The High Court of Australia has delivered its decision in Cantarella Bros Pty Limited v Modena Trading Pty Limited1 (Cantarella Case). In doing so, the High Court has clarified the correct test to be utilised when considering if a word trade mark (whether in English or any other language) is inherently adapted to distinguish under section 41(3) of the Trade Marks Act 1995 (Cth) (Act). In this case, Cantarella Bros' trade marks "ORO" and "CINQUE STELLE" were determined by the majority of the High Court to be inherently adapted to distinguish coffee and similar goods in Class 30 in Australia. We look briefly at the High Court decision and history of this case.
Facts of the Cantarella Case
The Appellant (Cantarella) is a coffee bean producer and sells and promotes its coffee under a number of trade marks, including VITTORIA. In 2000, Cantarella registered the trade mark "ORO", and in the following year, obtained registration of the trade mark "CINQUE STELLE" (Cantarella Trade Marks). The meanings of these words in Italian are "gold" and "five stars", respectively.
The Respondent (Modena) imports coffee into Australia and markets the coffee through an Italian company, Caffè Molinari SpA. "Oro" and "Cinque Stelle" are the names of blends of coffees that Molinari sold in Italy and exported to other countries. These two coffee blends have been imported into Australia since 1996 and 1998, respectively.Cantarella subsequently brought proceedings in the Federal Court against Modena for infringement of its Cantarella Trade Marks.
Decision of the Federal Court
Modena claimed that the words "Oro" and "Cinque Stella" were common place words that other traders might use to indicate the quality or variety of their coffee products. Modena argued that the Cantarella Trade Marks did not satisfy the test under s43(1) the Act, and therefore were not capable of registration. Modena filed a cross-claim in the form of a removal action under ss 88(1) and 92 of the Act, on the basis that the Cantarella Trade Marks had not been used as trade marks for three years and should be removed.
In his decision at first instance, Justice Emmett considered the number of Italian speakers in Australia and the extent to which the Italian meaning of the words "Oro" and "Cinque Stella" would be understood in Australia. He also determined that only a very small section of the English speaking population in Australia would understand the translated meaning of the words "Oro" and "Cinque Stella". His Honour made reference to the ordinary consumer’s understanding of the meaning of the words "Oro" and "Cinque Stelle", which would not generally be understood to mean "gold" or "five stars" respectively. He found that the Cantarella Trade Marks were inherently adapted to distinguish Cantarella’s coffee products from those of other traders. A finding of trade mark infringement was made and Modena's cross claim seeking removal of the Cantarella Trade Marks was dismissed.
Modena appealed to the Full Court of the Federal Court.
Decision of Full Court of Federal Court
The Full Court considered the scope of s41(3) of the Act and its application in previous cases. Modena had centred its argument for the appeal on the reasoning of the High Court in the case F.H. Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited.2 In that case, Justice Kitto set out the test for distinctiveness as follows:
"The question to be asked in order to test whether a word is adapted to distinguish one trader's goods from the goods of all others is whether the word is one which other traders are likely in the ordinary course of their business and without any improper motive, to desire to use upon or in connection with their goods."
The Full Court held that the correct test for considering distinctiveness for s41(3) of the Act was as stated by Kitto J in Clarke Equipment Co v Registrar of Trade Marks.3 This test, the Full Court determined, focussed on the likelihood of traders in the relevant goods or services (in this case, coffee traders) and not the general consumer, wanting to use the words "Oro" and "Cinque Stelle" as descriptors of quality or variety of their goods or services, and not as a trade mark.
Their Honours held that that other traders were likely to want to use, in the ordinary course of their business and without any improper motive, the words "Oro" and "Cinque Stelle" in connection with their own coffee goods in Australia. This was reinforced by the fact that the Italian language is commonly used in conjunction with coffee and coffee products in Australia. Accordingly, the appeal was unanimously allowed and an order was made to remove the Cantarella Trade Marks pursuant to s88 of the Act.
Cantarella appealed to the High Court.
Decision of the High Court
The High Court considered the test of "inherently adapted to distinguish" as required under s43(1) of the Act. A majority of the Court (Justice Gageler dissenting) found that in determining whether a trade mark satisfies the test, it is necessary to consider the "ordinary signification" of the word or words to any persons in Australia who are concerned with the goods which the trade mark seeks to cover. This section of the population would include not just coffee traders, but also consumers.
The High Court majority found that the Cantarella Trade Marks were inherently adapted to distinguish, as the terms "Oro" and "Cinque Stelle" were not found to sufficiently convey a particular meaning or idea to those in Australia concerned with coffee products, as words that directly referenced the quality or character of those coffee products. The evidence produced by Modena in the Federal Court also fell well short, in the High Court majority's view, to show that the registration of the words "ORO" and "CINQUE STELLE" would preclude honest rival traders from having those words available to describe their coffee products in some manner. As such, there was no basis to prevent registration of the Cantarella Trade Marks based on this issue either.
Ultimately, the evidence was insufficient to show that the target audience for the coffee products would sufficiently identify the words "Oro" and "Cinque Stelle" to mean gold or five stars respectively. Although the words obviously had an Italian meaning, that in itself was an insufficient basis to determine the words were not inherently capable of distinguishing Cantarella's goods from other traders. Nor was that a sufficient basis to determine that other traders may legitimately wish to use these Italian words to refer to the type or quality of their products.
His Honour Justice Gageler delivered a separate dissenting Judgment, largely agreeing with the Full Federal Court's position. His Honour considered that the Cantarella Trade Marks (based on the evidence), were not inherently capable of distinguishing the coffee and related goods, particularly given that coffee in Australia was commonly associated with Italy. His Honour also considered other persons in the ordinary course of trade (again based on the evidence provided) might honestly seek to use the terms "Oro" and "Cinque Stelle" in a non-trade mark sense.
Cantarella's appeal was upheld and the orders of the Full Court were set aside and the Full Court Appeal dismissed. As a result, the primary Judge's orders will stand and the Cantarella Trade Marks will be reinstated and infringement by Modena of those marks upheld.
Implications of the Cantarella Case
The High Court’s decision makes it clear that determining the inherent adaptability of foreign (or English) words to distinguish the goods or services of a trade mark owner, will turn on the meaning of those words to those persons who would be concerned with the relevant goods or services in Australia (whether traders or consumers). Importantly, the High Court also reaffirmed the importance of the evidence and the high evidentiary burden on a party challenging a trade mark on the basis of its alleged descriptiveness. A party wishing to make such a challenge needs to ensure the evidence strongly supports that the word is descriptive, in the context of its ordinary understood meaning and target audience in Australia. For foreign words, the fact that the word may have a meaning in another language will be insufficient on its own to show a lack of inherent ability to distinguish particular goods or services.
If the words are directly descriptive of the good or service in question, then they will not generally be registrable (unless they have acquired a secondary meaning associated with the brand owner). However, if the words are only allusive as to a quality or the character of the goods or services, then they are likely to be inherently adapted to distinguish and therefore will also likely be registrable as trade marks in Australia under the Act.