By Eliza Jane Saunders, Jennifer Tutty and Lucy Diggle.

Last Friday Justice Yates of the Federal Court of Australia handed down his reasons for judgment in Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258.

To summarize the decision, his Honour found that Lavazza infringed Cantarella’s two trade mark registrations for the word mark ‘ORO’, however Lavazza’s cross-claim for invalidity of the trade marks was successful.  Ultimately, this resulted in the cancellation of the ORO trade marks.

What Were the Key Findings of The Court?

The findings of the Court (spanning 655 paragraphs!) were as follows …

Use As A Trade Mark

The use of ‘ORO’ by Lavazza was trade mark use (‘LAVAZZA’ and ‘ORO’ functioning independently as trade marks having regard to their size, colour, position and prominence). Hence the use by Lavazza of ORO infringed Cantarella’s two registered trade marks for ORO in class 30 for coffee products (Cantarella is the company that distributes and sells the VITTORIA brand of coffee).

A Trade Mark’s Capacity to Distinguish

Lavazza’s cross-claim that the ‘oro’ trade mark lacked capacity to distinguish Cantarella’s coffee products from those of other traders did not succeed.  His Honour found that the word “oro” is not commonly understood to mean “gold” amongst ordinary members throughout the Australian community at large. 

The trade mark was therefore capable of distinguishing Cantarella’s coffee products from other traders (arguably stare decisis with the decision of the High Court in Cantarella Bros v Modena Trading [2014] HCA 48 (the HC Modena decision). 

Lavazza unsuccessfully attempted to broaden the test for distinctiveness by arguing that regardless of whether a word was “distinctive” it may lack an inherent capacity to distinguish simply because of its “commonality” (used by other traders) (as per Gageler J in the HC Modena decision and that of the Full Federal Court).  

Ownership of a Trade Mark…Or Lack Thereof

Lavazza’s cross-claim for invalidity for lack of ownership succeeded.  To succeed on this ground it was necessary for Lavazza to prove that at the time Cantarella applied for its trade marks it was not the owner of the trade marks. 

On the evidence presented before the court, his Honour found that although Lavazza’s use of the ORO trade mark pre-dated Cantarella’s, this use was not trade mark use. 

However in light of evidence, which included a summary of interrogated business records filed by Lavazza later in the proceeding, and the cross examination of various witnesses, his Honour held that use of the ORO trade mark by the third party, Café Molinari, in 1995, was use as a trade mark.

As this authorised use of the ORO mark preceded the first use of the ORO trade mark in Australia by Cantarella (held to be 1996) Cantarella was held not to be the owner of the trade mark.

Discretion and Public Interest

Cantarella contended that should his Honour find that it is not the owner of the trade marks (as above) that his Honour not exercise his discretion under s 88(1) Trade Marks Act 1995 (Cth) to cancel the marks.

Cantarella raised various considerations for his Honour to not exercise his discretion to cancel, including the fact that Cantarella had continuously used the ORO trade mark in Australia since 1996, its “strong reputation and goodwill”, the decision of the High Court on the distinctiveness of its trade mark, inconvenience and confusion. 

However, none of the considerations provided his Honour with sufficient reason not to cancel the trade mark registrations.  Indeed, his Honour held that it was not in the public interest to allow the trade mark registrations to stand.

Defences

Finally, although unnecessary having found the trade marks invalid, for completeness his Honour thoroughly considered each of the defences raised by Lavazza, holding that none of the defences would have been available to Lavazza in the event the trade marks were valid and infringed.

Can We Expect An Appeal?

In light of this decision being part of a long-running dispute between some of the country’s largest coffee suppliers and Cantarella Bros’ appeal to the High Court ten years ago to protect its ‘ORO’ brand, we would not be surprised to see this decision appealed to the Full Federal Court.

Written by Eliza Jane Saunders, Principal, Jennifer Tutty and Lucy Diggle.

Published 25 October 2023.

Photo by Christina Rumpf on Unsplash.

Further Information

If you have any questions regarding the adoption, registrability and validity of trade marks, please contact us at hello@studiolegal.com.au.

For more on the use of trade marks, read our blogs:

– ‘5 Key Steps to Take Before… Launching a Brand in an Emerging Market’, and

– ‘Top Trade Mark Tips: How to use Trade Marks to Protect your Brand’

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.