In the recent decision of Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3)  FCA 1258, Cantarella alleged that Lavazza had infringed its registered ORO trade marks by applying them to its coffee bean products. Lavazza successfully defended the action by arguing that Cantarella was not the first user of the relevant marks, despite the court’s finding that its conduct would have otherwise infringed those trade marks. Justice Yates also considered whether ORO was inherently adapted to distinguish coffee goods (it was) and whether the good faith defence was available to Lavazza (it was not).
Cantarella was not the first user of the trade marks
Lavazza argued that Cantarella’s ORO trade marks should be removed from the Register because it, or in the alternative, Caffe Molinari was the first user of the trade marks for coffee in Australia. His Honour set out the relevant principles:
- Prior public use combined with local authorship (meaning the origination or first adoption of the mark as and for a trade mark in Australia) is enough to demonstrate ownership of a mark.
- The requisite ‘threshold’ of use requires less than an established local reputation, in other words ‘slight use in Australia’ is sufficient.
- ‘Prior use’ however slight must be ‘use’ in the course of trade in Australia.
- The ‘use’ of a mark requires ‘substantial identity’, meaning representations must be identical or near-identical to the registered mark.
- Multiple signs that appear together on packaging may each function as a badge of trade origin in their own right.
Justice Yates considered that in many cases, correspondence, invoices, shipping documents, brochures, and the like, are often sufficient to demonstrate the use of a mark for the purpose of ownership. However, his Honour identified an exception in relation to Lavazza’s claimed use. While his Honour acknowledged that Lavazza had used the ORO mark as a line item on its invoices, this was not use as a trade mark because the products to which that line item referred did not use ORO on their packaging. Rather, the word ORO in the line item was a mere descriptive shorting, and not use in the course of trade.
On the other hand, his Honour accepted that use of the work ORO on the packaging of CAFFE MOLINARI ORO coffee was ‘use’ as a trade mark which pre-dated the priority date of the contested marks and rejected arguments that Molinari had ceased to use the mark by the priority dates, because Molinari had showed “continuing preparedness to use” ORO as a trade mark.
The trade marks were inherently adapted to distinguish coffee products
To determine whether the word ORO was inherently adapted to distinguish coffee goods, his Honour expressed a preference for the following two-step test:
- Establish the ordinary signification of the word or words for which registration as a trade mark is sought; and
- Determine whether other persons trading in goods of the same or similar kind would want to use the mark “being actuated only by proper motives” by reference to that ordinary signification.
Justice Yates gave little weight to evidence of the meaning of the word ORO from professionals in the coffee industry. Further, his Honour was not persuaded by census data suggesting that ORO had a descriptive meaning for large bilingual communities. This evidence did not establish the meaning of the word to the population at large. Accordingly, it is essential that evidence in the form of surveys or census data represents a genuine cross section of the Australian public.
In contrast, Yates J considered that the presence of a word in an Australian dictionary is strong evidence that the word has a descriptive meaning to Australians. In the absence of an accepted definition, considerable evidence may be required to persuade the court that a foreign word has a descriptive meaning to Australians generally.
Lavazza had not used the trade marks in good faith
Justice Yates’ finding that the word ORO did not have an ordinary signification to Australians was key to his decision that Lavazza was not entitled to rely on the good faith defence.
His Honour considered that if a trade mark on the register is ‘inherently adapted to distinguish’ because it is an invented or foreign word, then use of the word by a third party is not in good faith. In other words, if the word does not have a descriptive meaning to Australian consumers, there is no proper motive for another trader to use that word. In the present case, Yates J considered that use of “ORO” on the impugned packaging was not in good faith because “ORO” does not have an ordinary signification in relation to the characteristics of coffee in Australia.
- Before commencing trade mark infringement proceedings, litigants should be confident that they are the first user of a mark in Australia or risk removal from the Register in the likely counterclaim by the alleged infringer.
- Declarations from industry professionals and census data relating to a segment of the community are not persuasive evidence of a word’s ordinary signification.
- The ‘good faith’ defence is only available when the trade mark used has an ordinary signification in Australia.