In what might (with respect) be seen as a surprising decision, the High Court, by majority, has allowed Cantarella’s appeal and restored its trade mark registrations for ORO and CINQUE STELLE in respect of coffee to the Register of Trade Marks. Gageler J dissented and would have dismissed the appeal.
Modena, which had been importing and selling Caffe Molinari’s Oro and Cinque Stelle “brands”, was found to have infringed Cantarella’s registrations but for its successful cross-claim invalidating the registrations on the grounds that the marks were not capable of distinguishing the products. As a result of the High Court’s decision, therefore, this infringed Cantarella’s rights:
Cantarella registered ORO and CINQUE STELLE as trade marks for coffeee in Australia in, respectively, 2000 and 2001. Cantarella had first started using ORO to designate one of its lines of VITTORIA coffee in 1996 and CINQUE STELLE in 2000.
Caffe Molinari has been selling its Caffe Molinari Oro blend of coffee in Italy since 1965 and its Caffe Molinari Cinque Stelle blend since 1997. Its Caffe Molinari Oro products had been imported into Australia since 1996 and the Caffe Molinari Cinque Stelle products after their introduction.
Mr Pagent, one of the principals of Modena, had been selling VITTORIA products, including ORO and CINQUE STELLE in one of his previous businessnes since the mid–1990s. After he sold those businesses, through Modena he began importing and selling Caffe Molinari’s products in the UK and then, from 2009, in Australia. By the time the litigation started, there were literally “dozens” of “ORO” coffee brands in the market.
The legal question
In the High Court, the question was whether ORO and CINQUE STELLE iwere “capable of distinguishing” Cantarella’s coffee products under s 41. That in turn turned on whether each was “inherently adapated to distinguish [coffee] … from the [coffee products] … of other persons”.
Both the majority and Gageler J agreed that “inherently adapted to distinguish” was to be interpreted in accordance with the longstanding case law and the statement of the basic test from the Clark Equipment case. That is:
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.
The words in italics were emphasised by the majority. Their Honours held that those italicised words imposed an additional and limiting requirement to the test for signs which lacked inherent adaptation to distinguish. It was not enough that another trader might with improper motives wish to use the sign, the sign must also have direct reference to the quality or some other characteristic of the products in question. So, at , French CJ, Hayne, Crennan and Kiefel JJ said:
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.
In the case of foreign words, as here, their meaning translated into English was relevant, but not necessarily critical. What was critical was the meaning conveyed by the foreign term, if any, to those “who will be concerned with the relevant goods”. That is, what is the ordinary meaning, if anything, of that foreign word or expression to those in Australia who will purchase, consume or trade in the relevant products?
Then, at , their Honours explained:
…. Once the “ordinary signification” of a word, English or foreign, [if any, to those in Australia who purchase or consume or trade in such products] is established an enquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods. If a foreign word contains an allusive reference to the relevant goods it is prima facie qualified for the grant of a monopoly. However, if the foreign word is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods, then prima facie the proprietor is not entitled to a monopoly of it. Speaking generally, words which are prima facie entitled to a monopoly secured by registration are inherently adapted to distinguish. (footnote citations omitted)
The problem (for Modena) in this case is that apparently there are only 350,000 people in Australia speaking Italian at home. However, the trial judge found:
only a “very small minority” of English speakers in Australia would understand the meaning of the words, and that the Italian language is not “so widely spread” that the words would be generally understood as meaning “gold” and “five stars” respectively.
As a result, the majority explained at :
Like “TUB HAPPY” in respect of cotton goods, “ORO” and “CINQUE STELLE” 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.
Gageler J’s dissent
In broad terms, Gageler J, especially at  –  disagreed that the words from Clark Equipment emphasised by the majority were an additional and limiting requirement. Rather they were merely a “parenthetical reference”, a subset of the overall test which focussed:
on the extent to which the monopoly granted on registration of a trade mark would foreclose options otherwise available to rival traders acting in the ordinary course of their businesses without any desire to benefit from the applicant’s reputation.
For example, his Honour pointed out that in Clark Equipment itself, which conerned the trade mark MICHIGAN, there was no evidence that any other trader manufactured the farm machinery in question in Michigan. Indeed, as the trade mark was registered in the USA, no-one probably could.
Extraordinary or just a decision on its facts
Given the trial judge’s finding of fact, one could argue that this case is just a decision on its facts.
That overlooks the important difference in principle on how one tests inherent adaptation to distinguish between the majority and Gageler J. It is also hard to resist an impression that Gageler J’s approach adopted a broader or more “multicultural” perspective.
One consequence of the decision is that Caffe Molinari’s products, which had been imported into Australia since 1996 / 1997 have been found to infringe so many years after the event even though Cantarella’s trade marks were registered after the infringing conduct commenced. Of course, as s 124 and s 44 illustrate, an assiduous infringer cannot gazump a trade mark owner.
Another “oddity”: Cantarella accepted that it could not stop Modena using QUALITA ORO, presumably because it is descriptive?
Further, by 2011, the evidence showed dozens of other traders in Australia using Oro or D’oro to identify their coffee products. These included Lavazza Qualità Oro, Caffè Incas Oro, Coffee Mio Brazil Oro …. A number of these uses appear to have predated Cantarella’s registrations. There were also one or two Five Stars or 5 Stelle and, of course, hundreds of businesses have Five Star in their names.
French CJ, Hayne, Crennan and Kiefel JJ discounted these; for example at :
The evidence led by Modena purporting to show that rival traders used (or desired to use) the word “oro” to directly describe their coffee products showed no more than that the word “oro” or the form “d’oro” had been employed on internet sites and coffee product packaging in respect of coffee products in a range of composite marks featuring Italian words which ostensibly were distinguishable aurally, visually and semantically. Further, the presence on the Register, before Cantarella’s trade mark “ORO” was registered, of another proprietor’s composite mark “LAVAZZA QUALITA ORO plus device” and Cantarella’s own composite mark “MEDAGLIA D’ORO” in respect of coffee products fell well short of proving that the word “oro”, standing alone, is understood in Australia by persons concerned with coffee products to be directly descriptive of the character or quality of such goods. (emphasis supplied)
One might hope that, being “distinguishable aurally, visually and semantically”, these other traders’ uses would not infringe Cantarella’s trade marks. But, putting Woolworths Metro to one side, one does not usually avoid infringement by making it clear from the surrounding circumstances that the trade source is different from, (i.e., not) the trade mark owner. Correspondingly, would someone who uses “5 star” to designate its premium coffee infringe?
Cantarella Bros Pty Limited v Modena Trading Pty Limited  HCA 48