determine if Seven had successfully proven that it had used the 7NOW mark in relation to the Defended Goods and Services during the non-use period. The primary judge found that while Seven had established use for one category of goods and services, it had not done so for the remaining categories. The court then had to consider whether the discretion under section 101(3) of the Trade Marks Act should be exercised to allow the mark to remain on the Register for the remaining categories of goods and services.

The court found that the primary judge had erred in relation to one of the categories and that the decision to not exercise the discretion under section 101(3) of the Trade Marks Act in favour of Seven was not appropriate. The court decided to re-exercise the discretion and concluded that none of the categories should remain on the Register. The appeal was allowed in part, and the parties were directed to file a minute of consent orders to determine the appeal and to program written submissions in relation to the costs of the appeal and the proceeding below.

Orders

Orders of the court

1. Within 14 days of the date of this order the parties must file a minute of consent orders, or competing minutes if necessary:

(a) proposing orders to determine the appeal (save in relation to the costs of the appeal and of the proceeding below); and

(b) programming written submissions in relation to the costs of the appeal and of the proceeding below.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In the view we have taken, as set out below, the primary judge's decision was, with respect, attended by error in relation to Category 2. It would cause injustice to Seven if that aspect of the decision were enabled to stand. In addition, as explained further below, that conclusion necessitates that this Court re-exercise the discretion under s 101(3) in relation to the other three categories of goods and services and the remaining part of the Category 2 services, although in the result we consider that none of those categories should remain on the Register. For all those reasons, leave to appeal will be granted and the appeal allowed in part.3. THE PRIMARY JUDGMENT Seven obtained registration of the 7NOW mark on 7 August 2013. The primary judge divided the Defended Goods and Services by reference to the following categories ([21]):Category 1: computer software (in class 9);Category 2: the promotion and sale of goods and services for others including through the distribution of online promotional material and promotional contests (in class 35);Category 3: retail and wholesale services including retail trading via television programmes and by telephone and electronic means including the Internet (in class 35); andCategory 4: the bringing together, for the benefit of others, of a variety of goods enabling customers to conveniently view and purchase those goods including by mail order, telecommunications, website or television shopping channels (in class 35). The primary judge summarised the issues before him as being whether Seven had discharged its onus of proving that it had used the 7NOW mark in respect of the Defended Goods and Services during the non-use period and, if not, whether the Court should exercise the discretion under s 101 of the Trade Marks Act to remove the mark in relation to those goods and services. His Honour then noted that the use claimed may be defined by reference to two different uses. The first was from 24 July 2018 to 1 April 2019 during which persons entering the URL 7now.com.au were redirected to a 7plus.com.au domain. However, this use is not relied upon on appeal and need not be mentioned further. The second period of use was from 1 April 2019 until 10 June 2019 (the latter date being the end of the non-use period) during which those who used the 7now.com.au domain landed on the 7NOW website. That website is still operating. Seven relies on its use of the word 7NOW on the 7NOW website during the period from 1 April 2019 to 10 June 2019 in its application for leave to appeal and any appeal (the 7NOW website period). The primary judge found that during the 7NOW website period, the user traffic to the website totalled 157. The first occasion on which there was any traffic was 16 May 2019, when eight users visited the site. Traffic on the website during that period peaked on 8 June 2019 with 11 users. The evidence did not indicate whether the majority of traffic was generated by Seven itself, for example, staff checking the content of the website. 7-Eleven made a submission in passing that there was no finding that any visitors were Australian, and that this was an evidentiary hole that precluded any finding of trade mark use. But that submission was neither put to the primary judge nor determined by him, and nor was it the subject of a notice of contention. 7-Eleven cannot rely on it now.

Ratio Decidendi

Legal Principle Established

7-Eleven submits that what it calls 'this broad claiming, and evergreening, of goods and services without any corresponding disclosed intention to use the mark' is a factor against exercising the discretion in Seven's favour.7.4 Consideration Before turning to the exercise of discretion we must first consider the points raised by Seven in its submissions. It may be noted that the parties' submissions (necessarily) address the question of the exercise of the discretion by reference to purported errors made by the primary judge. While the question of error in the primary judge's exercise of the discretion is not strictly relevant, since we are to re-exercise it, we consider it appropriate to consider the submissions made in that context before turning to the re-exercise of the discretion.7.4.1Reputation in 7-formative marks and risk of confusion Seven submits that the primary judge erred in his consideration of the reputation Seven had acquired in the 7-formative marks and that in so doing he erred in concluding that there would be no substantial risk of confusion if the 7NOW mark was removed in relation to the Defended Goods and Services. The primary judge accepted that Seven has acquired a reputation in Australia in relation to certain 7-formative marks in broadcasting and entertainment and, through those, advertising for third parties. He was not, however, satisfied on the evidence that any of the 7-formative marks have acquired a reputation in connection with the Defended Goods and Services. Seven challenges the latter finding in relation to Category 1 (computer software), referring to the evidence of its Company Secretary and Legal Counsel, Warren Coatsworth, who gave evidence of use of '7plus' and '7+' logos in connection with Seven's broadcaster video on-demand (BVOD) web platform of that name since 2017. Mr Coatsworth also deposed to the fact that since 2017, Seven has also provided the 7plus app for both Android and Apple devices, with the app offering the same BVOD service as the website. Seven also relied on evidence from its Product Director, Richard Cole, to the effect that the 7PLUS service is also available as a Connected Television (CTV) app, which Mr Cole describes in his affidavit as 'one that is made available on a device that connects to, or is embedded in, a CTV to support video streaming'. Mr Cole's evidence was that as at 15 February 2023 there were approximately 12.5 million unique registered users of 7PLUS. It is not clear how many of them use the service via the app. Mr Cole also refers to a number of different apps that Seven developed that are no longer available to consumers, such as 7SPORT and PLUS7 (which was replaced by the 7plus app). Whilst the primary judge did not explain in terms the basis for his conclusion going to reputation in computer software, it is apparent that he was not satisfied from the evidence that, in the minds of consumers, any particular computer application was associated with one or other of the 7-formative marks. The onus lay on Seven to establish that association. For that purpose, it was not sufficient for Seven to refer to a number of downloads achieved in order to establish that it had a reputation in respect of computer software. In fact, the software relied upon simply enabled consumers to use Seven's streaming service. It was entirely open to the primary judge to conclude, as he apparently did, that the use of the 7-formative mark concerned was likely to be perceived by consumers to be connected to its streaming services and its broader reputation in entertainment services rather than in relation to computer software. That is the conclusion that we too reach.