The Federal Court of Australia has determined the long-standing dispute between coffee giants Cantarella Bros and Lavazza Australia. While the Court found that Lavazza had been using Cantarella’s ORO trade marks on its packaging, it held that those trade marks were invalid and should be cancelled from the Register and no issue of infringement therefore arose.
Cantarella and Lavazza have each been selling coffee products in Australia for many years. In 2000 and 2013 respectively, Cantarella registered two word marks for ORO in relation to coffee (ORO Marks). In 2019 Cantarella commenced proceedings against Lavazza alleging that it had infringed the ORO Marks by selling various coffee products branded LAVAZZA QUALITA ORO.
This was not the first time Cantarella had litigated to protect its ORO branding. It had previously taken action against another of its competitors, Modena Trading, importers of MOLINARI branded coffee, which ended in a decision of the High Court in Cantarella’s favour.1
In the Federal Court, Justice Yates found that the references to ORO on the packaging of Lavazza coffee products amounted to use of those words as a trade mark given that:
- the location and depiction of the word “ORO” constituted a dominant feature of the packaging; and
- the word “ORO” was not used as part of a composite mark (specifically LAVAZZA QUALITA ORO and QUALITA ORO) – rather, it was used as an independent trade mark.
However, the Court ultimately did not make a finding of trade mark infringement because Lavazza was able to argue successfully that the ORO Marks should be cancelled.
Lavazza’s cross-claim to cancel the ORO Marks for invalidity relied on two grounds, being those on which the registration of the marks could have been opposed:
- under section 41 of the Trade Marks Act – on the basis that the ORO Marks were incapable of distinguishing Cantarella’s products from other coffee products; and
- under section 58 of the Trade Marks Act – on the basis that Cantarella was not the owner of the ORO Marks at the time of its trade mark applications because it was not the first person to use the ORO mark in respect of coffee.
Capacity to distinguish
Lavazza argued that the ORO Marks lacked an inherent capacity to distinguish because:
- Commonality: the word “oro” (and “d’oro”) is used in relation to various coffee product names sold by numerous traders of coffee; and
- Descriptiveness: a significant part of the Australian public would understand “oro” to mean “gold” and, therefore, “premium quality”. Accordingly, the word “oro” is no more than descriptive of the quality of the goods.
Yates J rejected both arguments. As to commonality, his Honour observed that the High Court of Australia had “authoritatively decided” in the previous Cantarella proceedings2 that it was not a relevant factor when determining whether a mark has an inherent capacity to distinguish.
Insofar as descriptiveness was concerned, Yates J noted that the appropriate question was whether, at the relevant time, the Italian word “oro” had an “ordinary signification” – in other words, if it was part of Australian English and had a commonly understood and commonly shared meaning by ordinary members of the Australian community. Examples of some foreign words that have ordinary signification include “bravo”, “encore” and “tour de force”.
Notwithstanding evidence that there was a “numerically significant number” of Australians who would likely understand the meaning of “oro”, Yates J found that even now, the Australian public at large would not understand “oro” to mean gold, or that it signified premium quality. The fact that a brand such as Lavazza’s might have a significant reputation also does not necessarily mean that its use of a foreign word in relation to its goods will be readily understood by the public.
Cantarella not the owner of the ORO Marks
In assessing whether Cantarella or another person was the owner of the ORO Marks in relation to coffee, the Court is required to determine the “author” of the mark. In trade mark terms “authorship” is the “origination or first adoption of the mark as and for a trade mark”. Use of a mark on documents and materials other than the products themselves – such as correspondence, invoices, shipping documents, brochures, and similar documents, in relation to the goods – can be sufficient to demonstrate prior use, so long as the use is in the course of business in Australia.
As a starting point, after reviewing copious amounts of evidence including historical documents and images, Justice Yates determined that Cantarella had first used the ORO word mark on 20 August 1996. Lavazza was not able to establish that it had used ORO as a trade mark before this time but it also relied on evidence of use of the ORO mark by another competitor, Molinari, for its CAFFÈ MOLINARI ORO products. The Court determined that Molinari’s use was use of ORO as a trade mark from 1995 and at various points in time since then (including as at the time the proceedings and cross-claim were initiated). Accordingly (and notwithstanding that the question of ownership had not been raised in the earlier proceedings between Cantarella and Modena Trading), at the time of its registration of the ORO Marks, Cantarella could not have been the owner of those marks and its registrations therefore were not valid.
Justice Yates declined to exercise the discretion under section 88 of the Trade Marks Act not to cancel the registration of the ORO Marks. In doing so his Honour observed that, to the extent that there might be any deception or confusion arising from the use of ORO by another trader, Cantarella would still be able to protect its brand because of the rights it has accrued from the strength of its reputation and goodwill.
Significance of the decision
In terms of registrability, this case confirms the High Court’s decision that commonality is not a relevant factor in determining whether a mark has an inherent capacity to distinguish. It also provides greater clarity on the meaning of ordinary signification. The fact that a large number of Australians are likely to understand the meaning of a foreign word, or that the word is widely understood and used by industry traders and in marketing of the product, are not determinative factors. Instead, the relevant inquiry should be directed to whether ordinary members of the Australian community understand the word.
The case also serves as a reminder that the basis of our trade mark law is a system of “registration of ownership”, and not ownership by way of registration. A valid trade mark registration is available only to the “owner” of the mark, which most commonly is the first user of the mark.
1 Cantarella Bros Pty Ltd v Modena Trading Pty Ltd  HCA 48; 254 CLR 337.
2 Adopting what Kitto J said in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511.