Intellectual Property – Trade Marks – Ownership of an abandoned mark
This Full Court of the Federal Court of Australia was asked to consider whether there was a disconformity between the ground of opposition to trade mark registration requiring the applicant to be the owner of the mark (in section 58 of the Trade Marks Act 1995 (Cth)) and the honest concurrent use exception to rejection of a mark that otherwise conflicts with an earlier registered mark (in section 44 of the Act). The Full Court indicated that the disconformity might be addressed by excusing non-compliance with section 58 where there has been honest concurrent use, but declined to decide the point given it was not run before the primary judge. In this article, we address that issue, and some others, arising over yet another dispute over the use of ORO as a trade mark for coffee.
In August 1996, Cantarella first used the word “ORO” (the Italian word for “gold”) as a trade mark in Australia in relation to coffee. In 2000, Cantarella applied to register ORO as a trade mark in respect of “coffee; beverages made with a base of coffee, espresso; ready-to-drink coffee; coffee based beverages”. That mark was duly registered, as was another identical mark applied for by Cantarella in 2013.
A requirement for registration of a trade mark is that the applicant is the owner of the mark: section 58 of the Trade Marks Act 1995 (Cth). Trade mark ownership can arise from being the first person to intend to use the mark and apply to register it, or the first person to use the mark. But complexities can arise. When relying on being the first user, the use has to be with respect to the same mark, or a mark with additions or alterations that do not substantially affect its identity: section 7(1) of the Act. The use also has to be with respect to the same goods or services with respect to which registration is sought. Also, questions arise as to who the owner of a mark is when there has been another earlier user who might be said to have intentionally abandoned the mark.
With that in mind, shortly prior to August 1996, another entity, Caffè Molinari SpA, sold coffee in packs branded as follows:
One might anticipate from the above that questions arose as to whether Molinari’s use above was of “ORO” on its own, or as part of a different mark comprising the words “MISCELA DI CAFFE”, and whether it was in respect of all the goods designated for Cantarella’s registered marks. Those matters are addressed below. There was also a question as to whether Molinari had abandoned use of the mark, but the evidence was that it continued to use the mark as depicted above or in substantially similar formats up until September 2021, well after the priority date of Cantarella’s two ORO marks.
Can honest concurrent use overcome a section 58 objection?
Perhaps the most interesting debate in this case (because of its novelty), was whether Cantarella could satisfy section 58 as an owner of the mark, notwithstanding that it was not the first user of the mark and Molinari had not abandoned the mark, because Cantarella was an honest concurrent user of the mark, in the sense contemplated by section 44(3) of the Act. Cantarella’s argument was that there was a “common law doctrine of honest concurrent use” that could overcome an objection pursuant to section 58 of the Act because the honest concurrent user was an “owner” of the mark in the sense of a co-owner with the first user.
Section 44 prohibits the registration of a mark that is substantially identical, or deceptively similar, to a mark that is already on the Register of Trade Marks in respect of similar goods or closely related services. Section 44(3)(a) provides an exception to that prohibition where the Registrar is satisfied that “there has been honest concurrent use of the 2 trade marks”.
Avid trade mark aficionados will appreciate there is a potential disconformity between sections 44(3) and 58 of the Act in respect of a trade mark application for a mark that is exactly the same as an existing registered trade mark. Section 44(3) indicates the fact of honest concurrent use should allow registration while section 58 provides that there should be no registration. However, each section of the Act is generally understood to provide an independent basis for rejecting a mark for registration – just because section 44(3) is enlivened does not mean the mark cannot be rejected pursuant to section 58. Furthermore, section 44 also caters for rejection of marks which are not substantially identical (e.g., deceptively similar marks and marks in respect of non-same goods) whereas section 58 is concerned with substantially identical marks for the same goods. So, it is not clear on the face of the statute that section 58 should bow to any “honest concurrent use”.
Professors Burrell and Handler in their text Australian Trade Mark Law proposed that co-ownership of a mark could be established by honest concurrent use over many years so as to overcome section 58. That view was accepted by a Delegate of the Registrar in Australian Institute of Management v The Australian Institute of Music Ltd (2021) 162 IPR 555 at [50] finding that honest concurrent use for almost 25 years established co-ownership of the mark. The problem with that conclusion is that it stretches the concept of co-ownership considerably – for there to be co-ownership of a mark at common law, there would have to be some joint business sharing goodwill in the mark, which did not appear to be the circumstances in that case.
The Full Court recognised the potential disconformity between sections 44(3) and 58 identified above, and that “the preferable solution may be to read s 58 and s 44(3) together to form a harmonious legislative scheme” which involves “recognising that s 58 does not apply in the circumstances where s 44(3) has been satisfied”. However, their Honours also observed that the concept of a right of ownership based on honest concurrent use is “inconsistent with a statutory scheme that contemplates that the owner of the mark referred to in s 58 will be the first person to either use the mark in Australia as a trade mark or apply for its registration with the intention of so using it.”
The Full Court did not need to resolve this issue because it was not satisfied that the requirements of section 44(3) were shown to have been met. The problem for Cantarella was that it did not run the point at trial. It had the onus of establishing why it adopted the ORO mark and was a co-owner, and it had failed to do so. If Lavazza had the onus of establishing that Cantarella was not an honest concurrent user (which the Full Court doubted) it would have been open to Lavazza to seek discovery on the issue – which it did not do because there was no such issue. And so Cantarella was denied leave to appeal on this point.
Cantarella has sought special leave to appeal the Full Court’s decision, focussing on whether the prohibition in section 58 can be avoided where there has been honest concurrent use. Plainly enough, there are significant hurdles to overcome in order to obtain special leave, but the question is one that may be of interest to the High Court, given the complexities of statutory construction involved.
Was ORO simpliciter used
Returning to the more anodyne issues on the section 58 debate, the Full Court considered whether Molinari’s packaging depicted above constituted use of “ORO” simpliciter, as required by the authorities.
The Full Court reiterated the common refrain in these kinds of cases that packaging can comprise more than one mark, and so the fact that the packaging bore the mark “CAFFE Molinari” did not mean that ORO was not being used as mark. The Full Court observed that the more difficult question was whether the word ORO was used as a trade mark in its own right, notwithstanding the words appearing above or to the side of it: “MICELA DE CAFFE”. Their Honours concluded at [93]:
"We have had regard to the primary judge’s finding, applying Modena, that the word ORO is inherently distinctive and capable of acting as a badge of origin when used in relation to coffee. We have had regard to the prominence given to the word ORO both in the context of the packaging as a whole, and relative to the words MISCELA DI CAFFÈ in the much smaller font. We have also had regard to the appearance of what Cantarella calls the composite expression as it appears on both the front and back of the 3kg packaging, where the relevant words are differently arranged. In each case the word ORO appears much more prominently than the words MISCELA DI CAFFÈ. We consider the word ORO simpliciter acts as a badge of origin. We therefore agree with the primary judge’s finding on this topic".
That is a finding about which minds might credibly differ. It seems that the words “MISCELA DI CAFFE” on the packaging are linked with the word ORO and are all Italian words (and so distinctive of coffee) and the same colour (black) and font (albeit ORO is a bold, or thicker, font). Accordingly, a consumer might reasonably conclude that there was a linkage between all four words in terms of the trade mark which was being used. The fact that the words are of a different size should not be determinative, because that occurs in many composite trade marks. Finally, the words MISCELA DI CAFFE are not so small as to be able to be disregarded as it seems the Full Court has arguably done.
This dispute is also the subject of Cantarella’s application for special leave to the High Court but does not appear to raise any significant legal principle in and of itself.
The discretion
Finally, Cantarella contended that the primary judge erred in failing to exercise the discretion in section 88(1) of the Act not to cancel the ORO trade marks, even if the section 58 ground of removal had been made out and the mark was susceptible to removal pursuant to section 88(2)(a) of the Act.
Cantarella leaned heavily on its “honest concurrent use” argument here. The problem for Cantarella was that Yates J considered that Cantarella’s use did not overcome the public interest in cancelling the registrations. One such public interest is in ensuring that trade mark registrations are only made in favour of applicants who are entitled to obtain them. This highlights that, where section 58 is successfully raised against a trade mark registration, it will be rare for the discretion to apply in favour of the trade mark owner.
Cantarella has also sought special leave to appeal to the High Court on the application of the discretion, focussing on its alleged honest concurrent use.
