Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48

Introduction

A recent decision of the High Court of Australia has clarified the ability of brand owners to register and protect trade marks which have descriptive or laudatory connotations, confirming that the meaning of words to consumers is paramount. 

In this decision, the High Court allowed an appeal brought by coffee trader Cantarella Bros Pty Ltd (Cantarella) against a Full Federal Court decision cancelling two of its registered trade marks. The trade marks in question were the words “ORO” and “CINQUE STELLE” registered in respect of products including coffee (the trade marks). “Oro” and “cinque stelle” are Italian words respectively meaning “gold” and “five stars”.

The appeal to the High Court turned on the issue of whether the trade marks were “inherently adapted to distinguish” Cantarella’s goods and it is an important  authority on  the use of foreign words as trade marks.

Key points

Brand owners who currently use trade marks containing words which have a descriptive or laudatory connotation should take comfort from this decision and their ability to enforce their exclusive rights.  This case confirms that the meaning of the words to consumers is the key consideration and that rival brand owners cannot simply point to the desire of other traders to use the mark to establish that the words do not function as a trade mark.

When choosing a trade mark which has a descriptive or laudatory meaning in relation to a brand owner’s goods, it is important to assess the ordinary meaning of those words in Australia to persons who will purchase, consume or trade in the goods or services the subject of the trade mark.

  1. If the words make a direct reference to the character and quality of the relevant goods or services, it is likely that your trade mark will not be registrable.
  2. If the words make a covert and skilful allusion to the character and quality of the relevant goods or services, it is likely that you will be able to register your trade mark.

Importantly, the same test applies whether the trade mark consists of foreign words or English words.

Background

Both Cantarella and the respondent, Modena Trading Pty Ltd (Modena), are suppliers of coffee products in the Australian coffee industry. Cantarella uses the trade marks “ORO” and “CINQUE STELLE” in relation to specific coffee blends.

Modena imports coffee from Molinari, a company based in central northern Italy. From 1996 to 2009, various businesses distributed Molinari products in Australia, using the marks “CAFFÈ MOLINARI” together with the words “ORO” and “CINQUE STELLE”.

History of the proceedings

At trial, Cantarella successfully claimed that Modena had infringed its trade marks. Modena sought removal of Cantarella’s marks on the basis that other traders might, without improper motive, wish to use those words on their Italian-style coffee products, and that the words had acquired no distinctiveness in respect of Cantarella’s goods. In making this argument, Modena sought to rely on the use of the words “oro”, ‘d’oro” and “stelle” by other coffee companies.

In dismissing Modena’s claim, the primary judge found that, while an Italian speaker would appreciate that “oro” signifies some connection with gold, and that “cinque stelle” signifies five stars, it could not be concluded that “oro” and “cinque stelle” would generally be understood in Australia as having those meanings. Accordingly, the primary judge held that Cantarella’s trade marks were distinctive.  Modena appealed this finding.

On appeal, the Full Court of the Federal Court overturned the primary judge’s decision, holding that Cantarella’s trade marks should be cancelled and removed from the Register. The Full Court considered that the Italian words were “entirely descriptive of their quality as premium coffee products” and thus did not possess the necessary distinctiveness to be registrable. Central to the Full Court’s reasoning was the fact that other coffee traders had used the words “according to their ordinary signification as words descriptive of the quality of the coffee products” for a significant period of time both before and after Cantarella’s registration of the marks.

Appeal to the High Court

A four judge High Court majority ordered that the appeal made by Cantarella be allowed, and restored Cantarella’s trade marks to the Register.

The majority held that the test for determining whether or not a trade mark consisting of a word – including a foreign word – has been “inherently adapted to distinguish” is whether the “ordinary signification” of the word, in Australia, to persons who will purchase, consume or trade in the relevant goods, contains a “direct reference” to the character and quality of the goods or makes a “covert and skilful allusion” to the goods.

  1. If the word makes some “covert and skilful allusion” to the goods, it is likely registrable as a trade mark.
  2. If it has a “direct reference” to goods, it is likely not registrable because its use as a trade mark will rarely eclipse its ordinary signification.

In relation to establishing the “ordinary signification” of a trade mark consisting of a foreign word, the majority stated:

“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”.

It was held that once the “ordinary signification” of a word (foreign or English) had been established, “an enquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods”.

On the present facts, the majority held that the trade marks did not convey a meaning or idea “sufficiently tangible to anyone in Australia concerned with coffee goods as to be words having a direct reference to the character or quality of the goods”. Hence the majority found that Cantarella’s trade marks were inherently adapted to distinguish the goods for which they were registered from the goods of other persons.

In his dissenting judgement, Justice Gageler found that the Italian words were not inherently adapted to distinguish Cantarella’s goods from those of another. His Honour considered the words “gold” and “five star” to be ordinary English words that signify quality in the context of goods, words “which any person in the ordinary course of business might legitimately seek to use”. Justice Gageler placed particular emphasis on the goods’ association with Italy in assessing the ordinary signification of the words.