Federal Court of Australia

Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCAFC 156

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The cross-appeal be allowed.

3.    Orders 2 to 5 of the orders made on 26 February 2024 and the order made on 19 March 2024 be set aside and, in their place, it be ordered that:

(a)    The cross-claim be allowed.

(b)    Pursuant to s 88(1)(a) of the Trade Marks Act 1995 (Cth), the Register of Trade Marks be rectified by cancelling the registration of Trade Mark No 1760112 for the word “MERCATO”.

(c)    subject to order 5 below, the applicant pay the respondent’s costs of the proceeding (including the cross-claim).

4.    Subject to order 5 below, the appellant (cross-respondent) pay the respondent’s (cross appellant’s) costs of the appeal and cross-appeal.

5.    Either party or both parties may seek a variation of the orders for costs in paragraphs 3(c) and 4 by filing and serving by 4.00 pm on 13 December 2024 any evidence and a written submission of no more than three pages, 1.5 spacing, 12 point font, in which event –

(a)    the other party may by 4.00 pm on 20 December 2024 file and serve any evidence and a responding written submission of no more than three pages, 1.5 spacing, 12 point font; and

(b)    any reply evidence and a reply submission of no more than two pages, 1.5 spacing, 12 point font, is to be filed and served by 4.00 pm 17 January 2025.

6.    Subject to further order, any application for variation of the orders for costs will be determined on the papers.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    The appellant (Caporaso) operates an Italian-themed supermarket, restaurant, and wine retail business, amongst other business ventures. Caporaso owns three registered trade marks that incorporate the word mercato.

2    The respondent (Mercato Centrale) operates a business of providing retail food and beverage services under the name “Il Mercato Centrale” from premises in Collins Street, Melbourne.

3    At trial, Caporaso claimed that Mercato Centrale had infringed, and threatened to continue to infringe, its registered marks by using its own unregistered marks that also incorporated the word mercato. The parties’ trade marks are set out below –

4    At the time of trial, Caporaso’s Plain Word Mark was registered with a priority date of 21 March 2016 in respect of the goods and services in Classes 29, 30, 35, and 43 that the primary judge set out in her Honour’s reasons: see Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCA 138 (J) at [21]. The Plain Word Mark has the endorsement, “The applicant has advised that a translation of the Italian word MERCATO appearing in the trade mark is MARKET”.

5    Caporaso’s Fancy Word Mark is registered with a priority date of 4 August 2008 in respect of the services in Class 35 that the primary judge set out at J [23]. The Fancy Word Mark also has an endorsement, “The applicant has advised that a translation of the ITALIAN word MERCATO appearing in the trade mark is MARKET”.

6    Caporaso’s Red Man Logo is registered with a priority date of 14 May 2009 in respect of the services in Class 43 that the primary judge set out at J [25].

7    Mercato Centrale denied the claims of infringement, and brought a cross-claim. By its further amended notice of cross-claim, Mercato Centrale relevantly sought orders for –

(a)    the cancellation of the Plain Word Mark and the Fancy Word Mark to the extent that they were registered for particular goods and services;

(b)    further and in the alternative, the cancellation of the Plain Word Mark in its entirety or respect of certain services; and

(c)    an order that the registration of the Red Man Logo be rectified by adding a limitation that the registration does not confer any exclusive right to use the word mercato.

8    In light of the cross-claim, Caporaso pressed its claim of infringement with respect to the Fancy Word Mark and the Red Man Logo only in the event that the registration of the Plain Word Mark was cancelled in respect of any part of Class 35 or Class 43 of the Plain Word Mark: J [36].

9    The primary judge upheld the cross-claim in part. Her Honour held that the registration of the Plain Word Mark should be amended to alter the description of services in Class 43. Otherwise, the primary judge dismissed the cross-claim. The primary judge also dismissed Caporaso’s claims of infringement and threatened infringement, holding that none of Mercato Centrale’s marks was deceptively similar to any of Caporaso’s three registered marks.

10    Caporaso now appeals to this Court from the primary judge’s decision. By its amended notice of appeal, Caporaso raises 11 grounds of appeal, supported by particulars. The grounds of appeal essentially relate to two issues: (1) the primary judge’s failure to exercise (or to consider exercising) a discretion embedded in s 88 of the Trade Marks Act 1995 (Cth) not to amend the registration of the Plain Word Mark; and (2) the primary judge’s conclusions on the issue of deceptive similarity.

11    Mercato Centrale also cross-appeals from the primary judge’s orders to the extent that its cross-claim was dismissed. By its notice of cross-appeal, Mercato Centrale raised two grounds of cross-appeal, which essentially related to the question of confusion under s 88(2)(c) of the Trade Marks Act and the primary judge’s rejection of that aspect of Mercato Centrale’s cross-claim which sought the cancellation of the Plain Word Mark under ss 88(1)(a) and 62(b) on the ground that it had been accepted for registration on the basis of evidence or representations that were false in material particulars. At the hearing of the appeal, Mercato Centrale abandoned the first aspect, and pressed only the latter aspect of its cross-appeal.

12    Accordingly, not all of the issues that were determined at trial arise on appeal. For instance, there is now no challenge by Mercato Centrale to the primary judge’s rejection of those elements of its cross-claim that alleged that the Plain Word Mark should be cancelled on the ground that it is not inherently distinctive because it is a word of ordinary signification, or on the ground that it is liable to cause confusion because the word mercato has come to have a commonly understood meaning as referring to a marketplace in the Italian style. Those issues do not arise for determination by this Court.

13    In broad outline, the main issues on the appeal and cross-appeal are therefore as follows –

(1)    Did the primary judge err in dismissing the cross-claim that the Plain Word Mark should be cancelled on the ground that its registration could have been opposed on the ground that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars?

(2)    Did the primary judge err in narrowing the services in Class 43 for the Plain Word Mark on the ground that a non-party had made prior use of the mark in relation to restaurant services?

(3)    Did the primary judge err in finding that there was no deceptive similarity between Caporaso’s registered marks and Mercato Centrale’s marks?

The primary judge’s reasons

The primary judge’s reasons on infringement

14    The primary judge began with an outline of Caporaso’s infringement claim. After setting out the Caporaso marks and the Mercato Centrale marks, the primary judge noted that Mercato Centrale had attempted to register each of the Mercato Centrale marks in respect of certain services in Classes 35 and 45, which the primary judge set out at J [31]. Her Honour recorded that Mercato Centrale had withdrawn the applications in relation to MERCATO CENTRALE and IL MERCATO CENTRALE, and that the application for registration of the Mercato Centrale Logo was on foot, but was opposed by Caporaso.

15    The primary judge noted at J [33]–[34] that Caporaso put its infringement case on two alternative bases. Caporaso alleged that Mercato Centrale had used and continued to use as a trade mark a sign which is substantially identical or deceptively similar to one or more of the Caporaso marks in relation to –

(a)    the same goods and services for which the Caporaso marks were registered — s 120(1) of the Trade Marks Act; or, alternatively

(b)    goods and services of the same description as that of goods and services in respect of which the Caporaso marks are registered, or services that are closely related to the registered goods — s 120(2) of the Trade Marks Act.

16    The primary judge recorded at J [35] that Mercato Centrale acknowledged that it intended to use, and had already used, each of the impugned marks in respect of goods and services for which registration of the Mercato Centrale Logo was sought. At J [235]–[252], the primary judge summarised the evidence as to actual or threatened use. At J [253], the primary judge identified concessions made on behalf of Mercato Centrale that there was actual or intended use of each of the Mercato Centrale marks in relation to certain goods and services. Her Honour went further, however, and found that the marks would also be used as trade marks in relation to the overall business precinct, which involved “retailing … of goods (by any means)”: J [256]. At J [263], the primary judge characterised these findings as encompassing –

enough of what the parties referred to as the high water mark of Caporaso’s infringement action, namely use of the plain combined words mercato centrale in respect of retailing services (by any means) as an infringement of the Plain Wor[d] Mark (mercato), registered in respect of the same retail services.

17    As for deceptive similarity, the primary judge noted at J [264] that Caporaso did not press any claim that the marks MERCATO and MERCATO CENTRALE were substantially identical within the meaning of s 120 of the Trade Marks Act. Her Honour summarised the principles applicable to assessing a claim of trade mark infringement that are stated in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; 277 CLR 186 (Self Care) and other authorities.

18    The primary judge noted at J [268] that “[t]he submissions of each party focussed heavily upon cases in which the application [of] the principles resulted in an outcome that they favoured”. Her Honour then added –

In my view, considerable care must be taken when considering the result of a case turning on an essentially factual question. The cases illustrate how the established principles have been applied to different signs in different contexts, but they do not represent a tariff or standard to be followed in the case before me.

19    Nevertheless, her Honour stated that with that caution in mind she had considered various authorities identified by the parties, as well as additional authorities.

20    At J [280]–[289], the primary judge summarised the parties’ submissions and reached conclusions on the issue of deceptive similarity.

21    In abbreviated terms, Caporaso’s submissions to the primary judge were that consumers would have an imperfect recollection that included the word mercato and that “as a rule”, the first part of a mark is by far the most important for the purpose of distinction. Caporaso cited the decision of Burchett J in Conde Nast Publications Pty Ltd v Taylor (1998) 41 IPR 505 (Conde Nast) in support of this submission. Caporaso also submitted that the word centrale does not make the mark MERCATO CENTRALE so distinguishable as to diminish the likelihood of confusion for two reasons: first, because the word mercato was impactful and so more memorable; and secondly, because the word centrale would be more readily understood by ordinary Australians as being a foreign word which translates to central.

22    The primary judge did not wholly accept these submissions. Her Honour reasoned that the mark must be considered as a whole, and that it consisted of two Italian-sounding words, not one. Her Honour held that neither word had a proven meaning in English. At J [284]–[285], her Honour said –

The contention that the target audience would regard the word centrale as a mere descriptive add on comes up against the problem that in ordinary English adjectives do not follow nouns. One does not need to be a scholar in grammar to appreciate that. Unlike the signs considered in most of the cases relied upon by the parties, the signs under comparison do not include words having any proven ordinary signification to English speaking consumers. Both of the words are distinctive. Both are Italian sounding. Neither would be readily recognised as a noun or an adjective.

Nor do I accept that members of the target audience would consider mercato centrale to be a sub-brand of mercato, as to my mind neither word is less distinctive or more descriptive than the other. The sign mercato centrale is comprised of two words of equal significance and impact, both visually and aurally. In their aural representation they have a repetitive rhythm that the word mercato alone does not have. I do not consider there to be a risk that Australian consumers with an imperfect recollection of the Plain Word Mark would be caused to wonder whether the services provided by mercato centrale might be a commercial extension, franchise or sub-brand of mercato. In my assessment the word centrale is an obvious differentiating feature that cannot be put aside in the assessment.

23    Because of her Honour’s conclusion that MERCATO CENTRALE was not deceptively similar to MERCATO, the primary judge was able to deal efficiently with the remaining comparisons, involving the more complex marks. Her Honour found that none of the Mercato Centrale marks infringed any of the Caporaso marks, and concluded at J [293] that the infringement action should be dismissed.

The primary judge’s reasons on the cross-claim

24    At J [37], the primary judge said that the cross-claim broadly raised five questions, which respectively related to distinctiveness, confusion, ownership, misrepresentation, and limitation.

25    With respect to distinctiveness, the question was whether registration of the Plain Word Mark and the Fancy Word Mark should be cancelled or rectified under s 41 of the Trade Marks Act because they were merely descriptive of Caporaso’s designated goods and services, and therefore not, or not sufficiently, inherently adapted to distinguish those goods and services from the goods and services of other traders. The basis of this part of the cross-claim was Mercato Centrale’s claim that the word mercato, being an Italian word for market or marketplace, carried that same ordinary signification in Australia to English-speakers concerned with the challenged goods or services. Mercato Centrale submitted to the primary judge that the word mercato was thus directly descriptive of those goods and services, and so not inherently adapted to distinguish their commercial origin.

26    With respect to confusion, the question was whether registration of the Plain Word Mark and the Fancy Word Mark should be cancelled under s 88(2)(c) of the Trade Marks Act in respect of some classes of goods and services because use of those marks in those classes was likely to deceive or cause confusion. This question hinged on a submission that, regardless of the situation at the marks’ priority dates, the word mercato had come to bear an ordinary signification to mean market or marketplace.

27    The primary judge dealt with the questions of distinctiveness and confusion together. The two questions turned on the ordinary signification of the word mercato, although at different times. In the end, this temporal distinction did not affect the primary judge’s path of reasoning. Her Honour commenced with a survey of the authorities concerning inherent adaptation to distinguish, including (at J [57]) the reasons of Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 514.

28    The primary judge considered in detail Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2014] HCA 48; 254 CLR 337 (Cantarella), addressing the reasons for judgment at first instance, of the Full Court of this Court, and of the High Court. As is well known, that litigation concerned the Italian expressions oro and cinque stelle, being the Italian expressions for gold and five stars. A majority of the High Court at [74]–[78] held the expressions to be inherently adapted to distinguish the appellant’s goods, on the basis that it had not been established on the evidence that honest traders might legitimately wish to use the words to directly describe, or indicate, the character or quality of their goods.

29    The primary judge noted that the word mercato did not appear in the Macquarie Dictionary, whereas some other words of Italian origin did. The primary judge also had regard to extensive evidence about the use of the word mercato by different traders around Australia. The primary judge considered the evidence of five traders who were cross-examined at the trial, as well as evidence of searches conducted by the solicitors for Mercato Centrale and an expert witness called by Mercato Centrale. The primary judge summarised the evidence concerning 18 Australian businesses (excluding those of the parties) that appeared to employ the word mercato as a trade mark, or as part of a business or company name. Her Honour also considered the evidence of a director of Mercato Centrale on this topic, as well as expert evidence given by a marketing academic.

30    Applying Cantarella and other authorities to this evidence, the primary judge ultimately held at J [157]–[158] and [165] that the evidence did not establish that the word mercato bore any ordinary signification in Australia to relevant English-speakers (other than as an allusive reference to Italy) either at the priority dates of the Caporaso marks, or when the cross-claim was commenced. Mercato Centrale’s cross-claim therefore failed on the issues of distinctiveness and confusion.

31    It is important to note that there is no challenge to the primary judge’s conclusions on this topic. Accordingly, the premise upon which the appeal was argued, and upon which it must be decided, is that the word mercato has no ordinary signification, meaning that the Plain Word Mark, Fancy Word Mark, and Red Man Logo are all inherently adapted to distinguish. In other words, the way the parties have conducted the appeal means that the appeal must be decided on the footing that the word mercato would not be recognised by relevant members of the Australian public as the Italian word for market or marketplace.

32    With respect to ownership, the question was whether registration of the Plain Word Mark should be cancelled because, at its priority date, the applicants for the mark were not the owners of the trade mark MERCATO. This issue turned on evidence about a restaurant business in Daylesford that used the mark MERCATO @ daylesford. The primary judge stated at J [176] that this ground was pressed only in respect of the Plain Word Mark and only in respect of its registration for certain services in Class 43.

33    The primary judge noted that only a person claiming to be the owner of a trade mark may apply for its registration: Trade Marks Act s 27(1)(a). Her Honour explained at J [177] that at common law the owner of a trade mark is the first person to use it, or a mark substantially identical to it, as a trade mark. The primary judge weighed the evidence of Mr Mee, a qualified chef who stood behind the Daylesford restaurant known as MERCATO @ daylesford. Ultimately, her Honour concluded that MERCATO @ daylesford had been used as a trade mark before the priority date, but only in respect of “services for providing food and drink including services relating to the provision of food and drink at cafes, restaurants” and not the remainder of Class 43. Nor did her Honour accept that these services were of the same kind as the additional services in Class 43. The primary judge also concluded at J [195] that MERCATO @ daylesford was not substantially identical to the Plain Word Mark because of the ampersand and the lower case “d” in “daylesford”.

34    At J [196], the primary judge accepted that the plain word mercato, standing alone, had been used as a trade mark in connection with the same business. While the evidence had some deficiencies, her Honour was satisfied that the Daylesford restaurant business was promoted by way of a web site with the address “www.mercatorestaurant.com.au”. At J [198], her Honour concluded that the web site address was an instance of use as a trade mark and, in light of the descriptiveness of restaurant, that the website address was substantially identical to the word mercato standing alone. With respect to the scope of services, the primary judge held that services relating to the provision of food and drink at cafes and restaurants were the same kind of thing as providing food and drink at bars and hotels. Accordingly, at J [208] her Honour foreshadowed an order that the Register be rectified. For reasons explained in Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd (No 2) [2024] FCA 256, the primary judge ultimately made an order that the Register be rectified so that the Class 43 services in respect of which the Plain Word Mark is registered be described as –

Services for providing food and drink (other than services for the provision of food and drink at cafés, restaurants, bars or hotels); catering services; preparation of takeaway and fast foods; take away food and drink services; bakery services; bakery services relating to cakes and pastries; consultancy services relating to the operation of restaurants, cafes, take away food services, bars and hotels; temporary accommodation.

35    As for misrepresentation, the primary judge explained at J [44] that the question was whether registration of the Plain Word Mark should be cancelled on the ground that it was accepted for registration on the basis of evidence and representations that were false in material particulars within the meaning of s 62(b) of the Trade Marks Act. The evidence was that the applicants for the Plain Word Mark were John Caporaso and his wife Rose Caporaso, and that the applications for the trade mark were filed before the incorporation of the appellant. The evidence was that Mr and Mrs Caporaso assigned the trade marks to the appellant by way of an assignment dated 19 March 2019.

36    Mercato Centrale alleged that the registration of the Plain Word Mark was secured on the basis of a statutory declaration of John Caporaso that contained misrepresentations about the prior use of the word mercato as a trade mark. The primary judge set out the claimed misrepresentations at J [45].

37    The primary judge noted at J [214] that the facts relevant to this aspect of the cross-claim were mostly uncontentious. At J [217], the primary judge identified the following representations that were made to the Examiner on 14 October 2016 by a statutory declaration dated 10 October 2016 made by John Caporaso, in connection with the application, with cross-references to the relevant paragraphs of the statutory declaration –

(1)    “The trade mark MERCATO … is used in connection with the business first established by my parents Imma and Mario Caporaso as a commercial deli in 1972 under the name Imma and Mario’s Mercato” (at [2]).

(2)    From June 2005 “the store and business began to be referred to simply as MERCATO” (at [2]).

(3)    “The MERCATO brand has been used in connection with my family business and in particular retail and wholesale services since the early 70’s” (at [9]).

(4)    The business “has been known solely by the Trade Mark MERCATO for over a decade” (at [9]).

38    The primary judge noted at J [219] that Mr Caporaso had acknowledged in his affidavit that representation (1) was incorrect. In his affidavit, Mr Caporaso had referred to the representation in the statutory declaration and stated that his parents’ business was in fact known from 1972 as “Imma and Mario’s Continental”. The primary judge stated at J [219] that Mr Caporaso ultimately conceded in his evidence that other representations in [4] and [9] of his statutory declaration were also untrue, and stated at J [226] that there was no dispute that Mr Caporaso’s statutory declaration and the covering letter to the Examiner contained evidence or representations that were false, concluding that, “[a]s at 2016, the evidence and representations provided in support of the application for registration of the Plain Word Mark [were] plainly false in each respect alleged by Mercato Centrale”. The primary judge’s findings on this issue are not challenged on appeal.

39    Referring to Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd [2018] FCAFC 6; 259 FCR 514 (Anchorage) at [146] (Nicholas, Yates and Beach JJ), the primary judge said that the power under s 88 to order that the Register be rectified is discretionary. From Anchorage, her Honour at J [220] distilled the correct approach as involving two stages. First, it is necessary to determine whether the power to exercise the discretion has been enlivened. Secondly, if so, it is necessary to ask whether there appears a sufficient reason not to order the cancellation of the registered mark: see Anchorage at [158]. Her Honour considered the discussion in Anchorage of the different aspects of the public interest that were relevant, including a public interest in ensuring that trade mark registrations are only made in favour of applicants who were entitled to obtain them: see Anchorage at [163].

40    The primary judge referred at J [222] to the decision of Finkelstein J in Colorado Group Ltd v Strandbags Group Pty Ltd [2006] FCA 160; 67 IPR 628 (Colorado (First Instance)). In particular, her Honour extracted the following statement from Colorado (First Instance) at [42] as to the relevance of misrepresentations –

There is in any event a complete answer to the misrepresentation case that does not at all depend upon the meaning to be attributed to Mr Williams’ statement. Even if Mr Williams had set out to deceive the registrar, the point raised by the examiner was not a good point. This is because I do not agree with the examiner (or therefore the registrar) that the entitlement to registration depended upon satisfaction of s 45(5). I have already explained that when used on shoes and backpacks the mark COLORADO was inherently distinctive and that there was no need for evidence of use of the mark having acquired a secondary meaning. Of course the registrar was required to determine whether the word was used in a geographical sense, but that should have taken him along a different line of inquiry. So, if there was misrepresentation which procured the registration of the mark, as a matter of law it was a misrepresentation about an irrelevant fact.

41    While identifying that this statement was obiter, the primary judge at J [224] expressed her agreement with it. Her Honour stated –

On its terms, s 62(b) is concerned with representations that are false in material particulars. Considered in context of the [Trade Marks Act] as a whole, the word “materiality” should be understood as referring to matters that are relevant to the application of the [Trade Marks Act], properly construed and applied. It does not turn on the subjective views of the examiner as to what is relevant.

42    Applying this approach to the facts before her, the primary judge held that the ground for opposition based on misrepresentation had not been made out. While her Honour found at J [226] that the representations set out at [37] above were false, and at J [228] found that the Registrar accepted the application for registration on the basis of these false representations, the primary judge concluded at J [229] that the representations were not false in material particulars within the meaning of s 62(b) of the Trade Marks Act. In short, that was because “on the correct application of principle, the examiner ought to have concluded that the Plain Word Mark was inherently adapted to distinguish Caporaso’s goods in Class 35 from the goods of other persons in the same class”. That was because on a correct understanding of the application of s 41 of the Trade Marks Act, the Plain Word Mark was registrable irrespective of any questions relating to prior use of that mark as a trade mark.

43    Accordingly, on her Honour’s analysis, the false representations as to previous use of the Plain Word Mark were not relevant to the application of the Act, properly construed and applied. At J [230], her Honour concluded that the discretion under s 88(1)(a) was not enlivened.

44    With respect to limitation, at J [232] the primary judge framed the question as whether any order should be made subjecting any Caporaso mark to the limitation that “registration does not confer any exclusive right to use the word MERCATO”. This formulation differs slightly from the order sought in the further amended notice of cross-claim, which we have set out at [7(c)] above. The primary judge explained that this issue would only have arisen if Mercato Centrale had succeeded on the parts of its cross-claim that relied on ss 62(b) and 88(1)(a) of the Trade Marks Act. Since those parts of the cross-claim failed, it was not necessary for the primary judge to explore this issue.

Issue (1) — Cancellation of the Plain Word Mark on the ground of false representations

Cancellation of the Plain Word Mark on the ground of false representations — Mercato Centrale’s submissions

45    Mercato Centrale submitted that the primary judge should have cancelled the Plain Word Mark under s 88(1)(a) of the Trade Marks Act on the ground that registration of the mark could have been opposed under s 62(b), because the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars. As we have mentioned, this was the only ground of Mercato Centrale’s cross-appeal that was advanced at the hearing.

46    The starting point of Mercato Centrale’s submissions was to accept the primary judge’s factual findings about the course of events that led to the acceptance of Caporaso’s application to register the Plain Word Mark. In particular, Mercato Centrale embraced the primary judge’s unchallenged findings at J [226]–[228] that Caporaso made representations to the Examiner that were false, and that the Examiner read the material provided and based the decision to accept the application on the whole of it.

47    In this context, Mercato Centrale challenged the primary judge’s construction of the requirement in s 62(b) that the representations be false “in material particulars”. It submitted that the text, context, and purpose of s 62(b) supported a construction of s 62(b) in which a representation is false “in material particulars” if it is false in respects that were causative of the decision to accept the application.

48    With respect to text, Mercato Centrale submitted that s 62(b) contains no cross-reference to any other provision in the Trade Marks Act, and is engaged where an application has been accepted on the basis of evidence or representations containing particulars which were both false and material to (or causative of) the decision to accept the application.

49    With respect to structure, Mercato Centrale submitted that trade mark acceptance and opposition are dealt with in different Parts of the Act: Part 4 and Part 5, respectively. Mercato Centrale submitted that the separate grounds of opposition provided in ss 58–62A within Part 5 are “stand-alone provisions” that are not subject to, or dependent upon, the grounds of rejection provided by Part 4. By contrast, Mercato Centrale characterised the primary judge’s construction as “wrongly import[ing] the further requirement that the particulars must be relevant to a ground of rejection under Part 4 which, as a matter of law, would have prevented acceptance of the trade mark”.

50    Mercato Centrale identified the purpose of s 62(b) as to address the harm to the public interest that is caused where the Examiner is misled by false information to accept an application to register a trade mark. Mercato Centrale stressed that trade mark applications involve an ex parte examination. Mercato Centrale further submitted that ss 62(a)–(b) are concerned with the propriety of the application process itself, which told against imposing any requirement that the false information be objectively relevant to the task of the Examiner. Mercato Centrale also relied upon the decision of the Full Court in Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 (Prestige Group) for the proposition that s 62(b) seeks to ensure that if an applicant for a trade mark provides evidence or makes representations to an Examiner which are false in a manner that is material to the acceptance of the application, the applicant should not have the benefit of its misleading conduct.

51    Dealing with Colorado (First Instance), Mercato Centrale submitted that Finkelstein J’s analysis amounted to obiter dicta, and that the Full Court on appeal had neither criticised nor endorsed his Honour’s reasoning. In any event, Mercato Centrale submitted that Finkelstein J’s analysis was erroneous for the reasons already explained.

52    As for the question of discretion, Mercato Centrale referred to the following statement of Nicholas, Yates and Beach JJ in Anchorage at [158] –

If the evidence does not disclose sufficient reason not to cancel the mark then it should be cancelled. In the ordinary course of events, it will be for the party that resists the cancellation of the registered mark to persuade the court that there is a sufficient reason not to order its cancellation.

53    Mercato Centrale submitted that permitting the continued registration of the Plain Word Mark would favour Caporaso’s private interests over the public interest, and that the lack of truthfulness of Mr Caporaso at the time of seeking registration and up to his cross-examination should disentitle Caporaso from the benefit of the discretion. Mercato Centrale also submitted that the purity of the Register would be restored by cancelling the Plain Word Mark, which carries an endorsement indicating that the Registrar was satisfied that Caporaso had provided evidence of use of its mark sufficient to meet the requirements of s 41(4) of the Act.

Cancellation of the Plain Word Mark on the ground of false representations — Caporaso’s submissions

54    Caporaso’s submissions emphasised that the cross-appeal took no issue with the primary judge’s conclusion that the Plain Word Mark was registrable under s 41(1) on the basis that it was inherently adapted to distinguish. Accordingly, Caporaso submitted, the entire topic of Caporaso’s prior use of the Plain Word Mark was irrelevant to the analysis which the Examiner ought to have conducted.

55    Caporaso sought to support the primary judge’s approach to s 62(b) on the basis of the following main submissions. Caporaso submitted that the primary judge correctly construed s 62(b) in the context of the Trade Marks Act as a whole, and in light of key features of the Act including the presumption of registrability in s 33(1), and s 41 itself.

56    Caporaso also referred to a report of the Working Party to Review the Trade Marks Legislation titled “Recommended Changes to the Australian Trade Marks Legislation”, dated July 1992 (the Working Party Report). Caporaso emphasised the statement in the Working Party Report at 48 [8A(8)] that “the Working Party intends that ‘misrepresentation’ should be interpreted as meaning ‘a material misrepresentation of relevant facts’”. On this foundation, Caporaso identified the purpose of s 62(b) as being to deter the misrepresentation of facts relevant to obtaining acceptance of a trade mark, not the misrepresentation of facts which are not relevant on a proper application of ss 33(1) and 41(1).

57    Caporaso also submitted that the primary judge’s approach to s 62(b) was consistent not only with the approach of Finkelstein J in Colorado (First Instance), but also with the approach of Kenny J and Allsop J on appeal in Colorado Group Ltd v Strandbags Group Pty Ltd [2007] FCAFC 184; 164 FCR 506 (Colorado (Full Court)). In Caporaso’s submission, both Kenny J and Allsop J proceeded on the basis that, unless an impugned representation is relevant to whether the trade mark should be accepted, s 62(b) is not engaged. Caporaso further submitted that its approach was consistent with all other decided cases which have considered s 62(b) or 88(2)(e), and with the authorities on the concept of “false suggestion” in patent law, including Prestige Group.

58    Caporaso submitted that, in any event, the false representations could only be relevant to registration in Class 35, and that there was “no causative link” between the impugned representations and the registration of the Plain Word Mark in respect of Classes 29, 30, and 43.

59    In the alternative to its main submission, Caporaso submitted that it ought to be a powerful consideration in favour of exercising the discretion under s 88 against cancellation that the Examiner was obliged to accept the Plain Word Mark for registration on the proper application of ss 33 and 41. Caporaso further submitted that its use of the Fancy Word Mark should also weigh as a discretionary consideration against cancellation.

Cancellation of the Plain Word Mark on the ground of false representations — Analysis

The ground of opposition under s 62(b) was established

60    This issue involves a challenge to the primary judge’s construction of s 62(b) of the Trade Marks Act. Section 62 relevantly provides –

62    Application etc. defective etc.

The registration of a trade mark may be opposed on any of the following grounds:

…

(b)    that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars.

61    The issue can be framed as whether the word “material” relates to the Registrar’s acceptance of the application, or whether it relates to the registrability of the mark upon a true analysis of the material that was before the Registrar.

62    The construction of s 62(b) urged by Mercato Centrale is that evidence or representations are false in “material” particulars if they are false in a way that would probably have made a difference to the Examiner’s decision to accept a trade mark application, having regard to the path of reasoning actually followed by the Examiner. On the facts of the present case, this would mean that the representations identified at [37] above would be “false in material particulars” if it is the case that the Examiner, being apprised of the true position, would probably have decided not to accept the Plain Word Mark for registration in respect of the relevant services.

63    By contrast, the construction favoured by the primary judge and supported by Caporaso on appeal is that evidence or representations are false in “material” particulars only if they are false in a way that is relevant to the registrability of the mark in question, on a proper application of the Trade Marks Act. Here, this would entail that the representations identified at [37] above would be “false in material particulars” only if they were relevant to the registrability of the Plain Word Mark in respect of the relevant services on a proper application of ss 33(1) and 41(1). It was the unchallenged finding of the primary judge that the Plain Word Mark was inherently adapted to distinguish Caporaso’s goods in respect of the relevant services, and hence registrable without any evidence of prior use as a trade mark. Accordingly, on Caporaso’s construction, the representations identified above would not be false in “material” particulars, because the extent of Caporaso’s prior use of the Plain Word Mark was objectively irrelevant to the analysis the Examiner should have performed.

64    There is no authority binding on this Court that determines this issue. It essentially raises a question of statutory construction.

65    The modern approach to statutory construction is well known. As Gordon, Edelman, Steward and Gleeson JJ said in ENT19 v Minister for Home Affairs [2023] HCA 18; 410 ALR 1 at [86] –

The starting point for the ascertainment of the meaning of a provision is its text, while at the same time regard is to be had to its context and purpose. … Context should be regarded at the first stage and not at some later stage and it should be regarded in its widest sense, including by reference to legislative history and extrinsic material.

(Citations omitted.)

66    Some relevant aspects of the Trade Marks Act were described in Self Care at [6]–[7], and the provisions relating to registration were described at [9]–[14]. The basic scheme for the registration of trade marks under the Trade Mark Act is as follows.

67    Part 4 of the Trade Marks Act is titled “Application for registration” and comprises ss 27–51A. Within Part 4, a person may apply under s 27 for the registration of a trade mark. Next, the Registrar must publish the particulars of the application (s 30) and examine the application (s 31). Section 33 provides that the Registrar must, after the examination, accept the application unless satisfied that the application has not been made in accordance with the Act or that there are grounds under the Act for rejecting it, in which case the Registrar must reject the application. This gives rise to a presumption of registrability: Self Care at [10].

68    The grounds for rejecting an application for registration are set out in Division 2 of Part 4, and drawing on the summary in Self Care at [11], include that an application must be rejected if –

(1)    the trade mark is not capable of distinguishing the applicant’s goods in respect of which the trade mark is sought to be registered from the goods of other persons (s 41);

(2)    the use of the trade mark in relation to the particular goods would be likely to deceive or cause confusion, because of some connotation that the trade mark or a sign contained in the trade mark has (s 43); or

(3)    the applicant’s trade mark in respect of the applicant’s goods is substantially identical with, or deceptively similar to, a trade mark registered by another person in respect of similar goods and the priority date for the registration of the applicant’s trade mark is not earlier than the priority date for the registration of the other trade mark (s 44).

69    Part 5 of the Trade Marks Act is titled “Opposition to registration” and comprises ss 52–62A. Section 52 provides that, if the Registrar has accepted an application, a person may oppose the registration of the trade mark on any of the grounds specified in the Act and on no other grounds. Division 2 of Part 5 sets out the available grounds of opposition. These include almost all of the grounds on which an application for registration may be rejected by the Registrar (s 57), as well as additional grounds of opposition (ss 58–62A). Section 62, which is headed “Application etc. defective etc.”, sits within Division 2 of Part 5. The heading to s 62 forms part of the Act: Acts Interpretation Act 1901 (Cth) s 13(1), noting the transitional provision in the Acts Interpretation Amendment Act 2011 (Cth) sch 3, item 1.

70    Part 7 of the Act is titled “Registration of trade marks”. Section 68 requires the Registrar to register, within a certain time, a trade mark that has been accepted for registration under Part 4 and which has not been successfully opposed under Part 5.

71    Under this statutory scheme, opposition is a distinct phase of the registration process from examination and acceptance. The premise of the opposition phase is that the Registrar has accepted an application for the registration of a trade mark. While s 57 converts grounds of rejection into grounds of opposition, two of the grounds of opposition within Division 2 of Part 5 are directed to the process of examination and acceptance. At a high level, s 62 is directed to defects in the process of examination and registration. Section 62A, which makes it a ground of opposition that the application was made in bad faith, is likewise directed to attributes attaching to the application, rather than one of the grounds on which the Registrar must reject the application.

72    Within this statutory framework, s 62(b) provides that “[t]he registration of a trade mark may be opposed” on the ground “that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars”. The focus of s 62(b) is thus the process of examination and acceptance.

73    The focus of s 62(b) on whether the Registrar accepted the application based on evidence or representations that were false in material particulars tells in favour of Mercato Centrale’s construction. This focus cannot be explained by supposing that the purpose of s 62(b) is to ensure that trade marks are not registered where they are not registrable. By force of s 57, relevantly all of the grounds of rejection available at the examination stage are also available as grounds of opposition. If the Registrar has accepted an application on the basis of evidence that is false in a way that should have resulted in rejection, it is open to a trade mark opponent through s 57 to rely on a ground which mandated rejection of the application.

74    By way of illustration, consider a case where the Registrar accepts an application on the basis that the trade mark is capable of distinguishing the applicant’s goods or services because the mark, while not being sufficiently inherently adapted to distinguish, has acquired sufficient distinctiveness in fact due to prior use as a trade mark for the purposes of s 41(4). Suppose that the evidence of prior use provided to the Examiner by the applicant is false. In such a case, a trade mark opponent may rely on s 41 in combination with s 57. If the true position is that the trade mark is not registrable, the opponent has a good ground of opposition. There is then no need for the opponent to rely on s 62(b). Accordingly, the purpose of s 62(b) cannot be simply to ensure that only registrable marks are registered. That object is already achieved by other provisions of the Act.

75    Caporaso submitted that the purpose of s 62(b) is to deter misrepresentations of facts relevant to obtaining acceptance of a trade mark, not misrepresentations of facts which are not relevant on a proper application of ss 33(1) and 41(1). But it is difficult to see how s 62(b) would achieve this claimed purpose in its practical operation. In an environment where registration so often depends on questions of fact, degree, and value judgment on which reasonable minds might differ, Caporaso’s claimed purpose would not be achieved unless trade mark applicants could distinguish in advance between facts that are objectively relevant on a correct application of ss 33(1) and 41(1), and those that are not. Otherwise, s 62(b) would not be capable of selectively deterring applicants from making false representations only about objectively relevant facts.

76    A ground of opposition to registration on the basis of false representations at the application stage appeared in Australian trade mark legislation for the first time as s 63 of the Trade Marks Act 1994 (Cth), which was enacted but did not come into force. Section 62 was then enacted in the Trade Marks Act 1995 in the same terms as s 63 of the 1994 Act. There is no corresponding provision in the trade mark legislation of the United Kingdom, New Zealand, or Canada. There is a broadly corresponding provision in s 23(4) of Trade Marks Act 1998 (Singapore), but in the different context of a ground on which the registration of a trade mark may be declared invalid. See also s 75(a) of the Trade Marks Act 2002 (NZ).

77    The ground of opposition in s 62(b) bears some conceptual similarity to the revocation of a patent under s 138 of the Patents Act 1990 (Cth) on the ground that it was obtained by fraud, false suggestion, or misrepresentation. A similar provision appeared in s 100(1)(k) of the Patents Act 1952 (Cth), which succeeded s 86(3) of the Patents Act 1903 (Cth) which provided for revocation of a patent on every ground on which a patent might be repealed by scire facias at common law. The history of the writ of scire facias and its importance in understanding the false suggestion or misrepresentation ground of revocation in the patent legislation was addressed in detail by Gummow J, with whose reasons Northrop J agreed, in Prestige Group at 213–18.

78    The decision of the Full Court in Prestige Group is therefore helpful in identifying the purpose of s 62(b). There, the registered proprietor of a patent commenced proceedings for infringement of its patent against Prestige Group (Australia) Pty Ltd (Prestige Group). Prestige Group pleaded in defence that the patent was invalid because it was obtained on false suggestions or representations within the meaning of s 100(1)(k) of the Patents Act 1952. On appeal, the Full Court made observations about the scope of the words “false suggestion or representation” in s 100(1)(k), as well as the nature of the causal inquiry inherent in the provision.

79    Lockhart J said at 198 that the words “false suggestion or representation” were “of wide import”. His Honour continued –

The statutory ground of revocation and invalidity expressed in s 100(1)(k) is based on equitable notions of good faith, fairness, conscionable conduct and honesty. If an applicant for a patent has misled the Commissioner in a material respect in the course of procedures which led to the grant of the patent, he should not have the benefit of his misleading conduct.

80    At 200, Lockhart J added that “[i]t is only material, as distinct from non-material, false suggestions or representations that invalidate the patent under s 100(1)(k)”. As part of his Honour’s assessment of the respondent’s submissions on materiality, Lockhart J said at 201 that –

[t]he use of the words “obtained on” in par (k) plainly connote some causal nexus between the conduct constituting the false suggestion or representation and the grant by the Crown of the letters patent; but it does not follow in my opinion that the conduct must be such that in its absence the patent would not have been granted. … It is sufficient if the conduct is a material inducing factor which led to the grant.

81    At 199, Lockhart J addressed the purpose of the false suggestion ground in s 100(1)(k), where there were other grounds available which might have been the subject of a false suggestion –

It is true that s 100 separately defines other grounds of revocation, some of which are apt to include conduct which might otherwise fall within the concept of false suggestion or representation: for example, inutility (s 100(1)(h)), absence of the entitlement of the applicant to apply for the patent (s 100(1)(a)), valid claim of an earlier priority date (s 100(1)(t)) and s 100(1)(c) which includes non-compliance with s 40 itself as a ground of revocation. It is possible that there is little work for s 100(1)(k) to do; but that it has some work to do is recognised by its presence in the section as a separate ground of revocation.

82    Lockhart J gave as an instance the fact that members of the public might act on the faith of the claims made in support of an application for a patent that is granted, such as entering into an agreement as a licensee, as a rationale for the false suggestion basis of revocation.

83    Both Mercato Centrale and Caporaso relied upon Lockhart J’s reasons in Prestige Group to support their proposed constructions. We consider that his Honour’s reasons favour Mercato Centrale’s submissions more than those of Caporaso. Lockhart J identified the purpose of s 100(1)(k) of the Patents Act 1952 as ensuring that applicants who have misled the Commissioner do not have the benefit of their misleading conduct; this focuses attention on the integrity of the processes leading to the grant of the patent. While it is true that Lockhart J was discussing representations that were false “in a material respect”, his Honour’s statements at 201 clarify that the concept of materiality was directed to whether the conduct was a “material inducing factor which led to the grant”. In other words, the materiality of a false suggestion fell to be determined by reference to the actual process of consideration that led to the grant of a patent.

84    This conclusion is consistent with the reasoning of Gummow J, with whom Northrop J agreed. Gummow J traced the history of the statutory phrase “obtained on a false suggestion” back through earlier patents legislation, and ultimately to Sir Edward Coke’s statement of the grounds upon which the writ of scire facias lay for the annulment of letters patent. Gummow J at 215 quoted a passage from Hindmarch WM, A Treatise on the Law Relating to Patent Privileges for the Sole Use of Inventions (Stevens, Norton, Benning & Co, 1846) at 377–8 as providing a contemporary account of the operation of this ground –

Crown grants are indeed almost always obtained by means of representations made by, or on the behalf of the grantees, and as the sovereign is so much occupied with the affairs of the state, it would be impossible always to ascertain with certainty whether the representations of a petition for a grant by patent were true or not. The law, therefore, takes especial care to protect the Crown against false petitions and representations. It is accordingly laid down that it is the duty of every one obtaining a grant from the Queen, to see that she is correctly informed respecting the grant. And if it appears that the Queen has been deceived in any material particular, by a false representation or suggestion of the grantee, the patent will be wholly void.

(Emphasis added.)

See also Commissioner of Patents v Thaler [2022] FCAFC 62; 289 FCR 45 at [92] (Allsop CJ, Nicholas, Yates, Moshinsky and Burley JJ).

85    Gummow J added at 216 that the requirement for a “false suggestion” and that the Crown be “deceived” did not imply any requirement of sharp practice by the patentee. At 218, Gummow J said that he considered “that the words ‘obtained on’ convey the notion that the representation was material that the Crown was deceived in its grant” and agreed with Lockhart J’s assessment of the requisite causative threshold.

86    Prestige Group illustrates that it may be an intelligible element of a scheme for the registration of intellectual property rights that a ground is available for challenging a registered right on the basis that the applicant for registration obtained a grant or acceptance on the basis of false information. The statutory object that is identified in Prestige Group is the protection of the integrity of the grant process itself. Though it is cast in different terms, we consider that the place of s 62(b) within the scheme of the Trade Marks Act is analogous to the role of s 100(1)(k) within the Patents Act 1952. As with the Patents Act, an application that is accepted on the basis of a material misrepresentation may result in a false basis for the acceptance of the application being published and potentially acted upon. That occurred in this instance, where the Register recorded as an endorsement for the Plain Word Mark –

Evidence and/or other circumstances provided under subsection 41(4)

87    This conveyed to an informed member of the public that the Registrar must have been satisfied that prior or intended use, when combined with any extent to which the mark was inherently adapted to distinguish, rendered the mark capable of distinguishing the applicants’ goods and services, when in fact the representations as to prior use that were made by the applicants for registration were false.

88    As for Caporaso’s reliance on the presumption of registrability in s 33 of the Trade Marks Act, we do not consider that this assists in resolving the issue of construction. While it is true that the scheme of the Act is that marks should be accepted if and only if they are registrable, we have already explained how this object is achieved by provisions including s 57. The focus of s 62(b) is not on the presumption of registrability; rather, it is directed to the process of examination and acceptance itself. Its concern is with threats to the integrity of that process. And as Prestige Group shows in an analogous context, that is a legitimate area of concern where the acceptance of an application for registration of a trade mark is a step along the way to a statutory monopoly in the form of a personal property right which can be licensed, assigned, and enforced.

89    Nor does the Working Party Report gainsay this analysis. Caporaso relied upon the statement at 48 [8A(8)] of that report that “the Working Party intends that ‘misrepresentation’ should be interpreted as meaning ‘a material misrepresentation of relevant facts’”. Only a few points need be made. First, s 62(b) does not use the word “misrepresentation”. This aspect of the Working Party Report thus does not reflect the actual text that was used in s 62(b). Secondly, the Working Party Report’s statement raises, but does not answer, the question: what facts are relevant, those relevant to the basis on which the Examiner accepted the application, or those that someone else might consider relevant after correctly applying ss 33(1) and 41(1)? Thirdly, as French CJ, Gummow, Hayne, Crennan and Kiefel JJ cautioned in Saeed v Minister for Immigration and Citizenship [2010] HCA 23; 241 CLR 252 at [31], statements in explanatory memoranda cannot take the place of statutory text. A fortiori, the same is true of statements in recommendations of working groups. Fourthly, and relatedly, the text of s 62(b) is not tied to any concept of objectively relevant facts. The Working Party Report cannot be relied upon to insert this new idea into s 62(b) in such a wholesale manner.

90    We can deal with the decisions in Colorado (First Instance) and Colorado (Full Court) briefly. We respectfully agree with the primary judge’s characterisation of what Finkelstein J said in Colorado (First Instance) at [42] as obiter dicta. In that context, it is no criticism of Finkelstein J to note that Colorado (First Instance) does not embark on an analysis of the reasons why it is a “complete answer” to a misrepresentation case that the relevant evidence was false in particulars that may have, but should not have, made a difference to the outcome of an examination.

91    As for Colorado (Full Court), we accept Mercato Centrale’s submission that the Full Court’s decision is not authority in favour of the correctness of Finkelstein J’s dictum. Caporaso relied upon Kenny J’s statement at [31] that “[s]ince the respondent’s use of the word ‘Colorado’ is relevant to an inquiry under s 41(5) and (6), the respondent’s submission on its cross-appeal concerning false representation falls for consideration”. Caporaso’s position appeared to be that Kenny J considered that the false representation issue only arose “[s]ince” use was in fact relevant to acceptance. Caporaso appeared to submit that the word “[s]ince” implicitly suggests that Kenny J would have considered the false representation issue not to arise if the question of use had not been objectively relevant.

92    That submission reads too much into too little. The report of Colorado (Full Court) gives no suggestion that the correctness of Finkelstein J’s dictum was raised as an issue on the appeal, nor that any submissions were made about it. In those circumstances, Kenny J cannot be understood as offering a concluded view on the question. The same points can be made about Allsop J’s statement at [182] that the respondent’s use was relevant, and “[t]herefore” it was necessary to examine what happened. Colorado (Full Court) is not authority for the position urged by Caporaso.

93    Other contextual features of the Act also tell against Caporaso’s submissions, including ss 55 and 88. Section 55 requires the Registrar to refuse to register a trade mark, or to register it, having regard to the extent to which any ground of opposition has been established. Section 88 operates after registration, to empower a court to order that the Register be rectified on application based on grounds, including any ground on which registration could have been opposed. Section 88(1) includes within it a discretion not to rectify the Register, even if a ground of opposition or cancellation is made out: see Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; 209 ALR 1 at [129] (Moore, Sackville and Emmett JJ).

94    The existence of the discretion in s 88(1) means that the construction supported by Caporaso is not necessary as a means of ensuring that registered marks, which were entitled to be registered, are not cancelled automatically where the registration was obtained by representations that were false in material, but properly irrelevant, particulars. Depending on all the facts of the case, it may be an appropriate exercise of discretion not to cancel a mark that was accepted by the Registrar on the basis of representations that were false in material (but properly irrelevant) particulars, where the falsity of those representations was innocent. By contrast, it may be that, in some cases, acceptance is obtained by deliberate (albeit irrelevant) misrepresentations. The flexible discretion in s 88 is capable of meeting each case on its facts. The point is that the proper construction of s 62(b) that we favour does not inexorably lead to a scenario in which registered marks are cancelled in every case where a false, but irrelevant, statement is a material inducing factor in the acceptance of an application.

95    The fact that s 55 does not appear on its face to involve a similar discretionary element is explicable on the basis that s 55 operates at an earlier stage, before a trade mark is registered. It is an intelligible legislative judgment that marks that are not yet registered should not be registered where the application was accepted on the basis of material misrepresentations. In that event, the trade mark applicant is free to make a fresh application, and should not have the benefit of the misleading conduct, as Lockhart J remarked in Prestige Group in relation to the corresponding false suggestion provision of the patent legislation. Because the trade mark has not yet been registered in such a case, the vested interest that a registered owner has in the validity of a registered mark does not weigh on the analysis.

96    For these reasons, and while acknowledging that the issue is one of construction about which reasonable minds might differ, we accept Mercato Centrale’s submission that the primary judge erred at J [224] in concluding that a representation is only false “in material particulars” within the meaning of s 62(b) of the Trade Marks Act where it is false in a respect that is relevant to the application of the Act, properly construed and applied. In our view, the better construction of s 62(b) is that it is concerned with representations that are false in a way that was material to the decision to accept the application for registration.

97    At this stage, we note the primary judge’s reference at J [218] to the Examiner’s notes, which were in evidence. Relevantly, the Examiner’s notes stated that the “combination of applicant’s history and usage to date means maintaining objection not warranted”. We further note the primary judge’s finding at J [228] that the Examiner read the material provided, including the false representations, and based the decision to accept the application on the basis of the whole of it. If it were not already implicit in her Honour’s findings, we consider this sufficient to find that the representations made to the Examiner were false in particulars that constituted a material inducing factor in the decision to accept the whole application for registration. Accordingly, we conclude that the representations were false in material particulars within the meaning of s 62(b). The ground of opposition under s 62(b) is made out in relation to the whole of the registration.

Exercise of the discretion under s 88(1)

98    The next question is how the Court should exercise the discretion under s 88(1) of the Trade Marks Act in view of the conclusion that the s 62(b) ground of opposition is established. The parties made submissions on how the Court should exercise this discretion if the point arose. Neither party submitted that the matter should be remitted to the primary judge for consideration.

99    The discretion under s 88(1) is at large, constrained only by the general scope and objects of the Act: Anchorage at [146]. As Nicholas, Yates and Beach JJ said in Anchorage at [158] –

Leaving aside situations in which s 89(1) of the Act applies, when deciding whether to exercise the discretion under s 88(1), the correct approach is to ask, as McLelland J did in Charles of the Ritz, whether sufficient reason appears not to order the cancellation of a registered mark once the statutory discretion to make such an order has been enlivened. If the evidence does not disclose sufficient reason not to cancel the mark then it should be cancelled. In the ordinary course of events, it will be for the party that resists the cancellation of the registered mark to persuade the court that there is a sufficient reason not to order its cancellation.

100    Here, the starting point is to note that the ground of opposition under s 62(b) has been established. In light of the primary judge’s factual findings, the registration of the Plain Word Mark was obtained by misrepresentations as to the nature and extent of Caporaso’s prior use of that mark.

101    In Anchorage at [163], Nicholas, Yates and Beach JJ identified a public interest in “ensuring that trade mark registrations only be made in favour of applicants who are entitled to obtain them” in the following terms –

As the High Court explained in Health World Ltd v Shin-Sun Australia Pty Ltd at [27], the Act offers various facilities for “ensuring that the Register is pure in the sense that no mark is to be registered unless valid, and no registration of a mark is to continue if it is not valid”.

102    We do not understand these observations, however, as setting the metes and bounds of the public interests that are served by the provisions of the Trade Marks Act. We accept Mercato Centrale’s submission that the observations of Lockhart J in Prestige Group at 198–9 in the analogous context of s 100(1)(k) of the Patents Act 1952 are relevant: “If an applicant for a patent has misled the Commissioner in a material respect in the course of procedures which led to the grant of the patent, he should not have the benefit of his misleading conduct.”

103    We also respectfully agree with Lockhart J’s statement at 199 that “[i]t is possible that there is little work for s 100(1)(k) to do; but that it has some work to do is recognised by its presence in the section as a separate ground of revocation”. The same is true of s 62(b). It has a role to play that goes beyond providing just another basis on which to challenge the acceptance of applications for marks that are not registrable in themselves. Section 62(b) is, in part, a legislative recognition that there is a public interest in encouraging trade mark applicants to be candid with the Registrar during the examination process. The mere fact that the primary judge held that the Plain Word Mark was inherently adapted to distinguish does not in itself determine the proper exercise of the discretion.

104    Because of the way the primary judge decided this issue, it was not necessary for her Honour to make findings as to the state of mind with which Mr Caporaso made the relevant misrepresentations. Nevertheless, Caporaso has invited the Court to consider how the discretion embedded in s 88(1)(a) should be exercised. We are conscious of the caution advised by Hayne J in Waterways Authority v Fitzgibbon [2005] HCA 57; 221 ALR 402 at [134]–[135] concerning the ability of appellate courts to make findings on credibility. But in truth no questions of credibility arise here. Based on the evidence which Mr Caporaso gave, the false representations identified at J [217] related to matters that must have been within the knowledge of Mr Caporaso, in relation to which it can be inferred that Mr Caporaso knew the true position. As was canvassed in Prestige Group, it is a feature of the examination process that the Registrar is effectively required to take statements made by trade mark applicants at face value. The Examiner in this case was entitled to rely on the truth of the statements made by Mr Caporaso in his statutory declaration.

105    The statements made by Mr Caporaso to the Examiner included the false statements reproduced at [37] above. These representations made by Mr Caporaso were false in significant, and not trivial, respects. Taking them one by one –

(1)    It was false to say that “[t]he trade mark MERCATO … is used in connection with the business first established by my parents Imma and Mario Caporaso as a commercial deli in 1972 under the name Imma and Mario’s Mercato”. As the primary judge found at J [226], the word mercato was not used as a trade mark from the commencement of that business in 1972. Nor, as the primary judge found at J [219], was the business called “Imma & Mario’s Mercato” since 1972 at all, as Mr Caporaso noted during examination-in-chief. Based on Mr Caporaso’s evidence during cross-examination, it appears that the word mercato was never used as part of a business name by Mr Caporaso’s parents, and was only adopted at all in about 2005.

(2)    It was false to say that from June 2005 “the store and business began to be referred to simply as MERCATO”. The primary judge found at J [226], in accordance with Mr Caporaso’s acceptance during examination-in-chief, that the word mercato was not used as a standalone trade mark between 2005 and 2009.

(3)    It was false to say that “[t]he MERCATO brand has been used in connection with my family business and in particular retail and wholesale services since the early 70’s”.

(4)    It was false to say that the business “has been known solely by the Trade Mark MERCATO for over a decade”. As J [226] confirms, the word mercato had not been used as a standalone mark between 2005 and 2009, which was almost half of the period to which Mr Caporaso was referring in his statement of 10 October 2016.

106    Caporaso submitted that it should carry weight that Caporaso has a fancy script version of the Plain Word Mark registered in respect of the same services. In our view, this does not weigh in the balance on whether the Plain Word Mark itself, which extends far more broadly in the protection it offers, should be cancelled.

107    Caporaso has not advanced any persuasive case as to why the Court should exercise its discretion not to order that the Register be rectified by cancelling the registration of the Plain Word Mark. In our view, the nature and extent of the false representations which secured the acceptance of the Plain Word Mark, along with the public interest in ensuring that the Registrar is able to act on the assurances of trade mark applicants, tell in favour of cancellation. We do not accept that the primary judge’s conclusion that the Plain Word Mark was registrable in any event has decisive significance. To attach decisive significance to such a consideration in every case would be to take away the independent operation of s 62(b) as a provision directed to the integrity of the examination and acceptance process.

108    Nor do we accept the submission by Caporaso that rectification of the Register should be restricted to Class 35. We have already explained that the acceptance process was undermined by the false representations made by Mr Caporaso. At the same time, the process of opposition provided for under the Act was compromised, because of the false basis upon which the Plain Word Mark was accepted for registration. A reflection of this is the endorsement on the Register in respect of the Plain Word Mark, to which we have already referred. That endorsement does not distinguish between the different classes in respect of which registration was obtained. Restricting the rectification in this case to Class 35 would not address the broader ramifications of the false representations made to the Examiner. In these respects, we accept the submissions of Mercato Centrale that, in the circumstances of this case, cancelling the registration would uphold the public interest in preserving the registration process.

109    On all the facts of this case, we consider it appropriate to order under s 88(1)(a) that the Register be rectified by cancelling the registration of the Plain Word Mark.

Issue (2) — Narrowing of services in Class 43

Narrowing of services in Class 43 — Caporaso’s submissions

110    Caporaso did not seek to challenge the primary judge’s finding that Caporaso was not the owner of the trade mark MERCATO in connection with restaurant services. Indeed, Caporaso accepted that this finding was sufficient to make out a ground to rectify the registration of the Plain Word Mark in respect of certain services in Class 43.

111    Caporaso submitted that the primary judge erred by failing to consider at all whether to exercise the discretion under s 88 of the Trade Marks Act not to order that the registration of the Plain Word Mark be rectified pursuant to ss 58 and 88(2)(a) of the Act. Caporaso submitted that, while the primary judge acknowledged the existence of this discretion at J [220]–[221], her Honour’s consideration of it was confined to the context of ss 62(b) and 88(2)(a) of the Trade Marks Act, in their application to the misrepresentation claim. Accordingly, Caporaso submitted, this Court should consider for itself whether to exercise the discretion in respect of the ownership issue.

112    Caporaso identified three factors that told in favour of exercising the discretion so as not to rectify the registration of the Plain Word Mark. These factors were that –

(1)    Caporaso had developed a significant reputation in the mark MERCATO in connection with the provision of retail services and food and drink services, including the services excluded by the primary judge;

(2)    the Court ought to take into account the public interest in avoiding confusion resulting from fragmented ownership of the same or very similar marks for very similar services, differentiated by fine distinctions. Caporaso cited three decisions of single judges of this Court in support of this claimed “well established” proposition; and that

(3)    the Daylesford “MERCATO” restaurant business was sold in 2017 or 2018 to a company that was deregistered in 2022, in circumstances where Caporaso had unsuccessfully attempted to obtain an assignment of the unregistered trade mark MERCATO in 2023, and no other person had made such an attempt.

Narrowing of services in Class 43 — Mercato Centrale’s submissions

113    Mercato Centrale accepted that the primary judge had not considered whether to exercise the discretion in s 88 in respect of the ownership issue. However, Mercato Centrale submitted that Caporaso had not established a sufficient reason not to order the rectification of the Register. In particular, Mercato Centrale submitted that –

(1)    the primary judge made no findings about Caporaso’s reputation in the word mercato;

(2)    the public interest is not served by conferring a back-dated statutory monopoly on a party who is the owner of the same trade mark for adjacent goods and services, but is otherwise not entitled to have a trade mark registered in relation to the services at issue; and that

(3)    it is irrelevant that Caporaso had unsuccessfully attempted to obtain common law rights to the MERCATO trade mark in respect of the excluded services.

Narrowing of services in Class 43 — Analysis

114    Because we conclude that the registration of the Plain Word Mark must be cancelled, it is not strictly necessary that we address this issue. The parties did not squarely join issue on the question whether it was necessary for the primary judge to consider the s 88 discretion separately in relation to the question of ownership. The parties’ submissions were directed instead to the question of how this Court should exercise that discretion. On the basis of this seemingly accepted position, we will explain how we would approach the s 88 discretion if that issue were to arise.

115    We would accept the submissions of Mercato Centrale on this issue. The primary judge did not make any finding as to the extent of Caporaso’s reputation in the word mercato. We accept Mercato Centrale’s submission that it is irrelevant whether Caporaso has attempted to secure common law rights to the MERCATO trade mark, given that it has been unsuccessful in doing so.

116    Nor would we accept Caporaso’s submission that the risk of confusion told in favour of exercising the s 88 discretion not to rectify the Register. Caporaso relied upon the decision of Drummond J in McHattan v Australian Specialised Vehicle Systems Pty Ltd (1996) 34 IPR 517 at 544, cited in Tivo Inc v Vivo International Corp Pty Ltd [2012] FCA 252 at [471] (Dodds-Streeton J) and Sensis Pty Ltd v Senses Direct Mail & Fulfillment Pty Ltd [2019] FCA 719; 141 IPR 463 at [130] (Davies J). That decision ultimately related to the scope that should be given to the provisions in the Trade Marks Act that permitted limitations to be made on the registration of trade marks for non-use. The point Drummond J was making at 544 was that fine distinctions between sub-sets of registered goods ought not be drawn in the context of non-use applications under s 92 of the Trade Marks Act, for the purpose of avoiding the fragmentation of ownership which would give rise to confusion. That principle does not assist in a context where Caporaso was not entitled, as at the priority date, to registration in respect of the excluded services at all. The principle would in fact suggest that, if confusion would be the result of allowing Caporaso to register the Plain Word Mark in respect of the remaining services, then Caporaso ought not to have obtained the registration that it did in the first place.

117    It is also a weighty consideration that Caporaso was not entitled to registration in respect of the services excluded by the primary judge. Caporaso was not the owner of the mark in relation to those services. We consider that it would not advance the public interest to confer on Caporaso what Mercato Centrale described as a “back-dated statutory monopoly” over the word mercato used in connection with services in relation to which Caporaso was not the owner as at the priority date.

118    Additionally, as the primary judge noted at J [156], a significant number of businesses employing the word mercato in relation to various goods and services adopted that word after the priority date of the Plain Word Mark. We see no reason in this case to run the risk of conferring on Caporaso the right to use the word mercato as a trade mark in connection with the excluded services, to the exclusion of persons who, at the time they commenced trading, were entitled as against Caporaso to use that word as a trade mark.

119    At the hearing, senior counsel for Caporaso submitted that Caporaso would not oppose placing a limitation on the registration to the effect that the Plain Word Mark was also registered in relation to the excluded services, but only prospectively. In our view, if Caporaso wishes to obtain registration of the Plain Word Mark in relation to the excluded services, it is open to it to make an application in the ordinary way. We would not exercise the Court’s discretion in s 88 to achieve this result, even if persuaded that such a course were open.

120    Even putting our conclusion on issue (1) to one side, Caporaso has not advanced sufficient reason to exercise the discretion in s 88 not to rectify the registration of the Plain Word Mark.

Issue (3) — Deceptive similarity

Deceptive similarity — Caporaso’s submissions

121    Having regard to our conclusion on issue (1), the question of deceptive similarity does not arise in relation to the Plain Word Mark, but it remains an issue in relation to the other registered marks of Caporaso. However, for reasons that we will explain, we will address all the submissions that were made, as the issues are inter-linked.

122    Caporaso submitted that the primary judge’s finding that MERCATO CENTRALE was not deceptively similar to the Plain Word Mark MERCATO was affected by eight errors. In outline, these claimed errors were –

(1)    The primary judge failed to consider at all the fact that MERCATO is inherently distinctive of the relevant goods and services, despite this being a relevant consideration. Caporaso relied upon the decision of the Full Court in Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44; 407 ALR 473 (Yates, Stewart and Rofe JJ) (Energy Beverages) in support of this submission.

(2)    The primary judge failed to consider the fact that the registered trade mark MERCATO is “wholly incorporated” within MERCATO CENTRALE, despite this being a relevant consideration. Caporaso relied again on Energy Beverages to support this submission.

(3)    The primary judge at J [282] “misconstrued the established principle” that the first part of a mark is, as a rule, by far the most important for the purpose of distinction. Caporaso submitted that “the authorities for this principle” meant to refer to a norm of language in common usage, rather than a rule to which courts are bound.

(4)    The primary judge failed to consider at all the evidence of actual confusion that had been adduced at trial. This evidence, which we will address in due course, involved a customer emailing Caporaso asking for details of its new “Melbourne store”, which the customer clarified meant “the Melbourne store they have advertised in Collins Street Melbourne”, being an establishment of Mercato Centrale, not Caporaso. Referring to Australian Woollen Mills Ltd v FS Walton & Co Ltd (1937) 58 CLR 641 (Australian Woollen Mills) at 658 (Dixon and McTiernan JJ), Caporaso submitted that evidence of this sort was not essential, but “if forthcoming, is of great weight”.

(5)    The primary judge at J [283]–[284] placed undue weight upon the absence of a proven ordinary signification of the word centrale, and failed to give proper consideration to the likelihood that at least a number of ordinary English-speaking people in Australia would surmise that centrale has a descriptive meaning comparable to central. Caporaso submitted that her Honour ought to have found that the addition of centrale was not likely to diminish the trade mark significance of the word mercato within MERCATO CENTRALE.

(6)    The primary judge relied at J [284] upon a contention not advanced by either party that “in ordinary English adjectives do not follow nouns”, when it is in fact “quite common in the retail trade for geographic indicators to follow distinctive trade marks”.

(7)    The primary judge made a finding at J [285], without evidence, to the effect that centrale is not less distinctive or more descriptive than mercato.

(8)    The primary judge failed to consider the fact that, to the extent that centrale has no meaning to other ordinary Australians, its lack of any distinctive meaning undermines its effectiveness as a differentiating feature. Caporaso relied again on the Full Court’s analysis of the marks at issue in Energy Beverages to support this submission.

123    Caporaso submitted that this Court, when conducting the deceptive similarity analysis without these claimed errors, ought to find that there is a likelihood that at least a number of ordinary Australian consumers will be caused to wonder whether the goods and services provided under the mark MERCATO CENTRALE come from the same source, or are a variant or sub-brand of MERCATO.

124    As for the required comparisons other than the comparison of the Plain Word Mark with MERCATO CENTRALE, Caporaso submitted that the primary judge’s analysis was affected by the same eight errors identified above. Regarding the logo marks, Caporaso submitted that the confusion caused by the incorporation of the word mercato is not removed by the addition of a visual logo. Accordingly, Caporaso submitted that the Court should find that each of the Mercato Centrale marks is deceptively similar to the Plain Word Mark.

Deceptive similarity — Mercato Centrale’s submissions

125    Mercato Centrale submitted that the primary judge had identified the correct approach to the question of deceptive similarity at J [266]–[267]. Mercato Centrale submitted that, as the primary judge found, while the MERCATO CENTRALE mark shares the word mercato with the Plain Word Mark, there are also clear differences between the marks.

126    Senior counsel for Mercato Centrale accepted at the hearing of the appeal that the word centrale would be understood by an Australian consumer to mean central.

127    As for the eight claimed errors upon which Caporaso relied, Mercato Centrale submitted –

(1)    As for the claim that the primary judge failed to consider the inherent distinctiveness of the word mercato in her Honour’s analysis of deceptive similarity, the Court should infer that her Honour’s analysis of the distinctiveness of that word at J [49], [87] and [88] was taken into account even if it was not expressly mentioned. Senior counsel for Mercato Centrale also made submissions distinguishing previous decisions on their facts.

(2)    As for the claim that the primary judge failed to consider that the word mercato was wholly contained within each of the marks, a fair reading of her Honour’s reasons (especially J [284]–[285]) reveals that this was taken into account. Again, senior counsel for Mercato Centrale also made submissions directed to the facts of other cases where this issue had arisen.

(3)    As for the importance of the first part of a mark, Mercato Centrale submitted that this turned on the facts of each case, and in any event the primary judge had given consideration to this factor.

(4)    Mercato Centrale accepted that the primary judge had not taken the evidence of actual confusion into account, but maintained that the evidence should not affect the result of the deceptive similarity analysis. Mercato Centrale submitted that there was no evidence as to what the customer had seen or been told when she sent the email to Caporaso, and no evidence as to how or why any alleged confusion arose. Senior counsel for Mercato Centrale emphasised that the customer had not been called as a witness by Caporaso, and so her evidence could not be tested.

(5)    As for whether the primary judge placed undue weight on the fact that centrale has no understood meaning, Mercato Centrale reiterated that it accepted that centrale would be understood by Australian consumers to mean central. Nevertheless, Mercato Centrale emphasised that the combination of mercato and centrale produces a visually, aurally and rhythmically distinct impression from mercato alone.

(6)    As for the primary judge’s statement that adjectives in English do not follow nouns, Mercato Centrale submitted that the primary judge noted this but did not rely upon it.

(7)    As for the primary judge’s statement that neither of the words mercato nor centrale is less distinctive or more descriptive than the other, Mercato Centrale submitted that this was simply a factual finding, which was correct in any event.

(8)    As for the eighth alleged error, senior counsel for Mercato Centrale noted that there was no factual finding in support of this error, and submitted that the error was not established.

128    With respect to the primary judge’s consideration of marks other than the Plain Word Mark and the mark MERCATO CENTRALE, Mercato Centrale submitted that the primary judge worked incrementally, comparing the words in each mark before analysing how different stylisations affected the inquiry. Senior counsel for Mercato Centrale emphasised the striking visual differences between the Red Man Logo and the Mercato Centrale Logo in particular.

Deceptive similarity — Consideration

The applicable standard of appellate review

129    Grounds three to 11 of the amended notice of appeal claimed that the primary judge erred in her Honour’s assessment of deceptive similarity between the Caporaso marks and the Mercato Centrale marks. The parties made competing submissions about the approach that this Court should adopt to the appellate review of the primary judge’s assessment.

130    Caporaso submitted that the eight claimed errors identified above “caused the primary judge’s process of evaluation … to miscarry, such that the Full Court should carry out its own evaluation and undertake the task of trade mark comparison afresh”. Senior counsel for Caporaso structured his oral submissions around these eight errors, and a consequential fresh comparison of the relevant marks.

131    Mercato Centrale submitted that this appeal is a rehearing, not a new hearing. In Mercato Centrale’s submission, the determination of whether trade marks are deceptively similar to each other is a factual enquiry consisting of an evaluative and essentially impressionistic assessment, on which reasonable minds may differ. Accordingly, Mercato Centrale submitted, it is not sufficient for the success of the appeal that the Full Court might itself have reached a different conclusion from the primary judge on the question of deceptive similarity.

132    The approach advocated by Mercato Centrale does not reflect the correct approach to the exercise of this Court’s appellate jurisdiction, as it has been explained in judgments of the High Court, and especially in Warren v Coombes (1979) 142 CLR 531 at 551 (Gibbs ACJ, Jacobs and Murphy JJ). In GLJ v Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32; 414 ALR 635 (GLJ) and Steven Moore (A Pseudonym) v The King [2024] HCA 30; 98 ALJR 1119 (Moore), the High Court reaffirmed some of the principles governing the standard of appellate review on an appeal by way of rehearing. Essentially, the applicable standard of appellate review is the product of two factors: the nature of the appellate court’s powers; and the nature of the decision made by the court below.

133    As to the nature of the decision made by the court below, the High Court has emphasised the distinction between the principles essayed in House v The King (1936) 55 CLR 499, which apply to appellate review of discretionary decisions where the primary decision-maker is allowed some latitude as to the choice of the decision to be made, and the “correctness standard”, which applies to “questions to which there is but one legally permissible answer, even if that answer involves a value judgment”: see GLJ at [16] (Kiefel CJ, Gageler and Jagot JJ, Steward J agreeing at [95], Gleeson J agreeing at [161]). The correctness standard has been applied by Full Courts to evaluative decisions in a number of contexts, such as those involving defamatory meaning, and whether a deed of company arrangement should be terminated: see Bazzi v Dutton [2022] FCAFC 84; 289 FCR 1 at [22]–[26] (Rares and Rangiah JJ), and Project Sea Dragon Pty Ltd (Subject to a Deed of Company Arrangement) v Canstruct Pty Ltd [2024] FCAFC 141 at [114]–[118] (Jackman J, O’Callaghan J and McElwaine J agreeing). The correctness standard has also been applied by the High Court to the evaluative question whether tendency evidence has “significant probative value” for the purposes of s 97(1)(b) of the Evidence Act 2008 (Vic): R v Dennis Bauer (A Pseudonym) [2018] HCA 40; 266 CLR 56 at [61] (Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ), with the Court stating that on appeal, “it is for the court itself to determine whether evidence is of significant probative value, as opposed to deciding whether it was open to the trial judge to conclude that it was”.

134    As for trade marks, while questions of deceptive similarity for the purposes of claimed trade mark infringement may be evaluative questions involving matters of impression on which reasonable minds may differ, they raise an “objective question based upon a construct” (Self Care at [28]) to which there is one uniquely correct outcome. The scheme of the Trade Marks Act does not provide for any zone of choice on the question of deceptive similarity.

135    The powers of this Court on an appeal from a single judge are conditioned on a finding of some legal, factual, or discretionary error. In relation to an evaluative conclusion, specific error may be shown in a trial judge’s reasoning or approach that falsifies the conclusion. But specific error need not be established. Error may established in an evaluative conclusion where, after giving proper weight and respect to the trial judge’s views and any advantages that the trial judge enjoyed, the appellate court ultimately takes a different view: see Warren v Coombes at 551 (Gibbs ACJ, Jacobs and Murphy JJ); and see the earlier reasons of Jacobs J when President of the New South Wales Court of Appeal in Cashman v Kinnear [1973] 2 NSWLR 495 at 499, which were quoted in Warren v Coombes at 549. As the High Court stated in Moore at [14], citing Warren v Coombes at 552 and Fox v Percy [2003] HCA 22; 214 CLR 118 at [23] –

Under the correctness standard, the appellate court determines for itself the correct outcome while making due allowance for such “advantages” as may have been enjoyed by the judge who conducted the trial or hearing.

136    In Frigger v Trenfield (No 3) [2023] FCAFC 49 (Frigger) at [139], Allsop CJ, Anderson and Feutrill JJ referred to the leading authorities, and in terms that we respectfully adopt, stated that –

error may be demonstrated, after due regard for and respect is paid to, the advantages and views of the trial judge, by a different conclusion by the appeal court as to the relevant fact or question. Error is not limited to showing why or how the trial judge erred in the process or approach that was taken; error may be concluded from the difference in view of the appeal court as to the conclusion in issue.

(Emphasis added.)

137    For these reasons, the real question is not whether the primary judge’s conclusion on deceptive similarity was “clearly open” to her Honour, as Mercato Centrale submitted.

138    Counsel for Mercato Centrale cited the Full Court’s decision in Energy Beverages at [158]–[160] (Yates, Stewart and Rofe JJ) to support a submission that “it is not sufficient that the Full Court might itself have reached a different conclusion from the [primary judge]”. See also The Agency Group Australia Ltd v HAS Real Estate Pty Ltd [2023] FCAFC 203; 177 IPR 1 (The Agency Group) at [62]–[64] (Yates, Markovic and Kennett JJ), which was cited in argument.

139    Contrary to the submission, the cases that we have cited establish that error may be shown where, although respect and weight are given to the primary judge’s reasons, and regard is had to any advantages that the primary judge enjoyed, there is nonetheless a difference of opinion as to the conclusion. As Frigger at [139] highlights, in these circumstances the difference of opinion may itself constitute the error. That is because while different minds may take different views, “[i]f the appellate mind ultimately takes a different view of the conclusion, then, for the purposes of the litigation, that conclusion is right and the conclusion of the court below is wrong”: Cashman v Kinnear at 499. We do not understand the Full Courts in Energy Beverages and The Agency Group to have intended to depart from the well-known principles referred to in Warren v Coombes that were the subject of explanation in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 at [28]–[30] (Allsop J, Drummond J and Mansfield J agreeing), and in Frigger at [139]. Indeed, in The Agency Group at [62] the Full Court observed that “[t]he threshold for appellate intervention is the demonstration of error in the outcome or in the carrying out of the evaluation”.

140    Therefore, while it is open to an appellant, and it may be a persuasive form of advocacy, to point to and rely upon specific errors of reasoning as Caporaso did on this appeal, it is also open to an appellant to rely on the ultimate evaluation as itself being in error, without identifying any specific error that caused the supporting analysis “to miscarry”, as Caporaso’s submissions suggested was necessary.

141    In the present case, there was no submission that this Court is not in as good a position as the primary judge to assess whether the Mercato Centrale marks are deceptively similar to the Caporaso marks: see also RB (Hygiene Home) Australia Pty Ltd v Henkel Australia Pty Ltd [2024] FCAFC 10; 302 FCR 285 at [12] (Nicholas, Burley and Hespe JJ). Therefore, while this Court should accord weight to the reasons and conclusions of the primary judge, it should give effect to its own conclusions if they differ from the conclusions of the primary judge.

Analysis of deceptive similarity

142    At the hearing of the appeal, counsel for Caporaso clarified that the issue of deceptive similarity called for a comparison of each of the Caporaso marks with each of the Mercato Centrale marks. Given that there was no challenge to the registration of the Fancy Word Mark or the Red Man Logo, our conclusion with respect to the cancellation of the Plain Word Mark does not mean that this issue falls away. Indeed, because of the way Caporaso put its submissions concerning the deceptive similarity between the Fancy Word Mark, the Red Man Logo, and the Mercato Centrale marks, it is necessary to pay close attention to the Plain Word Mark despite our conclusion on issue (1).

143    As noted above, the trial was conducted on the basis that Caporaso only pressed its infringement case in relation to the Fancy Word Mark and the Red Man Logo in the event that the registration of the Plain Word Mark was cancelled.

144    For the reasons we have explained above, it is not necessary to consider in sequence each of the eight claimed errors upon which Caporaso relied. The parties accepted that this Court should conduct the deceptive similarity analysis for itself again on appeal. Accordingly, we will treat the eight claimed errors as the articulation of Caporaso’s submissions on the substance of the question before the Court.

145    The primary judge summarised the principles relating to deceptive similarity at J [265]–[279] in a way that was entirely orthodox, with a focus on the decision of the High Court in Self Care. We respectfully agree with her Honour’s summary of the applicable principles. For present purposes, it is sufficient to set out the following passages from Self Care.

146    At [26], the Court said –

[A] trade mark is taken to be deceptively similar to another trade mark if it “so nearly resembles that other trade mark that it is likely to deceive or cause confusion”. The essential task is one of trade mark comparison; the resemblance between the two marks must be the cause of the likely deception or confusion. In evaluating the likelihood of confusion, the marks must be judged as a whole, taking into account both their look and their sound.

(Citations omitted.)

147    At [28]–[32], the Court added –

The question to be asked under s 120(1) is artificial – it is an objective question based on a construct. The focus is upon the effect or impression produced on the mind of potential customers. The buyer posited by the test is notional (or hypothetical), although having characteristics of an actual group of people. The notional buyer is understood by reference to the nature and kind of customer who would be likely to buy the goods covered by the registration. …

The issue is not abstract similarity, but deceptive similarity. The marks are not to be looked at side by side. Instead, the notional buyer’s imperfect recollection of the registered mark lies at the centre of the test for deceptive similarity. The test assumes that the notional buyer has an imperfect recollection of the mark as registered. The notional buyer is assumed to have seen the registered mark used in relation to the full range of goods to which the registration extends. The correct approach is to compare the impression (allowing for imperfect recollection) that the notional buyer would have of the registered mark (as notionally used on all of the goods covered by the registration), with the impression that the notional buyer would have of the alleged infringer’s mark (as actually used). As has been explained by the Full Federal Court, “[t]hat degree of artificiality can be justified on the ground that it is necessary in order to provide protection to the proprietor’s statutory monopoly to its full extent”.

A trade mark is deceptively similar if it “so nearly resembles” the other trade mark that it is “likely to deceive” or “cause confusion”. “[D]eceive[d]” implies the creation of an incorrect belief or mental impression; “caus[ing] confusion” may merely involve “perplexing or mixing up the minds” of potential customers. Intention to deceive or cause confusion is not required, although if present may be a relevant consideration. Similarly, evidence of actual cases of deception or confusion is of great weight, but not essential.

The usual manner in which ordinary people behave must be the test of what confusion or deception may be expected, having regard to the character of the customers who would be likely to buy the goods. As explained by Dixon and McTiernan JJ in Australian Woollen Mills, potential buyers of goods are not to be credited with “any high perception or habitual caution”; however, “exceptional carelessness or stupidity may be disregarded”.

It is not necessary to establish actual probability of deception or confusion. But a mere possibility of confusion is not enough; there must be a real, tangible danger of deception or confusion occurring. It is enough if the notional buyer would entertain a reasonable doubt as to whether, due to the resemblance between the marks, the two products come from the same source. Put another way, there must be “a real likelihood that some people will wonder or be left in doubt about whether the two sets of products … come from the same source”.

(Citations omitted.)

148    We also respectfully agree with the primary judge’s statement at J [268] in relation to authorities that “considerable care must be taken when considering the result of a case turning on an essentially factual question”. As her Honour put it, “[t]he cases illustrate how the established principles have been applied to different signs in different contexts, but they do not represent a tariff or standard to be followed in the case before me”. We consider this observation apt to the task before this Court, and would additionally refer to the caution of Windeyer J in Teubner v Humble (1963) 108 CLR 491 at 503, quoted in Bus v Sydney County Council (1989) 167 CLR 78 at 89 (Mason CJ, Deane, Dawson and Toohey JJ), that law reports “should not be ransacked and sentences apt to the facts of one case extracted from their context and treated as propositions of universal application”. In our view, there was a tendency in the submissions of Caporaso to detach factual analysis from the context of the case in which it was conducted, and to treat it as establishing a principle that holds good even beyond that context.

149    We do not accept Caporaso’s submissions with respect to the third claimed error. Caporaso’s submissions relied upon the decisions of this Court in Conde Nast at 511 (Burchett J) and Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH [2001] FCA 1874; 190 ALR 185 (Frito-Lay) at [160] (Lindgren J) as “authorities for this principle”. Those decisions establish no such principle. Both Burchett J and Lindgren J were concerned with emphasising, on the particular facts of those cases, the importance of the first syllable of particular words. Those observations were made in the course of comparing the whole of the relevant marks, and they were directed to the precise nature of the marks in question, taking into account features such as emphasis and accented syllables. In our view, the primary judge was correct not to reason by reference to factual findings made in previous cases. Nor do we accept Caporaso’s submission on the appeal that these isolated sentences in Conde Nast and Frito-Lay amount to “authorities” for any “principle” — whether a principle of law, or of English usage.

150    Nor, given that the parties accepted that this Court should conduct its own analysis, do we consider it necessary to deal in detail with the attacks upon the primary judge’s specific course of reasoning in claimed errors (1), (2), (7) and (8).

151    For the reasons that follow, we conclude that the word marks MERCATO CENTRALE and IL MERCATO CENTRALE are deceptively similar to the Plain Word Mark.

152    At the outset, we reiterate that the premise upon which the appeal was conducted was that the Australian public would not recognise the word mercato as the Italian word for market or marketplace, or as having any other ordinary signification. By contrast, as we noted at [126] above, senior counsel for Mercato Centrale accepted at the hearing that Australian consumers would understand the word centrale to mean central. It appears from the primary judge’s reasons that there was no such acceptance before her Honour. At J [283]–[285], her Honour noted the submissions that centrale would be understood to mean central, and that the target audience might well understand the word centrale to be a “descriptive add-on”. Her Honour did not accept those submissions, and said that centrale did not have a proven ordinary signification to English-speaking consumers. Her Honour concluded that, like mercato, the word centrale was distinctive and would not be readily recognised as a noun or an adjective. This conclusion, combined with her Honour’s observations about English word order, led to the rejection of the submission that members of the target audience would consider MERCATO CENTRALE to be a sub-brand of MERCATO.

153    For several reasons, we accept Caporaso’s submission that her Honour erred at J [284] by placing weight upon the proposition that, in ordinary English, adjectives do not follow nouns.

154    First, there are many examples in ordinary English of adjectives following nouns. This phenomenon may occur in some fixed expressions, or when the adjective happens to follow the noun it governs, or when the order is reversed for rhetorical effect (for example, “letters patent”, “body politic”, “body corporate”, “code red”, “times past”, “life everlasting”, “time immemorial”, “proof positive”, and “bliss eternal”): see Burchfield R W, Fowler’s Modern English Usage (rev 3rd ed, Oxford, 2004) at p 23. There are examples aplenty, which need not be multiplied in the space available.

155    Secondly, the question whether MERCATO CENTRALE would appear as a sub-brand requires that attention be paid to the conventions used in the context of sub-brands. It is a matter of common knowledge that descriptive adjectives may follow nouns in the particular context of sub-brands, often to indicate a variant of some description. Well-known examples include Coke Zero, Pepsi Max, Virgin Mobile, Coles Local, MacBook Pro, Samsung Galaxy Ultra, and Nescafé Gold.

156    Thirdly, if the primary judge meant to observe that adjectives usually follow nouns in Romance languages, but usually do not follow nouns in English, then that observation ought not to have carried much weight. The fact that adjectives typically precede nouns in English does not mean that ordinary English speakers will not follow when an adjective comes after a noun, where the context otherwise clarifies the intended meaning.

157    Accordingly, once it is accepted that centrale would be understood to mean central, the analysis takes on a different complexion from the appearance it took at trial. In our view, a substantial number of consumers would look at the mark MERCATO CENTRALE, note that the whole of the Plain Word Mark MERCATO has been incorporated in it, and consider that the word centrale is a descriptive addition to that mark, connoting either a variant or sub-brand of MERCATO. In other words, we would reach the same conclusion as Burley J did in Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808; 158 IPR 9 at [344] in relation to the facts of that case involving the registered mark LA FAMIGLIA and the words LA FAMIGLIA RANA. Additionally, however, the fact that the word centrale is descriptive weighs in favour of our conclusion, since it aligns the MERCATO CENTRALE brand name with those of the well-known sub-brands identified above.

158    We also consider that the evidence of actual confusion upon which Caporaso relied confirms this conclusion. As noted in Self Care at [30], “evidence of actual cases of deception or confusion is of great weight, but not essential”. The evidence in question comprised an exchange of emails between a member of the public and Caporaso’s Marketing Manager.

159    On 22 February 2023, a member of the public sent an email to the address “info@mercato.com.au”, which relevantly stated: “Can you please tell me if the Melbourne store has opened yet. When I google it I am not given this information.” Caporaso’s Marketing Manager replied on the same day, asking: “Apologies. May I ask which business you are referring to?”. The member of the public then replied: “The Melbourne store they have advertised in Collins Street Melbourne. They did say it would be opened by the end of 2022.”

160    Of course, it was Mercato Centrale that was opening an outlet in Melbourne, not Caporaso. Caporaso relied on this exchange as an example of a member of the public being actually confused as to the trade origin of the goods and services offered by Mercato Centrale because of the resemblance between the mark MERCATO CENTRALE and the Plain Word Mark.

161    In connection with this exchange, senior counsel for Caporaso relied on various press reports that were in evidence before the primary judge. Caporaso submitted, and we accept, that these reports explain that a business known as “Mercato Centrale” was said to be opening in Collins Street, Melbourne, by the end of 2022.

162    Mercato Centrale submitted that the member of the public who sent the email had not made an affidavit, was not called as a witness, and consequently was not cross-examined. Senior counsel for Mercato Centrale submitted that there was no way of testing how she came to possess the information identified in her emails, and whether she had read the press reports on which Caporaso relied. In these circumstances, Mercato Centrale submitted that it would be dangerous to rely on the email exchange as evidence of actual confusion.

163    We acknowledge the limitations on the probative value of this evidence of actual confusion. Nevertheless, we consider that it does carry weight and tends to confirm the conclusion we have reached. Given the information possessed by the member of the public, it would seem likely that the press reports identified by Caporaso were at least the ultimate source (and probably the immediate source) of the confusion. Given contact was made with Caporaso, it would also seem likely that the member of the public was actually deceived as to the commercial origin of the goods and services offered under the trade mark MERCATO CENTRALE. This buttresses our conclusion that there is a real risk that members of the public, familiar with the Plain Word Mark, would at least be caused to wonder whether there is a commercial connection between the traders that stand behind MERCATO and those that stand behind MERCATO CENTRALE.

164    For these reasons, we conclude that MERCATO CENTRALE would infringe the Plain Word Mark if the registration of the Plain Word Mark were not cancelled. For the same reasons, the same result would follow in respect of the word mark IL MERCATO CENTRALE, as identified at [3] above.

165    We would not, however, hold that the Mercato Centrale Logo infringes the Plain Word Mark, given that the Mercato Centrale Logo includes a prominent device comprising a black outline and central red dot, features which have no counterpart in the Plain Word Mark, even as imperfectly recalled.

166    The challenge to the registration of the Plain Word Mark did not extend to the Fancy Word Mark or the Red Man Logo. These marks are registered, and will remain registered. We do not, however, accept that either the Fancy Word Mark or the Red Man Logo is infringed by any of the Mercato Centrale marks. An essential feature of the Fancy Word Mark is that it is in a fancy script. The monopoly it secures is not a monopoly over the plain word mercato. Rather, it secures a monopoly over that word as rendered in the fancy script depicted on the Register. To adapt the analysis of the Full Court (Allsop CJ, Besanko and Yates JJ) in Australian Meat Group Pty Ltd v JBS Australia Pty Ltd [2018] FCAFC 207; 268 FCR 623 at [78], to consider the Fancy Word Mark otherwise would be to extend the scope of the Fancy Word Mark well beyond the monopoly that was granted upon registration.

167    The notional consumer’s imperfect recollection of the Fancy Word Mark as used across the entire range of goods and services in respect of which it is registered would, as part of that imperfect recollection, include that the word is rendered in a curly typeface. That consumer would thus understand that the word mercato only denotes the trade source of the goods to which the Fancy Word Mark is applied when that word is rendered in the distinct curly typeface that is comprised in the registered mark. There is no suggestion that the word mark MERCATO CENTRALE has been rendered in a curly typeface; indeed, as pleaded, it is neutral as to typeface. Consumers would not be caused to wonder, from this use of the mark MERCATO CENTRALE, whether the commercial origin of the MERCATO CENTRALE goods and services is the same traders as stand behind the Fancy Word Mark. A fortiori, neither the word mark IL MERCATO CENTRALE nor the Mercato Centrale Logo infringes the Fancy Word Mark.

168    An essential and central feature of the Red Man Logo is the red man it contains. The word marks MERCATO CENTRALE and IL MERCATO CENTRALE have no feature that even approximates the Red Man Logo. The notional consumer, with an imperfect recollection of the registered mark, would not have cause to wonder whether these marks denote the same commercial source as the Red Man Logo. Further, it would take exceptional carelessness or stupidity to look at the Mercato Centrale Logo and wonder whether, because it contains the word mercato and a device with a red dot in its centre, the Mercato Centrale Logo and the Red Man Logo denote the same commercial source.

169    The infringement case must therefore fail in all of its permutations.

Conclusions

170    The cross-appeal should be allowed, and the appeal should be dismissed. The order made by the primary judge on 19 March 2024, and orders 2 to 5 of those made on 26 February 2024, should be set aside. In their place, it should be ordered that the cross-claim be allowed and that the registration of the Plain Word Mark be cancelled.

171    The parties should be given an opportunity to be heard on costs, but we are of the provisional view that all costs of the proceeding below, the appeal, and the cross-appeal, should follow the event.

Associate:

Dated:    6 December 2024