Highest court considers registrability of foreign language trademarks

In Cantarella Bros Pty Limited v Modena Trading Pty Limited ([2014] HCA 48, December 3 2014), Australia's highest court has considered an appeal concerning the inherent registrability of the trademarks ORO and CINQUE STELLE. It decided, on the facts of the case, that those marks are inherently registrable and should remain registered for coffee.

At first instance, the trial judge had concluded that only a 'very small minority' of English speakers in Australia would understand the meanings of ORO and CINQUE STELLE. He had found that knowledge of the Italian language is not quite so widely spread that the words would be generally understood as meaning 'gold' and 'five stars', respectively.

The Full Court of the Federal Court upheld an appeal from that decision, rejecting it as expressing an "Anglo-centric perspective". According to 2001 and 2006 censuses, Italian was the second most widely spoken language in Australia and the Full Court noted that it is common for coffee products to be sourced from Italy. On the basis of the evidence filed, the Full Court accepted that the words 'oro' and 'cinque stelle' are Italian words signifying high quality. It found that other traders have used them in that sense and will wish to use them in that sense to describe the quality of their coffee products.

The High Court allowed an appeal from that decision, and reinstated the trial judge's finding that the marks are inherently registrable.

The decision of the trial judge had focused upon the target audience’s general understanding of the words 'oro' and 'cinque stelle', while the Full Federal Court's decision focused upon the likelihood of other traders desiring to use those words.

In upholding the trial judge's decision, the majority of the High Court expressed the view that determining the "ordinary signification" was crucial. It commented that:

1. the ordinary signification must be assessed in terms of whether the mark has "direct" reference to the character or quality of the goods; and
2. once this is done, "an enquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods"; however, this seems to be a secondary consideration subject to, and ultimately to assist in determining, the ordinary signification of the trademark.

The majority accepted that the types of marks that have direct reference to the character or quality of the goods include laudatory epithets, geographical names, surnames, words that have become generic, and words that have always been directly descriptive.

When assessing the "ordinary signification" of the words, whether they are English or foreign language words, it is necessary to assess whether they will be "understood by the target audience as having a directly descriptive meaning in relation to the relevant goods".

While the decision referred to understanding by "the target audience", it did not go into detail in discussing how to assess the understanding of the target audience, and some comments made are arguably slightly confusing.  This is because the judgment referred to considering the ordinary signification of the words "to any person in Australia concerned with the goods to which the proposed trademark is to be applied" (emphasis added) and states that 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" (emphasis added).

However, given the reference to the target audience, and the decision’s general endorsement of the trial judge's approach, it seems implicit and logical that the ordinary signification needs to be assessed with reference to that group of people, and there needs to be a sufficient level of understanding among that group of the trademark as having a directly descriptive reference to the goods or services.

The target audience was not explicitly defined by the court, other than by reference to “persons concerned with coffee products”. However, it seems to have accepted Cantarella’s submission that it is “anyone ordinarily purchasing, consuming or trading in the relevant goods”.

The majority did not accept the evidence flied as establishing that the words oro and cinque stelle were understood as conveying a direct reference to the character or quality of the goods.

In relation to the evidence filed, the majority expressed the view that the evidence did not establish that registration of the marks "would preclude honest rival traders from having words available to describe their coffee products either as Italian coffee products or as premium coffee products or as premium blend coffee products".

In relation to the evidence submitted, the majority expressed the following views:

1. Evidence of internet sites and coffee product packaging showing use of 'oro' or 'd'oro' in a range of composite marks featuring Italian words, which were distinguishable aurally, visually and semantically from ORO, did not establish any basis for denying registration of ORO;
2. The existence of a prior third-party registration for LAVAZZA QUALITA ORO (and device), and Cantarella's earlier MEDAGLIA D'ORO registration, in respect of coffee products, fell well short of proving that the word 'oro', standing alone, was understood to be directly descriptive of the character or quality of the goods; and
3. Evidence showing that traders in Australia used 'five star' on packaging of coffee, and that many traders use 'five star' in respect of a range of services including restaurant and accommodation services, also fell well short of establishing that 'cinque stelle' is understood as being directly descriptive of the character or quality of coffee products.

It seems that the evidence filed did not directly address and answer the crucial question of what persons involved with coffee products understood ORO and CINQUE STELLA to mean. Rather, it seems to have sought to establish their understanding of the words indirectly.

The notion of the presumption of registrability also gives context to the views expressed on the evidence, which failed to establish to the court's satisfaction reasons for rejecting the application.

In its preliminary discussion concerning the structure of the Trademarks Act 1995, the court pointed out that the current act "affected significant changes to Australian trademark law" because "for the first time in Australia, the act only specified the kinds of trademarks which were not registrable. The previous act specified the types of marks that were registrable. However, the current act indicates that the registrar must accept an application unless satisfied that there are grounds for rejecting the application and it now needs to be established that a mark is not registrable if it is to be rejected”.

In his dissenting judgment, Justice Gageler supported the Full Federal Court's view, which focused on the desires of other traders. He considered as relevant factors such as the finding that Molinari had produced Café Molinari Oro in Italy continuously since 1965 and introduced Café Molinari Cinque Stelle as its premium blend in 1997. He also noted that, as at 2011, dozens of coffee distributors in Australia used 'oro' or 'd'oro' to denote products within their ranges or to denote their house brands, that there was use at that time by a number of coffee distributors of '5 stelle' and 'five star', and that hundreds of Australian businesses have used 'five star' in their names.

He concluded that, as the words 'gold' and 'five star' have always been used to signify quality, they are not inherently adapted to distinguish the goods or services of one person from the goods or services of another. He also agreed with the Full Federal Court's conclusion that the Italian equivalents of those words were not, at the relevant dates, inherently adapted to distinguish “when applied in Australia to goods of a kind commonly associated with Italy, often enough imported from Italy and often enough sold to Italian speakers”.

The decision of the majority emphasises the importance of assessing the "ordinary signification" of a trademark in determining whether it is inherently registrable.

In accordance with the general presumption of registrability, the decision implies that a high bar should be set for establishing that the interests of other traders preclude registration of a trademark, if the ordinary signification of the word concerned is not clearly directly descriptive.

In the case of foreign words, it is the meaning and understanding of those foreign words, rather than their English translations, that first need to be considered.

At a practical level, it is anticipated that the decision will likely lead to less difficulties in establishing that some marks, which are currently viewed by trademarks examiners as not inherently registrable, are entitled to acceptance. 

Sean McManis, Shelston IP, Sydney