Inherently adapted to distinguish – using foreign words as trade marks

IP

Take home points
1. Trade marks used to distinguish goods and services for businesses. A trade mark must be “inherently adapted” to the goods/services in which they are being sought (e.g. not merely descriptive) in order to be registered and protected.

2. The correct test to assess the inherent adaptability of a proposed mark is to determine the “ordinary signification” of the word to the target audience of the mark, being the ordinary purchasers, consumers and traders of the goods.

3. The meaning of foreign words which are sought to be registered as a trade mark is relevant in the sense that, whether or not consumers will understand the proposed foreign words are directly referable to the character or quality of the goods.

4. Metaphorical, allusive, or indirect references may be registerable. A proposed mark which is a “covert and skilfull allusion” to goods are considered, on its face, to be registrable (for example, a synonymous word or phrase in a foreign language) while a proposed mark which has a “direct reference” to the goods is, on first glance, not registrable (e.g. “Oro” vs “Gold” to describe coffee).

5. The likelihood of other businesses wanting to legitimately use a word in connection with their goods, is a separate inquiry. If the foreign words are intended to be descriptive, that is when it is appropriate to consider the potential use by other businesses.

6. The decision by the Court in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48 widens the range of marks, including foreign descriptive words, which may be registrable under the Trade Marks Act 1995 (Cth).

A trade mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods or services of one party from those of others. It allows a customers of a business to identify the business and its goods or and services A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods.

Often it may take the form of a logo, image, or a brand name including foreign language words. In order to be enforceable and protected, businesses must register the proposed trade mark with the relevant government authority. Marks will undergo a process of assessment by the authority to ensure it complies with the requirements under national laws and international treaties (if applicable) before being registered. In Australia, the relevant legislation regulating trade marks is the Trade Marks Act 1995 (Cth) (the Act).

One of the requirements when registering a trade mark is to show that the proposed mark is “capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered”.

Business seeking to use foreign language words (which are descriptive of the goods) as trade marks in Australia can take comfort that their applications for registration may be more likely to be accepted, thanks to the 2014 decision by the High Court in Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48.
The decision by the Court ruled that the Italian words “Oro” (Italian for “gold”) and “Cinque Stelle” (Italian for “five stars”) are distinctive and may be registered as trade marks in relation to coffee and related goods.

Relevant facts
Cantarella Bros Pty Ltd (Cantarella) imported and sold coffee beans in Australia under a number of brands including the registered trade marks “Oro” (being the Italian word for “Gold”) and “Cinque Stelle” (the Italian word for “Five Stars”) (collectively, the Marks). Modena Trading Pty Ltd (Modena) also imported and sold coffee beans in Australia using the marks “Oro” and “Cinque Stelle” but was not the owner of those trade marks.

As a result, Cantarella commenced trademark infringement proceedings against Modena in the Federal Court seeking (among other things) damages, injunctions and an account of profits and orders for breaches of consumer protection laws. In response, Modena filed a cross-claim seeking for the Marks to be cancelled under section 88 of the Act on the basis that they were not capable of distinguishing Cantarella’s goods because Italian.
Modena argued that many people in Australia who understand the meaning of the Marks in English and therefore the Marks were not capable of distinguishing Cantarella’s products from the products of others. Further, if the words in question are Italian, if an objection would exist to registration of the English translations, the same objection would exist to any foreign language equivalent of the words.

At first instance, the trial judge, Justice Emmett found in Cantarella’s favour holding that while Italian speakers would understand the Marks as having the English meanings “Gold” and “Five Star” the Italian words are not so obvious to ordinary English speaking persons in Australia that Cinque Stelle and Oro have a specific meaning. Modena appealed the decision to the Full Court of the Federal Court.

The Full Court of the Federal Court granted Modena’s appeal. There, the Full Court held that the relevant test of whether a mark is ‘inherently adapted to distinguish’ was that propounded by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 where his Honour held that:
“…by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage- will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.”
(Our emphasis)

Cantarella sought leave to appeal the decision to the High Court, arguing that the test applied by the Court was incorrect, and that the Marks were inherently adapted to distinguish.

The High Court’s decision
The High Court allowed Cantarella’s appeal and held that the Marks were inherently adapted to distinguish the goods which they were registered against. The Court determined that the test applied by the Full Court of the Federal Court (whether other traders would be at least likely in the ordinary course of business and without improper motive, want to use the words in connection with the same goods) was incorrect.

While that was certainly a consideration to be taken into account later on, determining whether or not a proposed mark is distinctive or inherently adapted to distinguish goods involved a two stage test, namely:
1. What is the ‘ordinary signification’ of the words proposed as trade marks, to any person in Australia concerned with the relevant goods claimed by the trade mark.

The decision maker assessing the mark must decide whether the ordinary meaning of the words is at first appearance renders it unregisterable on the basis that it is “not an invented word and has ‘direct’ reference to the character and quality of goods, or because it is a laudatory epithet or a geographical name, or because it is a surname, or because it has lost its distinctiveness or never had the distinctiveness to start with”.

For example, words like “coffee”, “tasty”, “Italy”, or “Ricci” in relation to coffee products would not be registerable. Foreign words which by their ordinary meaning have only an allusive reference to goods or services being claimed were considered to be registerable. If the foreign words were understood to be directly descriptive of the goods or services, then it may prima facie not be registerable; and

2. Once the ordinary signification of a word, English or foreign, is established, then it was proper to determine whether or not other traders will need to use the word in respect of their own goods/services.

In the case of foreign words, if it is show that the ordinary meaning of the words amongst Australians is such that the words are descriptive of the goods/services which registration is being sought, then the decision maker assessing the mark may consider whether other traders will need to use the word in respect of their own goods/services.
The High Court held that the Marks were not demonstrated to convey any particular meaning or idea to a person in Australia in relation to coffee and were therefore inherently adapted to distinguish the goods.

Justice Gageler disagreed with the majority’s decision. His Honour held that the focus of the test is to determine the extent to which the monopoly granted by registration of the trade mark would exclude other traders in the goods from using them without any desire to benefit from the applicant’s reputation.
His Honour held that the finding that the word not having a direct reference to the character or quality of the goods/services is not itself a conclusion that the word is inherently adapted to distinguish the goods/services from others. In relation to foreign words, other considerations such as the use by other traders in its technical or foreign context, were to also be taken into account.

Conclusion
The test and approach put forward by the majority in the High Court represents (in some sense) a more Anglocentric approach to determining whether or not a proposed trade mark is inherently adapted to distinguish goods in which they are sought.

Without further evidence of use, the words “Gold” and “Five Star” may have been unable to be registered in Australia in relation to coffee goods, as it would be descriptive of the quality of the goods and not “inherently adapted” to distinguish. However, the meaning of the equivalent words in Italian amongst ordinary consumers (in Australia) must be assessed to determine whether or not it would be understood as descriptive.

It may not be easier for trade mark applicants to register marks which are a metaphorical, allusive, or indirect references to characteristics or qualities of certain goods, provided the mark is not understood in Australia to be directly descriptive goods. The mere fact that a foreign word may be translated into English which is descriptive in relation to the goods being sought is not enough to show that the mark lacks inherent distinctiveness. The recent decision by the High Court will lead to a greater number of marks (including foreign words) which may now be registrable as a trade mark.

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