Seven Network (Operations) Limited v 7-Eleven Inc

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FEDERAL COURT OF AUSTRALIA

Seven Network (Operations) Limited v 7-Eleven Inc [2023] FCA 608  

Appeal from: Seven Network (Operations) Limited v 7 Eleven Inc [2021] ATMO 58; 164 IPR 370
File number(s): NSD 735 of 2021
Judgment of: THAWLEY J
Date of judgment: 8 June 2023 
Catchwords: TRADE MARKS – appeal from decision of delegate of Registrar of Trade Marks – whether trade mark should be removed from Trade Marks Register for non-use – whether onus of proof discharged in relation to non-use period –whether Court should exercise discretion under s 101 of the Trade Marks Act 1995 (Cth) not to remove trade mark – public interest and risk of confusion – part of appeal allowed with consent of parties – appeal otherwise dismissed
Legislation: Trade Marks Act 1995 (Cth) ss 6(1), 17, 92(1), 92(2), 92(4)(b), 100(1)(c), 100(3), 101(2), 101(3), 102
Cases cited: Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; 254 CLR 337
Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721; 96 FCR 107
E & J Gallo Winery v Lion Nathan [2010] HCA 15; 241 CLR 144
Edgetec International Pty Ltd v Zippykerb (NSW) Pty Ltd [2012] FCA 281; 98 IPR 1
Freshfood Holdings Pte Limited v Pablo Enterprise Pte Limited (No 2) [2021] FCA 1404; 164 IPR 5
Hungry Spirit Pty Limited ATF The Hungry Spirt Trust v Fit n Fast Australia Pty Ltd [2020] FCA 883
Jafferjee v Scarlett [1937] HCA 36; 57 CLR 115
Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd [1991] FCA 402; 30 FCR 326
Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks [2002] FCAFC 273; 122 FCR 494
Lodestar Anstalt v Campari America LLC [2016] FCAFC 92; 244 FCR 557
McHattan v Australian Specialised Vehicle Systems Pty Ltd [1996] FCA 481; 34 IPR 537
Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73; 156 CLR 414
Nature’s Blend Pty Ltd v Nestle Australia Ltd [2010] FCAFC 117; 272 ALR 487
Nissan Motor Company v Nissan Computer Corporation 378 F (3d) 1002 (9th Cir, 2004)
PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128; 285 FCR 598
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; 141 IPR 463
Seven Network (Operations) Limited v 7 Eleven Inc [2021] ATMO 58; 164 IPR 370
Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; 109 CLR 407
Solahart Industries Pty Ltd v Solar Shop [2011] FCA 700; 281 ALR 544
Sports Warehouse Inc v Fry Consulting Pty Ltd [2010] FCA 664; 186 FCR 519
Taxiprop Pty Ltd v Neutron Holdings Inc [2020] FCA 1565; 156 IPR 1
Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156; 237 FCR 388
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Details
Case
[2023] FCA 608
Decision Date

CaseChat Overview and Summary

In the matter of Seven Network (Operations) Limited v 7-Eleven Inc, the Court was tasked with determining whether the 7NOW Mark should be removed from the Trade Marks Register for non-use, as well as the exercise of the discretion under section 101 of the Trade Marks Act 1995 (Cth). The case involved a dispute between Seven Network (Operations) Limited, the owner of the 7NOW Mark, and 7-Eleven Inc, which sought the removal of the mark from the register. The primary issue was whether the 7NOW Mark was used as a trade mark in relation to the relevant categories during the contested non-use period. Additionally, the Court had to consider whether it was reasonable to exercise its discretion under section 101 not to remove the trade mark, taking into account the public interest and the risk of confusion.

The Court found that the 7NOW Mark was not used as a trade mark in relation to the relevant categories during the non-use period. This was based on the fact that the services offered on the linked e-commerce platforms were not offered on the 7NOW website, and the typical consumer would not have understood those services as being offered by reference to the 7NOW Mark. The Court also noted that the 7NOW Mark was not used on the 7TRAVEL website or the Better Homes and Gardens Shop website. The connection or association between the 7NOW Mark and the services offered on the linked websites was not sufficient to establish use of the mark in relation to the relevant categories. In relation to the exercise of the discretion under section 101, the Court found that the onus was on the trade mark owner to persuade the Court that it was reasonable to exercise the discretion in their favour. The Court considered the various factors relevant to the exercise of the discretion, including the public interest and the risk of confusion. Ultimately, the Court found that it was not reasonable to exercise the discretion in favour of the trade mark owner, and the 7NOW Mark should be removed from the Trade Marks Register.

The Court ordered that the parties confer with a view to agreeing on orders to give effect to these reasons and appropriate orders with respect to costs. The proceedings were listed for resolution of any dispute as to appropriate orders. The entry of orders was dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The parties confer with a view to agreeing by 12:00pm on 14 June 2023: (a) orders to give effect to these reasons; and (b) appropriate orders with respect to costs.

2. The proceedings be listed at 9:00am on 15 June 2023 for resolution of any dispute as to appropriate orders.

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

The services offered on the linked e-commerce platforms were not offered on the 7NOW website and the typical consumer would not have understood those services as being offered by reference to the 7NOW Mark. The 7NOW Mark was not used on the 7TRAVEL website or the Better Homes and Gardens Shop website. The connection or association must therefore derive from the use of the 7NOW Mark on the website which contains the relevant link. The typical consumer would not have understood the services offered on the websites to which they navigated from the 7NOW website as being services relevantly connected with and provided by 7NOW as opposed to services offered by businesses with some affiliation with 7NOW.Conclusion on use during the contended non-use period It follows from the foregoing, that the 7NOW Mark was not used as a trade mark in relation to Categories 1, 2, 3 or 4 during the non-use period.DISCRETION UNDER SECTION 101General principles As noted earlier, s 101 of the TMA contains a discretion. Section 101(3) provides:If satisfied that it is reasonable to do so, the Registrar or the court may decide that the trade mark should not be removed from the Register even if the grounds on which the application was made have been established. The Full Court (Jagot, Nicholas and Burley JJ) in PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd [2021] FCAFC 128; 285 FCR 598 at [153], made a number of observations about the discretion, which may be summarised as follows:(a)The discretion is broad and unfettered in the sense that there are no express limits on it. It is limited by the subject-matter, scope and purpose of the legislation and, in particular, by the subject-matter, scope and purpose of Part 9 of the TMA.(b)The TMA strikes a balance between various interests, including: ·the interest of consumers in recognising a trade mark as a badge of origin and in avoiding confusion as to that origin; ·the interest of traders, both in protecting their goodwill through the creation of a statutory species of property protected by the action against infringement, and in turning the property to valuable account by licensing or assignment.(c)Part 9 provides for the removal of unused trade marks from the register and is designed to protect the integrity of the register and in that way the interests of consumers. At the same time, it seeks to accommodate the interests of registered trade mark owners, where reasonable to do so. (d)The Court must be positively satisfied that it is reasonable that the trade mark should not be removed. The onus in this respect lies on the trade mark owner to persuade the Court that it is reasonable to exercise the discretion in favour of the owner. Section 101(3) requires consideration of whether, at the time that the Court is called upon to make its decision, it is reasonable not to remove the mark.(e)The range of factors considered in the exercise of the discretion has included whether or not:·there has been abandonment of the mark;·the registered proprietor of the mark still has a residual reputation in the mark;·there have been sales by the registered owner of the mark of the goods for which removal was sought since the relevant period ended;·the applicant for removal had entered the market in knowledge of the registered mark;·the registered proprietors were aware of the applicant’s sales under the mark; Summary of Seven’s submissions

Ratio Decidendi

Legal Principle Established

Seven submitted that this case fit equally within those words.Consideration In Solahart, the applicant owned three trade marks for SOLAHART. The respondent commenced a business in May 2009 called Solar Hut which it launched from a website with the URL at [2]-[3]. The respondent also advertised its solar panel products by reference to the trade mark SOLARHUT, including in television, radio and newspaper advertisements and invited consumers to visit its website at solarhut.com.au: at [43]-[44], [51]. All of this displeased Solahart. Solahart was concerned about the similarity of its name with the name SOLARHUT, particularly the aural similarity: at [4]. After correspondence from Solahart, the respondent decided in October 2009 to abandon its use of the word SOLARHUT in favour of SUNSAVERS. It created a new website with the URL However, it did not wholly abandon use of the word SOLARHUT, because it maintained the URL If this URL was accessed, the user would be redirected to the new business website at at [5]. That is, despite rebranding, the respondent maintained its solarhut.com.au domain name and used it to redirect consumers to its Sunsavers website. Consumers searching for the words “Solar Hut” using a search engine and clicking on the results were taken to the Sunsavers website, and so the domain name solarhart.com.au “continued to funnel consumers to the website at at [7], [53]. Solar Hut intended to have the solarhut.com.au domain name redirect consumers to the sunsavers.com.au website “for as long as possible to take advantage of whatever the benefits of its continued existence might be”: at [59]-[60]. Solahart alleged that the respondent infringed the trade marks in three ways: first, by Solar Hut’s sale of its photovoltaic systems using the word SOLARHUT; second, by keeping the website and, third, by maintaining the website after the switch to the SUNSAVERS brand as a redirect to at [6]. It is the third aspect of the case upon which Seven relies in the present case. Justice Perram stated the relevant principles in the following way at [50]:The issue of whether use of a domain name is trade mark use is more difficult. The questions which arise in this area were usefully considered, and the authorities collected, by Kenny J in Sports Warehouse Inc v Fry Consulting Pty Ltd (2010) 186 FCR 519 at 552-556 [141]-[156] and I acknowledge the value and considerable advantage I have derived from her Honour’s reasons in what follows. A number of propositions should be accepted: first, mere registration of a domain name does not establish the infringement of a trade mark; secondly, where a cybersquatter does not seek to attract consumers to the occupied domain name but merely seeks to treat with the owner of the mark it is unlikely that trade mark infringement will be shown for there will be no goods or services being proffered to consumers to which the impugned sign, contained within the domain name, may be reasonably be seen as relating (‘[t]here could be a threatened infringement if one were to take seriously the suggestion that [the cyber squatter] intended to engage in the sugar trade’: CSR Ltd v Resource Capital Australia Pty Ltd (2003) 128 FCR 408 at 416 [412] per Hill J); thirdly, where a person uses a domain name to attract consumers to a website which promises connexions with goods or services relating to the registered mark infringement may be established even if the owner of the domain name does not sell the goods or services and instead merely benefits from a flow of traffic over the website (Nissan Motor Co v Nissan Computer Corp 378 F.3d 1002 (2004) (9th Cir. 2004)); fourthly, where a domain name is used to conduct a website from which goods or services are sold the same kinds of questions which arise in ordinary trade mark litigation will arise, for in such cases the analogy between the sign on the front of a shop and the goods sold within will be established; fifthly, explicit advertising of the website in that context is obviously relevant for it will show more clearly the connexion between the sign and the service.