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Australia clarifies law on foreign language marks

Australia’s High Court outlines the test for the analysis of the distinctiveness of foreign language marks

The trade marks in dispute in the case of Cantarella Bros v Modena Tradingwere marks for the Italian words for gold ("oro") and five stars ("cinque stelle"). Cantarella, the rights holder, sold coffees marketed under both marks, while Modena imported from Italy coffees using these names.

Cantarella sued Modena for infringement, which in turn cross-claimed for cancellation, arguing that the marks were not capable of distinguishing Cantarella’s goods from others in the market because they were used to denote the quality or character of the goods.

The Federal Court sided with Cantarella, finding that the two marks are sufficiently distinctive and that Modena infringed the marks. Justice Emmett noted that very few consumers in Australia understood the meaning of the words or the allusions to quality stemming from those words.

"The Full Federal Courtfound that these Italian words were commonly understood among coffee traders who see these terms as indicators of quality or character."

On appeal, the Full Federal Court (Justices Mansfield, Jacobson and Gilmour) unanimously overruled the trial decision, finding that the mark lacked distinctiveness. Noting Australia’s “rich cultural and ethnic diversities”, it found that the relevant population the court should be focusing on were coffee traders rather than the general population. Furthermore, it found that these Italian words were commonly understood among coffee traders who see these terms as indicators of quality or character.

The Supreme Court reversed the Full Federal Court’s ruling. In a majority decision (Chief Justice French along with Justices Hayne, Crennan and Kiefel, with Justice Gageler dissenting), it held that the proper test is to consider the “ordinary signification” of a word to the relevant users, whether it is in English or another language.

It found that that even among the coffee trading community, there was not enough evidence that the words carried a reference to the character or quality of the goods. The court found that Modena’s evidence that some Australian coffee traders saw the expression “five star” as an indication of quality or character fell short of proving that “cinque stelle” was understood to be a descriptive term.

Similarly, it found that Modena did not sufficiently prove that honest traders may legitimately wish to use these terms to describe the character or quality of their own goods.

A J L Bannon SC, M Green and Clayton Utz represented Cantarella, while I M Jackman SC, C L Cochrane and Corrs Chambers Westgarth acted for Modena Trading.

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