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

FACTS

CB owned CINQUE STELLE and ORO in class 30 in respect of coffee and similar products/beverages.

In Italian, CINQUE STELLE means 5 stars and ORO means gold.

CB used the marks in connection with its well-known Vittoria branded coffee.

MT imported Caffe Molinari branded coffee with packaging that included Cinque Stelle and Oro.

CB claimed MT infringed its CINQUE STELLE and ORO trade marks.

MT argued that it was not using the words as trade marks but descriptively, as an indication of quality.

MT cross-claimed that the marks should be cancelled pursuant to section 41(3) of the Trade Marks Act 1995 on the grounds that they were not inherently adapted to distinguish CB’s goods.

LOWER COURT DECISION

CB succeeded in its action against MT for infringement before a single judge of the Federal Court.

MT appealed and succeeded before the Full Federal Court who found that the trade marks were not inherently adapted to distinguish.  Note that the Court held that MT’s use of the words was trade mark use (and would have been infringing use if the marks were valid).

CB appealed to the High Court of Australia.

HIGH COURT DECISION AND REASONING

HC majority (4:1) in favour of CB:  The marks were distinctive and therefore should be restored to the Trade Marks Register (the Full Federal Court order that the trade marks be removed was reversed).

HC minority (single judge):  The Full Federal Court applied the correct test in determining whether other traders might legitimately wish to use the marks.  The marks were not distinctive and were correctly ordered to be removed by the Full Federal Court.

Federal Court Full Court test:  Whether other traders would be at least likely, in the ordinary course of business and without improper motive, to want to use the words in connection with the same goods.

The Federal Court Full Court test was incorrect in focussing too much on the needs of other traders.  The High Court specified a 2 stage test:

What is the “ordinary signification” (meaning) of the words (English or foreign) to any person concerned with the relevant goods claimed by the trade mark? [This is not limited to other traders; it will include consumers, wholesalers and retailers, depending on the goods or services.]

Will other traders legitimately need to use the words in respect of their own goods?

Registrability will be problematic if the word has a direct reference to the character or quality of the goods, is a laudatory epithet, a geographical name or a surname, or has otherwise lost distinctiveness (become generic), or never had the required level of distinctiveness.

A non-distinctive word can acquire a secondary meaning/reputation by use which may make it registrable.

There is no special test for assessing the registrability of foreign words as trade marks.

It is not the translated meaning of the foreign word that is critical but that may be relevant.  What is critical is the meaning conveyed by the foreign word, if any, to a person concerned with the relevant products.

Foreign words whose ordinary signification is only metaphorical or allusive to the product (rather than a direct reference to the product) are capable of distinguishing the product and are prima facie registrable.

ORO and CINQUE STELLE would not be understood by ordinary Australians as a direct reference to the quality of the goods.  According to the Court, only a small minority of people in Australia would even understand what the words meant (despite Italian being the 2nd most widely spoken language in Australia).

From the Solio case (cited by the High Court with approval), an invented word need not be completely meaningless and could be traced to a foreign source or contain a covert and skilful allusion to the character or quality of the goods, as in the case of the current marks – they were not directly descriptive.

Even applying the second stage of the test (unnecessary because the first stage was not satisfied), the evidence that other traders would wish to use these words was insufficient.  The evidence was limited and consisted of extracts from the Trade Marks Register showing a small number of other marks incorporating Oro or 5 Star along with census data about the number of Italian speakers in Australia.

KEY LESSONS

Foreign language marks are easier to register in Australia where it is clear that the relevant audience does not understand the ordinary meaning of the foreign words or where the understood meaning is not directly descriptive of the goods/services – even where the equivalent English words would not be registrable.

 

To challenge a mark on descriptiveness grounds, strong evidence of how consumers and traders in Australia understand the mark will be required, along with evidence of general use by other traders.