Distinctiveness under the microscope – Cantarella granted special leave to appeal to the High Court

On Friday, 14 March 2014, the High Court granted Cantarella Bros Pty Ltd special leave to appeal the Full Court of the Federal Court’s decision in Modena Trading Pty Ltd v Cantarella Bros Pty Ltd [2013] FCAFC 110. The High Court has been asked to clarify the correct application of the test for distinctiveness (section 41 of the Trade Marks Act) particularly as it relates to trade marks which are not commonly understood by the general public (in this case, foreign language words). Is the focus of the test for distinctiveness on the ordinary consumer’s understanding of the meaning of the mark, or whether traders desire to use it, or both?

The case concerns whether the Italian words “cinque stelle” and “oro”, meaning “five stars” and “gold” respectively, are able to distinguish coffee and coffee related goods in Australia, in circumstances where those words may not be understood by the ordinary public but are commonly used by traders of coffee products in Italy (and, perhaps, also by traders in Australia) to signify the quality of their coffee products.

At first instance Emmett J held that the trade marks CINQUE STELLE and ORO, registered trade marks of Cantarella, were inherently capable of distinguishing Cantarella’s coffee products from those of other traders, and had been infringed by Modena’s use of them as trade marks. His Honour applied the test for distinctiveness principally by reference to the ordinary persons’ understanding of the words “cinque stelle” and “oro”, finding that only a very small minority of ordinary English-speaking people in Australia would understand them to have a particular connotation relating to quality. Accordingly, Emmett J’s application of the test for distinctiveness was primarily consumer focused.

The Full Court overturned the trial judge’s decision, finding that the marks were not inherently capable of distinction. The Full Court considered that the words are known by consumers and traders in the Australian wholesale coffee trade to have a particular descriptive connotation in relation to coffee and that traders have, in fact, used the words (albeit in a descriptive sense) in relation to their goods in Australia. As honest traders want to use the words in the course of trade, the marks were not capable of distinction. Accordingly, the Full Court’s application of the test was trade focused. The Full Court also held that Cantarella had not used its registered marks “as trade marks” and so ordered cancellation of the marks from the register on the basis of non-use. Our post on the Full Court’s decision is here.

The parties’ principal submissions before the High Court (consisting of French CJ and Crennan J) at the special leave hearing were as follows (transcript here).

Cantarella

1. The first step is always to ask whether the trade mark has an ordinary meaning in the mind of the “relevant public” – being both consumers and traders.
2. The trade mark must, at least, have a particular signification in the mind of consumers for it to be incapable of distinction. If it does not, then the mark is capable of distinction and the inquiry ends. If it does have a particular meaning to consumers, then one asks whether an honest trader actuated only by proper motives would desire to use it?
3. Here, consumers are not likely to understand the words “cinque stelle” or “oro” as having a particular signification (i.e. as to quality) and so one does not need
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4. However, even if the trade marks did have a particular signification in the mind of consumers, the only evidence of use of the marks in Australia prior to Cantarella’s registration (other than use by Cantarella) was a limited use by Modena itself, and such evidence was insufficient to establish that honest traders would desire to use the marks.

Modena

1. The question is whether the mark has a particular meaning or signification in the minds of the section of the public with whom traders are relevantly dealing; including traders and consumers.
2. If the word is commonly understood by traders and consumers in that specialised market as having a particular connotation, such that honest traders would want to use the word in the course of their trade, then you cannot monopolise it.
3. Here, it was clear that the relevant public understood “cinque stelle” and “oro” to have a particular meaning when applied to coffee products, and the evidence showed that honest traders have and continue to use the words for that purpose.

Before granting special leave, Crennan J referred to the “paradoxical concept” of distinctiveness in trade mark law where inherent adaptability depends, on the one hand, on the nature of the trade mark itself – something which cannot be changed by use or otherwise – and, on the other, on whether traders would desire to use it (informed by evidence of actual use). In passing, French CJ also noted that the words “cinque stelle” and “oro” are not simply descriptive words (even when translated in English, i.e., coffee is not colored gold) but are “laudatory metaphors”, in a foreign language.

We will be watching this case closely as it is likely to have broad implications, particularly on whether the desire of traders to use a mark in a descriptive sense (rather than as a trade mark) has any applicability on the test for distinctiveness. The case will be heard by the High Court later in the year.