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Friday, August 8, 2014

Almost brewed: High Court hears coffee trade mark dispute

By Deborah Jackson, Senior Associate

This blog has been following the dispute between Cantarella and Modena in respect of the challenge to Cantarella's registered trade marks CINQUE STELLE and ORO in relation to coffee, which has now reached the High Court. A five-star debate was foreshadowed, as this is the first time the High Court has had to consider the inherent distinctiveness of foreign laudatory words. In Italian CINQUE STELLE is said to mean 'five stars' and ORO 'gold'. In the unfurling debate, some promising signs emerged in the firm position each side adopted in oral submissions before the High Court on 5 August 2014 on how to determine the issue.
 
To recap, a trade mark is able to be registered without evidence of use if the Registrar considers that the trade mark is inherently adapted to distinguish the goods from those of other traders. Inherent in this context means whether the mark by itself, and without regard to any acquired distinctiveness based on use, is adapted to distinguish the goods. If there is some doubt as to the extent to which the mark is inherently adapted to distinguish, then the Registrar is able to consider use and intended use of the trade mark and other circumstances to determine whether the mark has capacity to distinguish.  The question in this case is how is the inherent adaptation to distinguish of the two trade marks – being Italian words – to be determined.

Cantarella's counsel argued that to determine whether the marks are inherently adapted to distinguish, regard must be had to the ordinary signification of the words. The average Australian consumer and the trader would not understand these Italian words to describe the quality of coffee. Some traders and consumers may be able to translate the words but reference must be had to the target market as a whole. At best, the Italian words referred only indirectly or in an allusive sense to the quality of coffee because it is necessary to go through what was described as a translational process. CINQUE STELLE and ORO were able to be distinguished from an Italian word such as CAPPUCCINO, which had passed into the English language. Counsel also argued that there was insufficient evidence to show that as at the date of registration other traders did wish to use CINQUE STELLE and ORO as trade marks for coffee. Use after registration of the words CINQUE STELLE and ORO had occurred in circumstances which were not fully known and in most cases as part of composite marks or in a context that did not suggest trade mark use. As registration had been granted, the onus was on Modena to show why the trade marks should not have been registered.

Modena's counsel argued that the critical question is whether other traders would be likely to wish to use CINQUE STELLE and ORO in relation to coffee without improper motive. It was not relevant to ask what was the ordinary signification of the words in Italian because this was a question which arose under repealed legislation. Nor was it necessary to inquire into whether the average Australian would understand the meaning of the Italian words in relation to coffee. In this case, where Modena's market was primarily in the wholesale field, the question should be decided by reference to traders. There was evidence to show that coffee was often associated with Italy. There were according to the 2001 census more than 350,000 Australians who speak Italian at home, not taking into account those who might be familiar with the language. Within the wholesale market the category of those familiar with Italian is likely to be higher. It was sufficient that there was a real likelihood that other traders would wish to use these Italian words to refer to the quality of coffee. There was evidence of use of these words by other traders which showed that they would wish to do so. Referring in oral argument to cases under repealed legislation, Modena's counsel argued that in such a case as this where there was doubt the onus was on Cantarella to show why the trade marks should be registered. 

Judicial consideration arises in this case of the boundaries of monopoly accorded to foreign laudatory words – an important question in the context of multilateral trade and ecommerce – and whether and to what extent it is relevant to ask if the English meaning of the foreign words is said to be known, and what weight to accord the need for a translational process. 

The High Court has reserved its decision.

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