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

The High Court has handed down its decision in Cantarella Bros Pty Limited v Modena Trading Pty Limited, allowing Cantarella’s appeal and finding that the marks “ORO” and “CINQUE STELLE” are inherently adapted to distinguish the goods for which they are registered from those of other traders.

The case provided the High Court with the opportunity to clarify the correct approach to take when determining whether a foreign word mark is inherently adapted to distinguish, within the meaning of section 41(3) of the Trade Marks Act.

Key Learnings

In summary, the High Court has clarified that the following points are to be taken into account when considering whether a trade mark is inherently adapted to distinguish within the meaning of section 41(3) of the Trade Marks Act:

  • Section 41(3) requires consideration of the “ordinary signification” of the words to any person, in Australia, that has or may have a connection with the goods/services to which the proposed trade mark may be used.
  • The same test is to be applied whether the word or words are in English or a foreign language.
  • If the word or words are merely allusive to a quality or character of the goods, then on their face they are inherently adapted to distinguish and thus registrable.
  • In contrast, if the word or words are directly descriptive, then on their face they are not registrable.

The High Court has also clarified that if a third party wishes to challenge a foreign word trade mark on the basis that it is descriptive then there is a significant onus on the challenger to provide sufficient evidence to support this claim.

Summary of the High Court decision

The only question before the court was the correct application of section 41(3) of the Trade Marks Act, including whether Cantarella’s trade marks “ORO” and “CINQUE STELLE” are inherently adapted to distinguish Cantarella’s goods from those of other traders.

The majority of the High Court (Justice Gageler in dissent) found that the correct application of section 41(3) requires consideration of the “ordinary signification” of the words proposed to be adopted as a trade mark to any person in Australia concerned with the goods to which the mark is to be applied (including purchasers, consumers and traders).

Applying this test, the High Court found that that “ORO” and “CINQUE STELLE” were not shown to convey a meaning or idea sufficiently tangible to persons in Australia concerned with coffee products as to be words having a direct reference to the character or quality of the goods. The High Court found that Modena’s evidence fell well short of establishing that registration of the words “ORO” and “CINQUE STELLE” would preclude honest rival traders from having words available to describe their coffee products.

Accordingly, the majority of the High Court allowed Cantarella’s appeal and set aside the orders of the Full Federal Court requiring rectification of the Trade Marks Register by removal of the trade marks.

By separate judgment, Justice Gageler in dissent agreed with the analysis and conclusion of the Full Court, holding that the evidence relied upon by Modena, including evidence of the use by a number of coffee distributors of Five Star and Gold, establishes that “ORO” and “CINQUE STELLE” are words which any person in the ordinary course of business might legitimately seek to use. Justice Gageler found such words are not inherently adapted to distinguish the goods of one person from the goods of another when applied in Australia to goods of a kind commonly associated with Italy, often imported from Italy and sold to Italian speakers.

The case highlights the importance of considering the ordinary understanding of the meaning of a word or words (whether in English or a foreign language) when adopting the word or words for use, as a trade mark, in Australia.

If the word or words are directly descriptive of the goods/services in respect of which they are to be used as a trade mark, then on their face, they will not be registrable.

On the other hand, if the word or words are merely allusive of the goods/services (as in the current case), then they should be considered inherently adapted to distinguish and thus registrable.

Background to the proceedings

Cantarella commenced proceedings in the Federal Court against Modena for infringement of its “ORO” and “CINQUE STELLE” trade marks.

In Italian, ORO means “Gold” and CINQUE STELLE means “Five Stars”. Cantarella had sold “Vittoria” branded coffee under the names “VITTORIA ORO” and “VITTORIA CINQUE STELLE” in Australia since 1996 and 2000 respectively.

By way of defence, Modena filed a cross-claim asserting that ORO and CINQUE STELLE are not inherently adapted to distinguish and were commonly used in the marketing of Italian-style coffee in Australia. Modena also alleged that the marks had not been used as a trade mark for three years and accordingly should be removed for non-use.

At first instance, Justice Emmett rejected Modena’s invalidity claim and found that the marks were infringed by Modena’s importation and sale of coffee in Australia under the brands CAFFÈ MOLINARI ORO and CAFFÈ MOLINARI CINQUE STELLE. In reaching his conclusion, Justice Emmett referenced the ordinary consumer’s understanding of the meaning of the words “ORO” and “CINQUE STELLE”, finding the trade marks were inherently adapted to distinguish Cantarella’s coffee products from those of other traders as only a small minority of English-speaking people in Australia would understand the laudatory meaning of those words.

On appeal, the Full Federal Court overturned Justice Emmett’s decision, finding the trade marks “ORO” and “CINQUE STELLE” were not inherently capable of distinguishing Cantarella’s products from those of other traders. The Full Court held that Justice Emmett adopted an erroneous approach to the question of distinctiveness and the correct test for distinctiveness is focused on knowledge of coffee traders as opposed to the general consumer. Their Honours held that use of Italian is sufficiently common in relation to coffee in Australia that other traders are likely to want, in the ordinary course of their business and without any improper motive, to use the words (and had in fact used the words) “Oro” and “Cinque Stelle” in connection with their own coffee goods in Australia. Accordingly, the marks were held to be not capable of distinguishing.

Cantarella appealed the decision to the High Court.