Judgments this week in the High Court of Australia

On Wednesday, 3 December 2014 the High Court of Australia will deliver judgment in two cases.

The first judgment is 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, Caffè 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 ordered that the registration of the trade marks of those words be cancelled.

The second judgment is in Commissioner of Taxation v MBI Properties Pty Ltd, which raises a short question of statutory construction under the GST legislation, and in particular whether or not there is a supply to a lessee by the purchaser of the reversionary interest under the lease who continues to receive rent.