A challenge by 7-Eleven has seen Seven lose its Australian registered trade mark for “7NOW” for the vast majority of goods and services covered by the registration. This serves as a stark reminder to trade mark owners to use their registered trade marks as trade marks and for the goods and services for which they are registered.
Background
Seven operates the Seven Network, a major Australian commercial free-to-air television network. Part of its revenue comes from selling advertising space on its television channels.
In 2013, Seven filed and registered an Australian trade mark application for the mark “7NOW” (the Seven Mark), in respect of goods and services in classes 9, 35, 38 and 41 including for:
- computer software in class 9;
- 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 2 Services);
- retail and wholesale services including retail trading via television programmes… and…the Internet in class 35; and
- the bringing together, for the benefit of others, of a variety of goods enabling customers to conveniently view and purchase those goods including by…website or television shopping channels in class 35
(together, the Defended Goods and Services).
7-Eleven Inc (7-Eleven) is an international chain of convenience stores, that has been operating in Australia since 1977. Outside of Australia, 7-Eleven uses “7NOW” and (the 7-Eleven Logo) in relation to a food and alcohol delivery and pick-up service.
In March 2020, with the intention of providing a delivery and pick-up service in Australia, 7-Eleven applied to register trade mark “7NOW” and the 7-Eleven Logo in respect of “retail convenience stores” and “online retail convenience store services…featuring home delivery service and in-store pickup” in class 35 (the 7-Eleven Applications).
The Seven Mark was cited as a basis to refuse acceptance of the 7-Eleven Applications.
Non-use applications generally
In Australia, for marks that were filed on or before 24 February 2019, a removal for non-use application can be made if 5 years has elapsed from the date of filing.
For registered trade marks filed after 24 February 2019, a removal for non-use application can be made if more than 3 years has passed since the mark was entered on the Register of Trade Marks.
In either case, non-use must be established in a three-year period, ending one month before the date of filing the non-use application.
We note that even if non-use is established in that three-year period, the Registrar retains a discretion to leave the mark on the Register.
7-Eleven’s non-use application
Prior to filing the 7-Eleven Applications, 7-Eleven had applied to remove the Seven Mark for non-use. The relevant non-use period was between 10 June 2016 and 10 June 2019 (the Non-use Period).
A delegate of the Registrar of Trade Marks found that the Seven Mark had not been used, and that it should be removed from the Register in its entirety.
Appeal to the Federal Court
Seven appealed the decision of the Registrar to the Federal Court of Australia. 7-Eleven sought to defend the delegate’s decision only in respect of the Defended Goods and Services (as set out above).
Although Seven had registered the domain name www.7now.com.au (Domain Name) in 2011, it accepted that it had not used the Seven Mark before 24 July 2018.
Seven sought to rely on two periods of use:
- Between 24 July 2018 and 1 April 2019 when the Domain Name automatically redirected users to the 7PLUS website at www.7plus.com.au (Redirect Period); and
- Between 1 April 2019 and 10 June 2019 when the Redirect Period ended and users landed on the 7NOW website (7NOW Website Period).
During the Redirect Period, the 7PLUS website allowed users to live stream Seven’s digital channels, which screened advertisements and various television programs including home shopping programs and programs that incorporated advertorials. Seven argued that this constituted use of the Domain Name (and thus the Seven Mark) in respect of the Defended Goods and Services.
As to the 7NOW Website Period, the 7NOW website allowed users to access television content through Seven’s online platforms, and included links to various websites including the 7PLUS website and websites of third parties, as well a link to download the 7PLUS app. The 7NOW website featured the following banner across the top of the web page (7NOW Banner):
The Primary Judge
The primary judge found that neither use of the Domain Name, nor the 7NOW Banner constituted use of the Seven Mark as a trade mark, i.e. as a badge of origin – the Seven Mark had not been used to indicate a connection in the course of trade between 7NOW and the relevant goods and services.
The primary judge noted that, beyond contending that it had used the Seven Mark during the non-use period, Seven had not sought to provide explain any non-use. Rather, it contended that if the Seven Mark was removed, that removal would “seriously prejudice Seven’s private interests”, or that it was contrary to public interest. The primary judge rejected these arguments.
Accordingly, having found that Seven failed to demonstrate the necessary use of the Seven Mark during the Non-Use Period, and refusing to exercise the discretion under section 101(3) of the Trade Marks Act 1995 (Cth), the primary judge ordered that the Seven Mark be removed from the Register in respect of the Defended Goods and Services.
Appeal to the Full Court
Seven sought leave to appeal the decision to the Full Court.
Seven argued that the primary judge had erred in: (1) finding that the Seven Mark had not been used in relation to the Defended Goods and Services during the 7NOW Website Period (and not the Redirect Period); and (2) not exercising the discretion under section 101(3) to not remove the Seven Mark in relation to the Defended Goods and Services.
While the Full Court rejected the majority of Seven’s arguments, the Full Court did find error with the primary judge’s reasons in relation to the Category 2 Services (set out above).
In this regard, the Full Court held that the primary judge mistook the nature of the Category 2 Services – this category referred to the service of promoting the goods and services of others. Once this was understood, then it became apparent that consumers would likely view the 7NOW Banner as a badge of origin of a service that aggregates and promotes third party goods and services. As such, the Seven Mark will remain on the Register in respect of these limited services.
The Full Court also considered it appropriate to reconsider the issue the exercise of discretion afresh, because of the finding that the Category 2 Services should be maintained.
However, the Full Court did not exercise that discretion in circumstances where Seven had not used the Seven Mark before or since the non-use period, and provided no explanation for doing so. While Seven may have a reputation in respect of other 7-formative marks generally, that reputation was confined to specific services, and the Full Court was not persuaded that the public interest was not served by maintaining the Seven Mark on the Register for services where there was no use.
Key Takeaway
This decision serves as a reminder to persons seeking trade mark registration, and owners of Australian registered trade marks that:
- it is important to consider at the filing stage how a mark will be used, and craft a specification carefully;
- the failure to use a trade mark leaves it vulnerable to challenge by third parties;
- the onus is on the opponent to removal to establish that it is appropriate for the discretion to be exercised not to remove a mark – and without any evidence of use of the particular mark after the non-use period, or proof of reputation, that is a very difficult hurdle.
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