By Despina Lyons, Senior Associate & Trade Mark Attorney and Dalinee Bangaroo, Trade Mark Attorney/Solicitor

After all of the upfront investment (and in some instances, stress) involved in getting trade marks registered, it can be easy to relax and forget about their ongoing protection until it is time to renew the trade mark in 10 years. However, a key consideration in trade mark law is that trade marks need to be used once they are registered. If you do not use a trade mark in respect of all, or some, of the goods or services for which the mark is registered, it will become vulnerable to removal from the Trade Marks Register on the basis of non-use. The recent case of Seven Network (Operations) Limited v 7-Eleven Inc [2023] FCA 608 serves as a timely reminder of the importance of using trade marks and ensuring that you have use in respect of all of the relevant goods and services for which you expect to maintain exclusive rights.

Background of the case

The machinations of this case make very interesting reading. Seven Network (Operations) Limited (Seven Network) owns Australian trade mark number 1540574 for “7NOW”, which was registered in August 2013 for a range of goods and services in classes 9,35, 38 and 41, including for:

• 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…the Internet in class 35; and
• Category 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…website or television shopping channels in class 35 (together, the Challenged Goods and Services).

7-Eleven Inc (7-Eleven) use a number of trade marks which feature the number “7” in Australia. 7-Eleven planned to launch a delivery and pick-up service in Australia under the “7-NOW” trade mark. After undertaking its due diligence and conducting trade mark searches, 7-Eleven came across the Seven Network’s “7NOW” trade mark registration. 7-Eleven undertook research regarding the use of this mark and formed the view that the Seven Network mark was not being used in respect of all of the goods and services included in the registration; in particular, those goods and services which would overlap with their intended use of the “7-NOW” trade mark and form a barrier to their registration of the “7-NOW” trade mark.

Once you have a registered trade mark you generally enjoy a monopoly over the use of that mark in relation to the specified goods and services. Since there is a public and commercial interest in the Trade Marks Register not being clogged up with zombie trade marks that are not being used, registered trade marks which are not used for the relevant period become vulnerable to non-use removal. On 10 July 2019, 7-Eleven filed a non-use application to remove Seven Network’s “7NOW” trade mark from the Trade Marks Register. Thereafter, on 23 March 2020 with the intention of launching the above-mentioned delivery and pick-up service in Australia using the trade mark “7-NOW”, 7-Eleven filed an application to register its own “7-NOW” word mark and “7-NOW” logo mark in respect of “retail convenience stores” and “online retail convenience store services…featuring home delivery service and in-store pickup” in class 35. As you can see, these services are the same, or similar to, the Category 2, 3 and 4 services listed above.

As expected, Seven Network’s “7NOW” trade mark was cited as a basis to refuse acceptance of the 7-Eleven applications. Before a Delegate of the Registrar of Trade Marks, 7-Eleven was successful in removing the “7NOW” trade mark, pursuant to section 92(4)(b) of the Trade Marks Act 1995 (Cth) (the Act). The decision was reached on the basis that Seven Network had not used the “7NOW” mark in Australia during the relevant non-use period in respect of the Challenged Goods and Services.

Appeal to the Federal Court

Seven Network was not satisfied with this decision and appealed the Delegate’s decision to the Federal Court of Australia. Seven Network argued that its use of 7NOW in the https://7now.com.au (Domain Name) and in the below website banner (Banner) was sufficient use of the “7NOW” trade mark and as such, the trade mark should not be removed from the Register in respect of the Challenged Goods and Services.

The Banner was displayed above the following logos, and a representation of how the two banners appeared is included below:

Seven Network sought to rely on two periods of use:

1. 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
2. Between 1 April 2019 and 10 June 2019 when the Redirect Period ended, and users landed on the 7NOW website (7NOW Website Period).

Outline of the Federal Court’s decision

a) The Court agreed with the Registrar in the first instance and held that even though the domain name included the trade mark “7NOW”, users were directed from this domain to the 7PLUS website, which did not display the “7NOW” trade mark. Even though the 7PLUS website did promote third-party services, the “7NOW” trade mark was not present on this website and thus did not constitute use of the 7NOW as a badge of origin, i.e. it had not been used to indicate a connection in the course of trade between 7NOW and the relevant goods and services. This illustrates that use of a trade mark within a domain name, with nothing more, does not constitute use of a trade mark.

b) Secondly, Seven Network also contended that since the Banner was predominantly displayed on the 7NOW website, and this website promoted the services of other third parties, through the logos displayed underneath the Banner, this as a whole constituted use of the “7NOW” trade mark:

The Court rejected this argument, asserting that despite the presence of the “7NOW” trade mark in the Banner, the ordinary consumer would not think the “7NOW” trade mark was being used to promote the services of other third parties. Rather, they would believe it was being used to promote 7NOW’s own goods and services. Overall, the use of the “7NOW” trade mark in the banner alone was not sufficient to fulfill its registered purpose. Further steps should have been taken to make clear the “7NOW” trade mark was being used to promote third-party services, for e.g. displaying the 7NOW trade mark on those third-party websites.

c) Finally, Seven Network argued that the Court should exercise their discretion outlined in s 101(3) of the Act and permit the continuance of Seven Network’s trade mark, as Seven Network would otherwise suffer ‘irreparable prejudice to its private interests’ if their trade mark was removed. The Court rejected this argument, concluding no prejudice would arise, as it was unlikely the ordinary consumer would believe the “7NOW” trade mark of Seven Network and 7-Eleven were in any way connected.

Seven Network was again dissatisfied with this decision and sought leave to appeal the Federal Court’s decision to the Full Federal Court.

Appeal to the Full Court

Seven Network argued that the primary judge had erred in:

1. finding that the “7NOW” trade mark had not been used in relation to the Challenged Goods and Services during the 7NOW Website Period; and
2. not exercising the discretion under section 101(3) to not remove the “7NOW” trade mark in relation to the Defended Goods and Services.

While the Full Court rejected the majority of Seven Network’s arguments, Seven had one pyrrhic victory when 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 misunderstood the nature of the above service – as being the service of promoting the goods and services of others rather than for others. Once this was understood, then it became apparent that consumers would likely infer that the Banner (as shown above) was used as a badge of origin of a service that “aggregates, presents and promotes” the offerings of others. Namely, the “7NOW” trade mark was used in the Banner to promote the streaming services of others, for example, 7PLUS, etc. This was sufficient to establish use as a trade mark in relation to that relevant service, i.e. ‘the promotion of goods and services for others including through the distribution of on-line promotional material and promotional contests’. As held by the Registrar and the primary judge, no use was established in relation to the sale of goods and services of others. On this basis, the decision to remove the Category 1, 3 and 4 goods on the basis of non-use was upheld.

Additionally, the Full Court did not exercise its discretion under s 101 of the Act to retain the “7NOW” trade mark on the Register in relation to the remaining categories. While Seven Network may have a reputation in respect of other 7-formative marks generally, that reputation is confined to specific category of services, and the Full Court was not persuaded that it was in the public interest to allow the trade mark to remain on the Register in respect of services where Seven Network had not established use.

Key Points & Take Away Messages

This case highlights the importance of conducting regular audits of your trade mark registrations to see whether you are using your trade marks in respect of all of the goods and services included in the registrations which are still of interest to your business. This is a relevant and highly valuable consideration in each and every jurisdiction in which you have registered trade mark rights, as the requirements are somewhat consistent but differ slightly from market to market.

Scheduled audits can identify gaps in use and focus your attention on ensuring you continue (or start) using your trade mark for all goods and services of interest. The case also emphasises that you cannot assume that use of a trade mark in a domain name or online use on a website banner or other blanket promotional examples of use are sufficiently connected to all of your goods and services of interest. If you are not sure if your current use is sufficiently connected to all of your goods and services of interest, we do recommend reaching out and seeking our advice. We can assist you by reviewing your use and identifying any gaps which need addressing. Nothing is more galling than going through the process of investing heavily in your trade marks only for them to fall vulnerable to a non-use removal only a few years later.

In addition to reviewing your registrations to ensure that all goods and services of interest are covered and being used, we recommend ensuring that you keep good records of use which are dated. Having access to records which clearly show dated use of your trade mark in respect of your goods and services of interest is a great way to respond to any non-use removal claims quickly and easily.

Contact us

If you are concerned about the extent of use of your registered trade marks and if you would like further information on the above or advice on specific trade marks, please contact one of our experts below.