Modena Trading Pty Ltd v Cantarella Bros Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Modena Trading Pty Ltd v Cantarella Bros Pty Ltd [2013] FCAFC 110

Citation: Modena Trading Pty Ltd v Cantarella Bros Pty Ltd [2013] FCAFC 110
Appeal from: Cantarella Bros Pty Limited v Modena Trading Pty Limited [2013] FCA 8
Parties: MODENA TRADING PTY LIMITED v CANTARELLA BROS PTY LIMITED
File number: NSD 401 of 2013
Judges: MANSFIELD, JACOBSON & GILMOUR JJ
Date of judgment: 30 September 2013
Catchwords:

TRADE MARKS – validity – trade marks registered in relation to coffee products – whether Italian words “oro” and “cinque stelle” inherently adapted to distinguish the goods of the registered owner – whether primary judge erred in determining distinctiveness by reference to the probability of persons understanding the words and calling to mind their attachment to the goods

TRADE MARKS – validity – whether other traders acting with proper motives would want to use the trade marks in connection with goods – principle in Clark Equipment – inquiry to be informed by the likely use of the marks by traders as informed by potential consumers

TRADE MARKS – registered trade marks – orders sought to cancel registration of trade marks pursuant to s 88(1)(a) of the Trade Marks Act 1995 (Cth)
Legislation: Trade Marks Act 1995 (Cth) ss 27, 31, 33, 41(2)-(6), 88, 92
Trade Marks Act 1955 (Cth) (repealed) ss 24(1), 24(2)
Trade Marks Act 1905 (Cth) (repealed) ss 16(1), 26(1), 26(2)
Cases cited:

Advanced Hair Studio of America Pty Ltd v Registrar of Trade Marks (1988) 12 IPR 1
Blount Inc v Registrar of Trade Marks (1998) 83 FCR 50
Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417
Chancellor, Masters and Scholars of University of Oxford (Trading as Oxford University Press) v Registrar of Trade Marks (1990) 24 FCR 1
Clark Equipment Company v Registrar of Trade Marks (1964) 111 CLR 511
Eastman Photographic Materials Company Ltd v Comptroller-General of Patents, Designs and Trademarks [1898] AC 571
Eclipse Sleep Products Incorporated v Registrar of Trade Marks (1957) 99 CLR 300
Eutectic Corporation v Registrar of Trade Marks (1980) 32 ALR 211
F.H. Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited (1964) 112 CLR 537
Howard Auto-Cultivators Limited v Webb Industries Proprietary Limited (1946) 72 CLR 175
Johnson & Johnson Australia Pty Limited v Sterling Pharmaceuticals Pty Limited (1991) 30 FCR 326
Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks (2002) 122 FCR 494
Mantra IP v Spagnuolo (2012) 205 FCR 241
Mark Foy’s Ltd v Davies Co-op & Co Ltd (1956) 95 CLR 190
Mid Sydney Pty Ltd v Australian Tourism Co Limited (1998) 90 FCR 236
Philmac Pty Ltd v Registrar of Trade Marks (2003) 126 FCR 525
Re Application by Adrian Barr (190) 18 IPR 196
Re Applications by Hongkong and Shanghai Banking Group (1990) 19 IPR 223
Re Applications by Maxam Food Products Pty Ltd (1991) 20 IPR 381
Re Opposition by Cantarella Bros Pty Ltd [2007] ATMO 3
Registrar of…

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Details
Case
[2013] FCAFC 110
Decision Date

CaseChat Overview and Summary

Modena Trading Pty Ltd sought to have the registrations of certain trade marks held by Cantarella Bros Pty Ltd cancelled. The case before the Court of Appeal was an appeal from the judgment of Emmett J in the Federal Court of Australia. The dispute was between two Australian companies that import and sell coffee products. Modena argued that Cantarella should not be permitted to use the trade marks Oro and Cinque Stelle in relation to coffee products as these words were not distinctive and were descriptive of the quality of the coffee. Cantarella argued that the trade marks were distinctive and had been used in relation to coffee products in Australia for a number of years. The Court of Appeal was required to consider the grounds of appeal in relation to the determination of the distinctiveness of the trade marks Oro and Cinque Stelle. The Court was also required to consider whether the primary judge erred in his determination of the distinctiveness of the trade marks by reference to the probability of persons understanding the words and calling to mind their attachment to the goods. The Court of Appeal found that the primary judge erred in his determination of the distinctiveness of the trade marks by reference to the probability of persons understanding the words and calling to mind their attachment to the goods. The Court held that the distinctiveness of a trade mark should not be determined solely by reference to the probability of persons understanding the words and calling to mind their attachment to the goods. The Court held that the distinctiveness of a trade mark should be determined by reference to the likelihood that other traders would want to use the trade marks in connection with their goods. The Court held that the primary judge erred in his determination of the distinctiveness of the trade marks by failing to consider the likelihood that other traders would want to use the trade marks in connection with their goods. The Court of Appeal set aside the orders made by the primary judge and dismissed the application for the cancellation of the trade marks. The Court also ordered that the registrations of the trade marks be cancelled and that the respondent repay any monies paid to it by the appellant with interest. The Court further ordered that the respondent pay the appellant’s costs of and incidental to the proceedings in this Court and in the Federal Court of Australia both at first instance and on appeal.

Orders

Orders of the court

1. Paragraphs 1 to 12 and 17 of the orders made by Emmett J on 25 February 2013 be set aside.

2. The application dated 10 February 2011 be dismissed.

3. Pursuant to s 88(1)(a) of the Trade Marks Act 1995 (Cth) the Register maintained under the Act be rectified by cancelling the registration of each of the Australian Trade Marks Nos 829098 and 878231.

4. The amended cross-claim be otherwise dismissed.

5. The respondent on the appeal repay any monies paid to it by the appellant pursuant to paragraph 10 of the order made by Emmett J on 25 February 2013 in Federal Court proceeding No NSD 113/2011, with interest.

6. The respondent on the appeal pay the appellant’s costs of and incidental to the proceedings in this Court and in the Federal Court of Australia both at first instance and on appeal.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The question of distinctiveness is one of fact for the trial judge: Advanced Hair Studio of America Pty Ltd v Registrar of Trade Marks (1988) 12 IPR 1 at 7. There is no challenge to the findings of fact other than his Honour’s finding that the marks were distinctive for the purposes of s 41(3) of the Act. We will now set out the relevant facts as found by the primary judge. The facts Modena imports into Australia coffee products supplied by an Italian company, Caffè Molinari SpA (Molinari). Molinari is incorporated in Italy and produces coffee products. Since the 1980’s there has been a move towards a pure coffee culture in Australia with enormous growth in the pure coffee and café cultures. The burgeoning café industry in Australia is indicative of that growth. The Australian pure coffee market includes various imported coffee products that are roasted and packaged overseas and sold in Australia. Various imported coffee products originate in Italy such as those imported by Modena from Molinari. Products of Molinari imported into Australia have had the words Cinque Stelle and the word Oro on their packaging. Modena has also used those words in connection with its marketing of coffee products in Australia. Cantarella In 1958, Cantarella began to import raw coffee beans from all over the world and then to roast, grind and package coffee products, under the trade mark Vittoria. Cantarella describes Vittoria as its “house trade mark”. The coffee business has expanded since 1958 and Cantarella now promotes and sells coffee using the following registered trade marks:· Vittoria· Aurora · Delta · Chicco D’Oro · Cinque Stelle· Oro Each of those trademarks is used by Cantarella in Australia and in other countries and they are registered in many of those countries. The first four of these trademarks are described by Cantarella as house marks, while Cinque Stelle and Oro are used on, and in relation to, specific blends of coffee. Cantarella began using the Oro mark in approximately 1996. In about 2000, Cantarella repositioned Oro branded coffee as a new offering to its food service customers. The new offering was part of three products sold under the marks Oro, Cinque Stelle and Nero. Oro branded coffee is made entirely from arabica beans. Cinque Stelle branded coffee was first marketed in 2000. Since that time, it has been promoted on Cantarella’s websites and through various forms of print advertising and sponsored articles, as well as through direct marketing campaigns to food service providers. It has been featured at various promotional events and on menus and product labels at such promotional events. Since Cinque Stelle branded coffee was launched, it has been sold to fine dining restaurants and esteemed food service establishments. In 2011, Cantarella gained the business of Qantas, and Cinque Stelle branded coffee is served on first class flights and in the Qantas Chairman’s Lounges in domestic and international airports. From about March 2003 to about June 2007, Cinque Stelle branded coffee was supplied in a canister with a colour scheme of blue and silver. The canister acted as a coffee holding unit attached to the top of a coffee grinder. Since about December 2005, Cantarella has made available to its customers promotional Cinque Stelle canisters in the same colour scheme, for display purposes only.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Molinari has exported its Molinari Cinque Stelle coffee to Australia since 1998. No other trader appears to have used the words Cinque Stelle on its coffee.The primary judgment Central to Modena’s case at trial on the issue under s 41(3) of the Act was that “Oro” and “Cinque Stelle” are words that other traders might, without improper motive, want to use as varietal indicators on their Italian-style coffee products. The word “oro” was used in relation to coffee by other traders. Modena had contended that the words were not distinctive at their respective filing dates. It had also contended that the evidence demonstrated that the words were commonplace words in marketing generally and certainly in the marketing of Italian-style coffee in Australia. The primary judge considered that the words were distinctive. This conclusion was reached upon application of the test of inherent adaptation to distinguish by reference to the probability of ordinary persons understanding the words, in their application to the goods, as describing, indicating or calling to mind either their nature or some attribute they possess. There was no issue at trial as to whether the words were distinctive in fact. This approach proceeded from what was said in Mark Foy’s Ltd v Davies Co-op & Co Ltd (1956) 95 CLR 190 which was a case concerning the first proscription found in s 16(1)(d) of the Trade Marks Act 1905 (Cth), which provided relevantly that: . . . A registrable trade mark must contain or consist of at least one of the following essential particulars . . .(d)[a] word or words having no direct reference to the character or quality of the goods ... The mark in that case consisted of two English words “Tub Happy” referrable to articles of clothing. Dixon CJ at 195 described the test under that provision as lying in the probability of ordinary persons understanding the words, in their application to the goods, as describing or indicating or calling to mind either their nature or some attribute they possess. The primary judge’s approach was also founded upon what “distinctive” meant as found 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: see S. Ricketson, par 25.8” (at 336 per Lockhart J). That case concerned whether the use made by the appellant of the word “caplets” on the packaging of certain of its pharmaceutical products was descriptive and not distinctive. This approach led the primary judge to consider the extent of Italian speakers in Australia and whether the Italian words “Oro” and “Cinque Stelle” were sufficiently well understood in Australia. His Honour concluded at [117]-[118] that only a very small minority of ordinary English-speaking people in Australia would understand the allusions made by the words Cinque Stelle and Oro. His Honour was not persuaded that the Italian language is so widely spread that the conclusion should be drawn that the words would be generally understood as meaning “Five Stars” and “Gold” respectively.

Ratio Decidendi

Legal Principle Established

The grounds of appeal are as follows: 1.The primary judge erred in finding that ORO and CINQUE STELLE are sufficiently inherently adapted to distinguish the designated goods from the goods of other persons to be capable, on that basis alone, of so distinguishing the designated goods, within the meaning of ss 41(2) and (3) of the Trade Marks Act 1995 (Cth). 2.The primary judge erred in not finding that ORO and CINQUE STELLE are not capable of distinguishing the designated goods from the goods of other persons within the meaning of s 41(2) of the Trade Marks Act 1995 (Cth). 3.The primary judge erred in finding that the respondent on the appeal has used, and is using, ORO and CINQUE STELLE as trade marks within the meaning of ss 17 and 92 of the Trade Marks Act 1995 (Cth). Consideration The statutory framework As the primary judge correctly identified, the relevant statutory framework is as follows. Under s 27 of the Act, a person may apply for the registration of a trade mark in respect of goods if the person claims to be the owner of the trade mark and the person is using, or intends to use, the trade mark in relation to the goods. Under s 31, the Registrar of Trade Marks (the Registrar) must examine and report on whether the application has been made in accordance with the Act and whether there are grounds for rejecting it. Under s 33, the Registrar must, after the examination, accept the application, unless satisfied that the application has not been made in accordance with the Act or that there are grounds for rejecting the application. Under s 41(2), an application for the registration of a trade mark must be rejected if the trade mark is not capable of distinguishing the applicant’s goods in respect of which the trade mark is sought to be registered (designated goods) from the goods of other persons. Under s 41(3), in deciding that question, the Registrar must first take into account the extent to which the trade mark is inherently adapted to distinguish the designated goods from the goods of other persons. If the Registrar is unable to decide the question, s 41(4) requires the Registrar to follow one of two courses. Under s 41(5), the first course is to be followed if the Registrar finds that the trade mark is to some extent inherently adapted to distinguish the designated goods from the goods of other persons, but is unable to decide, on that basis alone, that the trade mark is capable of so distinguishing the designated goods. In that case, the Registrar is to consider whether, because of the combined effect of the extent to which the trade mark is inherently adapted to distinguish the designated goods, the use or intended use of the trade mark by the applicant, and any other circumstances, the trade mark does or will distinguish the designated goods as being those of the applicant. If the Registrar is then satisfied that the trade mark does or will so distinguish the designated goods, the trade mark is taken to be capable of distinguishing the applicant’s goods from the goods of other persons. If the Registrar is not satisfied that the trade mark does or will so distinguish the designated goods, the trade mark is taken not to be capable of distinguishing the applicant’s goods from the goods of other persons.