Seven Network (Operations) Limited v 7-Eleven Inc

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

8 June 2023 – Thawley J

This was an appeal by Seven Network (Operations) Limited (“Seven”) from a decision of a delegate of the Registrar of Trade Marks in relation to a non-use application made by the respondent, 7-Eleven Inc (“7-Eleven”), under section 92 of the Trade Marks Act 1995 (Cth)  to remove Seven’s registered trade mark for the word “7NOW” in classes 9, 35, 38 and 41 (the “7NOW Mark”).

The removal application was made on the basis of section 92(4)(b) of the Trade Marks Act, namely that Seven had not used the 7NOW Mark, or had not used it in good faith, during the three years between 10 June 2016 and 10 June 2019 (the “non-use period”) in respect of the designated goods and services.  The delegate held that the 7NOW Mark should be removed from the register and refused to exercise the discretion in section 101(3) of the Trade Marks Act not to remove the 7NOW Mark.  Seven appealed to the Federal Court.

Seven is the major operating company for the Seven Group and operates the Seven Network, a major Australian commercial free-to-air television network broadcasting across Australia for many years.  Seven’s core business operation is to generate revenue from the provision of advertising services and selling advertising space on its television channels.  In order to generate that revenue, Seven makes content available for free and promotes that content with the aim of attracting audiences to whom advertisers can promote their goods and services.

7-Eleven Inc operates an international chain of convenience stores under its 7-ELEVEN brand, including in Australia since 1977.  Overseas, 7-Eleven uses 7NOW in relation to a food and alcohol delivery and pick-up service.  It has not been able to use the 7NOW mark in Australia but has been trying to register this mark so it can commence use here.

Seven’s 7NOW Mark has been registered since August 2013 in relation to goods and services in classes 9, 35, 38 and 41.

Part of appeal allowed by consent

In the appeal, 7-Eleven sought to defend the delegate’s decision only in respect of particular goods and services (the “Defended Goods and Services”).  The parties agreed to the appeal being allowed in relation to certain goods and services without a hearing on the merits.  The Registrar did not oppose this course.  As in Hungry Spirit Pty Limited ATF The Hungry Spirit Trust v Fit n Fast Australia Pty Ltd [2020] FCA 883, the parties asked the Court to make an order by consent allowing an appeal pursuant to section 104 of the Trade Marks Act.  Justice Thawley accepted this course, but noted that it did not equate to finding or accepting that there had been use by Seven during the non-use period.  The authors understand that as a practical matter, the “Undefended Services” were not of commercial relevance to 7-Eleven and 7-Eleven intended to only contest arguments by Seven that it had used the 7NOW Mark for such services to the extent that Seven intended to then rely on any such use as being relevant to the exercise of discretion.

Had there been use of the 7NOW Mark in relation to the Defended Goods and Services in the non-use period?

Two issues were to be resolved.  First, whether Seven had discharged its onus of proof that it had used the 7NOW Mark in respect of the Defended Goods and Services during the non-use period.  Secondly, if not, whether the Court ought to exercise its discretion under section 101 to remove the 7NOW Mark.

As to the first issue, the usage examined was divided into two periods:

• From 24 July 2018 to 1 April 2019 (the “redirect period”) during which the 7now.com.au domain redirected users to the 7plus.com.au domain. The 7PLUS website is a broadcaster video on demand platform.  Users of the 7PLUS website could access live streaming of Channel 7, 7two, 7mate, and 7flix and a range of other digital channels and on-demand television programmes.
• From 1 April 2019 to the end of the non-use period on 10 June 2019 (the “7NOW website period”) the 7now.com.au domain ceased redirecting to 7plus.com.au and users landed on the 7NOW website.

Seven did not contend any use of the 7NOW Mark beyond the use of it in the domain name and on the 7NOW website during the non-use period.

Use in the redirect period

During the redirect period, the 7PLUS website allowed users to stream Seven’s digital channels live.  Seven sold advertising space on these channels, and screened advertisements for its clients.

Seven relied on the decision of Justice Perram in Solahart Industries Pty Ltd v Solar Shop Pty Ltd [2011] FCA 700; 281 ALR 544 (“Solahart”).  In particular, it relied on his Honour’s statement at [61] and submitted that:

[b]ecause the above categories of the Defended Goods and Services were offered or advertised on the 7PLUS website while the 7NOW domain name was redirecting there, it follows that the 7NOW domain name was used in respect of those goods and services during the redirect period.

Justice Thawley examined Solahart and the question of whether use of a domain name is trade mark use, noting that, in that case, the respondent decided to abandon its use of the word SOLARHUT in favour of SUNSAVERS, but that, despite rebranding, the respondent maintained its solarhut.com.au domain name and used it to redirect consumers to its Sunsavers website. 

Justice Thawley stated that Justice Perram’s conclusion in Solarhart that the domain name was still being used “as a trade mark” was reached in a context where: 

• before the time of the impugned use, there had been promotion of the SOLARHUT trade mark in conjunction with the solarhut.com.au domain name as indicating the trade origin of the solar panels that were for sale; and
• the ongoing use of the domain name was to transfer customers who were looking for solar panels by reference to the SOLARHUT name, including by internet searches, to a business selling solar panels.

It was in that specific factual context that Justice Perram found that the domain name continued to function as a trade mark.

Justice Thawley considered that the present case was different to Solarhart.  At [60] his Honour concluded:

“The 7NOW Mark was in the domain name which had been registered in 2011.  This was not a trade mark use: Sports Warehouse Inc v Fry Consulting Pty Ltd [2010] FCA 664; 186 FCR 519 at [153]; Solahart at [50].  All that had happened on around 24 July 2018 was that Seven caused a redirection to be put in place.  There was no evidence of any promotion of 7NOW or the 7now.com.au website.  Leaving aside the use of “7now” in the domain name, the 7NOW Mark was not apparently being used in any connection with any business or commercial activity.  There was no evidence of anyone searching for 7NOW or in fact being redirected to the 7Plus website.  There was no direct evidence about what a person who might have searched for 7NOW, or otherwise happened upon the www.7now.com.au website, might have been looking for or expecting to find or even if they expected goods or services to be available there.”

Therefore, there was no offer of any goods or services in connection with the 7NOW Mark when it was used in the domain name during the redirect period.  A trade mark must be shown not to have been merely “used”, but used as a trade mark in relation to relevant goods or services.

While accepting that the use of a domain name to redirect potential customers to a website displaying one’s goods and services may be analogous to using those words as a sign on the front of a shop to indicate the goods or services that are sold within, that was not what was occurring in this case.

Rather, during the redirect period, the user was instantaneously redirected to the 7PLUS website (unlike the situation in Taxiprop Pty Ltd v Neutron Holdings Inc [2020] FCA 1565; 156 IPR 1), and the 7now.com.au domain name did not continue to be visible in the browser after the user was redirected.  The 7NOW Mark did not appear on the 7PLUS website.  At no time was a user taken to a 7NOW website.  If anything, the user would assume that the 7NOW Mark was not in use at all.

Use during the 7NOW website period

From 1 April 2019, 7now.com.au stopped redirecting to the 7PLUS website.  It instead resolved to a standalone website that displayed its own content: the 7NOW website. 

From 1 April 2019 to 10 June 2019 the user traffic to the website totalled 157.  The 7NOW website promoted television content that was available to users through Seven’s online platforms and allowed users to access that content directly from the 7NOW website.  Having determined that this involved use of the domain name as a trade mark, his Honour had to determine whether it was use with respect to any of the Defended Goods and Services.

Category 1 – class 9 – computer software

The first category of the Defended Goods and Services was in class 9, for computer software.

Seven submitted that the 7NOW website promoted the 7PLUS App by displaying the 7PLUS logo and providing links which stated, “Get iOS App” and “Get the Android App”. 

Justice Thawley found that the viewer of the 7NOW website would see the banner at the top of the page in which 7NOW appears.  The viewer would also understand that the viewer was on a website the address of which included “7now”.  The viewer would see the various tiles on the website and would not fail to notice that many of them were associated with Seven.  At the bottom of the page, after the tiles, the viewer would see the 7PLUS mark in the following part of the screen [the strike through arises from deletions in the evidence]:

Justice Thawley found that the viewer would consider the matters at the bottom of the screen as being the trade offerings of 7PLUS and the viewer would not consider that the 7NOW Mark was being used to indicate a connection in the course of trade between the 7PLUS App and 7NOW.  While accepting that a consumer would think there was some commercial connection between the businesses of 7NOW and 7PLUS, they would presume them to be separate and would not understand that the 7NOW Mark was being used to distinguish the 7PLUS App or as being co-offered by 7NOW together with 7PLUS.

Category 2 – class 35 – promotion and sale of goods and services for others

Category 2 was for “the promotion and sale of goods and services for others including through the distribution of on-line promotional material and promotional contests” in class 35.

Seven argued the 7NOW website promoted and advertised other publications and businesses in which Seven West Media held a commercial interest, being businesses which were nevertheless independent from Seven.

Justice Thawley found that the typical viewer would not consider that the 7NOW Mark was used to indicate a trading connection between 7NOW and the goods and services offered by those other businesses. His Honour stated that promotional and advertising services are services in which one party promotes or advertises the goods or services of another party. The consumer is not the recipient of promotional or advertising services.  The typical consumer would assume that 7NOW was affiliated in some way with other Seven entities and that Seven was promoting its own business interests, not that Seven was engaged in promotional or advertising activities by reference to the 7NOW Mark.

Categories 3 and 4 – class 35 retailing services

These categories covered retailing type services in class 35.

As at 1 April 2019 (and 22 August 2019), the 7NOW website included click-through tiles for “7travel” and “Better Homes and Gardens Shop”.  As at 20 February 2020, the tile for “7travel” that appeared on the 7NOW website linked to a website at the URL www.7travel.com.au (“7TRAVEL website”).  The 7TRAVEL website was an e-commerce platform operated by Seven from 2017 until early 2020, offering consumers access to a range of travel products supplied by companies with whom Seven entered into marketing partnerships.

Justice Thawley found that 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 reference to the 7NOW Mark.

Discretion under section 101

Justice Thawley refused to exercise the discretion under section 101 of the Trade Marks Act to decline removing the mark from the Register.