|Focus:||Cantarella Bros Pty Limited v Modena Trading Pty Limited  HCA 48 (3 December 2014)|
|Services:||Commercial, Competition & Consumer Law, Intellectual property & technology|
|Industry Focus:||Energy, resources & infrastructure, Financial services, Life sciences & healthcare, Insurance, Property|
Cantarella Bros Pty Limited v Modena Trading Pty Limited  HCA 48 (3 December 2014)
In an eagerly anticipated decision, the High Court of Australia has allowed Cantarella's appeal, finding that the trade marks ORO and CINQUE STELLE are inherently adapted to distinguish. In doing so, the High Court has emphasised that it is the ordinary meaning of the word/s that constitute a trade mark, that is crucial in determining whether a foreign word is capable of protection as a trade mark in Australia.
For a trade mark to obtain registration without evidence of use or reliance on other circumstances, it needs to be different from other trade marks and possess an inherent level of 'distinctiveness' in relation to the goods or services sought to be protected.
In determining the question as to whether a trade mark is inherently adapted to distinguish the goods or services for which it seeks protection from those of other traders, Australian Trade Mark law has relied on Kitto J's well known test in Clark Equipment Co. v. Registrar of Trade Marks (1964) 111 CLR 511 where His Honour stated that this should be assessed "by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives... will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it".
Cantarella, a coffee importer, producer and owner of numerous well-known trade marks including "Vittoria", obtained Australian trade mark registrations for the words "ORO" in respect of "coffee; beverages made with a base of coffee, espresso; ready-to-drink coffee; coffee based beverages" and "CINQUE STELLE" in class 30 in respect of "coffee, coffee essences and coffee extracts; coffee substitutes and extracts of coffee substitutes; coffee-based drinks; tea, tea extracts and tea-based drinks; cocoa, cocoa-based preparations and drinks". When translated from Italian, these words respectively mean "GOLD" and "FIVE STARS".
Modena imported coffee produced by an Italian company Caffč Molinari SpA, which included blends named ORO and CINQUE STELLE in packaging bearing those words. Cantarella sued Modena for trade mark infringement. Modena cross-claimed, seeking the cancellation of Cantarella's trade mark registrations.
At first instance, Emmett J upheld Cantarella's claim of trade mark infringement and rejected Modena's cross-claim for cancellation, finding that ORO and CINQUE STELLE were sufficiently distinctive in respect of the goods for which they had obtained registration and only a small minority of Australians would understand the meaning of the words.
Modena appealed to the Full Court of the Federal Court of Australia and the Full Court constituted by Mansfield, Jacobson & Gilmour JJ unanimously allowed Modena's appeal, dismissing Cantarella's claim and ordering the cancellation of Cantarella's ORO and CINQUE STELLE trade mark registrations on the basis of non-distinctiveness.
The Full Court held that the trial judge erred in focusing on the probability that ordinary Australian consumers would understand the foreign words, when the focus of his Honour's enquiries should have been on the traders' knowledge of coffee products from Italy.
Grounds of appeal to the High Court
Cantarella sought special leave to appeal to the High Court arguing that:
- in determining whether a trade mark is inherently adapted to distinguish, consideration must be afforded to the ordinary meaning as understood by the relevant public being the average Australian consumer and trader
- although some Australian consumers and traders may be able to translate ORO and CINQUE STELLE from Italian, most traders and consumers would not understand or associate these words as describing the quality of coffee
- given ORO and CINQUE STELLE needed to be translated into English before they could be understood by the target market as indicating GOLD and FIVE STARS, the trade marks could at their highest only refer in an allusive sense to the quality of coffee and could, therefore, be distinguished from an Italian word such as CAPPUCCINO, the meaning of which is commonly understood to have been incorporated into the English language, and
- there was insufficient evidence to conclude that other traders, without improper motive, wished to use ORO and CINQUE STELLE as trade marks for coffee.
Modena countered by arguing that:
- the critical question is whether other traders, actuated only by proper motives, would wish to use ORO and CINQUE STELLE in relation to coffee
- it was sufficient that there be a real likelihood that other traders would wish to use ORO and CINQUE STELLE to refer to the quality of coffee and there was evidence traders other than Cantarella had used these words, and
- the ordinary meaning of the words in Italian was irrelevant as was an enquiry into whether the average Australian consumer would understand the meaning of ORO and CINQUE STELLE in relation to coffee.
At the relevant time, Section 41(2) of the Trade Marks Act 1995 (Cth) provided that an application for registration of a trade mark must be rejected if the trade mark "is not capable of distinguishing the applicant's goods ... in respect of which the trade mark is sought to be registered ... from the goods... of other persons". Section 41(3) stated that, in deciding whether s 41(2) applies to an application, the Registrar must first take into account the extent to which the trade mark "is inherently adapted to distinguish the designated goods ... from the goods ... of other persons".
In a 4:1 decision, the majority constituted by French CJ, Hayne, Crennan and Kiefel JJ accepted Cantarella's submissions and held that the trade marks ORO and CINQUE STELLE are inherently adapted to distinguish. Relying on well-established authorities [at 48], the majority held that "...it is not the meaning of a foreign word as translated which is critical, although it might be relevant. What is critical is the meaning conveyed by a foreign word to those who will be concerned with the relevant goods".
The High Court's decision to allow Cantarella's appeal means that Cantarella retains its registered trade marks ORO and CINQUE STELLE on the Australian Trade Marks Register.
The majority stated at  that assessing whether a trade mark is inherently adapted to distinguish first involves a consideration of the "ordinary signification" of the word/s and once the "ordinary signification" of the word/s is established, an enquiry is then made into whether other traders might legitimately want to use the word/s in respect of their goods. If the word, whether it be an English or foreign word, contains an allusive reference to relevant goods, the word is prima facie registrable as a trade mark.
The majority found that the trade marks ORO and CINQUE STELLE, in their ordinary signification, were not shown to convey a meaning or idea sufficiently tangible to anyone in Australia concerned with coffee goods as directly referring to the character or quality of the goods.
In a dissenting judgment, Gageler J agreed with the assessment of the Full Court of the Federal Court.
Where to from here?
In an age where traditional notions of commerce being constrained by geographical boundaries have been challenged by a new reality of globalisation, free trade agreements and the internet, the question as to what (if any) monopoly should be afforded to foreign word trade marks, is an important one.
The High Court's decision makes plain that in assessing the inherent adaptability of foreign words to distinguish the good/services of the trade mark owner, it will be the meaning conveyed by that foreign word to those who will be concerned with the relevant goods, that will be critical.
Brand owners should not be deterred from seeking trade mark protection in Australia for foreign word trade marks, provided that the words do not have a directly descriptive meaning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.