The High Court of Australia has confirmed that when considering whether foreign word marks are distinctive in Australia, it is necessary to consider the “ordinary signification” of the word or words to persons in Australia that are “concerned” with the goods to which the trade mark is applied – “concerned persons” being those who “purchase, consume and trade in the goods”.  

This is the final episode of the battle between Cantarella Bros Pty Ltd and Modena Trading Pty Ltd, where the distinctive character of the words “CINQUE STELLE” (meaning “five stars” in Italian) and “ORO” (meaning “gold” in Italian) were in dispute as applied to coffee imported from Italy.

HISTORY OF THE DISPUTE BETWEEN THE COFFEE IMPORTERS

Cantarella has been extensively using the “Oro” mark since 1996 and the “Cinque Stelle” mark since 2000 throughout Australia in connection with its coffee products that are marketed and sold under the “Vittoria” house mark.  It has held Australian trade mark registrations since 2000 and 2001, respectively.

In late 2009 Modena began to import into Australia and distribute “Caffè Molinari” coffee products from Italy under the labels “Caffè Molinari, Cinque Stelle and Caffè Molinari Oro”.  In June 2011, product previously branded as “Caffè Molinari Oro” was rebranded as “Caffè Molinari Qualita Oro”.

In 2013 Cantarella sued Modena for trade mark infringement, misleading and deceptive conduct, misrepresentation and passing off.  Modena argued in a cross-claim that Cantarella’s registrations on which the infringement action was based should be cancelled because the words “Cinque Stelle” and “Oro” were not inherently adapted to distinguish the goods for which they were registered as they are commonly used by other traders to designate the quality or characteristics of Italian coffee.

ARE CANTARELLA’S TRADE MARKS “INHERENTLY ADAPTED TO DISTINGUISH”?

In order for trade marks to be registered under section 41 of the Trade Marks Act 1995, they must be inherently adapted to distinguish one trader’s goods from another (i.e. be distinctive).   The leading authority when assessing the inherent adaptability of a trade mark in Australia comes from a 1964 High Court judgment from Justice Kitto:1

"by reference to the likelihood of other persons, trading in goods of the relevant kind and being actuated only be proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – 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 relied upon the above passage to support the proposition that the inherent adaptability of a trade mark is to be tested by “checking” the ordinary meaning (i.e. the ordinary signification) to anyone “purchasing, consuming or trading in the goods”.

By contrast, Modena asserted that the test is in terms of the likelihood that other traders may legitimately desire to use the words in connection with their own goods.

The Trial Decision:  Cantarella’s marks were distinctive

At the Federal Court trial held in February 2013, the trial judge, Justice Emmett, did not consider either of the words Oro” or “Cinque Stelle” to be widely understood in Australia. The marks were therefore found to be distinctive, and validly registered. Cantarella succeeded in its trade mark infringement claim and was granted relief by way of an injunction which restrained Modena’s future sale of goods under the marks.  Our discussion on the primary judgment can be found at here.

Trial Decision reversed by Full Federal Court

Modena appealed the trial decision on the basis that the trial judge erred in concluding that the trade marks were inherently distinctive because other traders were using, and likely to want to use the words “Oro” and “Cinque Stelle” in connection with coffee.  

In September 2013, the Full Federal Court found in favour of Modena and interpreted Justice Kitto’s reference to “common right of the public” as referring to members of the public who may become traders.  In finding “Cinque Stelle” and “Oro” to be entirely descriptive words in Italian, the Full Court did not consider it necessary to consider if consumers knew their English translation because the words were in “common heritage” amongst traders of coffee products sourced from Italy.  

Cantarella’s application for special leave to appeal to the High Court was granted on the basis that the High Court would only consider the issue in respect of the test to be applied in determining whether trade marks are inherently adapted to distinguish under section 41.

HIGH COURT UPHOLDS ORIGINAL DECISION; CANTARELLA’S MARKS ARE INHERENTLY ADAPTED TO DISTINGUISH

The High Court confirmed, by a 4-1 majority, that the test to be applied when assessing the inherent distinctiveness of foreign words under Australian trade mark law is the same as it is for English words, being:

An assessment of the "ordinary signification" of the words having regard to persons who will purchase, consume or trade in the goods and in the historical context of Australia being an English speaking nation.

This permits a conclusion to be drawn as to whether the word contains a “direct reference” to the relevant goods (prima facie unregistrable) or a “covert and skilful allusion” to the goods (prima facie registrable).

Once the "ordinary signification" of a word is established, an assessment as to whether other traders might legitimately need to use the word in respect of their goods should be made, looking from the point of view of the possible impairment of the rights of honest traders.  

If the foreign word contains an allusive reference to the goods, a monopoly could be granted in respect of that word.  However, if it is understood by the target audience as having a directly descriptive meaning, monopoly rights should not be allowed.

Where the Full Court were said to have erred

The High Court held that Modena and the Full Court “misunderstood” the expression “ordinary signification” when rejecting the trial judge’s so called “Anglocentric approach” in determining the ordinary understanding of the words “Cinque Stelle” and “Oro” in Australia.  

Modena’s evidence did not show that either “Cinque Stelle” or “Oro” were being used to describe any attribute of coffee. As such, when considering the “ordinary signification” of the words to coffee - coffee being “a commodity and a familiar beverage consumed by many”- the High Court considered that the words were merely allusive of the goods claimed.  

Accordingly, the High Court concluded that the trade marks were inherently adapted to distinguish Canterella’s coffee-related goods from those of other traders.  Cantarella’s registrations were therefore maintained, and in turn Modena’s use of these words was an infringement.

Impact of use of the words by other traders

Modena argued that other traders in coffee use the word “oro” and lodged evidence which purported to show use of the word “oro” by rival traders to directly describe their coffee products.  The High Court considered that this evidence did not show that the word "oro", standing alone, would be understood in Australia as directly descriptive of the character or quality of such goods.

Modena’s evidence also demonstrated use of the expression "five star" on packaging of coffee and use of "five star" by traders in a range of services.  Again, the High Court did not consider this evidence sufficient to show that the Italian equivalent, "Cinque Stelle", is understood as a descriptor of the character or quality of coffee products.

Thus, Modena’s evidence did not detract the High Court from their initial finding that the trade marks were inherently distinctive.

JUSTICE GAGELER’S DISSENT

In his dissenting judgement, Justice Gageler agreed with the Full Federal Court and held that the relevant perspective is “that of another trader, located in Australia or elsewhere, who might desire to use the word or other sign in the ordinary course of its business”.  Significantly, Justice Gageler held that simply because a word does not have direct reference to the character or quality of the goods does not in itself render the word to be inherently adapted to distinguish.

When considering previous decisions on distinctive character as well as public policy considerations, Justice Gageler stated that the test under section 41 should focus on the “extent to which the monopoly granted on registration of a trade mark would foreclose options otherwise available to rival traders”.

Having found “gold” and “five star” in English to be ordinary English words to indicate quality, and not inherently adapted to distinguish, Justice Gageler concluded that the Italian equivalents of those words were also not inherently adapted to distinguish goods of a kind commonly associated with Italy, imported from Italy and sold to Italian speakers.

TAKE HOME MESSAGES TO PONDER OVER YOUR COFFEE

  • The High Court has seemingly reached its conclusion regarding the distinctive character and hence the registrability of “Cinque Stelle” and Oro”  on the basis that the English translations for these words, namely “five star” and “gold” do not directly describe any attribute of coffee, and rather are an allusive metaphor.  Therefore, these words are distinctive and prima facie registrable
  • The decision affirms that the distinctive character of foreign marks in Australia must be assessed in the same context as English words and whether those words convey a “tangible meaning” to anyone in Australia concerned with the relevant commodity.
  • The ordinary significance of the word is considered in the context of all persons who will encounter the commodity in Australia.