Coffee Wars
The term “ORO” is Italian for gold and by all evidence is commonly used on the packaging of various coffee brands to connotate a high standard of product. However, Cantarella Bros, a Sydney-based coffee importer, registered 2 trade marks for ORO, namely:
Australia TM No. 829098 ORO for coffee and related coffee beverages claiming a priority date of 24 March 2000; and
Australia TM No. 1583290 ORO for coffee and related coffee beverages claiming a priority date of 30 September 2013.
Cantarella use ORO on its popular Vittoria coffee range.
Cantarella’s Vittoria ORO
ROUND 1 - 2011
In Round 1, filed on 10 February 2011 Cantarella sued Moderna claiming that Moderna’s use of ORO on its Molinari coffee brand was an infringement of Cantarella’s Australian TM No. 829098 ORO.[3] The Federal Court of Australia agreed and found that Moderna had failed in its defence that it had merely used the trade mark ORO as an indication of quality. That is, the court found that Moderna had used the term ORO on its Molinari coffee as a trade mark (more on that in Round 3).
ROUND 2 – 2014
In Round 2, Moderna counter-sued Cantarella claiming that Australia TM No. 829098 ORO should be cancelled because the term ORO is not inherently adapted to distinguish Cantarella’s goods. The Australian High Court found that in order to determine whether a mark is inherently adapted to distinguish requires a consideration of the “ordinary signification” of the words proposed as trade marks to any person in Australia concerned with the goods to which the proposed trade mark is to be applied.[4] The High Court’s test in Cantarella forms the basis of examination by IP Australia as to whether a trade mark application is distinctive (see Part 22.3 of the Australian Trade Marks Manual of Practice and Procedure)
Moderna led evidence that other traders use the term ORO on their coffee products sold in Australia, including LAVAZZA’s QUALITA ORO (more on that below). However, the High Court found that the evidence led by Moderna did not establish that the term ORO conveyed a direct reference to the character or quality of coffee to Australian consumers.[5]
ROUND 3 – 2023
In Round 3, Cantarella sued Lavazza claiming Lavazza’s use of the trade mark ORO for coffee infringed on both Cantarella’s Australia TM’s No. 829098 and No.1583290 for ORO.
Lavazza’s Qualita Oro
Lavazza filed a cross-claim seeking to cancel Cantarella’s trade mark registrations for ORO on the basis that:
Cantarella’s ORO trade mark registrations are not inherently able to distinguish (that is, the term ORO is descriptive for coffee) – the same argument run by Moderna in the earlier case; and
Cantarella is not the owner of the mark ORO.
Last Friday, 20 October 2023, the esteemed Yates J found that although Lavazza do use the trade mark ORO for coffee and Cantarella’s marks are able to distinguish, Cantarella is not the owner of the ORO trade mark.[6] This is despite the fact that Cantarella has used ORO as a trade mark for over 25 years and has owned a registered trade mark for ORO for since 2000. In reaching this conclusion, Yates J ordered that both of Cantarella’s long-standing trade mark registrations for ORO be cancelled and, based on the same, that Lavazza had not infringed Cantarella’s trade mark rights.
How did this happen? Lavazza argued that coffee company Molinari (imported by Moderna from Round 1 and Round 2), along with other coffee companies, uses the term ORO for its coffee and its use of ORO for coffee pre-dates that of Cantarella. As a result, it is Molinari who is the “author” of the trade mark ORO and, as such, Cantarella cannot claim to be the owner of the trade mark ORO.
Molinari’s ORO coffee
Section 58 of the Trade Marks Act 1995 (Cth) provides that a trade mark registration may be opposed on the ground that the Applicant is not the owner of the trade mark.[7] Under s 88 a trade mark registration may be cancelled on any of the grounds upon which a trade mark registration could have been opposed.
Cantarella submitted it first used ORO in August 1996.
Lavazza argued that it had early use of ORO starting in 1982. However, the Federal Court found that Lavazza’s early use was not use as a trade mark.
Lavazza alternatively argued that Molinari (a third party coffee manufacturer and not a party to this Round 3) had used the trade mark ORO in September 1995 (about a year before Cantarella). Yates J considered the size, colour, positioning and prominence of the word ORO on the Molinari packaging to be trade mark use and found that Molinari did have prior use of the trade mark ORO. Because Molinari had prior use of the trade mark ORO in Australia, Cantarella could not be the owner of the ORO trade mark.
It is irrelevant that Molinari is not the owner of the trade mark ORO, or even is claiming to be the owner of the trade mark ORO.
It is irrelevant that Molinari had not registered the trade mark ORO or even attempted to register the trade mark ORO.
The fact that Cantarella owns a registered trade mark for ORO does not mean that it is now the owner of the trade mark.
Cantarella pleaded the Federal Court to exercise its discretion not to cancel its ORO trade mark registrations in consideration of its long history of use and given that the High Court in Round 2 had found that ORO was inherently adapted to distinguish the coffee of Cantarella. Yates J refused. Yates J found that to allow Cantarella’s ORO trade mark registrations to remain registered would not be in the public interest and other “traders should not be vexed with the prospect that these registrations might be deployed by Cantarella to inhibit their trading activities, as has happened in the present case”.[8]
TAKEAWAYS
1. The correct test for whether a trade mark is inherently adapted to distinguish continues to be that stated by Kitto J in Clark Equipment Co Registrar of Trade Marks (1964) 111 CLR 514
[T]he question whether a mark is adapted to distinguish be tested 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, for the sake of the signification which they ordinarily possess—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.
2. Even long-standing trade mark registrations can be cancelled on the basis of prior use in the market by any third party. To be successful:-
Use must be use as a trade mark.
The trade marks must be substantially identical (a deceptively similar trade mark is not sufficient).
Use must be in the Australian market.
3. Trade mark use searches are a key part of trade mark infringement proceedings!!! Common law use rights are a powerful defence in trade mark proceedings in Australia.
[1] Statista Research Department, 13 July 2023
[2] Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258; Cantarella Bros Pty Limited v Modena Trading Pty Limited [2014] HCA 48; Modena Trading Pty Ltd v Cantarella Bros Pty Ltd [2013] FCAFC 110; Cantarella Bros Pty Limited v Modena Trading Pty Limited [2013] FCA 8.
[3] Cantarella Bros Pty Limited v Modena Trading Pty Limited [2013] FCA 8
[4] Cantarella Bros Pty Limited v Modena Trading Pty Limited [2014] HCA 48 at 70.
[5] Ib id at 74.
[6] Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258
[7] Over 8,000 pages of evidence was submitted in this case related to who was first to use the trade mark ORO on coffee.
[8] Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258 at 597.