Clayton Utz wins on same test for foreign and English words as trade marks in High Court

Describing a really good cup of coffee

Cantarella Bros owned the registered marks "ORO" and "CINQUE STELLE" registered for its coffee products. "Oro" is Italian for "gold"; "cinque stelle" means "five stars".

Modena was found to have infringed these marks, but argued they should never have been registered as they were not inherently adapted to distinguish. Modena sought to have them cancelled on this basis.

Generally, a word that has not acquired a secondary meaning/reputation through use cannot be registered as a trade mark if it is not inherently adapted to distinguish the goods in question. A mark will lack inherent adaptation to distinguish if it:

• has "direct" reference to the character and quality of goods; or
• is a laudatory epithet; or
• is a geographical name; or
• is a common surname; or
• is otherwise not capable of distinguishing one trader's goods from those of another.

Modena alleged that "oro" and "cinque stelle" would be understood as laudatory by enough people in Australia, and so they should not have been registered as trade marks.

Justice Emmett disagreed, finding that they were inherently adapted to distinguish as they would not be generally understood in Australia. The Full Federal Court disagreed with Emmett. The High Court has overturned the Full Federal Court and agreed with Justice Emmett.

The High Court says "sì": the correct test for "inherently adapted to distinguish"

The High Court found that the relevant test requires a determination of what is the ordinary signification of a word to anyone who buys, trades or consumes the goods, and there is no special test for foreign words. The correct approach is:

• first, look at what the words (English or foreign) ordinarily signify to any person in Australia concerned with the goods to which the trade mark is to be applied; then
• ask if other traders might legitimately need to use the word(s) in respect of their goods.

The test is not what the foreign words mean when translated into English (although that might be relevant) – what is relevant is how they are understood by the target audience.

If an English or foreign word contains an allusive (indirect) reference to the relevant goods it is prima facie registrable. If a foreign word is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods, then prima facie it is not registrable. In the context of the trade and consumption of coffee in Australia, Modena had failed to show that neither "oro" nor "cinque stelle" had been used by other traders, though some composite use was shown such as "qualita d'oro" and "casa del oro".

The High Court said that the Full Court's rejection of an "Anglocentric" approach misunderstood the meaning of "ordinary signification". In the context of trade and consumption of coffee in Australia, neither "oro" nor "cinque stelle" conveys a meaning or idea sufficiently tangible to amount to a direct reference to the character or quality of the goods. The registrations of ORO and CINQUE would not stop honest traders from describing their products as premium coffee products, or Italian coffee products, or as premium Italian coffee products. Accordingly "oro" and "cinque stelle" were inherently adapted to distinguish Cantarella's coffee and the registrations should not be cancelled.

A clear test for any word mark

This decision is one of significant practical importance because of the increasing globalisation of trade. As part of this tendency to globalisation, trade marks using words from foreign languages are increasingly common.   This decision will give guidance particularly to foreign brand owners seeking to protect their rights in Australia.