High Court of Australia Decides Landmark Trade Mark Case

Decision in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd Clarifies Test for Distinctiveness of Trade Marks in Australia

This week, the High Court of Australia (High Court) handed down only its third decision considering trade mark issues since the enactment of the Trade Marks Act 1995 (Cth). This decision could make it easier to register foreign language words as trade marks.

In Cantarella Bros Pty Ltd v Modena Trading Pty Ltd, the High Court was called upon to determine the correct test for assessing whether a particular trade mark filed in Australia is sufficiently distinctive to warrant registration. Under the Trade Marks Act 1995, trade marks that are not “inherently adapted to distinguish” the claimed goods and/or services of the applicant from those of other traders face additional barriers to registration.

Cantarella Bros and Modena Trading are competing suppliers of coffee products in Australia. Cantarella Bros was the registered owner of trade marks for the words ‘ORO’ and ‘CINQUE STELLE’ in respect of coffee and coffee-related products. Both ‘ORO’ and ‘CINQUE STELLE’ are Italian words, meaning ‘gold’ and ‘five stars’, respectively. Modena Trading was successful in the Full Federal Court in its attempt to have the trade marks cancelled on the basis that they were merely descriptive, and did not distinguish Cantarella Bros’ coffee products from those of other traders. However, the majority of the High Court held that the trade marks ‘ORO’ and ‘CINQUE STELLE’ were distinctive, and should be reinstated on the Register of Trade Marks.

The majority found that the test applied by the Full Court, which asked whether other traders would want to use the words in connection with the same goods, was incorrect. Instead, the High Court proposed a two-stage test:

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 mark?
2. Will other traders legitimately need to use the word in respect of their own goods?

Under the first question, courts should consider whether the ‘ordinary signification’ (or meaning) of the words is a direct reference to the character or quality of the goods, a laudatory epithet, a geographical name or surname, or a word without distinctiveness, as each of these categories of words are likely to be considered to lack the ability to distinguish the relevant goods. Examples include applications for trade marks for words such as ‘SOAP’, ‘BEAUTIFUL’, ‘SMITH’ or ‘MELBOURNE’ for a brand of soap.

Crucially, foreign words which by their ‘ordinary signification’ have only a metaphorical or allusive reference to the goods, are likely to be capable of distinguishing those goods, and thus registrable. In the High Court’s view, the words ‘ORO’ and ‘CINQUE STELLE’ would not be understood by ordinary Australians as having a direct or tangible reference to the quality of the relevant goods. The High Court also found that there was not sufficient evidence that honest rival traders needed to use the marks to describe the quality of their products.

The effect of this decision could be wide-reaching. While, in our experience, applicants have faced significant challenges when attempting to register many foreign language trade marks, it seems likely that words not commonly used in Australia will now generally be considered registrable for a wide range of goods and services. Similarly, words that are only tangentially connected to the goods and services claimed may be more likely to pass examination than previously. Watch this space!