July 2024

7NOW and the Shell Oil Drop Man

Leave a Comment / Trade marks / / / , , , , , ,

7NOW and the Shell Oil Drop Man

In the 7Now case, the Full Court reminded us that the classic statement of when a sign is used as a trade mark for the purposes of Australian law is the Oil Drop Man case:[1]

With the aid of the definition of ‘trade mark’ in s. 6 of the [1955 Trade Marks] Act, the adverbial expression [‘as a trade mark’] may be expanded so that the question becomes whether, in the setting in which the particular pictures referred to were presented, they would have appeared to the television viewer as possessing the character of devices, or brands, which the appellant was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the petrol and the appellant. Did they appear to be thrown on to the screen as being marks for distinguishing Shell petrol from other petrol in the course of trade?

In that case, the High Court held that Shell was not using a caricature image of an animated oil drop man as a trade mark in its television advertisements and so did not infringe Esso’s registered trade marks depicting a “humanized oil-drop”. A surprising aspect of that decision is that, in doing so, the High Court overruled Windeyer J who had found it did infringe.

Unlike the High Court (who did watch the ads), we can’t see how Shell’s Oil Drop Man appeared. So it has always been something of a challenge to understand why.

Now Dr Vicki Huang, who professes law at Deakin University, has published an article revealing to the world some images from the original appeal books: “Uncovering secrets of Australia’s landmark High Court cases” (2024) 54 Australian Bar Review 209. (Unfortunately, its behind a paywall.) If you are a trade mark lawyer trying to grapple with what the late Prof. Lahore always regarded as the most elusive concept in Australian IP law, you should read it!

Back to the 7Now case

Seven had registered 7NOW as a trade mark, TM No 1540574, in respect of a range of goods and services in classes 9, 35, 38 and 41. 7-Eleven filed non-use applications against the trade mark on the s 92(4)(b) grounds.

By the time the proceeding reached the Full Court, four categories of goods and services in classes 9 and 35 were still in dispute (7-Eleven not pursuing the other services):

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); 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 mail order, telecommunications, website or television shopping channels (in class 35).

The trial Judge found that Seven had not discharged its onus under s 100 to show it had used its trade mark in respect of any of the categories and refused to exercise the discretion under s 101 not to order removal.

The Full Court allowed Seven’s appeal in relation to the promotion of goods and services for others only in Category 2 but otherwised dismissed it. As the Full Court emphasised in its quote from the Oil Drop Man case, the different outcomes arose from whether or not Seven’s use of its sign was sufficiently connected with the particular category.

How Seven used its 7NOW mark

It seems Seven’s evidence of use in the relevant period was limited to a one-page website:

As you can see, there is a 7NOW banner at the top of the page. Then (during the relevant period) there were 48 “tiles” which, if clicked, transferred the user to a different websites (some of which were associated with Seven such as 7plus and 7travel while others were not) and, finally, there was a panel with four columns of links at the bottom of the page.

Category 2 services

In effect the website operated as advertising the services being offered from the various websites linked through the 48 “tiles”. As the Full Court explained at [105], the

grid of those icons – [brought] to the consumer’s attention the services and goods offered on the linked websites and [made] it easier for the consumer to acquire those services and goods….

That was the performance of promotional services and those services were provided by reference to the 7NOW badge which clearly functioned as a trade mark. Accordingly, at [106]:

In our view, the connection shown on the website between the 7NOW mark, which has the character of a brand, and the actual performance of those promotional services is sufficient to mean that it has been used as a trade mark in relation to those services. ….

But, as the 7NOW website did not actually offer any goods or services for sale as opposed to the linked websites, the website was not “a means of delivering the service of selling goods. And so, Seven had not proved use of the mark in relation to sales services.

The other categories

To establish use in relation to computer software, Seven relied on the bottom two links under the 7Plus logo in the first column in the page “footer”:

“Get the iOS App

“Get the Android App”

If you clicked on one or other of those links, you were transferred to the page in the App store or the Android Play store where you could download the 7Plus app. 7NOW did not appear anywhere on those pages.

The Full Court agreed with the primary Judge’s conclusion that 7NOW had not been used to distinguish the (7PLUS) software from software being offered by third parties. A number of considerations from the overall context of the use played into this conclusion. These included:

  • 7NOW appeared only once on the website – at the top of the page and separated from the Store links by the 48 “tiles”;
  • the links to the stores were very much smaller and much less prominent that the tiles;
  • the links appeared under the, relatively speaking, prominent 7PLUS logo
  • there was no reference to the 7plus app at all;
  • getting to the software involved a 3-step process
    • the user had to navigate to the 7NOW page
    • the user then had to scroll down to links at the bottom of the page and perceived and read the words under the 7PLUS logo; and
    • then click on the link and be transferred to the page;
  • the 7NOW trade mark did not appear on the Store page

The same problem infected the claimed use for the other categories. Seven’s argument was that its 7NOW trade mark was being used for retail services because a user could buy goods of services from the websites linked by some of the tiles. So for example if one clicked on the tile for 7travel or House & Garden, this is what happened:

As with the computer software, however, the Full Court found the consumer would think the goods or services being offered from the linked website were being offered by reference to the trade mark(s) on that website. The connection between the 7NOW trade mark and the service of offering the goods or services in question for sale was not so much attenuated as severed.

If you do a Google search to buy some product, such as say a book, and the search results bring up, say, 10 or 20 links to sites from which you can buy the book, would you think Google was engaging in retailing the book?

Discretion

Finally, the Full Court rejected the appeal from the refusal to exercise the discretion against removal.

Seven placed heavy reliance on its family of 7-formative marks and its reputation in particularly the 7plus mark given there were some 12.5 million registered users of the 7plus app.

A number of factors played into the Full Court’s conclusion at [166] that the risk of confusion if another trader were to use 7NOW in relation to, say, retail services [via convenience stores] was so high that it would be reasonable to retain the registration for all categoires.  Seven Network (Operations) Limited v 7-Eleven Inc [2024] FCAFC 65 (Burley, Jackson & Downes JJ)

  1. Shell Company of Australia Ltd v Esso Standard Oil (Australia) Ltd [1963] HCA 66; (1963) 109 CLR 407 at 425 (Kitto J, Dixon CJ, Taylor and Owen JJ agreeing). The Full Federal Court supplied the emphasis.  ?

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Moral rights and the statute of limitations

Leave a Comment / Copyright / / / , , , ,

Ms Skildum-Reid’s application for preliminary discovery against the University of Queensland (UQ) has failed for a number of reasons, the most interesting of which is Derrington J’s ruling that it is likely that a six year statute of limitations applies to infringements of moral rights.

Some background

Ms Skildum-Reid is a corporate sponsorship consultant, adviser, speaker and author. Over the years since 2006, she has given presentations at various workshops. In the course of doing so, Ms Skildum-Reid developed one or more slide decks.

In July 2023, Ms Skildum-Reid discovered through internet searches some 15 slide decks with 79 instances of what she considered plagiarism being, or having been used, in two marketing courses being run by UQ.

Through her lawyers, Ms Skildum-Reid wrote to the University stating (amongst other things):

In addition to the egregious and blatant infringement of our client’s Copyright Works, our client considers the unauthorised use of the Copyright Works by the University without any accreditation or reference to her as author (in breach of her moral rights in the Copyright Works) to constitute plagiarism and serious academic misconduct on the part of the UQ staff members who have been responsible for delivering/presenting the UQ Courses.

Correspondence between the parties’ lawyers followed, without resolving the dispute.

Ms Skildum-Reid then brought a preliminary discovery application against the University under both FCR 2011 r 7.22 and r. 7.23. That is, seeking discovery from the University of documents or information to enable her to identify a prospective respondent or, alternatively, whether she had a right to relief against the prospective respondent.

In responding to the application, however, the University provided evidence from the person running the course, a Dr Chien, that she was simply using and updating slide decks provided to her by the University when she took over the course in 2009, some 15 years earlier.

The problem

This evidence caused considerable consternation in Ms Skildum-Reid’s camp. Ms Skildum-Reid wanted to identify who were the person(s) who had prepared the slide decks passed on to Dr Chien.

As those events occurred more than six years previously, Ms Skildum-Reid ran into the limitation of actions provided by Copyright Act 1968 (Cth) s 134(1):

An action shall not be brought for an infringement of copyright or in respect of the conversion or detention of an infringing copy, or of a device (including a circumvention device) used or intended to be used for making infringing copies, after the expiration of six years from the time when the infringement took place or the infringing copy or device was made, as the case may be. (emphasis supplied)

and the University made it plain it intended to rely on s 134(1).

At the hearing of the application for preliminary discovery, Ms Skildum-Reid sought to modify her claims to include infringement of her moral rights.

By this stage, Ms Skildum-Reid had realised that any claims of copyright infringement against whomever had prepared the slide decks provided to Dr Chien were well and truly statute barred. Ms Skildum-Reid’s argument was quite simple. Section 134(1) applies only to infringement of copyright. Infringement of moral rights is not infringement of copyright so, therefore, s 134(1) has no application.

An attempted solution

The argument is that infringement of copyright is defined by ss 36 to 38 in Part III and ss 101 to 102 in Part IV. So, for example, s 36(1) provides in part that “copyright subsisting in a literary, dramatic, musical or artistic work is infringed by ….”[1] (emphasis supplied)

And, further, what constitutes copyright is defined by s 31 “Nature of copyright in original works” in the case of original literary, dramatic, musical and artistic works[2] and ss 85 – 88 in the case of other subject matter. None of these provisions confers a right of attribution or a right of integrity.

Moral rights while subsisting in original works and other (Part IV) subject matter, are not “copyright” and do not arise under Part III (original works) or Part IV (other subject matter). Instead, moral rights arise under Part IX – all the way down in s 189 and following.

These provisions include separate provisions about infringement. So, for example, s 195AO provides:

… a person infringes an author’s right of attribution of authorship in respect of a work if ….

Sections 195AP and 195AQ make corresponding provision for infringement of the moral rights of integrity and against false attribution.

No mention of “copyright” in any of them.

Despite running (in the case of “author’s rights) all the way down to s 195AZO, there is no counterpart to s 134. The Copyright Act does not in terms include a statute of limitations on moral rights claims.

The University, however, sought to invoke the six year statute of limitations on claims of tort arising under Queensland state law[3] which, the University contended, applied through s 79(1) of the Judiciary Act 1903 (Cth):

The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.

The State statute of limitations applied

At [40] – [42], Derrington J cited the High Court’s interpretation of the role of s 79 as filling any “gaps” in Federal law by allowing the application of the relevant state or territory law in such cases.[4]

Derrington J could discern nothing in the Copyright Act or the Explanatory Memorandum for the bill introducing moral rights to suggest that a limitations period for moral rights had been deliberately excluded. Accordingly, there was a “gap” and it was generally accepted infringement of copyright, while statute based, was tortious conduct.

Rule 7.22 requires only that the prospective applicant for preliminary discovery may have a claim, not a prima facie case. Derrington J considered, however, it was still necessary to take into account the prospects of success. Pointing out at [53]:

…. It would be productive of wasted time and money to require a person to make discovery of documents to a prospective applicant in circumstances where, if the contemplated action were pursued, it would necessarily fail.

His Honour found that it was unlikely Ms Skildum-Reid would be able to avoid the operation of the Queensland Limitations of Actions Act. Accordingly, her application under r. 7.22 failed. At [54], his Honour concluded:

Here, no answer was provided to the prospective respondents’ submissions that the claims sought to be made would be barred by s 10 of the Limitation of Actions Act. Though there may be arguments that actions for the infringement of statutory intellectual property rights are not tortious in nature so that s 10 of the Act does not apply to them, such arguments would have to overturn long lines of authority to the contrary. The prospect of doing so is unlikely. In those circumstances, the prospective applicant has not established for the purposes of r 7.22(1)(a) that she may have a right to obtain relief against the unidentified previous course co-ordinator or guest lecturer for infringement of her moral rights.

The prospects of a successful claim, or rather the lack of prospects, also meant Derrington J would not have exercised the discretion in favour of ordering preliminary discovery.

Rule 7.23

Ms Skildum-Reid’s application for preliminary discovery under r 7.23 ran into other difficulties. The main problem being, having accused the University of “egregious and blatant” copyright infringement, it was rather difficult to satisfy the requirement that Ms Skildum-Reid had insufficient information to decide whether to sue or not.

Having made allegations in “emphatic and unequivocal terms”, there was nothing in her evidence explaining why she had insufficient information to decide whether to proceed. At [88] – [89]:

…. It might be inferred from her affidavit material that she believes that she has claims against the prospective respondents. However, there is nothing to suggest that her belief is only that she may have claims against them. No statement of uncertainty about the veracity of her anticipated claims, or why that uncertainty might exist, is provided. Further, she did not identify what information she lacked but needed in order to decide whether to start proceedings. (original emphasis)

These were fatal omissions. Whilst it might occasionally be possible to attribute to the prospective applicant the assertions of their solicitor or counsel for the purposes of establishing the reasonable belief, the drawing of that inference can be difficult. It is preferable, on any application for there to be direct evidence of the prospective applicant’s belief for the purposes of subparagraph (1)(a) and of the lack of information which prevents a decision being made for the purposes of (1)(b). Here, none of those matters were addressed in the affidavits relied upon.

Skildum-Reid v University of Queensland [2024] FCA 733

  1. Section 101 makes similar provision: “a copyright subsisting by virtue of this Part is infringed by ….”  ?
  2. In the case of literary, dramatic and musical works, the familiar rights to reproduce the work in a material form, publish it (for the first time), perform it in public, communicate it to the public etc.  ?
  3. s 10 of the Limitation of Actions Act 1974 (Qld). Every state and territory has equivalent legislaton.  ?
  4. Rizeq v Western Australia (2017) 262 CLR 1 at [16] (Kiefel CJ) and [90] (Bell, Gageler, Keane, Nettle and Gordon JJ).  ?

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