Tuesday, August 5, 2014

The High Court returns from holidays - this week's arguments

This week the High Court returns from its winter sojourn to hear argument in four cases.  Perhaps appropriately, the court will wake from its hibernation with a dispute over coffee.
Today the Court will hear argument in Cantarella Bros Pty Limited v Modena Trading Pty Limited, which raises important issues relating to the use of foreign descriptive words as trade marks in Australia. Cantarella produces coffee in Australia from imported beans.  It promotes and sells its coffees using various registered trade marks including “Vittoria”, “Oro” and “Cinque Stelle”.  Cantarella widely promoted its Oro branded coffee through supermarkets, and its Cinque Stelle coffee was served in many restaurants and by Qantas. Modena imports and markets coffee supplied by an Italian company, Caff√® Molinari SpA (“Molinari”).  Molinari’s coffees include blends named “Oro” and “Cinque Stelle”, which are sold in Italy and are exported to many countries.  Many other producers and importers of coffee also use the word “Oro” in their brands in Australia.  In Italian, “Oro” means gold, and “Cinque Stelle” means five stars.  Cantarella sued Modena for infringement of its registered trade marks.  Modena cross-claimed, seeking the cancellation of each trade mark’s registration.  At first instance Justice Emmett declared that Modena had infringed Cantarella’s trade marks.  His Honour held that the words “Oro” and “Cinque Stelle” were sufficiently distinctive because only a small minority of people in Australia would understand the meaning of the words, and thus the allusions to quality made by them.The Full Court of the Federal Court unanimously allowed Modena’s appeal. Their Honours held that instead of focusing on the knowledge of the general population, the focus ought to have been on the knowledge of traders in coffee.   Italian was so commonly used in relation to coffee in Australia that traders other than Cantarella would readily understand, and indeed had long used, the words “Oro” and “Cinque Stelle” to signify quality of goods.  The Full Court then ordered that the registration of the trade marks of those words be cancelled.
On Wednesday, 6 August 2014 the Court will hear argument in Maxwell v Highway Hauliers Pty Ltd, which raises an important issue in relation to the proper construction of s 54 of the Insurance Contracts Act 1984 (Cth). Hauliers carried on a trucking business and operated a fleet of trucks and trailers that transported freight between the Eastern and Western states of Australia. Hauliers had a contract of insurance with various Underwriters at Lloyds in London (represented in Australia by Maxwell) that covered accidental loss or damage to all vehicles owned, leased or acquired by it.  The contract of insurance also included a provision which stated that no indemnity was provided under the policy unless all drivers met certain conditions, including obtaining a People and Quality Services test score of at least 36. In separate accidents in 2004 and 2005 trucks owned by Hauliers were damaged. Claims under the insurance policy were rejected on the basis that the relevant drivers had not obtained the relevant PAQS test score.  It was accepted by Maxwell that the failure of the drivers to complete a PAQS test had not caused or contributed to the accidents. Hauliers sued Maxwell for indemnity, and also claimed damages for breach of the contract of insurance for the loss of profits for not being able to use the damaged trucks.  At first instance and in the Western Australia Court of Appeal, it was held that Maxwell was obliged to indemnify the Insured by reason of s 54(1) of the Act, which relevantly provides that where the effect of the policy would be that the insurer may refuse to pay a claim (in whole or in part) by reason of some act of the insured or of some other person, being an act that occurred after the policy was entered into, the insurer may not refuse to pay the claim by reason only of that act, but its liability is reduced by the amount that fairly represents the prejudice to the insurer's interests. In doing so they rejected the contention by Maxwell, relying upon a 2010 decision of the Queensland Court of Appeal, that the failure to undertake the PAQS test was not an omission to which section 54(1) applied, but was simply a state of affairs which had the effect that there was no cover provided by the policy at all. 
On Thursday, 7 August 2014 the Court will hear argument in related appeals in Kentwell v The Queen and O’Grady v The Queen.  These cases raise an important procedural issue in relation to appeals in the criminal jurisdiction in NSW.  In each case the appellants commenced an appeal against sentence in the NSW Court of Criminal Appeal, but required an extension of time within which to bring that appeal.  The same panel of judges heard each of the applications, and in each case it was found that the sentencing judge had erred by making a so-called Muldrock error (named after the High Court decision that held that a standard non-parole period was not the starting point from which sentencing courts depart by applying aggravating or mitigating factors, but was simply one of the factors in determining the appropriate sentence).  Nonetheless, in each case the Court of Criminal Appeal held that the error had not resulted in any substantial injustice and therefore refused the extension of time within which to appeal.  The appellants’ complaint is two-fold: firstly, the CCA should not have imposed a “no substantial injustice” test to the exercise of the discretion to extend time, and secondly that in doing so they effectively determined the merits of the appeal in a “summary fashion”.

On Friday, 8 August 2014 the Court will hear argument in Alphapharm Pty Ltd v H Lundbeck A/S.  This case involves a challenge to a decision by the Commissioner of Patents (upheld by the AAT and the Full Federal Court) to extend the time within which Lundbeck could make an application to extend the term of the Patent held for an anti-depressant drug marketed by Lundbeck in various forms under the names Cipramil and Lexapro.  At its heart is an argument about the proper construction of the Patents Act and the regulations made thereunder.  But it has profound commercial significance for Lundbeck and its competitors (who had already placed generic versions of the drugs on the market prior to the extension) as well as for the public health budget.

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