All ORO again: ‘first user' ground invalidates trade mark registrations in Cantarella v Lavazza - Trademark

In a recent infringement proceeding concerning its trade marks for coffee products, Cantarella Bros Pty Ltd (Cantarella) claimed that Lavazza Australia Pty Ltd and Lavazza Australia OCS Pty Ltd (together, the Lavazza distributors) infringed its ORO marks on certain packaging designs for coffee products.

On 20 October 2023, Justice Yates of the Federal Court of Australia delivered judgment in Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258. His Honour determined that the Lavazza distributors would have infringed the ORO trade marks owned by Cantarella, but given the finding that Cantarella was not the owner of the marks pursuant to section 58 of the Trade Marks Act 1995 (Cth) (the Act), Cantarella's infringement claim could not succeed.

Background to the dispute

Cantarella is the registered owner of two 'ORO' trade mark registrations in Australia, each of which is a word mark registered in class 30 for coffee products (ORO Marks).

The ORO Marks were registered by Cantarella in 2000 and 2013. The first ORO registration was the subject of an earlier, unrelated proceeding in which the High Court ultimately found that the registration was inherently adapted to distinguish, despite a challenge to its validity (2014 High Court Decision).¹The Lavazza distributors supply coffee and related products in Australia. Cantarella claimed that the Lavazza distributors' supply of coffee in packaging referencing the word ORO infringed the ORO Marks. An example of one of the Lavazza products is shown below.

The Lavazza distributors argued that their use of the word 'oro' was not use as a trade mark, and that Cantarella's registrations were not validly registered and should therefore be cancelled.

Use of 'oro' as a trade mark

The question of whether the Lavazza distributors infringed the ORO Marks primarily turned on whether they used the word 'oro' as a trade mark.² Cantarella claimed that the Lavazza distributors' use of 'oro' (as part of the phrase 'qualità oro' meaning 'gold quality' in Italian) on the coffee packaging designs was trade mark use, as the use of 'oro' was separate and distinct from the use of other words on the packaging. The Lavazza distributors, on the other hand, argued that their use of 'oro' appeared as part of the phrase 'qualità oro' and that 'oro' is commonly used by traders in relation to coffee products and would be understood as an Italian word referencing the quality of the product.

Justice Yates underscored that the different sizes and stylistic representations of 'oro' and 'qualità' were sufficient to distinguish between the uses of each word, and that mere common use of a particular word in a given trade does not mean that the word is precluded from functioning as a trade mark in that trade. Accordingly, the Lavazza distributors' use of 'oro' was determined to be a separate, independent use of the word as a trade mark.

Cross-claim for invalidity: no capacity to distinguish and ownership

Having found the use of 'oro' as a trade mark, his Honour proceeded to consider the Lavazza distributors' cross-claim seeking cancellation of the ORO Marks.

Under the Act, a trade mark registration can be cancelled on any grounds on which the registration could have been opposed.³ Specifically, the Lavazza distributors argued that:

the ORO Marks were not capable of distinguishing Cantarella's goods from the goods of other persons;⁴
and Cantarella was not the owner of the ORO Marks.⁵

No capacity to distinguish

A trade mark registration may be cancelled if, at the filing date of the registration, the mark was not capable of distinguishing the applicant's goods or services in respect of which the trade mark is sought to be registered.⁶

As a preliminary comment, Justice Yates observed that this ground of invalidity must be considered on the evidence before the Court, and as such the Court would not be bound by the findings on distinctiveness in the 2014 High Court Decision as doing so would overstate the doctrine of stare decisis.⁷

His Honour then considered the legal test to be applied under section 41 of the Act and noted competing principles raised in earlier decisions, including in the early United Kingdom case of Registrar of Trade Marks v W & G Du Cros Ltd⁸ and comments made by Justice Kitto in Clark Equipment Co v Registrar of Trade Marks. It was clarified that any legitimate desire of other traders to use a word in connection with their own goods/services (i.e. the principle of 'commonality'), is not a relevant consideration when determining the distinctiveness of a mark.¹⁰ Rather, it is dependent on whether the mark has an 'ordinary signification' in relation to the registered goods/services (i.e. 'descriptiveness').¹¹

With regard to foreign words, this assessment necessarily involves determining whether a word has been received into Australian English, and has a commonly understood and shared meaning by ordinary members throughout the Australian community at large.¹²

While Justice Yates noted that foreign words can be incorporated into a local language,¹³ the evidence presented by the Lavazza distributors (which included evidence from industry workers and census data) did not establish that 'oro' would generally be understood in Australia as meaning 'gold', and that it therefore did not have an 'ordinary signification' in Australia. As a result, the ORO Marks were found to be capable of distinguishing Cantarella's goods, so the distributors were unsuccessful on this ground of invalidity.

Ownership

The Lavazza distributors also sought cancellation of the ORO Marks on the basis that Cantarella was not first to use the ORO Marks in Australia.¹⁴ Justice Yates accepted that Cantarella's first use of the ORO work mark dated back to 20 August 1996,¹⁵ so the question in issue was whether the marks had been used by another person prior to that date.

The Lavazza distributors unsuccessfully argued that 'oro' had been used as a trade mark in their retailers' advertisements and by their parent company in relation to the LAVAZZA QUALITÀ ORO coffee product, prior to Cantarella's first use. However, his Honour did accept the distributors' alternative argument, which was that an unrelated entity, Caffè Molinari SpA (Molinari), had used 'oro' as a trade mark in Australia prior to Cantarella's first use. His Honour was satisfied that Molinari had used the mark on packaging for its CAFFÈ MOLINARI ORO coffee product, which it had supplied between September 1995 and March 1996. An example of Molinari's product is shown below.

This led to a finding that each of the registrations of the ORO Marks was invalid and should be cancelled. His Honour also refused to exercise the Court's discretion not to cancel the registration of the ORO Marks,¹⁶ noting that Cantarella would not lose any rights (if any) which have been acquired by reason of its reputation, to claim for any deception or confusion that may be caused by another trader's use of ORO Marks.¹⁷

Defences under the Act: right to obtain registration

Despite the Lavazza distributors' success on their cross-claim for invalidity, Justice Yates proceeded to consider the availability of a number of defences to trade mark infringement raised by them.^[18] Although his Honour found that none of the defences would have been available to the Lavazza distributors, a notable discussion surrounded sections 122(f) and (fa) of the Act, which provide protection for infringement where it can be proven that a person would obtain registration of the mark in their name if they were to apply for it.

The distributors advanced a broad interpretation of those sections and submitted that because their Italian parent company would have been able to register the relevant marks in Australia, as 'authorised users' they would also be entitled to rely on the defences. The distributors argued that such an approach would be consistent with other rights conferred by the Act.¹⁹ Justice Yates disagreed with that submission and found that the defence is confined to the trade mark owner, and that it does not extend to other persons, for example those authorised by the trade mark owner to use a mark.

While 'authorised use' of a trade mark is generally understood to be 'use' of the trade mark by the owner,²⁰ it would appear from his Honour's comments that 'authorised users' of trade marks cannot enjoy the benefit of the sections 122(f) and (fa) defences to infringement.

Key takeaways

As at the date of publication of this article, this decision remains open for appeal.

At this juncture, and pending the outcome of an appeal (if any), some of the key issues for litigants to consider are as follows:

A court may determine that a party ostensibly using a composite trade mark consisting of various elements, is in fact using one of those elements as a standalone trade mark. Factors to consider include the relative prominence of the various elements contained in the composite mark.
Litigants seeking to enforce their registered rights should consider the risks of a successful cross-claim posed by potential previous uses of the same or substantially similar marks by another trader.
Sections 122(f) and (fa) of the Act do not apply to respondents that are 'authorised users' of marks.

Footnotes

¹ Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48.

² Trade Marks Act 1995 (Cth) (the Act), section 120(1).

³ Ibid, sections 88(1)(a) and (2)(a).

⁴ Ibid, section 41.

⁵ Ibid, section 58.

⁶ Ibid, section 41(1).

⁷ Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258 (Cantarella v Lavazza), [455] to [457].

⁸ [1913] UKHL 588.

⁹ [1964] HCA 55.

¹⁰ Cantarella v Lavazza, [413] to [416].

¹¹ Ibid, [331] and [415].

¹² Ibid, [424].

¹³ Ibid, and gave the examples of 'encore' and 'en route'.

¹⁴ The Act, section 58.

¹⁵ Cantarella v Lavazza, [537].

¹⁶ Under section 88(1) of the Act.

¹⁷ Cantarella v Lavazza, [598].

¹⁸ Specifically, ss 122(1)(b)(i), 122(1)(e), 122(1)(f), 122(fa) and 124(1) of the Act.

¹⁹ Including the concept of an 'authorised user' under section 26 of the Act and the rights provided therein.

²⁰ The Act, section 7(3).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.