As you sip your morning coffee, you probably don’t ponder Australia’s coffee heritage, but you are probably aware of its provenance in the Italian language, eg caffè latte, cappuccino, affogato, caffè machiatto and espresso.   But do you know the meaning of the Italian words “cinque stelle” and “oro”, being “five stars” and “gold” respectively?   And in considering whether those words are capable of being registered as trade marks, does it matter what you, a coffee-consuming member of the public, know?  Or, does it only matter what you know if you are a trader in the coffee industry?  The Full Court recently considered these questions in Modena Trading Pty Ltd v Cantarella Bros Pty Ltd [2013] FCAFC 110.

The Full Court’s decision concerns the test of registrability set out in section 41(2) of the Trade Marks Act, which provides that a mark must not be registered if it is not capable of distinguishing the applicant’s goods from the goods of other persons.  In Modena v Cantarella, Cantarella was the owner of registered trade marks CINQUE STELLE and ORO in class 30 in relation to coffee and related products.  Cantarella brought proceedings against Modena for infringement of its trade marks.  Modena denied that it had used the words “oro” and “cinque stelle” as trade marks, and by way of cross-claim, sought to cancel Cantarella’s trade mark registrations on the basis that they were not “inherently adapted” to distinguish coffee and related products because of their descriptive meaning in the Italian language. At first instance, Emmett J held that the trade marks were distinctive and had been infringed by Modena’s use of the words as trade marks. On appeal, the key question before the Full Court was whether Cantarella’s trade marks were “inherently adapted” to distinguish the goods of Cantarella from those of other traders.

The important point arising from the Full Court’s decision in Modena v Cantarella is that the test of whether a trade mark is sufficiently distinctive for registrability purposes is principally concerned with whether traders are likely to want to use the word in issue.  While consumers’ familiarity with a particular word may be relevant (to the extent that this indicates whether traders are likely to want to use that word), it may not be appropriate to consider in cases where the word is a foreign word or an English word with a meaning that is not “commonly understood”.  That is, a word that is not well-known to Australian consumers may nonetheless fail to be distinctive (and be incapable of registration), if that word is commonly used by or known to traders within Australia.

In Modena v Cantarella, the Full Court found that ORO and CINQUE STELLE were not inherently adapted to distinguish the goods from those of other traders. They were not distinctive.  This finding was supported by the following facts: the words mean “gold” and “five stars”, which signify the highest quality, pure coffee is often associated with Italy, there are many Italian speakers in Australia, Cantarella itself used the words to signify quality, and most importantly, other traders have used the words ORO and CINQUE STELLE, being words that were well-known in the coffee trade as descriptive of the quality of the coffee products.  As a consequence of the finding that the words were not inherently adapted to distinguish Cantarella’s goods, the Full Court ordered cancellation of Cantarella’s trade mark registrations.

The Full Court found that the approach of the primary judge to the test of distinctiveness was in error.  The primary judge considered that the words ORO and CINQUE STELLE were distinctive, applying the test in Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited (1991) 30 FCR 326 at 335-336 namely, “what is important is that a significant number of consumers in the relevant market identify the plaintiff’s goods as coming from one trade source”.  The Full Court said that the primary judge’s approach was not appropriate where common Italian words, descriptive of quality, were in issue.  The test of distinctiveness is focussed on the likelihood that other traders will think of and want to use the words.

The Full Court provided further clarification to the famous general principle stated by Kitto J in Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511 at 514:

[T]he question whether a mark is adapted to distinguish [is to] be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by 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.

(emphasis added)

The Court held that the words “public” and “common heritage” in this general principle refer primarily to the knowledge base of the traders in the particular goods and services, as it is the question of their likely use of the mark which is to be considered (at [84]).   However, the Full Court said that the expressions are “fluid” and their content will vary according to the particular case.   A consideration of the knowledge of consumers may not be appropriate in cases where the word is a foreign word or a word where its meaning is not “commonly understood”.    In contrast, where the words are ordinary English language words then consideration of the “common heritage” of the general public may very well be apt (at [81]).

As an interesting side note (strictly obiter), the Full Court in Modena v Cantarella said (at [71]), that it was not immediately persuaded that it was correct to apply the principle from Clark Equipment to marks besides word marks, such as shapes or other signs.    In our experience, the test in Clark Equipment is routinely applied by the Trade Marks Office across all types of trade marks, so it will be an interesting to “watch this space” and see whether, as a result of the Full Court’s obiter comment, any change in the applicable law results.