Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337 (“Cantarella”)

Authors: Zeinab Farhat & Gianluca Pecora, Progressive Legal

The Cantarella case remains the leading authority regarding ascertaining the inherent distinctiveness of a trade mark, and the consideration of the ordinary signification (ordinary meaning) of the words comprising the trade mark for anyone in Australia purchasing/ trading the goods, and, the likelihood of other traders wanting to use that mark. 

Procedural history

In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2013] FCA 8 (“the Original Case”), the Federal Court of Australia ordered in favour of Cantarella Bros Pty Ltd.  

In Modena Trading Pty Ltd v Cantarella Bros Pty Ltd (2013) 215 FCR 16 (“the First Appeal”) the Federal Court of Australia Full Court ordered in favour of Modena Trading Pty Ltd.  

In the First Appeal, Cantarella claimed that Modena had infringed two of its registered trade marks. The first being for the word “ORO” registered in class 30. The second being “CINQUE STELLE” also registered in class 30 (“the Cantarella Marks“).  

In the Original Case, Cantarella succeeded in establishing infringement, and Modena failed in its defence that it was merely using the Cantarella Marks as an indication of the quality of the goods being sold. Modena also failed in submitting that the marks were not inherently adapted to distinguish the Appellants goods.  

The Primary Judge in the Original Case held that whilst an Italian speaker would appreciate that the word “ORO” suggests a connection with Gold, and “CINQUE STEELE” suggests five stars, it could not be concluded that those words, in Australia, would be understood as having those meanings. 

The Full Court held that the test of whether a mark was “inherently adapted to distinguish” certain goods, turned not on what a word was generally understood to mean, but whether other traders would want to use that word in connection with the same goods.  

To that end, the Original Case and the First Appeal were arguably at direct odds in considering the importance of ordinary signification for the purposes of establishing whether a mark is “inherently adapted to distinguish” under s 41(3).  

The decision of the High Court provided clarification on these points.

Facts 

1. Cantarella was the High Court appeal of the First Appeal brought by Cantarella Bros Pty Limited (“the Appellant”). 

2. As outlined above, the First Appeal followed previous proceedings in the Original Case where Modena Trading Pty Limited (“the Respondent”) was found to be infringing on the Cantarella Marks. 

3. The Appellant and the Respondent are both companies that sell coffee products in Australia.  

4. Since 1958, the Appellant has imported raw coffee beans which have been packaged under various registered trade marks, including: “vittoria”, “aurora”, “delta”, “chicco d’oro”, “oro nero”, “medaglia d’oro” and “chicco d’oro”. Each of these registrations came before the Appellant obtained registration of the Cantarella Marks. The Cantarella Marks were used for specific blends of coffee that the Appellant sold.  

5. The Respondent was the exclusive Australian distributor of Molinari, which was a coffee company operating since 1965, in central northern Italy. Molinari used, at various points in time, the trade marks, “caffè molinari”, “oro” and “caffè molinari”.  

6. Approximately eighteen months before trial, the Respondent and Molinari stopped using the trade mark “oro” and began using the phrase “qualità oro”.  

7. The Respondent and Molinari also used the phrase “cinque stelle” on packaging but never held a corresponding trade mark for the words. 

Issues

The primary issue for consideration on appeal for the High Court, was whether the Cantarella Marks were inherently adapted to distinguish the Appellant’s goods within the meaning of s 41(3) of the Act? at [6].

Key Submissions regarding inherent adaptation to distinguish   

In contention between the two parties were what variables should be considered when ascertaining whether a mark is inherently adapted to distinguish pursuant to s 41(3) of the Act, and, whether in fact, the Cantarella Marks were actually inherently adapted to distinguish? 

In other words, the Court had to consider what test was best applicable for enquiries made under s 41(3) of the Act and apply that accordingly. This was pertinent given the different approaches applied in the Original Case and First Appeal.  

The Respondent submitted that the Court only needed to consider whether other traders in the coffee bean industry would legitimately desire to use the words “CINQUE STELLE” and “ORO” to describe their products.  

Alternatively, the Appellant argued that the Court should first consider whether the Cantarella Marks were directly descriptive of the goods on which they were used.  

Decision

The Court held that the Cantarella Marks were ‘inherently adapted to distinguish’ the Appellants products within the meaning of s 41(3) of the Act.  

Therefore, the Court allowed the appeal in favour of the Appellants, and, set aside the orders made by the First Appeal, including the order for rectification of the Register.

Reasoning

Chief Justice French and Justices Hayne, Crennan and Kiefel (“the Majority”) held that the Appellant’s version of the test under s 41(3) was correct. 

In reaching this conclusion, the Majority noted the following inter alia: 

1. “In Clark Equipment, Kitto J considered for the purposes of registration in Part B the word “Michigan”, which had acquired distinctiveness through 20 years of use in respect of the applicant’s goods despite the fact that it was a geographical name of a State in America.  After approving Lord Parker’s test in Du Cros and Hamilton LJ’s observation in R J Lea, his Honour explained that directly descriptive words, like geographical names, are not prima facie suitable for the grant of a monopoly because use of them as trade marks will rarely eclipse their “primary” (that is, ordinary) signification [66].

Such a word, his Honour said, “is plainly not inherently, ie in its own nature, adapted to distinguish the applicant’s goods”[67]. Traders may legitimately want to use such words in connection with their goods because of the reference they are “inherently adapted to make” to those goods[68]. Kitto J’s elaboration of the principle, derived from Lord Parker’s speech in Du Cros, applies with as much force to directly descriptive words as it does to words which are, according to their ordinary signification, geographical names” at [57] (italics added).

2. “The principles settled by this Court (and the United Kingdom authorities found in this Court to be persuasive) require that a foreign word be examined from the point of view of the possible impairment of the rights of honest traders and from the point of view of the public. It is the “ordinary signification” of the word, in Australia, to persons who will purchase, consume or trade in the goods which permits a conclusion to be drawn as to whether the word contains a “direct reference” to the relevant goods (prima facie not registrable) or makes a “covert and skilful allusion” to the relevant goods (prima facie registrable). 

When the “other traders” test from Du Cros is applied to a word (other than a geographical name or a surname), the test refers to the legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods.  The test does not encompass the desire of other traders to use words which in relation to the goods are allusive or metaphorical. In relation to a word mark, English or foreign, “inherent adaption to distinguish” requires examination of the word itself, in the context of its proposed application to particular goods in Australia” at [59] (italics added).

3. The Court relied on the principles espoused by previous authorities in relation to the interpretation of s 41(3) of the Act and noted that considering whether a trade mark is “inherently adapted to distinguish” requires a consideration of the “ordinary signification” of the words to any person in Australia, concerned with the goods to which the proposed trade mark is applied at [70].

4. The test arising from Cantarella is therefore: once a mark is alleged to not be registrable (for lack of distinctiveness etc), and the “ordinary signification” of a word (English or foreign) is established [i.e. what do the words mean], then the enquiry can be made as to whether other traders might “legitimately need to use the word in respect of their goods” at [71]. Such articulation of this test was in contrast to the position provided by the First Appeal. The key qualifications provided by the Court in consideration of this were:

If a foreign word contains an allusive reference to the goods, it has prima facie qualified for the grant of a monopoly;

Alternatively, if a foreign word is understood by the target audience as having a descriptive meaning in relation to the goods it is applied to, then there is acceptance that it has not prima facie qualified for the grant of a monopoly; and

Where words are prima facie entitled to a monopoly granted by registration of that mark, the words are inherently adapted to distinguish.

5. Because coffee is popularly consumed by many, the consideration of ordinary signification of the words “ORO” and “CINQUE STELLE” undertaken by the Primary Judge in the original case was accepted at [72].

6. The Respondent had failed to demonstrate through its evidence, that rival traders used, or desired to use the word “ORO” in respect of their coffee products. Further, the Respondent failed to show that “CINQUE STELLE” is “understood in Australia by persons concerned with coffee products to be directly descriptive of the character or quality of such goods” at [76].

7. In other words, although, the English translations of the Cantarella Marks – being “FIVE STAR” and “GOLD” – may be considered directly descriptive of a good, these English meanings do not automatically transfer to foreign words. Foreign words will only be considered descriptive if they have an “obvious [descriptive] meaning” to “ordinary Englishmen” (italics added).

8. The Italian language was not “so widely spread” that the Cantarella Marks would be understood to signify the meaning of “FIVE STAR” and “GOLD”. As such, it was the Courts position that the Cantarella Marks, “were not shown to convey a meaning or idea sufficiently tangible to anyone in Australia concerned with coffee goods as to be words having a direct reference to the character or quality of the goods” at [73]. 

Key Takeaways from Cantarella 

As indicated above, Cantarella established a two-stage test (at [70]-[71]) for determining whether a trade mark (whether comprising English or foreign words) is inherently adapted to distinguish goods or services.  

The test is simplified as: 

1. Stage 1: what is the ‘ordinary signification’ of the words proposed as trade marks to any person in Australia concerned with the relevant goods claimed by the trade marks? and 
2. Stage 2: will other traders legitimately need to use the words in respect of their own goods?  

As such, the enquiry is not concerned with what the words mean when translated to English, though this can be relevant. The important issue for consideration is the manner in which those words are understood by the target audience (those people concerned with the relevant goods) (i.e their ordinary signification).

Further, stage 1 of the enquiry affirms the position that ‘ordinary signification’ is concerned with the ordinary meaning of a word by consumers in Australia. In other words, whether the words are descriptive in another language is not a determinative factor in consideration of inherent adaptability to distinguish.  

Lessons for businesses

When choosing which words to trade mark and use as the name or tag-line of your product, consider whether other traders in your industry would have a legitimate reason to use those words when describing their product.  

However, even where you have a mark which may be needed by other traders, depending on your evidence of use, you may be able to still obtain registration of that mark.  

If your trade mark is of a foreign word, it may be immune to this rule based on the Cantarella case. However, this can be a complex matter.  

Progressive Legal has a team of experienced lawyers dedicated to helping small to medium sized businesses navigate trade mark applications and opposition. We are able to suggest which trade marks are best protected by common law principles like in Cantarella.

Contact us by giving us a call on 1800 820 083 or request our advice today.

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