FEDERAL COURT OF AUSTRALIA
Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCA 138
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The originating application is dismissed.
2. The cross-claim is:
(a) allowed to the extent provided for in paragraph 3 of these orders;
(b) otherwise dismissed.
3. Subject to paragraph 4, in respect of Trade Mark No 1760112, the Register of Trade Marks be amended so that the description of services in Class 43 read as follows:
Services for providing food and drink (other than services relating to 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.
4. The parties have liberty to apply to vary the order in paragraph 3 so as to reflect the reasons for judgment published today, such liberty to be exercised on or before 4 March 2024.
5. On or before 12 March 2024 any party seeking an order for costs is to file and serve an affidavit specifying the order sought.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
CHARLESWORTH J
1 The applicant, Caporaso Pty Ltd is the owner of several registered trade marks comprising or incorporating the word mercato. It alleges that the first respondent Mercato Centrale Australia Pty Ltd has infringed and threatens to continue to infringe three of those marks. It seeks declaratory relief, as well as an order permanently restraining Mercato Centrale from engaging in the alleged infringing conduct. A case against the second respondent (Mr Eddie Muto) was not pressed to judgment.
2 Mercato Centrale denies that it has infringed Caporaso’s marks. By a cross-claim it seeks orders for removal or rectification of the three trade marks forming the subject of the infringement action (and rectifications relating to two further registered trade marks owned by Caporaso).
3 There are multiple issues in dispute. They are sketched out briefly in the pages that follow, and then resolved in the most convenient order.
4 In the result I have concluded that Mercato Centrale’s cross-claim should be upheld in part such that one of Caporaso’s trade marks should be removed from the register of trade marks in connection with certain services in Class 43.
5 The remainder of the cross-claim must be dismissed, as must the infringement action.
THE TRADE MARKS ACT
6 A “trade mark” is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person: Trade Marks Act 1995 (Cth) (TMA), s 17.
7 A trade mark may be registered in accordance with the TMA in respect of goods, services, or both: TMA, s 19(1). The Trade Marks Regulations 1995 (Cth) prescribe classes into which goods and services are divided for the purposes of the TMA. The registration of a trade mark may be in respect of goods or services of more than one class: TMA, s 19(2). When a trade mark is registered, its particulars are entered by the Registrar of Trade Marks on a Register kept in accordance with s 207 of the TMA. The Register is prima facie evidence of any particular or other matter entered in it: TMA, s 210.
8 Subject to Pt 3 of the TMA, if a trade mark is registered, its registered owner has the exclusive right to use it, and to authorise other persons to use it, in relation to the goods and/or services in respect of which it is registered: TMA, s 20(1). The registered owner also has the right to obtain relief under the TMA if the trade mark has been infringed: TMA, s 20(2).
9 Part 4 of the TMA prescribes how applications for registration of trade marks are to be made and decided. An application for registration may be made under s 27 of the TMA by a person claiming to be its owner. The Registrar must examine the application and report on whether the application has been made in accordance with the TMA and whether there are grounds under the TMA for rejecting it: TMA, s 31. After the examination, the Registrar must accept the application unless satisfied that it has not been made in accordance with the TMA or if there are grounds under the TMA for rejecting it (in which case it must be rejected): TMA, s 33(1), s 33(3). An application may be accepted subject to conditions or limitations: TMA, s 33(2).
10 Division 2 of Pt 4 of the TMA sets out the grounds on which an application to register a trade mark may be rejected. It contains s 41, as amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth). The amendment came into effect on 14 April 2013, after registration of one of the trade marks in issue in these proceedings, and before registration of another of them. As Burley J explained in Goodman Fielder Pte Ltd v Conga Foods Pty Ltd [2020] FCA 1808; 158 IPR 9 (at [209]), a purpose of the amendments was to clarify that the presumption of registrability in s 33 applies equally to s 41. His Honour said that whilst the wording was different, the practical operation of the new provision was similar to the old, and authorities dealing with s 41 prior to the amendments remain appliable today. In these proceedings neither party contended that the difference in wording should result in differing outcomes as between one trade mark or another. I will therefore proceed by reference to s 41.
11 Section 41(1) provides that an application for the registration of a trade mark must be rejected if it is not capable of distinguishing the applicant’s goods or services in respect of which the trade mark is sought to be registered from the goods or services of other persons. A trade mark is taken not to be capable of distinguishing the designated goods or services from the goods or services of other persons only if s 41(3) or s 41(4) applies: TMA, s 41(2). They provide:
(3) This subsection applies to a trade mark if:
(a) the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and
(b) the applicant has not used the trade mark before the filing date in respect of the application to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant.
(4) This subsection applies to a trade mark if:
(a) the trade mark is, to some extent, but not sufficiently, inherently adapted to distinguish the designated goods or services from the goods or services of other persons; and
(b) the trade mark does not and will not distinguish the designated goods or services as being those of the applicant having regard to the combined effect of the following:
(i) the extent to which the trade mark is inherently adapted to distinguish the goods or services from the goods or services of other persons;
(ii) the use, or intended use, of the trade mark by the applicant;
(iii) any other circumstances.
12 For the purposes of those provisions, the use of a trade mark by a predecessor in title of an applicant for the registration of a trade mark is taken to be use of the trade mark by the applicant: TMA, s 41(5).
13 Part 5 of the TMA establishes a regime for registration of trade marks to be opposed. Registration may be opposed on any of the grounds specified in the TMA, but on no other grounds: TMA, s 52(4). If the Registrar has accepted an application for the registration of a trade mark, a person may oppose the registration by filing a notice of opposition. If such a notice is filed, the Registrar must conduct a proceeding for dealing with the opposition and, at the end, must decide either to refuse to register the trade mark or to register the trade mark (with or without conditions or limitations), depending on the extent to which the grounds of opposition have been established: TMA, s 54, s 55.
14 The grounds for opposing registration are prescribed in ss 57 to 62A. They include opposition on any of the grounds on which an application for registration of a trade mark may be rejected (other than on the ground that the trade mark cannot be represented graphically). They also include the ground that the applicant is not the owner of the trade mark (TMA, s 58) and the ground that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars (TMA, s 62(b)).
15 Subject to exceptions that do not presently apply, the registration of a trade mark in respect of the goods and or services in respect of which it is registered is taken to have had effect from (and including) the filing date in respect of the application for registration, referred to as the priority date.
16 A registration may be amended, cancelled or revoked in accordance with Pt 8 of the TMA, including by orders of this Court. Relevantly, the Court may, on the application of an “aggrieved person” or the Registrar, order that the Register be rectified by cancelling the registration of a trade mark, removing or amending any entry in the Register relating to it, or entering any condition or limitation affecting its registration: TMA, s 88. An application under s 88 may be made on (and only on) the grounds specified in s 88(2). They relevantly include “any of the grounds on which registration of the trade mark could have been opposed under this Act”: TMA, s 88(2)(a).
17 Part 12 of the TMA deals with infringement of trade marks. Section 120 relevantly provides:
(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
(2) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to:
(a) goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or
(b) services that are closely related to registered goods; or
(c) services of the same description as that of services (registered services) in respect of which the trade mark is registered; or
(d) goods that are closely related to registered services.
However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.
Note 1: For registered trade mark see section 6.
Note 2: For deceptively similar see section 10.
Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A.
18 The relief that may be granted by the Court on an infringement action includes an injunction, which may be granted subject to any condition that the Court thinks fit: TMA, s 26.
THE INFRINGEMENT ACTION
19 Caporaso sues in its capacity as trustee of the Diversity Trust. In that capacity it sues for infringement of three registered trade marks.
20 The first mark sued upon is Trade Mark No 1760112, being the plain word mercato. I will refer to it as the Plain Word Mark. It has a priority date of 21 March 2016 and relevantly carries the following endorsements:
Evidence and/or other circumstances provided under subsection 41(4).
...
The applicant has advised that a translation of the Italian word MERCATO appearing in the trade mark is MARKET.
21 The Plain Word Mark is registered in respect of the following goods and services in Classes 29, 30, 35 and 43:
Class 29:
Meat, fish, poultry and game; meat extracts; preserved, dried and cooked fruits and vegetables; jellies, jams, compotes; eggs; milk and milk products; edible oils and fats including olive oil
Class 30:
Coffee, tea, cocoa and artificial coffee; rice; tapioca and sago; flour and preparations made from cereals; biscuits and biscuit products; bread, pastry and confectionery; edible ices; sugar, honey, treacle; yeast, baking-powder; salt; mustard; vinegar, sauces including pasta sauces; spices; ice
Class 35:
Retail and wholesale services; retailing and wholesaling of goods (by any means); supermarket retailing; discount services (retail, wholesale, or sales promotion services); distribution of goods (not being transport services) (agent, wholesale, representative services, by any means); administration of the business affairs of franchises; business advisory services relating to the establishment of franchises; business advisory services relating to the operation of franchises; business assistance relating to the establishment of franchises; advertising; advisory services relating to advertising; business advertising services, relating to franchising; business consultation relating to advertising; consultancy relating to advertising; outdoor advertising; placing of advertisements; planning services for advertising; preparing of advertisements; provision of advertising spaces; business advisory services relating to the management of businesses; business management; business organisation and management of discount services
Class 43:
Services for providing food and drink including services relating to the provision of food and drink at cafes, restaurants, bars, hotels and provision of catering services; preparation of take away 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
22 The second mark sued upon is Trade Mark No 1255041, having the priority date 4 August 2008. It will be referred to as the Fancy Word Mark. It appears as follows:
23 The Fancy Word Mark has the endorsement “The applicant has advised that a translation of the ITALIAN word MERCATO appearing in the trade mark is MARKET”. It is registered in respect of the following services in Class 35:
Class 35:
Administration of the business affairs of franchises; business advisory services relating to the establishment of franchises; business advisory services relating to the operation of franchises; business assistance relating to the establishment of franchises; advertising; advisory services relating to advertising; business advertising services relating to franchising; business consultation relating to advertising; consultancy relating to advertising; outdoor advertising; placing of advertisements; planning services for advertising; preparing of advertisements; provision of advertising spaces; business advisory services relating to the management of businesses; business management; business organisation and management of discount services; retail services; retailing of goods (by any means); supermarket retailing; discount services (retail, wholesale, or sales promotion services); distribution of goods (not being transport services) (agent, wholesale, representative services, by any means)
24 The third is mark sued upon is Trade Mark No 1299144, having the priority date 14 May 2009. It will be referred to as the Red Man Logo and appears as follows:
25 The Red Man Logo is registered in respect of the following services in Class 43:
Class 43:
Bakery services; cake and pastry services; services for providing food and drink including services relating to the provision of food and drink at cafes, restaurants, bars, hotels and provision of catering services; preparation of take away and fast foods; take away food and drink services; consultancy services relating to the operation of restaurants, cafes, take away food services, bars and hotels; temporary accommodation
26 The three marks sued upon may be referred to together as the Caporaso Marks.
27 In its Further Amended Statement of Claim (FASC) dated 4 August 2023, Caporaso alleges that it is the operator of a successful Italian themed supermarket, restaurant and wine retail business. The business is alleged to have been operated by Caporaso and its “predecessors in business” since 1972 and that it has “traded by reference to” the trade mark mercato from at least 2005, initially from premises situated in the Adelaide suburb of Rostrevor and then (and currently) from premises situated in the Adelaide suburb of Campbelltown. Particulars of the business are given as follows:
5.1 The Applicant’s business was first established in in 1972 by its predecessors in title, Mario & Imma Caporaso, and traded under the name ‘Imma & Mario’s Continental’ or ‘Imma & Mario’s Continental Store’;
5.2 On 8 February 1999, Giovanni ‘John’ Caporaso and Rosalba ‘Rose’ Caporaso purchased the business trading as ‘Imma & Mario’s Continental’, including goodwill, from Mario and Imma Caporaso;
5.3 From 2005, the Applicant and its predecessors in title ceased using the trade marks ‘Imma & Mario’s Continental’ or ‘Imma & Mario’s Continental Store’;
5.4 From 2005, the Applicant and its predecessors in title have promoted, offered for sale and sold the goods and services of the Applicant’s business predominantly under or by reference to the trade marks ‘Imma & Mario’s Mercato’;
5.5 From 201109, the Applicant and its predecessors in title have promoted, offered for sale and sold the goods and services of the Applicant’s business predominantly under or by reference to the trade mark ‘Mercato’ (or by reference to logo marks incorporating that word mark);
5.6 At all times from 2005, the predominant word used by the Applicant and its predecessors in title in its unregistered and registered trade marks has been the word ‘Mercato’.
28 In addition, Caporaso alleges that it has, since about March 2018, operated an online food and beverage delivery service at the internet address www.mercato.com.au and related social media accounts.
29 Caporaso alleges that Mercato Centrale has infringed the Caporaso Marks by promoting and offering for sale goods and services by reference to three trade marks namely:
(1) the words MERCATO CENTRALE;
(2) the words IL MERCATO CENTRALE; and
(3) a logo featuring the words IL MERCATO CENTRALE (Mercato Centrale Logo) as follows:
30 I will refer to them together as the Mercato Centrale Marks.
31 It is not disputed that Mercato Centrale applied to register each of the Mercato Centrale Marks in respect of Classes 35 and 45 including the following services:
(Class 35) wine shop services; retail services; retail services for goods (by any means); retail services relating to bakery products; supermarket retailing; retail sale of prepared meat and meat products (butcher’s shop); business advertising services relating to franchising; business franchising services (group purchasing, group advertising);
(Class 43) restaurant services, restaurant services for the provision of fast food; restaurants; salad bar restaurant services; self-service restaurants; take-away restaurant services.
32 They are trade mark applications numbered TMA2272358, TMA2272266 and TMA2199554 respectively. The first two of those applications were subsequently withdrawn. Registration of the Mercato Centrale Logo was filed on 3 August 2021 and is currently opposed by Caporaso.
33 Caporaso alleges that by pleaded conduct (much of which is admitted), Mercato Centrale has, within the meaning of s 120(1) of the TMA, used and continues 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 same goods and services for which they are registered.
34 Alternatively, it alleges that Mercato Centrale has, within the meaning of s 120(2) of the TMA, used and continues 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:
(1) goods and services of the same description as that of goods and services in respect of which the Caporaso Marks are registered; or
(2) services that are closely related to the registered goods.
35 By its Further Amended Statement of Cross-Claim (FASCC) filed 4 August 2023, Mercato Centrale acknowledges that it intends to use and has to some extent already used each of the Mercato Centrale Marks in respect of goods and services for which registration of the Mercato Centrale Logo is sought, including by establishing and maintaining a website at www.mercatocentrale.com.au. In addition, newspapers and editorials have reported on and written about the proposed opening of a business trading as Il Mercato Centrale from premises situated on Collins Street in Melbourne. It is Mercato Centrale’s intention to provide food and beverage retail services from those premises. It denies that its current and intended conduct infringes any one of the Caporaso Marks.
36 In light of the cross-claim, Caporaso presses the allegation of infringement with respect to the Fancy Word Mark and the Red Man Logo only in the event that any part of (respectively) Class 35 or Class 43 of the Plain Word Mark is cancelled.
THE CROSS-CLAIM
37 The FASCC broadly raises five questions. It is convenient to name them in shorthand as relating to Distinctiveness, Confusion, Ownership, Misrepresentation and Limitation.
38 The Distinctiveness question is whether the Plain Word Mark and the Fancy Word Mark should be cancelled or rectified under s 41 of the TMA because they are 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.
39 Mercato Centrale contends that the only or dominant word in each of the Plain Word Mark and the Fancy Word Mark is the word mercato, being an Italian word meaning “market” or “marketplace”. It alleges that (as at the priority dates) the word carried that same ordinary signification in Australia to English speaking persons concerned with the goods or services for which the marks are registered “especially a market selling fresh food and ready-prepared meals in the style commonly associated with Italy”. It contends that the word mercato is directly descriptive of those goods and services, and is therefore a word that other honest traders might legitimately need or desire to use to describe goods and services of the same character.
40 The cross-claim under s 41 is limited to defined parts of the goods and services descriptions referred to as the Challenged Goods and Services. It is alleged that the ordinary signification of the word mercato is a direct reference to a market “being a place where goods in the nature of the Challenged Goods and Services are typically offered for sale and sold and/or where services in the nature of the Challenged Goods and Services are offered or provided”.
41 The FASCC contains allegations that the Italian language is (and was at the relevant priority dates) widely spoken in Australia, and that more than one million Australians claim to have Italian ancestry. However, at trial, those factual allegations were not actively pressed as a basis for cancellation or rectification. Rather, it is alleged that the word mercato, whilst having Italian origins, had come to be recognised by ordinary Australian consumers having acquired a familiar meaning, to English speakers, as ensconced and plainly descriptive as the words spaghetti or cappuccino have become.
42 The Confusion question is whether registration of the Plain Word Mark and the Fancy Word Mark should be cancelled under s 88(2)(c) in respect of some classes of goods and services because, in the circumstances existing at the time that Mercato Centrale commenced the cross-claim, use of those marks in those classes is likely to deceive or cause confusion. This aspect of the cross-claim hinges on a submission that, even if the Plain Word Mark and Fancy Word Mark were inherently adapted to distinguish the relevant goods and services of Caporaso as at their priority dates, as at 31 May 2023 the word mercato had come to bear an ordinary signification in the target audience of English speaking Australians to mean market or marketplace. Accordingly, it is said, use of the word as a trade mark is likely to cause confusion in the minds of consumers.
43 The Ownership question is whether registration of the Plain Word Mark should be cancelled because at its priority date Caporaso was not the owner of the mark mercato. Mercato Centrale alleges that the word mercato (alone) and the mark MERCATO @ daylesford were each used by the operators of a restaurant business in Daylesford in 2004. It alleges that the words were used in respect of goods and services being “the same kind of thing” as the services for which the Plain Word Mark is registered in Class 43 (with the exception of temporary accommodation services).
44 The Misrepresentation question is whether registration of the Plain Word Mark should be cancelled on the basis that it was accepted for registration on the basis of evidence and representations that were materially false within the meaning of s 62(b) of the TMA.
45 Mercato Centrale alleges that registration of the Plain Word Mark was secured on the basis of a statutory declaration of a representative of Caporaso, containing the following misrepresentations about the prior use of the word mercato as a trade mark in the conduct of Caporaso’s business:
(a) the trade mark applicants’ business commenced operation ‘in 1972 under the name Imma and Mario’s Mercato’ when, in fact, the business did not include the word ‘Mercato’ in its trading name until at least 2005; and
(b) ‘The MERCATO brand has been used in connection with my family business and in particular retail and wholesale services since the early 70’s’ when that is not the case; and
(c) The applicants’ business ‘has been known solely by the Trade Mark MERCATO for over a decade’ when that was not the case; and
(d) ‘the store and business began to be referred to as simply MERCATO’ in June 2005 when in fact, the business was not known or promoted as simply MERCATO until, at the earliest, 2009.
46 The Limitation question is whether, if any of the challenged marks are permitted to remain on the Register, they (together with two other logos) should be subject to the limitation that “registration does not confer any exclusive right to use the word MERCATO”. The limitation is sought in the event that the Court finds in favour of Mercato Centrale on the Misrepresentation question.
Defence to the cross-claim
47 Caporaso joins issue with the allegations in the FASCC, save for admitting certain misrepresentations. It alleges that if any one of its trade marks is to be subject to a limitation of the kind sought by Mercato Centrale, then it must follow that an equivalent limitation must apply in connection with the word mark Mercato Centrale. It contends that if any grounds for rectification were to be established, the Court should exercise its discretion under s 88 of the TMA to refuse to grant relief, including because Caporaso would have established registration of the relevant Caporaso trade marks on dates after their respective priority dates but before Mercato Centrale’s first use of its own marks or the date of filing of its own trade mark applications. Registration would have been obtained, Caporaso contends, by reason of its use or intended use (or that of its predecessors in business) of the relevant Caporaso trade marks before and after the priority dates for each of those marks.
48 It is convenient to resolve the issues arising on the cross-claim before turning to the infringement action.
DISTINCTIVENESS AND CONFUSION
49 These two aspects of the cross-claim may be dealt with together. Each of them require an enquiry into a similar question: whether the word mercato had an ordinary signification at the relevant time, specifically that it was commonly understood at those times to describe a market or marketplace.
50 The challenge under s 41 of the TMA is confined to the Plain Word Mark and the Fancy Word Mark in respect of what is described as the “Challenged Goods and Services (Word Marks)” specified in [11(a)] of the FASCC. They are:
(1) In respect of the Fancy Word Mark (priority date 4 August 2008):
Class 35: … business organisation and management of discount services; discount services (retail, wholesale, or sales promotion services); retail services; distribution of goods (not being transport services) (agent, wholesale, representative services, by any means); retailing of goods (by any means)
(2) In respect of the Plain Word Mark (priority date 21 March 2016):
Class 29: Meat, fish, poultry and game; meat extracts; preserved, dried and cooked fruits and vegetables; jellies, jams, compotes; eggs; milk and milk products; edible oils and fats including olive oil
Class 30: Coffee, tea, cocoa and artificial coffee; rice; tapioca and sago; flour and preparations made from cereals; biscuits and biscuit products; bread, pastry and confectionery; edible ices; sugar, honey, treacle; yeast, baking-powder; salt; mustard; vinegar, sauces including pasta sauces; spices; ice
Class 35: Retail and wholesale services; retailing and wholesaling of goods (by any means); supermarket retailing; discount services(retail, wholesale, or sales promotion services); distribution of goods (not being transport services) (agent, wholesale, representative services, by any means); …
Class 43: Services for providing food and drink including services relating to the provision of food and drink at cafes, restaurants, bars, hotels and provision of catering services; preparation of take away 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
51 That challenge turns on the ordinary signification (if any) of the word mercato as at the priority dates for the trade marks.
52 The challenge under s 88(c) also relates to the same marks, goods and services, but turns on the ordinary signification of the word mercato at the time that the cross-claim was commenced.
Distinctiveness principles
53 Section 41(3) and s 41(4) identify the only two ways in which a trade mark may be taken not to be capable of distinguishing the designated goods and services of the trade mark applicant from the goods and services of other persons. Section 41(3) has two necessary elements. The first is that the trade mark is not to any extent inherently adapted to distinguish the designated goods or services from the goods or services of other persons: TMA, s 41(3)(a). The second is that the registration applicant has not used the trade mark before the filing date to such an extent that the trade mark does in fact distinguish the designated goods or services as being those of the applicant. Section 41(4) is concerned with trade marks that are “to some extent, but not sufficiently, inherently adapted to distinguish” the designated goods or services from those of other persons: TMA, s 41(4)(a). In such cases, registrability will depend upon the extent to which it is so capable, together with the combined effect of the matters referred to in s 41(4)(b). They include the use or intended us, of the trade mark, by the applicant and “any other circumstances”.
54 In each instance, the initial focus is on the extent (if any) to which the mark is inherently adapted to distinguish, considered apart from the applicant’s use or intended use of it. The present inquiry focuses on whether the word mercato in the Plain Word Mark and the Fancy Word Mark is merely descriptive of some of the goods and services in respect of which they are registered. Where a trade mark is comprised solely of a word that is, or describes, the goods or services in respect of which it is sought to be registered, it is liable to be successfully opposed for failure to accord with the requirements of s 41. As Stephen J said in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 (at 229), “there is a price to be paid for the advantages flowing from the possession of an eloquently descriptive trade name”. His Honour explained (at 229):
… Because it is descriptive it is equally applicable to any business of a like kind, its very descriptiveness ensures that it is not distinctive of any particular business and hence its application to other like businesses will not ordinarily mislead the public. In cases of passing off, where it is the wrongful appropriation of the reputation of another or that of his goods that is in question, a plaintiff which uses descriptive words in its trade name will find that quite small differences in a competitor’s trade name will render the latter immune from action …
(footnote omitted)
55 In FH Faulding & Co Limited v Imperial Chemical Industries of Australia and New Zealand Limited (1965) 112 CLR 537, the appellant was the registered owner of the trade mark barrier in respect of chemical substances for use in medicine and pharmacy, which encompassed hand creams. Its infringement action against the respondent was met with a cross-claim for removal of the trade mark or the insertion of a limitation. McTiernan J at first instance allowed the cross-claim and inserted the limitation “other than skin protective creams”. On appeal, Kitto J held that the word barrier was not inherently adapted to distinguish the goods of the trade mark owner from those of other persons within the meaning of s 26(2)(a) of the Trade Marks Act 1955-1958 (Cth) as then in force because it was descriptive of a whole class of goods of which the appellant’s goods were but examples. His Honour said (at 555):
… That this is the case with Barrier as applied to skin protective creams is put beyond doubt by the evidence in this case. But for the evidence, it might have been said that the word, though inherently suited to be used adjectivally for the purpose of referring to the distinguishing characteristic of skin protective creams generally, is not one which would spring instantly to the mind of a person who wanted a word for the purpose but had never known Barrier to be so employed. This might have been said with the general principle in mind that the question to be asked in order to test whether a word is adapted to distinguish one trader’s goods from the goods of all others is whether the word is one which other traders are likely, in the ordinary course of their businesses and without any improper motive, to desire to use upon or in connexion with their goods: Registrar of Trade Marks v. W. & G. Du Cros Ltd.; Eclipse Sleep Products Inc. v. The Registrar of Trade Marks; Clark Equipment Co. v. Registrar of Trade Marks. But the evidence shows clearly, and it satisfied the learned primary Judge, that Barrier has long appealed to persons in industry, in pharmacy and in allied occupations as meeting their need for a word to describe succinctly and yet exactly the essential characteristic of protection which distinguishes the whole of the relevant class of creams. …
(footnotes omitted)
56 His Honour went on to say (at 556 – 557):
… at least by the year of the initial registration of the appellant’s trade mark (1943) the word Barrier had caught on as a word peculiarly apt, according to its ordinary signification, for descriptive use in connexion with skin protective creams, so that any trader in such creams would be very likely indeed, in the ordinary course of business and without any improper motive, to desire to use the word in order to distinguish such creams in general from creams intended for other purposes. We have not to inquire, on this aspect of the case, whether or not the respondent began its use of the word with a view to appropriating to itself some of the goodwill which the appellant had built up for its own product. What matters is that at all material times the word has had such a place in the vocabulary of persons concerned with skin protective creams that according to the principle which must be applied under the Trade Marks Acts the appellant cannot be allowed a monopoly of its use in connexion with such creams.
57 A year earlier, in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511, Kitto J (citing Lord Parker in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624) referred to the natural disinclination of the Legislature and the Courts to allow any person to obtain by a trade mark registration “a monopoly in what others may legitimately desire to use”. His Honour continued (at 514):
… The interests of strangers and of the public are thus bound up with the whole question, as Hamilton L.J. pointed out in the case of R. J. Lea, Ltd.; but to say this is not to treat the question as depending upon some vague notion of public policy: it is to insist that the question whether a mark is adapted to distinguish be tested by reference to the likelihood that other persons, trading in goods of the relevant kind and being actuated only by proper motives – in the exercise, that is to say, of the common right of the public to make honest use of words forming part of the common heritage, for the sake of the signification which they ordinarily possess – will think of the word and want to use it in connexion with similar goods in any manner which would infringe a registered trade mark granted in respect of it.
(footnotes omitted, emphasis added)
58 The application of those principles to trade marks comprising or containing “foreign” words is best illustrated by examining a case commenced in this Court in 2011 relating to trade marks for coffee products. The applicant, Cantarella Bros Pty Ltd brought proceedings against the respondent Modena Trading Pty Ltd alleging infringement of two trade marks registered in connection with goods including coffee products: oro (an Italian word for gold or golden) and cinque stelle (an Italian expression for five stars). It was not disputed that Modena had used and was continuing to use both marks on packaging and in connection with its marketing of coffee products in Australia, although use of the words as a trade mark was denied. By its cross-claim Modena sought orders under s 88 of the TMA for removal of the two marks from the Register on the grounds that they were not inherently adapted to distinguish, and did not in fact distinguish, Cantarella’s goods from the goods of other persons. At first instance, Emmett J allowed Cantarella’s claim in part and dismissed Modena’s cross-claim: Cantarella Bros Pty Ltd v Modena Trading Pty Ltd [2013] FCA 8; 299 ALR 752 (Cantarella First Instance). The Full Court set aside Emmett J’s orders: Modena Trading Pty Ltd v Cantarella Bros Pty Ltd (2013) 215 FCR 16 (Cantarella Full Court). The High Court set aside the judgment of the Full Court, identifying no error in that part of Emmett J’s reasons with which the Full Court dealt: Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 254 CLR 337 (Cantarella High Court). In the present case the parties are in dispute about the principles to be extracted from the judgment of the High Court and is therefore necessary to examine the judgment in some detail.
59 In Cantarella First Instance, Emmett J observed that neither the word oro nor the word stelle appeared in English dictionaries. His Honour referred to evidence of the frequent use of the word oro in Australia in connection with coffee products, often in the phrase oro qualita. For Modena it was submitted that the phrase described the character and quality of the goods such that they were not distinctive. Modena submitted that the English translation of the trade marks (respectively), gold and five stars, would not be capable of distinguishing the goods of Cantarella from the goods of other persons, that there were many people in Australia who understood the English meaning of the Italian words oro and cinque stelle and that, accordingly, the Italian words were not capable of distinguishing Cantarella’s goods. It submitted that if an objection can be made to the registration of an English word, then the same objection could be made to a foreign language word having the same meaning. It submitted that the words oro and cinque stelle were laudatory terms and therefore descriptive, rather than indicating a connection in the course of trade between Cantarella and the designated products. It further submitted that the evidence of extensive use of the word oro in the relevant trade indicated that it was not inherently adapted to distinguish, and that the trade marks were words that other traders might, without improper motive, want to use as “varietal indicators” of their own Italian style coffee products. Accordingly, it submitted, it should be free to use the words gold and five stars and the Italian translations of those words in connection with its own products.
60 Emmett J said that he would be disposed to accept the submission that the English words gold and five stars would not be distinctive and therefore could not have been registered by Cantarella at the relevant filing dates. However, his Honour said, that was not the question. The question was whether the marks oro and cinque stelle were validly registered. His Honour continued:
112 The adoption of a three-step test has been suggested in relation to marks consisting of words in a foreign language. First, it is necessary to determine whether the foreign language is well known in Australia. Second, it is necessary to determine whether the translation provided is the most common meaning attributed to the word. Finally, it is necessary to determine whether that common meaning has an inherent capacity to distinguish, applying the tests required by s 41 (see Cantarella Bros Pty Ltd v Sunbeam Corporation Ltd [2007] ATMO 3 at [21]).
113 Such a test may be a useful approach. However, I am by no means persuaded that it is necessarily the only approach. Some words in foreign languages may be well-known in Australia, even if the language itself is not well known. On the other hand, the mere fact that a language is well-known in Australia does not mean that every word in that foreign language should be taken to be well-known in Australia. Even if a particular language may be understood by many Australians, it does not follow that all words in that language would be understood by all English-speaking persons in Australia who have some familiarity with the foreign language. I consider that the question is whether the particular words that are intended to constitute the trade mark are sufficiently well understood in Australia. That does not depend upon whether a particular language is well-known in Australia. Specifically, the question is not whether Italian is understood by many persons in Australia, but whether Cinque Stelle and Oro are commonly understood in Australia as meaning five stars and gold respectively.
61 Justice Emmett went on to consider census data identifying the number of people living in Australia who identified themselves as having been born in Italy or having Italian ancestry or who spoke Italian at home. His Honour said that it may be clear enough to Italian speakers that oro and cinque stelle signified gold and five stars. However, neither of the marks meant anything in English. Whilst educated English speakers with some knowledge of Romance languages or Latin may be able to deduce their meanings, their allusions would be known to only a very small minority of English speaking people. His Honour was not satisfied that the words would be generally understood in Australia as bearing their translated meanings. Accordingly, both cinque stelle and oro were sufficiently inherently adapted to distinguish Cantarella’s goods from those of other persons because “the Italian words are not so obvious to ordinary English speaking persons in Australia that Cinque Stelle and Oro have a specific meaning” (at [118]).
62 Modena appealed to the Full Court. In their joint judgment, Mansfield, Jacobson and Gilmour JJ discussed the statements of Kitto J in FH Faulding and Clark Equipment, concluding that the parentheses statement in the latter case (emphasised in the passage extracted at [75] below) should be understood to have been maintained and applied in FH Faulding (notwithstanding its absence in the reasons from judgment) and so could not be ignored as surplusage (at [62] – [68]). The Full Court emphasised that the parenthetical explanation in Clark Equipment was not to be applied as though it were a statute, and that phrases such as “common right of the public” and “words forming part of the common heritage” were broad expressions having a content and application that may vary according to the facts and circumstances of a particular case. The Full Court said that the enquiry under s 41(2) and s 41(3) was “directed at least to traders with goods and services of the relevant kind and the likelihood, in a case such as this, of their thinking of and wanting to use the word(s) in question”. The enquiry may also have regard to the knowledge and practices of consumers as a relevant consideration informing the likely actions of traders but, the Full Court said, it will not necessarily be the focus of the enquiry (at [74]). The Full Court observed that in both Clark Equipment and FH Faulding the focus was not on the knowledge of the general public as potential consumers of the relevant products or otherwise, and that the majority of cases focussed instead on the knowledge and practice within the relevant trade. To posit whether the Italian words were commonly or generally understood in Australia by ordinary English persons as meaning gold and five stars was, the Full Court said, to adopt an approach that was not appropriate in a case where “common Italian words descriptive of quality, are in issue”. The Full Court said that there was no necessity to approach the enquiry from an Anglocentric perspective given the rich cultural and ethnic diversities in the population (at [85]) and that, as distinctiveness was a question of fact, the enquiry may involve contextual considerations. It was unnecessary, the Full Court said, that consumers know what the words mean in English, although the evidence showed that many people in Australia would in fact know what they meant, and that Italian speakers would understand the words “as common Italian laudatory and therefore descriptive words” (at [88]). The Full Court proceeded to identify a number of factual matters bearing on the enquiry, including evidence of the number of traders in coffee products in fact using the words to describe their quality, including use preceding Cantarella’s application to register the words as trade marks. In light of those contextual considerations and the focus on the actual and desired use of honest traders, the Full Court concluded that the words oro and cinque stelle were not inherently adapted to distinguish the designated goods from those of other traders in those goods.
63 The High Court held that approach was erroneous. The majority (French CJ, Hayne, Crennan and Kiefel JJ) traced the development of trade mark law in the United Kingdom particularly with respect to descriptive words over which no monopoly should be granted, such as geographic locations, initials, surnames, laudatory epithets used as adjectives, or words directly referring to the relevant goods. That jurisprudence grew out of s 6 and s 16 the Trade Marks Act 1905 (UK) (1905 Act) and cognate provisions in the Trade Marks Act 1955 (Cth) (1955 Act) (including s 24). As the majority observed, s 9(5) of the 1905 Act provided that marks (other than those falling within exceptions) were deemed to be distinctive, provided that they were “adapted to distinguish”).
64 Section 16(1) of the 1905 Act relevantly provided that to be registered a mark must consist of:
(c) an invented word or words;
(d) A word or words having no direct reference to the character or quality of the goods and not being according to its ordinary signification a geographical name or surname.
(e) Any other distinctive mark [other than those which fell within the preceding paragraphs, if deemed distinctive by the Registrar, Law Officer or court].
65 The word “distinctive” was defined in s 16(2) to mean “adapted to distinguish the goods of the proprietor of the trade mark from those of other persons”. As the majority said, enquiries about the meaning of a word (and hence its ordinary signification) were conducted on the basis that Australia is an English speaking nation. The majority explained that the early cases coming before the Court of Appeal recognised that the word “direct” in s 16(1)(d) of the 1905 Act was intended to permit entry onto the Register marks that constituted or contained a “skilful, covert or allusive reference to goods” (citing In re Joseph Crosfield & Sons, Limited [1910] 1 Ch 130 (Perfection)). In Eastman Photographic Materials Company Limited v Comptroller General of Patents, Designs, and Trade-Marks [1898] AC 571 (Solio) it was established that no monopoly could be granted under s 9(5) of the 1905 Act for laudatory epithets used as adjectives, such as “good” or “best”. In Perfection it was held that the word “perfection” could not be registered as a trade mark for soap because it was a word that should be open to use by other soap traders: Perfection, Fletcher Moulton LJ (at [144], [150], [151], [154]). Nor could a monopoly be granted in a word that was merely a phonetic equivalent of a directly descriptive word: In re H.N. Brock & Co Limited [1910] 1 Ch 130.
66 In the cases discussed by the majority, determination of whether a word had a direct reference to goods (such that a monopoly over its use should be precluded), it was critical to consider the goods themselves, because a word containing a direct reference to goods in one trade may not convey any such direct reference to goods in another (at [39]).
67 The majority in Cantarella High Court summarised (at [40]):
It was thus established early in the development of trade mark law in the United Kingdom that the ‘ordinary signification’ of any word, or words, constituting a trade mark is important, whether a challenge to the registrability of a trade mark is based on the word having a laudatory or directly descriptive meaning, or on the word being, according to its ‘ordinary signification’, a geographical name (or, in those times, a surname).
68 Their Honours went on to discuss Lord Parker’s statement in Du Cros, in which his Lordship considered whether two registration applications for marks consisting of letters of the alphabet joined with an ampersand were “adapted to distinguish” under s 9(5) of the 1905 Act. His Lordship explained that a trader should not be given a monopoly of letters that other traders may legitimately desire to use because they have the same initials. It was in that context that his Lordship made the statement cited by Kitto J in Clark Equipment, namely that registrability of a mark would “largely depend upon whether other traders are likely, in the ordinary course of their business and without any improper motive, to desire to use the same mark, or some mark nearly resembling it, upon or in connection with their own goods”: Du Cros at 635. As the majority explained, the United Kingdom cases showed that for at least a century, proposed trade marks had been examined both from the perspective of the impairment of honest traders to do what would be their natural mode of conducting their businesses (apart from the grant of a monopoly) and from the wider point of view of the public. In addition, the decisions showed that in assessing the distinctiveness of a word it was necessary to have regard to the word’s ordinary signification.
69 Against that background, the majority went on to discuss early cases involving “foreign” words, historically assessed under the test for whether a word could qualify as “invented” for the purpose of s 16 of the 1905 Act. In Phillippart v William Whiteley Ltd [1908] 2 Ch 274, the word diabolo was unregistrable because it was the name of a well known game in England. In Solio, there was opposition to the registration of the mark solio for photographic papers because it was said to be an Italian or Latin word (and therefore not invented) and a word that contained a reference to the goods. Lord Macnaghten said that an invented word could be one that could be traced to a foreign source, and it was not necessary to show that it should be wholly meaningless. Nor could there be objection to it on the basis that it contained a skilful allusion to the character or quality of the goods. In Australia, Solio was cited by Dixon J in Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd (1946) 72 CLR 175. His Honour added that the word should be “substantially different from any word in ordinary and common use” (at 181). Similarly, in Kiku Trade Mark [1978] FSR 246, the Supreme Court of Ireland concluded that a word that required translation could not be one having any signification to ordinary people living in Ireland who saw or heard it. In that case, the word Kiku (Japanese for chrysanthemum) was registrable because it contained no direct reference to the character or quality of the goods.
70 As the majority in Cantarella High Court observed (at [48]), those authorities:
… show that it is not the meaning of a foreign word as translated which is critical, although it might be relevant. What is critical is the meaning conveyed by a foreign word to those who will be concerned with the relevant goods.
71 Their Honours said that resolution of the appeal turned on the practical distinction between a word that made some covert or skilful allusion to the goods on the one hand, and words having a direct reference to them on the other. The former would be prima facie registrable, the latter would not (at [50]). The difference, their Honours said, was illustrated by two Australian cases decided under the 1905 Act: Howard and Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190.
72 In Howard, Dixon J concluded that the word rohoe would be understood by a farmer, horticulturalist, a trader in horticultural implements or a person otherwise concerned with them to be an obvious contraction of “rotary hoe”, given the special nature of the cultivating implements to which the trade mark was to be applied.
73 Mark Foy’s concerned the registrability of the words tub happy as a trade mark for cotton garments. Dixon CJ and Williams J concluded that it was able to be registered. The significance of their Honour’s reasoning was summarised by the majority in Cantarella High Court as follows (at [52]):
In agreeing with Williams J, Dixon CJ described the test for a word having ‘direct reference to the character or quality of the goods’ as lying ‘in the probability of ordinary persons understanding the words, in their application to the goods, as describing or indicating or calling to mind either their nature or some attribute they possess’. His Honour considered ‘TUB HAPPY’ to be allusive such that it did not convey a meaning or idea ‘sufficiently tangible’ to amount to a ‘direct reference’ to the character or quality of the goods. Citing with approval Lord Macnaghten in the Solio Case and Parker J in the Diabolo Case, Williams J illustrated why a covert and skilful allusive reference to goods does not render a word directly descriptive of goods as that expression is used in trade mark law. His Honour said the registration of ‘TUB HAPPY’ for cotton goods did not prevent others from describing their cotton goods as having the characteristics or qualities of ‘washability, freshness and cheapness’.
(footnotes omitted)
74 The term “inherently adapted to distinguish” was first introduced in the United Kingdom in 1938, by amendment that in turn influenced the 1955 Act and the TMA as presently in force in Australia. In the United Kingdom the amendment was explained as using statutory language to capture the same principle stated by Lord Parker in Du Cros: Cantarella High Court, at [54].
75 After summarising the judgments of Kitto J in FH Faulding and Clark Equipment, the majority in Cantarella High Court stated the applicable principle as follows (at [59]).
The principles settled by this court (and the United Kingdom authorities found in this Court to be persuasive) require that a foreign word be examined from the point of view of the possible impairment of the rights of honest traders and from the point of view of the public. It is the ‘ordinary signification’ of the word, in Australia, to persons who will purchase, consume or trade in the goods which permits a conclusion to be drawn as to whether the word contains a ‘direct reference’ to the relevant goods (prima facie not registrable) or makes a ‘covert and skilful allusion’ to the relevant goods (prima facie registrable). When the ‘other traders’ test from Du Cros is applied to a word (other than a geographical name or a surname), the test refers to the legitimate desire of other traders to use a word which is directly descriptive in respect of the same or similar goods. The test does not encompass the desire of other traders to use words which in relation to the goods are allusive or metaphorical. In relation to a word mark, English or foreign, ‘inherent adaption to distinguish’ requires examination of the word itself, in the context of its proposed application to particular goods in Australia.
(emphasis added)
76 On the proper construction of s 41(3) of the TMA, the majority said, determination of whether a trade mark was inherently adapted to distinguish required consideration of the “ordinary signification” of the words proposed as a trade mark to “any person in Australia concerned with the goods to which the proposed trade mark is to be applied” (at [70]). Their Honours said that once the ordinary signification of a word, English or foreign, is established an enquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods. The majority said that if a foreign word is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods, then prima facie the proprietor is not entitled to a monopoly of it (at [71]). Their Honours went on to identify error in the reasoning of the Full Court:
72 Because coffee is a commodity and a familiar beverage consumed by many, the consideration of the ‘ordinary signification’ of the words ‘oro’ and ‘cinque stelle’ in Australia undertaken by the primary judge accorded with settled principles. The Full Court’s rejection of what it called an ‘Anglocentric’ approach revealed a misunderstanding of the expression ‘ordinary signification’ as it has been used in Australia (and the United Kingdom) since at least 1905 to test the registrability of a trade mark consisting of a word or words, English or foreign.
73 Both Modena in argument and the Full Court in its reasons misunderstood Lord Parker’s reference in Du Cros to the desire of other traders to use the same or similar mark in respect of their goods. Lord Parker was not referring to the desire of traders to use words, English or foreign, which convey an allusive or metaphorical meaning in respect of certain goods. What Lord Parker’s ‘other traders’ test means in practice is well illustrated by the fate of the marks considered in Faulding, Clark Equipment and Burger King. Like ‘TUB HAPPY’ in respect of cotton goods, ‘ORO’ and ‘CINQUE STELLE’ were not shown to convey a meaning or idea sufficiently tangible to anyone in Australia concerned with coffee goods as to be words having a direct reference to the character or quality of the goods.
77 The majority said that the evidence led by Modena at trial did not show that registration of the words oro or cinque stelle as trade marks would preclude honest rival traders from having words available to describe their coffee products either as Italian coffee products or as premium coffee or blend products. The evidence fell well short of establishing that the word oro, standing alone, was understood in Australia by persons concerned with coffee products to be directly descriptive of the character or quality of such goods. Nor did the evidence concerning the words cinque stelle.
78 Two cases of this Court have considered the registrability of foreign words as trade marks since Cantarella High Court.
79 In Goodman Fielder, Burley J accepted that the mark LA FAMIGLIA would be understood by a substantial number of consumers as being Italian words meaning “the family”, however, they did not have a directly descriptive character when used in conjunction with the designated goods (pasta and bread products). His Honour said that they made only an allusive reference and “did not convey any meaning or idea sufficiently tangible to amount to a direct reference to the character or quality of the goods” (at [235]). His Honour went on to consider whether the words LA FAMIGLIA KITCHEN were inherently adapted to distinguish the applicants’ goods, which he considered to be perhaps more descriptive than the mark LA FAMIGLIA standing alone. His Honour ultimately concluded that the reference to the potential origin of the goods was indirect and that the combination of Italian and English was “sufficient to impart a sufficient degree of inherent distinctiveness” so as to satisfy the requirements of s 41 of the TMA (at [249]).
80 More recently, Yates J considered the use of foreign words as trade marks in Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258 (at [417] – [433]), a case again concerning the trade mark oro in its application to coffee products.
81 As his Honour there mentioned, “the word that is the subject of the inquiry must form part of the ‘common heritage’ – meaning, the common stock of language that is available to be used” (at [420], citing Apple Inc v Registrar of Trade Marks (2014) 227 FCR 511 at [11]), that is, “words that have been received into the stock of language that extends generally throughout the community, not merely to some part of it” (at [421]). Consistent with the majority in Cantarella High Court, his Honour said:
422 In the context of legislation that deals with the registrability of a trade mark, the common stock of language can only be the common stock of language that falls within the geographical operation of that legislation. As the operation of the Act extends to Australia, and the external Territories and other areas identified in s 4, that language is, relevantly, Australian English—in other words, the Australian lexicon.
423 Secondly, if the word is part of the ‘common heritage’, does it have a ‘signification’—in other words, a ‘meaning’—which can be characterised as one that the word ‘ordinarily’ possesses as part of that language? This is what is captured by the notion of the ‘ordinary signification’ of a word.
424 Bringing these strands together, for presently relevant purposes a word will have an ‘ordinary signification’ if it has been received into Australian English and has a commonly understood and commonly shared meaning by ordinary members throughout the Australian community at large.
82 His Honour said that it was not uncommon for foreign words to be incorporated into a local language and bear an ordinary signification in this sense, giving examples in the Australian lexicon, “encore”, “en route”, and “tour de force”, and “bravo” as confirmed by such words now having accepted dictionary meanings in Australian English (at [425]). However, his Honour said, the mere fact that a foreign word had been (relevantly for present purposes) broadly associated with particular traders or the products of particular traders, did not mean that the word had a commonly understood and shared meaning throughout the community at large (at [426]). That was so, his Honour said, “even where a numerically significant number of people either know the meaning of the foreign word or can deduce its meaning”. His Honour emphasised that the principles stated in Cantarella High Court applied in cases where the question involved the ordinary signification of a word referable to goods or services in a trade involving the community at large, but different considerations might apply where the trade was more specialised or directed to those having special vocational or technical interests (as in Dixon J’s consideration of the word rohoe). His Honour concluded that while the word oro may be understood to mean “gold” by a numerically large number of Australian people, he was far from persuaded that it had been accepted into Australian English to the degree it was commonly understood amongst the general population.
83 As the latter two cases show, whilst identifying the correct test for descriptiveness is a question of law (now resolved in Cantarella High Court), in its practical application the enquiry is essentially factual, turning on the sufficiency of the evidence adduced in the particular case by the party bearing the onus in respect of it. Here, that party is Modena as the prosecutor on the cross-claim.
Confusion principles
84 Under s 88(1) of the TMA, the Court may order the rectification of the Register on any one of the grounds specified in s 88(2), including that “because of the circumstances applying at the time when the application for rectification is filed, the use of the trade mark is likely to deceive or cause confusion”: TMA, s 88(2)(c).
85 The Court may decide not to grant an application for rectification on the ground referred to in s 88(2)(c) if the registered owner of the trade mark satisfies the Court that the ground relied upon by the rectification applicant has not arisen through any act or fault of the registered owner: TMA, s 89(1)(c). In applying s 89 of the TMA, the Court must take into account the matters specified in reg 8.2 of the Regulations, so far as they are relevant:
(a) the extent to which the public interest will be affected if registration of the trade mark is not cancelled;
(b) whether any circumstances that gave rise to the application have ceased to exist;
(c) the extent to which the trade mark distinguished the relevant goods and/or services before the circumstances giving rise to the application arose;
(d) whether there is any order or other remedy, other than an order for rectification, that would be adequate in the circumstances.
86 Mercato Centrale first filed a cross-claim for rectification on that ground on 31 May 2023. That is the date upon which the asserted likelihood of confusion is to be assessed.
Submissions and evidence
87 Mercato Centrale submits that neither the Plain Word Mark nor the Fancy Word Mark have the inherent capacity to distinguish Caporaso’s goods and services and that evidence of Caporaso’s use of them before their respective priority dates is insufficient to establish distinctiveness in fact.
88 It is convenient to focus first on the inherent capacity of the Plain Word Mark (mercato) to distinguish, before turning to consider the Fancy Word Mark and Caporaso’s pre-registration use of either or both of them. It is also convenient in this part of my reasons to set out all of the evidence as it relates to either or both of the Distinctiveness question and the Confusion question, although each question must of course be resolved separately.
89 It is common ground that the relevant consumers are ordinary members of the Australian public. The Court is not concerned to identify the meaning of a word in a specialised context.
Dictionary and census evidence
90 The word mercato means “market” or “marketplace” in Italian. It does not appear in the 2020 edition of the Macquarie Dictionary. Nor does the Spanish word mercado (having the same translated meaning).
91 Data from the 2021 census shows that 228,042 people in Australia spoke Italian at home in the census period, and 171,370 spoke Spanish. Those are not significant numbers given the total Australian population.
92 The same edition of the Macquarie Dictionary contains several definitions for words having Italian origins (mostly relating to food and drink) such as “bruschetta”, “cappuccino” and “spaghetti”. I would have no difficulty concluding that those words have commonly understood meanings in Australia to English speaking people.
93 Mercato Centrale submitted that the absence of a word from an English dictionary is not decisive. Whilst I accept that submission, I consider the absence of the word makes it considerably more difficult for a party in Mercato Centrale’s position to establish that the word in its ordinary signification is directly descriptive of the relevant Challenged Goods and Services. Critically, the ordinary signification of the word is not the meaning it has in the minds of speakers of the Italian language. The absence of the word in English dictionaries is plainly relevant to the question of whether the word has any ordinary signification to what the majority in Cantarella High Court described as the target audience, although it is not necessarily decisive.
Trade usage
94 Mercato Centrale relied on what it described as “extremely wide use of the word MERCATO by many different traders from all around Australia” as indicative of other traders’ desire to use the word or marks incorporating the word at, prior to and after the relevant priority dates. The usage evidence has four sources.
95 First, there is the testimony contained in affidavits of at least the following traders each of whom was cross-examined at trial:
(1) Mr Giovanni Pasquale Caporaso, the managing director of Caporaso;
(2) Ms Caterina Borsato, a restaurateur with more than 30 years’ experience in the operation of Italian restaurants in Melbourne;
(3) Mr Eddie Muto, a director of Mercato Centrale;
(4) Mr Richard Mee, the former owner of a business trading under the name MERCATO @ daylesford in Victoria from 2004 to 2018; and
(5) Mr Nicholas Basile, a current and former director of companies associated with Panetta Mercato, a specialty grocer with stores in New South Wales.
96 Second, there are the results of searches of public records undertaken by a solicitor for Mercato Centrale, Ms Noelene Smythe.
97 Third, there is the result of searches undertaken by Professor Valentyna Melnyk, a marketing expert called to give opinion evidence as part of Mercato Centrale’s case.
98 Fourth, there are the opinions of Professor Melnyk based on her skills, qualifications and experience, admitted in evidence as an exception to the opinion rule under s 79 of the Evidence Act 1995 (Cth).
99 Some of the usage evidence was the subject of objection at trial. Rulings on the objections were deferred and the parties were invited to include submissions on admissibility in their oral and written closing arguments. Elsewhere in these reasons I explain my conclusion that the contentious evidence is admissible (see [296] – [316] below) and I have had regard to all of it.
100 The usage evidence is summarised in Annexure A to each party’s written closing submissions. The following pages incorporate that material, at times adapting the language of the submissions without alteration.
Café via Mercato
101 An article in The Age newspaper 8 March 1994 referred to a “newcomer” cafe named Café via Mercato situated on Peel Street in Melbourne, serving an awful looking, lack lustre breakfast. The cafe sported a feature wall described as “a delightful melange of packing-case art, punctuated with pumpkins, potatoes, pasta and garlic”.
Ettos Caffe Mercato
102 An Australian Securities and Investments Commission (ASIC) business extract shows that on 2 May 2000, a company named Diab Corporation Pty Ltd registered the business name “Ettos Caffe Mercato” in New South Wales. There is no evidence that the company in fact operated any business by that name. The same extract shows that a trading name “Ettos Cafe” was used by the same entity. The name Ettos Caffe Mercato was registered as a business and trading name by a different company Pennyhill Pty Ltd from September 2003 to June 2008. There is no evidence that that company in fact operated a business by that name. If a business was conducted by either entity it may be inferred that it was in the nature of a café or that it otherwise had some association with coffee.
MERCATO @ daylesford
103 Use of the word mercato by this business is detailed elsewhere in these reasons in connection with the ownership question. I there conclude that Caporaso was not the owner of the Plain Word Mark (being the plain word mercato) as at the priority date for its registration. MERCATO @ daylesford was the business name for a restaurant owned and operated from 2004 in Daylesford, Victoria by a company controlled by Mr Mee. In the course of operating that business (and again before the priority date) the word mercato standing alone, or a mark substantially identical to it, was also used as a trade mark in respect of the services provided by the restaurant business. I have had regard to the evidence set out in that part of my reasons in reaching conclusions on the separate question of distinctiveness. I here set out Mr Mee’s evidence as to why he chose the name MERCATO @ daylesford, which I accept.
104 In cross-examination Mr Mee sad that he could not speak any languages other than English. At the time of choosing a name for the restaurant he did not know the meaning of the word mercato in Italian. He said that he chose the business name after he had a discussion with a friend with an Italian background and who suggested “Why not Mercato?”. He said that in Daylesford there was a market held at the top of the hill each Sunday. The Italian friend described the word mercato as a market that served as a meeting place where people got married, met friends and tasted foods. He said “that kind of tied into a restaurant”. As discussed later in these reasons, the full name MERCATO @ daylesford, with its “@” symbol was suggested by a signwriter when the restaurant name was being painted on the exterior.
Mercato e Cucina
105 “Mercato e Cucina” was registered as a business name in New South Wales in November 2012 and again (by a different entity) in May 2016. In her affidavit, the operator of the business, Ms Borsato described herself as “unashamedly Italian in every respect”. She confirmed that the business is highly successful restaurant and said that the word cucina means “kitchen” in Italian. There are two newspaper advertisements in evidence referring to a business by that name, dated December 2013 and December 2014. The business name also appeared in a Google Maps search of the terms “mercato sydney” conducted in February 2023.
106 The business website (www.mercatoecucina.com.au) confirms that it is the nature of a restaurant situated in Gladesville New South Wales and that it serves southern Italian cuisine.
107 In her affidavit, Ms Borsato said that “at Caterina’s I have always used Italian words as well as English on our menus, signage and other customer directed materials. This is because, even though most of our customers are not Italians peakers, the use of Italian language conveys the message that Caterina’s is authentically Italian and the food is true to form and part of the Italian tradition”. She explained the use of the word mercato in the business name as follows:
25. In the early days of having opened my restaurant, I would go to the Victoria Market early in the morning and source fresh produce myself, filling the boot of my car with a variety of things that would make their way onto the daily menu. Nowadays my staff source the produce under my guidance, and I leave the Victoria Market for my Saturday morning personal shopping trips. That said, the amazement of wandering through a hustling bustling market and smelling the various aromas of the fresh food and produce on sale, has not waned.
26. The word ‘mercato’ is Italian for market or market place. The origins of the word come from the Latin word ‘mercatus’ meaning gathering for the purpose of commerce. A ‘mercato’ or ‘market’ is not only a place to source products but also a communal meeting ground or gathering place for people with the same passions to congregate and share experiences. For example a trip for me to the fruit and vegetable section of the Victoria Market is just as much of a social and cultural outing as an outing to source produce to eat. Buying freshly cut ripe artichokes for one of my seasonal dishes at Caterina’s, is more than just buying a vegetable, it is about me envisioning how the artichoke will taste when cooked the Italian way by the hands of my chef Marcello, and the joy that will bring my customers. This is because food and wine and eating a meal together are so central to the Italian way of life, the Italian family unit and the cultural fabric of Italian society. Food is so much more than just food.
27. When I see the word ‘mercato’ used in a business name, I generally understand it to be descriptive of the type of business being run/goods being offered; namely a market or a communal meeting place where products are traded; a coming together in a communal way of various vendors looking to sell their products, and a place for buyers of those products to come together to admire all the different products and buy them. To my mind, the ability of a ‘mercato’ to bring people together and showcase products for sale in a social setting, is just as important as the actual products for sale. There is no limit to what can be traded at a ‘mercato’ - everything from fresh fruit and vegetables, fish, meat, salami and cold meats, grocery items, shoes, second hand goods and so forth.
Panetta Mercato
108 This business was established by Mr Basile and his wife, Rosemarie. Both of them have Italian heritage and both speak and understand the Italian language. Panetta is Mrs Basile’s maiden name.
109 The business first operated as a family owned fruit produce store trading as Panetta Fruits. The name was changed to Panetta Mercato in 2013 and the new name was registered as a business name on 27 June 2014. In his affidavit, Mr Basile said that the new name was chosen for the following reasons (at [10]):
(a) … Since the business was expanding beyond mainly selling fruit and vegetables to also selling groceries and delicatessen items, the business’ management recognised that the business was now more reflective of a traditional Italian market, rather than just a fruit and vegetable store.
(b) The use of the word Mercato instead of the English word Market enabled the business to point to the Italian background of the owners and operators of the business and the features of the business which reflect a traditional Italian market.
110 A website with the address www.panettamercato.com.au became operational after the new name was adopted. It contains an image of the internals of a store apparently selling deli, fruit and dairy products, together with this statement:
Panetta Mercato is family owned and has been operating since 1999.
We take pride in sourcing for our customers an extensive range of high-quality food products, including fresh fruit and vegetables, cold meats, cheese and other deli items, fresh fish, quality meats and specialty grocery.
111 The business has a Facebook page (with 3,600 followers) and an Instagram page (with 3,916 followers). The evidence shows that there are presently five Panetta Mercato stores in New South Wales owned and operated by entities associated with the Panetta family and offering substantially the same produce. They are situated in Marrickville, North Ryde, Baulkham Hills, Leichhardt and Kirrawee. The locations of the businesses appear on Google Maps on a search for the term “mercato sydney”. Mr Basile referred to 10 online articles that made mention of the business, published between 2014 and 2023, including one in the Daily Telegraph from 2014, and other sites apparently having a more local audience, such as “Ryde District Mums”, “Hills district Mums” and “Mums of the Shire”. Mr Basile gave examples of advertising activities, including advertisements placed in local online publications, on local radio, on billboards at the Marrickville train station, at and inside the Macquarie Centre and inside the Marrickville Metro shopping centre, and by way of distribution of promotional leaflets at a public school.
Napoli Mercato
112 In February 2015 an application to register a figurative mark featuring the words “Napoli Mercato” and “food is our life” was made in February 2015 in certain services relating to the wholesale and retail of food and beverages. As at February 2016 there existed a website www.diverseshopfitters.com.au featuring a photograph of a shopfront with signage depicting the figurative mark, photographs of the inside of a shop apparently selling grocery items, along with the following statements:
Napoli Mercato brings an authentic high quality Italian food shopping experience to Harrisdale, WA.
…
Owners Louie and Juanita Napoli have a lifetime of experience in the industry and wanted Napoli Mercato to set a new standard in fresh food retail. With a focus on quality authentic Italian products and the finest local produce, they were looking for a high quality fitout and contacted Diverse Shopfitters in 2014.
113 As at February 2023 there existed a website with the address www.napolimercato.com.au. It contained the figurative Napoli Mercato trade mark, together with a page with the words “Mercato noun/ Italian for market”. Statements on that website described a continental store operating in the Perth suburb of Harrisdale by persons with the surname Napoli. The owners referred to a long running family business previously trading as Alf’s Continental Store, and said they were “proud to continue to the tradition of our family”.
114 Between March 2019 and February 2022 there were reviews for the Napoli Mercato business on the Tripadvisor website. A search of Google Maps for the term “mercato perth” generates one result, namely the Napoli Mercato business with an image of the store front displaying the figurative trade mark.
Deli Mercato
115 A business name “Deli Mercato” was registered in May 2015, with a principal place of business in New South Wales. A month later a Facebook page was created with the title “Deli Mercato” and the descriptions “Traditional Italian Delicatessen”, “Italian Food Market” and “specialist food shop”. Two years later a review was posed on the Tripadvisor website for a business described as a “restaurant” having the name “Deli Mercato” in the same suburb and having the same business telephone number as that appearing on the Facebook page. A photograph accompanying the review shows a window with the sign writing “DELI MERCATO”.
Mercato on Byron
116 A company was registered in Victoria on 16 July 2015 with the name Mercato on Byron Pty Ltd. From at least April 2023 there existed a website with the address www.mercatoonbyron.com.au. Extracts from the website evidence a shopping mall with the name Mercato on Byron prominently displayed in a stylised logo. In April 2023 the website referred to a “progressive urban marketplace” including a Woolworths supermarket and a cinema, with the statement “Come check out our Mercato Twilight Markets! We will be hosting a range of local boutique market stalls”.
117 There also exists an Instagram account with the handle @mercatoonbyron. It employs a similar logo to that appearing on the website and describes “local marketplace in the heart of #ByronBay featuring unique shopping, dining & entertainment experiences”.
Henrys Mercato
118 The business name “Henrys Bayside Mercato” was registered in September 2015, specifying a principal place of business in Victoria. A company named Henrys Mercato Stud Park Pty Ltd was registered on 26 April 2017 with a place of business initially in Frankston and later in Stud Park Shopping Centre in the Melbourne suburb of Rowville. On 31 August 2020, a company named Henrys Mercato Waverley Gardens Pty Ltd was registered with a principal place of business in Frankston.
119 Evidence about a business trading by that name was given by Mr Muto. He deposed that to his personal knowledge a fruit and vegetable business known as Henrys Mercato had been operating for some time in Rowville. He said that the stores were set up “like an up market supermarket” with fresh produce in baskets, a delicatessen with Italian cold meats and a range of cheeses, wines and grocery items.
120 There exist Facebook pages for Henrys Mercato stores in Waverley Gardens (8,600 followers) and Stud Park (16,000 followers), featuring a logo with the words “Henrys Mercato”.
121 In July 2019 the words “Henrys Mercato” and the logo shown on the Facebook pages were registered as trade marks in relation to specified food goods, including fresh fruit and vegetables.
122 Results of a Google Maps search conducted on 17 April 2023 include a reference to a Henrys Mercato store, including a photograph of a store apparently selling fresh fruit and vegetables and grocery items.
Mercato on Ferry
123 A Facebook page with the handle, @mercatoonferry was created in June 2017, describing “Southport’s bustling social and foodie hub” and a “funky hub of good vibes, great coffee and delicious food” and including a logo in fancy fonts with the words “MERCATO ON FERRY: EAT PLAY STAY”. As at April 2023, the same logo appeared on a website with the address www.linktr.ee/mercatoonferry.
IGA Mercato
124 The business name Mercato IGA Plus Liquor was registered on 24 May 2019, specifying a principal place of business in Victoria. As at April 2023, a business named IGA Thomastown operating from the specified address was referred to in a website with the address www.iga.com.au. A Facebook page created on 14 May 2014 with the handle @IGAMercato. As at April 2023 the page included the title “IGA Mercato Plus Liquor” and the description “Shopping and retail; Supermarket”. Posts on the page contain the same address as the IGA Thomastown store referred to in the abovementioned website.
Piazza Mercato
125 A company named Piazza Mercato Pty Ltd was registered in November 2019 with a principal place of business in New South Wales.
126 As at September 2021, a restaurant named “Piazza Mercato” was promoted on a website with the address www.piazzamercato.com.au, including the following statements:
Our foundation is traditional. From slices of cured meat you can’t find at your typical deli to generous serves of slow-cooked ragu with house-made pasta, our unfussy food centres on fresh ingredients and flavour
…
About Piazza Mercato: Italian Marketplace – Restaurant, Bar and Live Music
Gradi Mercato
127 The words “Gradi Mercato” were registered as a business name on 12 October 2020, specifying a principal place of business in Victoria. In March 2022, the same registrant applied to register a logo trade mark incorporating the words in relation to certain foods in Classes 29 and 30 including olive oil, salami, cheese, canned vegetables, pickles, chilled pizzas, pasta, cakes and coffee. The same entity applied to register the words “Gradi Mercato” as a trade mark in relation to the same goods in September 2022.
128 As at April 2023, a website with the address www.gradimercato.store displayed the logo trade mark and an image of what appears to be an outdoor fruit and vegetable stall. The website refers to “rural Italian markets” and contains statements to the effect that Gradi Mercato trades in meals, deli items and groceries. The same business appears in Google Maps search results for the term “mercato melbourne”.
The Italian Fresh Mercato
129 A company named The Italian Fresh Mercato Pty Ltd was registered in July 2020 with a principal place of business in Griffith, New South Wales.
130 A Facebook page titled “The Italian Fresh Mercato” existed as at April 2023 (3,200 followers), describing a “locally owned Fresh Food Market”.
131 As at April 2023, a website with the address www.unita.com.au displayed pictures of a store incorporating a bakery and deli, with signage reading “the Italian FRESH MERCATO” and included the following statement:
This locally-owned fresh food market looks to recreate the authentic Italian experience at home. Beyond the stores impressive range of imported + local produce, the gourmet grocer provides the everyday shopper with a unique & personalised experience through an arched gourmet pantry, café & custom wine tasting station.
Mercatofoods
132 As at April 2023, results of a search of the term “mercato melbourne” in Google Maps included a reference to a business with the name “Mercatofoods” with the description, “Spice store”. At the same date, a website with the address www.mercatofoods.com.au existed. It displayed a logo incorporating a coffee cup and the words “MercatoFoods” together with this statement:
Mercatofoods is supplying a wide range of world class products imported from overseas, outsourced locally and globally, we provide you with the most tasty ingredient for your own dishes. We are also selling some food products online such as nuts, rice & more to come.
133 Photographs on the website suggests it is concerned with goods including nuts, rice, coffee, grains and pulses, seeds, tea, coffee, bread and snacks.
PF Mercato
134 In February 2023, the results of a Google Maps search for the term “mercato melbourne” included a business named “PF Mercato” with the description “pasta”. As at April 2022 a website with the address www.pfmercato.com.au contained a header incorporating the words “PF Mercato”. The website describes a business situated in Donvale, Victoria, described as follows:
PF Mercato aims to present local and Italian produce of quality imported fine foods. PF Mercato stocks flour, herbs and oils to pasta and sauces. Our onsite kitchen can also prepare a wide range of authentic homemade pasta and pizzas for you to take home.
Mercato Pizza
135 In February 2023 results for a search of the term “mercato melbourne” in Google Maps included a reference to a business named “Mercato Pizza” situated near Prahran Market in Melbourne. As at April 2023, a business named “Mercato Pizza” featured on the Uber Eats online platform, offering pizzas having Italian sounding names.
SPQR Mercato
136 As at April 2023, a website with the address www.spqrpizzeria.com described a business named “SPQR Mercato (Docklands)” and included a reference to “SPQR PIZZERIA (CBD)”.
Evidence of Mr Muto
137 Mr Muto was born in Victoria to Italian migrant parents. He has established and developed at least 20 restaurant businesses in Melbourne.
138 In an affidavit sworn on 14 April 2023, Mr Muto said that in his experience it was common for traders “wanting to project the message that their business is associated with Italy or with Italian values or qualities, to use Italian words in their branding”. He annexed to the affidavit extracts from websites promoting some of the businesses referred to thus far in these reasons. In accordance with rulings explained at the conclusion of these reasons, those website extracts have been admitted in evidence. They have been referred to above and will be taken into account in the analysis that follows.
139 In addition, Mr Muto annexed to his first affidavit a list of 23 results of a search for registered or pending trade marks containing the word mercato. He expressed the view that the list was not surprising to him because it was “likely that many traders would want to use the word ‘Mercato’ in their trading name for its descriptive meaning” (my emphasis). That view finds little or no support in the search results for a number of reasons.
140 Foremostly, the list includes three marks applied for by Mercato Centrale itself, as well as six trade marks owned by Caporaso. A further seven do not contain the word mercato at all, but rather the word mercator or mercatores, mostly within highly distinctive logos or accompanied by other words, and relating to classes of goods or services that are either unknown or that apparently bear no relation at all to a market or marketplace (whether or not in an Italian style).
141 The results include two trade marks for Henrys Mercato, marks that I find are used in the business of that name discussed above. Each of those registrations are confined to goods in Class 31 including such things as fresh asparagus, grains, tangerines, nuts, rice and fresh berries, but not in relation to any kind of retail services. There are two further results which include the combined words gradi mercato. Those marks may be associated with the business of that name discussed above. Finally, there is the registered mark luxury mercato, but there is nothing to suggest that the word mercato in that mark is intended to be a direct or even indirect reference to a market of the kind referred to by Mr Muto in his evidence.
142 Mr Muto also annexed to his first affidavit search results relating to business and company names incorporating the word mercato. Some of the business and company names relate to the businesses already discussed in these reasons.
143 The search results lend support to the bare proposition that some traders have chosen to incorporate the word mercato into an entity or business name. In conjunction with other evidence, the list also lends support (albeit slight) to the contention that traders may wish to incorporate an Italian word into an entity or trading name to project an association with Italy generally. However, it does little more than that. In particular, it does not support a proposition that the word is used by traders for any ordinary descriptive meaning to refer to a market or to describe the character or quality of a market or the goods that might be purchased at one. Many of the business and entity names are suggestive of trading activities bearing no relation to a market or marketplace at all, or whose trading activities (if any) cannot be guessed at by reference only to the name. They include: Marina Mercato Pty Ltd, Mercato Group Pty Ltd, Mercato Italiano Pty Ltd, Mercato Media Pty Ltd, Mercato Perth Pty Ltd, Milan Mercato Pty Ltd, Mercato Enterprises Pty Ltd, Mercato Holdings Pty Ltd, Mercato Investments Pty Ltd, Mercato Digital Publishing Pty Ltd, Mercato Medical Centre Pty Ltd, Piccolo Paradiso Mercato Pty Ltd and Sushi Izakaya (Mercato) Pty Ltd.
144 In summary, the results of trade mark searches and business name or entity searches adds little (if any) substance to the evidence of trade use discussed by reference to the specific businesses already referred to above.
145 I otherwise accept Mr Muto’s evidence that he has in the past chosen Italian words to incorporate into the names of many of his restaurants to project an association with Italy and note in that respect that he is an Italian speaker.
Expert evidence
146 Valentyna Melnyk is a Professor of Marketing and Deputy Head, Research at the University of New South Wales Business School. She was retained by Mercato Centrale to give opinion evidence about the use of foreign words in the marketing of goods and services in Australia, including the extent to which Italian words are used to promote food related goods and services. More specifically, she was instructed to explain “[w]hether [and why] traders in Australia are likely to want to use foreign words that their customers may not know the English translations of …” and “[w]hether and why the word MERCATO would be a word that traders in Australia may want to use in relation to food and food-related goods and services, including retail services”.
147 Professor Melnyk explained that “brand equity” was the value of a brand, as determined by consumer perceptions of its image, attributes, quality and desirability. She said that “brand name associations” incorporated all information and perceptions concerning the brand in the mind of the consumer, including thoughts, feelings, perceptions, images, experiences, beliefs, emotions and attitudes.
148 Professor Melnyk described “foreign branding” as a strategy of spelling or pronouncing a brand name in a foreign language targeted toward influencing the brand’s image. She said it was a “popular marketing technique” that involved the use of foreign words in their trading names or brands to enhance brand equity. She said that the strategy of using foreign words implied characteristics of a specific country of origin, usually favourable to the product category, which could “spill-over” into the brand and reinforce perceptions of a product’s attributes.
149 She said that some traders used foreign words with a particular meaning to “create more targeted associations”, while others used “foreign-sounding words” with a less clear meaning or no meaning at all to “activate a perception” about a country. She said that “foreign branding works irrespective of whether consumers understand the meaning of the foreign words, as long as it creates associations with a particular country of origin”.
150 Professor Melnyk said that Italian words used in connection with food related goods and services were generally desirable as they helped to “enhance perceived taste and hedonic associations between a brand and its product of services”. She referred to the international examples of Häagen-Dazs (an ice cream brand “that implies, to a non-Scandinavian audience, a Scandinavian origin”), Giordano (a clothing brand that created Italian country of origin associations bringing to mind high style Italian fashion) and Prego (a brand invoking consumer perceptions of high quality Italian tomato sauces). She gave Australian examples including Røde Microphones (giving the impression of “Danish or Norwegian” origin), and San Remo pasta (using a name of a “well-known Italian resort”). She went on to say that many brands chose to use completely made up words that were stylised for a specific language.
151 Generally in relation to Italian words, Professor Melnyk said that they were commonly used to describe categories of goods, such as the word “salumi” in connection with Italian-style cured meats. She said that “Italian or Italian-sounding words” were used in eight of 10 trading names for the reportedly best 10 pizza shops in Australia in 2023. She described Italian words as “definitely desirable elements” in brands for food related goods and services for two reasons. First, she said that visual clues could influence the perceived flavour of food, sensations that she said could be “affected by associations with a favourable country of origin implied by the corresponding words used in the branding”. Second, she said that the use of Italian words to market foods was likely to influence “general hedonic perceptions” of food or food related products. She said that there had been an increase in consumer demand for Italian food globally, including in Australia.
152 Professor Melnyk undertook the Google Maps searches referred to elsewhere in these reasons to identify the use of the word mercato in businesses situated in different States and Territories. She said that her searches demonstrated that Australian traders were already using the word mercato, both in the retailing of services and in relation to goods. She said that was done to “transfer associations to the brand related to positive stereotypes about Italian food in general”. She said that if consumers do not know the exact English translation of the word mercato, the word could activate association about Italy, and Italian food in general. For those that know (or could guess) the translation, there would be more specific associations with Italian markets. In either case, she said, the effect on the brand equity is likely to be positive.
153 In cross-examination Professor Melnyk said that she had grown up in the Ukraine that she had undertaken tertiary studies in the Netherlands before moving to New Zealand, and that she had first lived in Australia in January 2019. She confirmed that in 2023 she had worked as a visiting scholar at Bocconi University in Milan, Italy. She said that she had also travelled to Italy for conferences and as a tourist. She confirmed that for the purpose of preparing her affidavit she had been asked to assume that the word mercato meant market in Italian. She said that she was already aware of the meaning of the word from her prior travels to Italy. In relation to the Google Maps searches, Professor Melnyk:
(1) Accepted that the Napoli Mercato business identified in the Perth suburb of Harrisdale was 25km south of the city centre.
(2) Generally accepted that by reason of the nature of a grocery store, people would often shop at places that were close to where they lived, at least for “fast moving consumables”.
(3) Said that people may be more willing to go out of their way for something special or to order online.
(4) Confirmed that in her investigations she had not established the total number of grocery stores in the Perth metropolitan area.
(5) Did not accept that only a tiny proportion of Perth’s total population of two million people would have come into contact with the single grocery store identified with the name mercato, because much would depend on whether the store was prominent on a route to other popular destinations (a matter she had not investigated in relation to Napoli Mercato).
(6) Confirmed she had not established the extent to which the Perth Mercato store had been advertised or otherwise marketed, nor did she investigate the goods that were sold there.
(7) Said that her sole purpose was to determine how many companies in Australia were currently using the word mercato.
(8) Said that without conducting further investigations, she could not conclude either way whether the Perth business shown in Google Maps was commonly or generally known amongst consumers who lived in the Perth area, nor could she point to any reason why anyone would travel from out of their local area to go to the particular store.
(9) Said, in respect of the website for Napoli Mercato, that the website might have used the phrase “noun / Italian for market” to artificially emphasise the country of origin, and that traders often used that technique “as an excuse to really insert a very specific country of origin from which they want to build a stereotype and associations from”.
(10) Confirmed communicated an association in general to consumers, on an “emotional level” and that it involved allusions to Italy, adding:
So companies want to choose a – like, if they choose [the] strategy of foreign branding, that would mean they would have a brand that is either spelled or suggests a specific country of origin with positive associations or stereotypes in a particular product category. So, for example, we may not have positive stereotypes about Italian drivers, but we may have very positive stereotypes about Italian food. Therefore, in food category, in fashion, we see a lot of Italian words as part of brand names.
(11) With respect to her searches relating to Sydney, confirmed that it formed no part of her instructions to include any context about how many specialty grocery stores there were in the whole of the Sydney metropolitan area.
(12) Agreed that speciality grocery stores were all over the city, covering a huge geographical area, potentially numbering in the hundreds.
(13) Confirmed that her searches of Google Maps for “mercato sydney” included a business named Mercato Express, described as a “manufacturer” and having no reviews, agreed that the screen shot she took provided no information about the types of products manufactured, said she would assume by the brand name that it would have something to do with Italy “[b]ecause otherwise they would have no point of using Mercato in their brand name”, but acknowledged she had no basis to assume that the business manufactured food or food related products.
(14) With respect to the business Mercato e Cucina in Gladesville, agreed that it was situated about 12km from the centre of Sydney and agreed that she could not say anything about its size, how long it had been operating nor whether it was in a prominent or obscure location, nor anything about how it promoted itself.
(15) Agreed she knew nothing about the business named Mercato e Cucina other than the fact that it might be a restaurant located somewhere in Gladesville.
(16) Agreed that Sydney was a city covering vast areas, home to millions of people, and that the “millions and millions” of people who lived in the western, northern and southern areas of Sydney were highly unlikely to have attended a particular restaurant in Gladesville.
(17) Similarly, accepted that there were millions of people living in Sydney who would not have come across any one of the five Panetta Mercato stores, and that there were huge expanses of western, northern and southern Sydney having no such stores.
(18) Insisted that searches undertaken in Sydney revealed that mercato was a popular name for traders to use and that they evidenced a “pattern” with “seven players” in the Sydney market using the word.
(19) With respect to searches for the term “mercato melbourne”, confirmed that she undertook no investigation into whether the four business located there were in prominent or obscure locations, nor as to how they promoted themselves, nor as to their size, nor as to how long they had operated, their degree or success or the kind of consumers who patronised them.
(20) Confirmed that the businesses Piazza Mercato and PF Mercato appeared to relate to pizza and pasta, agreed (eventually) that there were potentially hundreds of pizza and pasta businesses in Melbourne, but could not say the exact number.
(21) With respect to Mercato Foods, confirmed that it appeared to be a business operating from the ninth floor of a building but could not say anything else about it.
(22) With respect to Gradi Mercato, confirmed that she did not know the address of that business.
(23) Confirmed that she could not estimate the number of consumers who were aware of the four businesses she identified in Melbourne, but insisted that there was a “very clear pattern that the word is used”, then described the pattern as “national”.
(24) Said that a business did not need to be successful or popular in order for customers to be aware of it and so be more likely to be “exposed” to the word mercato in the places where the businesses existed than in places where they did not.
(25) As to her searches concerning Brisbane, Adelaide, and Canberra, confirmed that her searches yielded no businesses trading under the name mercato (aside from the business operated by Caporaso).
(26) Confirmed that she had not conducted searches relating to Tasmania, but had undertaken searches relating to regional New South Wales, Victoria and Queensland, yielding no results.
154 In re-examination, Professor Melnyk said that she was “somewhat surprised” to find that there were “so many” businesses using the word mercato. She continued:
I was genuinely surprised to find, basically, over 10 altogether because that really indicates that market more treats it almost as a subcategory – as – as maybe a better version of – or more Italian-flavoured version of a Harris Farm or something like that. So, for me, it was very important to establish the number of businesses – outlets using the word Mercato in it, and that was important to address question to what extent this is a common word – commonly used word among businesses in Australian landscape.
155 In light of that evidence I will now determine whether the word mercato carried any ordinary signification among the target audience as at the respective filing dates for the Plain Word Mark and the Fancy Word Mark.
Ordinary signification as at the relevant priority dates
156 The evidence of trade use of the word mercato before the priority date for the Fancy Word Mark (4 August 2008) is limited to two instances. A further three pre-date the priority date for the Plain Word Mark (21 March 2016). The remaining 12 occur after both priority dates. If there are errors in that arithmetic, I do not consider the addition of a few further examples would alter the outcome.
157 The trade use evidenced before each priority date is plainly insufficient to prove the contention advanced by Mercato Centrale with respect to the ordinary signification of the word at those times.
158 Aside from trade use, there is an absence of any other evidence upon which the Court may conclude that the word mercato carried any ordinary signification at all within the target audience (comprised of English speaking traders and members of the public) as at either priority date.
159 At its very highest, the evidence may support a conclusion that some traders used the word as part of a trade mark in conjunction with other words, but the evidence does not demonstrate that they did so for its ordinary descriptive meaning, that is, to describe goods and services in the nature of a market or marketplace in the Italian style or any style at all or the produce that might be sold there. At its highest, the evidence may demonstrate that the word may have been chosen because of its subtle allusion to Italy.
160 In reaching those conclusions I have assessed the evidence both qualitatively and quantitatively. My assessment of the trade use pre-dating the priority dates is encompassed in the discussion below concerning the whole of the trade use prior 31 May 2023 (on which the Confusion question turns).
161 In accordance with the principles stated in Cantarella High Court, the trade use pre-dating the priority dates does not warrant a finding that the word mercato conveyed the ordinary signification of a market or marketplace. That was a fundamental plank in the argument alleging the lack of distinctiveness under s 41 of the TMA, and I reject it. Mercato Centrale has not shown that the word was not inherently capable of distinguishing Caporaso’s goods and services from those of other traders. As at their priority dates, Caporaso was entitled to the registration of the Plain Word Mark and the Fancy Word Mark on that basis. It was not necessary to demonstrate distinctiveness in fact by reference to its own earlier use of either mark, nor is it necessary for this Court to determine whether registration of the narks could otherwise be “saved” by reference to any such use in fact. It follows that the challenge under s 41 of the TMA must fail.
Ordinary signification as at 31 May 2023
162 Mercato Centrale submitted that even if the Court should take the view that the Plain Word Mark and the Fancy Word Mark could not distinguish Caporaso’s goods and services at their relevant priority dates, there could be “little doubt” that the word mercato is now “widely understood” as meaning a market or a marketplace, especially of an Italian style. It submitted that evidence showed “extremely wide” use of the word by other traders around Australia for that descriptive meaning over an extended period, and specifically at the date that it filed the cross-claim. In written submissions the confusion was said to arise as follows:
By [31 May 2023] the evidence unequivocally shows that many other traders had been using the word ‘mercato’ for its descriptive meaning as part of their trade indicia for many years. Accordingly, use by [Caporaso] of the word ‘mercato’ to distinguish a particular trader (i.e. use of that word alone as a badge of origin) rather than as a description of the nature of the goods or services being offered is likely to cause confusion. That is sufficient to engage s 88(2)(c) of the TMA and for the Court to conclude that the [Plain Word Mark and the Fancy Word Mark] should be cancelled.
163 It was further submitted that there was at least a real and tangible possibility that consumers would be confused by trade mark use of the word mercato to indicate a particular trader, because the consumer would be likely to understand the word as a descriptive term that could refer to many different traders within the class of Italian style markets or marketplaces. It was submitted that a number of factors referred to in reg 8.2 favoured cancellation of the marks, including that:
(a) The public interest will be best served by cancellation because the confusion caused by the continued registration of a widely-used descriptive term will be removed;
(b) The circumstances which gave rise to the rectification application have not changed;
(c) The extent to which the Word Marks distinguished the Applicant’s goods and services prior to the rectification application was very limited. As discussed above in relation to s 41, the word ‘mercato’ is inherently incapable of distinguishing the Applicant’s goods and services because its ordinary meaning to persons concerned with those goods and services is directly descriptive of an Italian-style market or market place. Further, most of the Applicant’s trading indicia continued to include the Red Man Device at least until 2022, and the words ‘IMMA AND MARIO’S MERCATO’ on its main store signage until April 2022 and, still today, on its pylon-sign at the storefront. Further, to the extent that it had developed any reputation in the word MERCATO alone, that reputation was confined to the Adelaide area.
(d) Complete cancellation is not required. The marks need only be cancelled in respect of the Challenged Goods and Services (Word Marks).
164 The crucial argument in this aspect of the cross-claim is that the word mercato has come to be used so extensively that the word had by 31 May 2023 come to have a commonly understood meaning among Australian speaking consumers such that, by virtue to their exposure to that use, they would now be likely to understand the word in its ordinary descriptive meaning as referring to a marketplace, more specifically a marketplace in the Italian style.
165 I do not accept the characterisation of the evidence relied upon to support the assertion that the word mercato is likely to be understood by Australian consumers as a descriptive word for a market or marketplace, or for the kind of produce that might be sold there.
166 The following general observations may be made about the nature and quality of the evidence.
167 I have already observed that the word mercato is not included in English speaking dictionaries before me. I accept that a word may have a commonly understood meaning before it finds expression in a dictionary. Here, Mercato Centrale invites the Court to draw that inference on the basis of the number of Australian businesses using the word in the course of trade, whether as a trade mark or as a description of the goods or services provided by them, or both. Speaking in the abstract, I accept that over time a foreign word may come to have a commonly understood meaning in an English speaking country by reason of its repeated and consistent use, including use in retail businesses that are visible to the public whether by their physical or online presence. However, there must be a proper evidentiary basis for drawing an inference that that has occurred in this particular case.
168 The evidence shows that traders in some (but not all) Australian States have chosen to include the word mercato in a trade mark, specifically in business names. But that alone does not demonstrate that the word is one that other traders may wish to use for the ordinary signification that the word possesses. In accordance with the reasoning in Cantarella High Court a trader may wish to use a word not for its ordinary signification as a direct description of the goods or services provided or to describe their characteristics or qualities, but rather as a skilful allusion. As Professor Melnyk repeatedly emphasised, a foreign word may be employed even if it has no ordinary signification to English speakers (or any meaning to foreign speakers for that matter). An Italian word may be employed simply because it sounds Italian and so invokes positive associations with that country.
169 Much of the evidence relied upon suggests that the word mercato is used in connection with businesses in the nature of restaurants and cafes, and not in connection with business in the nature of markets or marketplaces. To the extent that there is some concentration of evidence of use in the restaurant sector, that might support an inference that English speaking consumers have come to believe (wrongly) that the word means restaurant. Evidence of that kind does not support an inference that Australian consumers (or English speaking traders for that matter) understand the word to mean a market or marketplace.
170 I am not satisfied in any event that the use of the word mercato in connection with restaurant businesses in Australia is qualitatively or quantitively sufficient in its concentration or detail to support any inference at all as to the meaning of the word as understood by ordinary English speaking persons with an interest in the goods or services in respect of which the Caporaso Marks are to remain registered. In accordance with my findings below, upon rectification of the Register concerning the Plain Word Mark, those goods and services will not include restaurant services in Class 43. If anything, evidence of use of the word in restaurant names (as sparse as it is) detracts from Mercato Centrale’s proposition that the word is commonly understood by Austrlaians to refer to a market of marketplace in an Italian style.
171 I otherwise consider the opinion evidence of Professor Melnyk to be of limited assistance, principally because her opinions were in response to instructions that do not go to the heart of the questions this Court must decide. In accordance with her instructions, she largely approached her task as a numbers game, simply listing off those businesses with the word mercato in their names with little or no accompanying contextual information. It may be accepted that a word may come to have an accepted meaning after exposure to consumers by virtue of commercial use, and that that may occur in respect of those who do not patronise a business but nonetheless know of its existence. But the evidence before me does not permit inferences of that kind to be confidently drawn, for a number of reasons.
172 To begin with, the enquiry is one relating to the whole of Australia, which obviously includes places outside of Sydney and Melbourne. It has not been explained how the word mercato could have taken hold among English speaking Australians as a word meaning “market” when a significant proportion of the population resides in States or regions where there exist no traders at all making use of the word to describe businesses of that kind, or any kind at all. On my calculation, the collective population of the States and Territories having no evidence relating to them is 10.84 million.
173 Moreover, the evidence does not show that a single trader adopted or used the word mercato because of a subjective belief that the word was commonly understood by English speaking consumers to describe a market, or even to allude to one. Mr Caporaso, Mr Basile, Ms Borsato and Mr Mee all gave evidence on the basis that the word was chosen because of its meaning in Italian, not because the word had an accepted meaning among English speaking consumers to whom their trade was targeted. To the extent that the traders are Italian speaking (as in the case of Mr Caporaso, Mr Basile and Ms Borsato), they are not representative of the broader Australian community when it comes to determining whether a word having Italian origins has come to have any generally understood meaning in English.
174 As a temporal consideration, whilst there are numerous examples of the use of the word mercato in the course of trade, the concentration of use must be assessed over the course of about 20 years to which the evidence relates. For the most part there is little evidence (whether direct or indirect) as to whether many of the business activities evidenced in the materials have continued for any significant period of time. That is relevant in my evaluation of the concentration of the use of the word over time, and hence the degree of exposure ordinary Australians may have had to it.
175 Having regard to the evidence as a whole, I am not satisfied that use by Caporaso of the challenged marks would be likely to deceive or cause confusion within the meaning of s 88(2)(c) of the TMA in the manner contended for by Mercato Centrale.
OWNERSHIP
176 This ground is pressed only in respect of the Plain Word Mark and only in respect of its registration for services in Class 43 (other than temporary accommodation services). Those services are:
Services for providing food and drink including services relating to the provision of food and drink at cafes, restaurants, bars, hotels and provision of catering services; preparation of take away 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
177 The starting point is that only a person claiming to be the owner of a trade mark may apply for registration of it (TMA, s 27(1)(a)). Registration may be opposed on the ground that the applicant is not in fact the owner (TMA, s 58). 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. As to whether marks are substantially identical, in Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407, Windeyer J said (at 414):
In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. ‘The identification of an essential feature depends’, it has been said, ‘partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it’: de Cordova v. Vick Chemical Co. Whether there is substantial identity is a question of fact: see Fraser Henleins Pty Ltd v. Cody, per Latham C.J., and Ex parte O’Sullivan; Re Craig, per Jordan C.J., where the meaning of the expression was considered. …
(footnotes omitted)
178 Mercato Centrale alleges that the word mercato (or a mark substantially identical to it) was first used as a trade mark in respect of the same Class 43 services (or services which are “the same kind of thing”) by an entity controlled by Mr Mee. That alleged use was in connection with the restaurant trading as MERCATO @ daylesford discussed earlier in these reasons and is said to have included restaurant services, catering services, business hospitality, hosting of events and wine tastings.
The evidence of Mr Mee
179 Mr Mee is a qualified chef who has worked in the hospitality industry for 37 years. He is currently employed as an executive chef in a casual eatery in Mount Dandenong, Victoria. From its incorporation, he was a director and shareholder of Mercato at Daylesford Pty Ltd (renamed in 2017 to RB Mee Holdings Pty Ltd). Through that entity he and his then wife operated a restaurant business in Daylesford, Victoria, named MERCATO @ daylesford (the lower case is intentional) until the business was sold in July 2018. From 2004, the restaurant operated from a timber cottage and served modern Australian cuisine, opening six days a week. Mr Mee was employed to work as a chef in the restaurant for 12 months following its sale.
180 In his affidavit, Mr Mee described himself as “the face of the restaurant” and said that he was very familiar with its customers. He said that the restaurant was often fully booked on weekends and public holidays and “was a prominent part of regional Victorian culinary culture”. He said that it featured in various newspapers, magazines, leaflets and online articles and was the recipient of various awards.
181 I make the following findings based on the documents annexed to the affidavit, as explained by Mr Mee.
182 A number of business and third party publications used the word mercato or the name MERCATO @ daylesford in connection with the business, namely:
(1) Leaflets printed around the time of the business opening referred to it as “MERCATO @ daylesford”.
(2) On 4 August 2004 an advertisement was placed on page 10 of a newspaper announcing the opening of “MERCATO @ daylesford”, spruiking an “Award Winning Chef”, “Modern Australian Cuisine”, “Local Produce & Wines” and “Really Good Coffee!”.
(3) An article titled “Mercato to host fundraising dinner” was published in 2005 to promote an event to raise funds following the 2004 Indian Ocean tsunami.
(4) The restaurant featured in an article published in The Age newspaper on 31 January 2006, stating “Mercato – the name means market in Italian – is the well-thought-out venture of a young husband-and-wife team, Richard and Alison Mee.
(5) On 5 February 2008, a local newspaper, The Advocate, reported that MERCATO @ daylesford had won a Rotary hospitality award.
(6) In September 2012 and on 27 August 2013, The Age Good Food Guide published reviews titled “Mercato @ daylesford” stating: “[t]he evocative pictures of European market scenes are clues to the restaurant’s name, Italian for market. It’s apt too, as the reborn weatherboard cottage is just down the road from Daylesford’s popular Sunday market, and owner-chef Richad Mee takes pride in selecting the best seasonal produce of the region”.
(7) Leaflets were published to promote an art exhibition at MERCATO @ daylesford, but the date of their publication is not stated in the affidavit, nor is the date apparent on the face of the leaflet themselves.
(8) A local newspaper published (in print and online) an article on 15 September 2014 titled “Mercato @ Daylesford clocks up 10 years” referring to the restaurant as “Mercato” in the first line and in a caption, and including the website address www.mercatorestaurant.com.au discussed below.
(9) The website for Visit Victoria as at 4 April 2023 recommended “supper at Mercato”. The date on which that article first appeared there is unknown.
(10) An online publication “Broadsheet” included an article titled “Mercato”. The article remained on the site as at 4 April 2023 but the date on which it first appeared is unknown.
183 Of the nine third-party articles published about the business, three refer to it solely as “Mercato”, two refer to it as “MERCATO @ Daylesford” and the remainder use both names.
184 The restaurant was promoted on a website from the address www.mercatorestaurant.com.au. Mr Mee deposed (and I accept) that the website was created and maintained by a friend of his.
185 In his affidavit, Mr Mee stated that he had caused pages from the website to be extracted using the Wayback Machine which he said depicted pages as they appeared on 6 March 2019. There are three such pages annexed to his affidavit each of these admitted into evidence without objection. I do not accept that they capture the website as at 6 March 2019.
186 Information at the top of the extracts includes the words “Wayback Machine” and the words “502 captures 31 August 2007- 30 October 2008”, “9 captures 31 August 2007 – 10 April 2012” and “7 captures 31 August 2007 – 10 April 2012”. I infer that the extracts capture the pages as they appeared on 31 August 2007, as that date appears highlighted at the top right of each page. That conclusion is based in part on my approach to the admissibility of information contained in contentious Wayback Machine evidence before me, as discussed later in these reasons. I am reinforced in that conclusion by the circumstance that as at the later date of 6 March 2019, Mr Mee was not the “Chef & Owner” of the restaurant as stated on the web pages. In respect of this topic, I prefer the inference that may be drawn from the documentary record to the evidence of the later date provided by Mr Mee.
187 The first of the extracts from the website includes a photograph of the restaurant exterior showing the words MERCATO @ daylesford in black font against a white background. The capitalised word MERCATO is depicted in font twice the size as the words “@ daylesford”. The extracts otherwise contain the following statements:
We invite you to experience the culinary delights which have made Mercato a popular destination in itself within the [region]
…
Along with being a great restaurant, Mercato is available for any special occasion or event.
Whether you are planning a wedding reception, birthday party, or business dinner, Mercato is available to meet all of your specific needs.
Mercato - Italian for ‘market’.
Respecting the Italian heritage of Daylesford and the proximity of the famous Daylesford Market. In early European history, the town market place was the heart and soul of the town. All walks and stations of life came together to satisfy their needs, from the most basic to the most extravagant.
All forms of business were carried out from the administration of justice to the declaration of intention to marry in front of the market cross. The market was a gathering place of people and goods from around the world. Full of vibrant colours, a myriad of smells and tastes, the creative and the unusual, the unique and the necessary, and of course the gossip and intrigue.
Markets reflect life and all its rich tapestries. Come and join us for a while. Relax and ponder the amazing diversity and beauty of the world in which we now live.
188 In his affidavit, Mr Mee said that during the time he operated the restaurant, “it was most commonly referred [to], marketed and advertised as ‘Mercato’. However, at times … it was also referred to as Mercato @ Daylesford.” He said that “Mercato” and “Mercato @ Daylesford” were used interchangeably by him, restaurant staff, locals and patrons generally. He said that the restaurant was referred to as “Mercato” more commonly than “Mercato @ Daylesford”. He said that he answered the telephone with the words “Mercato”, rather than “Mercato at Daylesford”.
189 In cross-examination Mr Mee gave evidence inconsistent with his affidavit in several respects.
190 When questioned about how he would answer the phone while working at MERCATO @ daylesford, Mr Mee said that he would answer, “Mercato at Daylesford. Richard speaking.” He was taken to that part of his affidavit in which he said he answered the phone simply with the word “Mercato”:
Q: So see the last sentence there. Is that not quite right? Is that a mistake?
A: Yes.
Q: … Did you write that part of your affidavit or did someone write that for you?
A: Someone wrote it for me.
Q: Who was that?
A: I would say the solicitors.
191 The cross-examination continued:
Q: Now – so when you were yourself promoting and advertising the restaurant, did you – what brand name did you use for that?
A: Mercato @ Daylesford.
Q: So can I take you to paragraph 9 of your affidavit. Now, can you see in paragraph 9, it says:
During the time I ran Mercato, it was most commonly referred – well, marketed and advertised as Mercato.
Q: But you most commonly marketed and advertised it as Mercato @ Daylesford, didn’t you?
A: Yes.
Q: So is that sentence a mistake as well, that first sentence in paragraph 9?
A: Yes, it is.
192 Mr Mee said that he “clearly” did not write the words in [9] of his affidavit. When asked who did, he replied “The solicitors”.
193 It was put to Mr Mee that it was not correct to say (as he had in his affidavit) that “Mercato” and “Mercato @ daylesford” were used interchangeably as a name for the restaurant. He responded:
A: … since I’ve been talking about this – I haven’t thought about Mercato for five years, but after speaking to both sides last week and things cropping up, I’ve thought more about it, and, from time to time, yes, I would just speak about the restaurant as Mercato to patrons and suppliers and meeting people in the restaurant industry. Instead of saying Mercato @ Daylesford, I would just say, yes, Mercato.
Q: And that was an abbreviation for the proper name of the restaurant, which was Mercato @ Daylesford; correct?
A: Yes, correct.
Submissions and consideration
194 The evidence clearly shows that the business name “MERCATO @ daylesford” was used as a trade mark before the priority date. I am satisfied that it was so used in relation to restaurant services and more specifically, “services for providing food and drink including services relating to the provision of food and drink at cafes, restaurants” and to that extent it was used in respect of the same services in respect of which the Plain Word Mark is registered. However, the evidence does not demonstrate that it was used in relation to the other Class 43 services covered by the registration. The business operated by Mr Mee was not a bar or hotel, it did not provide catering services, nor did it provide takeaway food and drink, nor did it provide bakery services relating to cakes and pastries, nor did it provide consultancy services of any kind. In accordance with the principles stated below, I do not accept that those additional services can be said to be “the same kind of thing” as restaurant services.
195 In any event, I am not satisfied that the trade mark “MERCATO @ daylesford” (considered as a whole) is substantially identical to the Plain Word Mark. The use of the ampersand and the lower case “d” in “daylesford” are features of the trade mark that cannot be ignored. It may be accepted that they phonetically refer to a location “at Daylesford” at which the restaurant was located. They are descriptive in that sense, however, I consider them to be sufficiently unique in their appearance such that the whole of the mark “MERCATO @ daylesford” is neither identical nor substantially identical to the word mercato standing alone. Mr Mee’s evidence was that the addition of “@ daylesford” was a kind of branding. His subjective understanding coincides with the objective evidence. Accordingly, the earlier use of “MERCATO @ daylesford” as a trade mark does not support a conclusion that Mr Mee (or the relevant corporate entity) was the owner of the trade mark mercato.
196 However, the evidence also shows some use of the word mercato, standing alone, as a trade mark in connection with the same business. The use of that word was in relation to the restaurant services just described (services for providing food and drink including services relating to the provision of food and drink at cafes and restaurants) but did not extend to use in respect of the other Class 43 services.
197 There are some deficiencies in the evidence as to when in the history of the business the word mercato, standing alone, was first used as a trade mark. I am not satisfied that the word was used by Mr Mee in his manner of answering the telephone or by the manner in which he aurally marketed and advertised the business, before the priority date for the Plain Word Mark, for two reasons. First, the affidavit evidence on that topic was ambiguous as to the time in which the alleged first aural use of the “abbreviated” trade mark first occurred. In addition, I consider Mr Mee’s testimony to be so changeable on the topic that it cannot be relied upon to support a finding of trade mark use in the manner deposed. Even if it was shown that Mr Mee’s affidavit was indeed written by somebody else, as he asserted, it remains that he took an affirmation in respect of it and there is no adequate explanation for why his oral evidence shrank from his earlier assertions as to use of the word standing alone to promote the business. The ambiguity was not cured in re-examination, and there was no application by Mercato Centrale to cross-examine him on the basis that he was hostile to its case. The result is an unsatisfactory and unexplained inconsistency that renders the whole of his testimony on that topic concerning and unreliable.
198 I am nonetheless satisfied that the business was promoted by way of the website with the address www.mercatorestaurant.com.au before the relevant priority date In that website address the word “restaurant” is plainly descriptive of the business, so that the word “mercato” in the address assumes importance. Given the descriptiveness of the word “restaurant” I consider that the website address is itself an instance of the use of a mark that is substantially identical to the word mercato standing alone. I am also satisfied that the website address is itself an instance of use as a trade mark.
199 In addition, the pages extracted refer to the business as “Mercato”, in at least two instances. They further support a finding that the word mercato, standing alone, was used as a trade mark in connection with the restaurant services provided by the business. Given my findings about the dates of the extracts, the trade mark use occurred before the priority date for the Plain Word Mark. The two marks are identical. It follows that Caporaso was not the owner of the Plain Word Mark as at the priority date in connection with the limited restaurant services described in Class 43 as described in the extracted website pages.
200 I otherwise consider the third party publication evidence to be of limited value, given the very scant references to mercato standing alone before the relevant date, but it does lend some support to the conclusion that the name mercato was used as a trade mark at the relevant time and so may have been understood by outsiders to the business as having that use. They reinforce my conclusion that Caporaso was not the owner of the Plain Word Mark at the priority date in respect of some of the services described in the Class 43 registration, but my conclusion does not depend on them. The website evidence is sufficient.
Other services in Class 43
201 I emphasise that I am not satisfied that the mark mercato was used in respect of any services in Class 43 in respect of which the Plain Word Mark is registered, other than “services for providing food and drink, including services relating to the provision of food and drink at cafes, restaurants”. On the evidence before me I am not satisfied that the business operated by Mr Mee provided any other services referred to in the registration.
202 Mercato Centrale invited the Court to find that the services provided by the business included “restaurant services, catering services, business hospitality, hosting of events and wine tastings”. I accept that the business was a restaurant and a cafe. However, the evidence is insufficient to support a finding that the other alleged activities were services offered by reference to the trade mark before the priority date. If catering was a service provided by reference to the trade mark at the requisite time, then that would support a finding that the trade mark was used in connection with the same services as the registered services (which include catering). But the paragraphs of Mr Mee’s affidavit in respect of which Mercato Centrale relies make no reference to catering services.
203 As to the other services, if I am wrong in concluding that they were not provided, it would then be necessary to consider whether they are the “same kind of thing” as the registered services. As the Full Court said in Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 164 FCR 506, the phrase “same kind of things” refers to goods and services which are “essentially the same, though they may differ in size, shape or name”: Kenny J (at [12] – [14], [16]), Allsop J (as his Honour then was) (at [89]). Axes and hatches have been held to be goods of the same kind, as have wallets and purses (see respectively Jackson & Company v Napper (1886) 35 Ch D 162 and Colorado), whereas the following have been held not to be so: clocks mounted in vehicles compared with clocks and watches (Nissan Jidosha Kabushiki Kaisha v Woolworths Ltd (1999) 45 IPR 649); the treatment of motors and engines compared to lubricant conditioning agent (Howe Laboratories Inc v Daemar (1999) 36 IPR 638); insulated containers compared to insulated thermoelectric containers (Coleman Co Inc v Igloo Products Corporation (1999) 48 IPR 158); and food goods compared to services of providing food and drink refreshments to cinema patrons (The Hoyts Corp Pty Ltd v Hoyt Food Manufacturing Industries Pty Ltd (2003) 61 IPR 334).
204 As Allsop J explained:
88 In Carnival Cruise Lines v Sitmar Cruises 120 ALR at 514, Gummow J referred to there being no differences of ‘character or quality’ of the services in that case to gainsay that they were the ‘same kind of thing’.
89 There is a certain difficulty in fixing upon the proper frame of reference for the enquiry identified by the words used by Holroyd J, ‘same kind of thing’. Assistance is gained from the statutory context in which the question arises (see above), the common law notion of the right to registration from use, when that was the defining requirement: see Edwards v Dennis (1885) 30 Ch D 454 and Jackson & Company v Napper (1886) 35 Ch D 162 and the notion of the ownership of a common law trade mark: see the cases referred to by the primary judge at [25] of his first judgment (set out at [66] above). The aim of the enquiry is not to find some broad genus in which some common functional or aesthetic purpose can be identified. Nor is it an enquiry about the type of trade in which concurrent use might cause confusion. Rather, it is identifying, in a practical, common sense way, the true equivalent kind of thing or article. For example, use of a mark on hatchets or small axes, created proprietorship in relation to axes: Jackson v Napper 35 Ch D 160. This approach recognises ownership or proprietorship in a mark beyond the very goods on which the mark is used, to goods ‘though not identical … yet substantially the same’ (Hemming HB, Sebastian’s Law of Trade Marks (4th ed, Stevens and Sons, 1899) p 91) or ‘goods essentially the same … though they pass under a different name owing to slight variations in shape and size’ (Kerly DM and Underhay FG, Kerly on Trade Marks (3rd ed, Sweet & Maxwell) p 206). This approach is conformable with the terms of the 1995 Act.
90 That backpacks are a type or style of bag does not answer the question as to whether they should be viewed as essentially the same goods as any bag or receptacle. The backpack is a bag with straps to be worn on the back. It is not essentially the same or the same kind of thing as other bags, handbags, purses or wallets. The task is not to identify the genus into which the goods upon which the mark was used fall, but to identify the goods.
205 Mercato Centrale’s submissions on this question were correct with respect to the principles, but of little assistance in their practical application, rising to little more than an assertion that the services provided by the business operated by Mr Mee were either the same or the same kind of thing as all of the services in Class 43 in the registration for the Plain Word Mark.
206 If I am wrong in concluding that the services were limited to the operation of a restaurant or cafe, I would in that event conclude that the additional services were not the “same kind of thing”, except in one limited respect.
207 The services provided the business meet the description of “services relating to the provision of food and drink at cafes, restaurants”. I am satisfied that those services are the same kind of thing as providing food and drink at bars and hotels.
208 Accordingly, this aspect of the cross-claim succeeds only in part. There will be an order for the rectification of the Register 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 relating to 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.
209 However, given the phrasing of the Class 43 services in respect of which the Plain Word Mark is registered (and the absence of submissions about the precise form of a partial rectification), the parties should be afforded the opportunity to propose any alternative form of order that excludes from the description the limited restaurant services I have referred to in this part of my reasons.
MISREPRESENTATION
210 This aspect of the cross-claim relates to the Plain Word Mark and the material provided in support of Caporaso’s application for its registration lodged on 21 March 2016. The challenge affects the whole of the registration and is not confined to any particular goods or services.
211 On the application of an aggrieved person, the Court may order that the Register be rectified by (relevantly) cancelling the registration of a trade mark. The application may only be made on the grounds specified in s 88(2), including “any of the grounds on which the registration of the trade mark could have been opposed under this Act”: TMA, s 88(2)(a)
212 For the purposes of s 88(2)(a), the grounds of opposition include the ground under s 62(b), namely:
(b) that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars.
213 Section 62(b) “can apply to a misrepresentation made innocently, without knowledge of falsity or any intention to mislead or deceive”: Dunlop Aircraft Tyres Ltd v Goodyear Tire and Rubber Company (2018) 262 FCR 76 (at [231]).
Admitted misrepresentations
214 The facts relevant to this part of the cross-claim are mostly uncontentious.
215 On Caporaso’s application to register the Plain Word Mark, the trade marks examiner (in her capacity as a delegate of the Registrar under s 206 of the TMA) made two adverse reports, dated 26 May 2016 (May Report) and 22 July 2016 (July Report). The May Report was limited to the Class 35 registration only. The examiner said that the Plain Word Mark was, or had as its main feature, mercato, the Italian word for market. According to the examiner, that indicated that Caporaso’s “retailing and wholesaling services are provided through or are a market”, and that, in the context of the claimed services it was likely that the word would not be perceived as a badge of origin “but rather for its descriptive significance”. The examiner said that other traders should also be able to use the word mercato in connection with goods and services similar to the goods subject to the Class 35 registration. The examiner asked Caporaso to consider two alternate options: amendment of the goods and services to “overcome this problem” by deleting the services “for which the trade mark is descriptive” or “supply evidence of use in terms of subsection 41(4)” of the TMA.
216 The May Report was responded to by Caporaso’s trade mark attorney by letter dated 14 July 2016, containing submissions to the effect that the examiner had incorrectly applied the principle stated in Cantarella High Court. In the July Report the examiner stated:
Ordinary examination as per the requirements of the Trade Marks Act 1995 entails assessing the trade mark for capacity to distinguish. Numerous resources are utilised to make this legislative determination, and as I am sure you can appreciate that whilst the delegate has extensive examination experience, decisions must be supported by appropriate research and documentation. Research supports both the translation and use by other traders in this marketplace and I consider that the ordinary significance of this term is such that a consumer would readily understand it in the context of the services identified as problematic.
You have referenced the Cantarella decision, where the majority of the High Court confirmed that the test for inherent adaptation to distinguish set out in Clark Equipment Co remains appropriate. Had the translation reflected a laudatory or allusory term in reference to the nominated services, I may consider this argument persuasive.
Apropos of this, and your additional case references I would refer you to Telstra Corporation Limited v Phone Directories Company Pty Ltd [2015] FCAFC 156 (4 November 2015) and also Campbell Soup Company v Heinz Co Australia Ltd [2015] ATMO 73 (17 August 2015), which support the current office practice applied in this instance, in line with appropriate assessment under the Trade Marks Act 1995.
The trade mark when translated is not laudatory nor allusory, but describes the establishment without requirement to search further for meaning, while research in this jurisdiction shows use by other traders in this field employing the term descriptively.
Consumers in Australia are familiar with Italian being employed to describe goods and services and are likely to perceive this term for its descriptive significance. Likewise, other traders in this field are entitled to use this term in the course of trade.
217 By letter dated 14 October 2016, Caporaso’s trade mark attorney said “the Applicant has demonstrated extensive and widespread reputation of over a decade in connection with the trade mark solus”. An enclosed statutory declaration of Mr Caporaso contained the following representations:
(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]).
218 The examiner’s notes are in evidence. They include a note that a “combination of applicant’s history and usage to date means maintaining objection not warranted”. In addition a document recording the examiner’s consideration of the evidence included observations about the use of the word mercato and the duration of that use. The examiner stated that there were “minimal instances of mark as applied for in isolation from distinctive logo, however considered sufficient as not in close proximity and nature of tm is such that overwhelming evidence not required” and that Caporaso had “minor stylised variation of this tm registered 2008” (referring to the Fancy Word Mark) and that “figures provided support continual use and exposure”.
219 In an affidavit read in these proceedings, Mr Caporaso acknowledged that to the extent that [2] of his statutory declaration “might be interpreted to suggest” that the business had been called “Imma & Mario’s Mercato” since 1972, that was not correct and was an “error”. In cross-examination, Mr Caporaso ultimately conceded that the representations contained in [4] and [9] of his statutory declaration made in 2016 were also untrue.
Principles
220 The power under s 88 is discretionary: Anchorage Capital Partners Pty Ltd v ACPA Pty Ltd (2018) 259 FCR 514, Nicholas, Yates and Beach JJ (at [146]). As with all powers involving the exercise of a discretionary power, it is necessary to first determine whether the power to exercise the discretion has been enlivened. Here, Mercato Centrale relies solely on the discretion in s 88(1)(a). As the Full Court said in Anchorage, once it is established that the discretion is enlivened, the correct approach is to ask whether there appears a sufficient reason not to order the cancellation of the registered mark (at [158]), citing Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158. The Full Court explained (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 sufficient reason not to order its cancellation.
221 The Full Court went on to identify the different aspects of the public interest that were relevant on an application under s 88 of the TMA for an order to cancel a mark, including a public interest in ensuring that trade mark registrations only be made in favour of applicants who were entitled to obtain them (at [163]). It seems to me that that public interest is underscored by s 33, which requires an examiner to accept a trade mark application (after examining it) unless satisfied that the application has not been made in accordance with the TMA.
222 In Colorado Group Ltd v Strandbags Group Pty Ltd [2006] FCA 160; 67 IPR 628, Finkelstein J (at first instance) rejected a claim for cancellation based on s 62(b) and s 88(1)(a) of the TMA on the basis that the alleged misrepresentation had not been proven. That conclusion made it unnecessary for his Honour to consider whether the examiner was in fact misled by any implied misrepresentation, adding (at [41]) that it would have been near to impossible for such an allegation to be made in the absence of the Registrar who was not called to give evidence. His Honour continued (at [42]):
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.
223 On appeal, Allsop J did not agree that s 41(5) (namely the question of the trade mark applicant’s prior use of the mark) was irrelevant and so went on to consider whether Finkelstein J had erred in concluding that there had been a misrepresentation in fact. Allsop J did not otherwise criticise the reasoning that if a misrepresentation went to an irrelevant fact, that would provide a complete answer to an application under s 88 for cancellation of the registration. Whilst the reasoning at first instance was obiter, I respectfully agree with it, insofar as it is concerned with applications made under s 88(1)(a) in conjunction with s 62(b) of the TMA.
224 On its terms, s 62(b) is concerned with representations that are false in material particulars. Considered in context of the TMA as a whole, the word “materiality” should be understood as referring to matters that are relevant to the application of the TMA, properly construed and applied. It does not turn on the subjective views of the examiner as to what is relevant.
Conclusions
225 The ground for opposition under s 62(1)(b) (and hence the discretion under s 88(1)(a)) arises only if it is shown by Mercato Centrale that the Registrar accepted the application for registration on the basis of evidence or representations that were false in material particulars.
226 In the present case there is no dispute that Mr Caporaso’s statutory declaration and the covering letter contained evidence or representations that were false. Mr Caporaso ultimately conceded that the representations referred to at [217] of these reasons were not true. Some of those concessions were made more readily than others, but by the time of closing submissions it was common ground that the word mercato was not used as a trade mark from the commencement of the business established in 1972 by Imma and Mario. Mr Caporaso ultimately conceded that the word mercato had not been used as a stand alone trade mark between 2005 and 2009. The first use of the Fancy Word Mark incorporating the word mercato alone was in web pages and an advertisement first appearing in 2011. As at 21 March 2016 the word mercato had not been used as a trade mark for a decade or more, and it had certainly not been used in conjunction with the business first trading as Imma and Mario’s. Whilst there is some evidence of use of the word mercato as a trade mark by Caporaso’s business, in large part the documents evidence use of the word in conjunction with other words or in the context of otherwise distinctive logos. It is telling that a large sign on the front of the Caporaso store identified the business to the public as “Imma and Mario’s Mercato” as recently as 2022. As at the date of the trial, a pylon sign at the front of the complex continued to identify the business as “Imma and Mario’s Mercato”. As at 2016, the evidence and representations provided in support of the application for registration of the Plain Word Mark was plainly false in each respect alleged by Mercato Centrale.
227 Given the chronology of events and correspondence concerning the progress of the registration application, I am also satisfied that the Registrar (by delegation to the examiner) accepted the application for registration of the false evidence or representations. That inference arises because the May Report stated an intention to refuse to accept the application unless Caporaso either amended the application to confine the goods and services to which it related, or provided evidence of use of the Plain Word Mark. The application was not confined. Rather, Caporaso provided evidence and submissions to persuade the examiner that the Plain Word Mark was distinctive in fact of its goods or services by reason of it having an established reputation arising from Caporaso’s use of it.
228 For Caporaso it was submitted that the notes of the examiner demonstrate that the examiner did not act on the basis of representations made in the statutory declaration but rather on the basis of supporting documentation provided with it. I accept that the notes of the examiner reveal that the supporting documentation was indeed considered by the examiner. However, to demonstrate that is not to demonstrate that the examiner ignored the representations made in the statutory declaration and the covering letter. In circumstances where the examiner positively invited the provision of evidence as to trade mark use, in the absence of compelling evidence to the contrary, it may readily be inferred that the examiner read the material provided and based the decision to accept the application on the basis of the whole of it.
229 I have nonetheless concluded that whilst the evidence and representations were false, they were not false in “in material particulars” within the meaning of s 62(b) of the TMA. That is 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. In accordance with my earlier findings, the examiner was incorrect to assert in the May Report and the July Report that the word mercato, in its ordinary signification, was descriptive of the relevant goods. The request for evidence in the May Report was wrong-footed because the asserted lack of distinctiveness did not in fact or law present an obstacle to acceptance under s 33 of the TMA. The examiner was incorrect to base the registration decision on a distinction between words that were directly descriptive and words that were laudatory terms. That distinction assumed little importance in the reasoning in Cantarella High Court. The examiner did not consider the ordinary signification of the word to the relevant target audience of English speaking Australians. In accordance with my earlier findings, the word does not have the ordinary signification attributed to it by the examiner and was registrable in accordance with s 41(1) on the basis that it was inherently capable of distinguishing the relevant goods of Caporaso from those of other traders. The entire topic of Caporaso’s prior use of the Plain Word Mark or the reputation established in the mark by reference to that use was immaterial and, accordingly, evidence or representations going to those topics were not false “in material particulars” within the meaning of that phrase in s 62(b) of the TMA.
230 The evidence does not establish that registration of the Plain Word Mark could have been opposed under s 62(b) of the TMA, and the discretion to cancel registration of the Plain Word Mark under s 88(1)(a) of the TMA is not enlivened.
231 It is unnecessary to consider other factors that might have weighed for or against the exercise of the discretion under s 88(1)(a), including the nature and seriousness of the falsities, the goods or services to which they related, the state of mind accompanying them or their commercial consequences.
LIMITATION
232 Mercato Centrale applied for orders that there be endorsements made on the Register in relation to other trade marks owned by Caporaso to the effect that “registration does not confer any exclusive right to the use of the word MERCATO”, although only in respect of certain challenged goods and services. That application was dependant upon Mercato Centrale succeeding on its cross-claim founded on s 62(b) and s 88(1)(a) of the TMA. Given the failure of that part of the cross-claim no limiting endorsements will be ordered. Had the claim founded on s 62 succeeded, I would have had no hesitation ordering the rectification of the Register in the manner sought.
Infringement
233 To succeed on the infringement claim in connection with any one of the Caporaso Marks, Caporaso must show that Mercato Centrale has actually used or threatens to use, as a trade mark, a sign that is substantially identical with, or deceptively similar to, the relevant Caporaso Mark in relation to:
(1) the same goods or services in respect of which the relevant Caporaso Mark is registered (hereafter the registered goods and the registered services);
(2) goods of the same description as that of the registered goods;
(3) services that are closely related to the registered goods;
(4) services of the same description as the registered services; and
(5) goods that are closely related to the registered services.
234 Caporaso alleges actual or threatened use of the Mercato Centrale Marks in connection with a long list of goods and services now contained in [9.4(g)] of the FASOC.
Actual or threatened use of the Mercato Centrale Marks
235 The business proposed to be conducted by Mercato Centrale is described in the unchallenged affidavit evidence of Mr Muto. The following findings are based on that affidavit.
236 Mr Muto has longstanding experience in running Italian themed restaurants and bars in Melbourne. He regulatory travels to Italy for business.
237 In 2010, Mr Muto learned of a chain of large footprint Italian marketplace or food halls operating under the name “Eataly”, being food halls that are “essentially supermarkets with a variety of restaurants, food and beverage counters, bakeries, retail items and a cooking school”. Mr Muto further describes the concept as “bringing together under one roof, high-quality Italian food at sustainable and reasonable prices for all, thereby celebrating traditional Italian culture, and creating an informal, natural, and simple place to eat, shop, and learn to cook”. There are presently more than 35 Eataly locations around throughout Italy and the world.
238 In 2013 Mr Muto met with a representative in Rome to discuss the establishment of an Eataly outlet in Melbourne. Despite a presentation and negotiations, Mr Muto was unable to launch the proposed business with Eataly.
239 On a trip to Italy in 2016, Mr Muto came across a business conducted by Il Mercato Centrale Italy (MC Italy) in Florence. The business in Florence was conducted from a restored building in Piazza San Lorenzo and was in the nature of a bustling food hall with bars, stalls and shops selling produce, all branded “Mercato Centrale”. Mr Muto researched the business and was attracted to the concept of a meeting place where food and culture came together, as well as its focus on artisan-manned food stalls. Between April 2016 and October 2020 Mr Muto corresponded with MC Italy representatives about the possibility of bringing the MC Italy concept to Melbourne, initially without success. In September 2019 he “speculatively” applied for (and secured) registration of the business names Mercato Centrale and Mercato Centrale Melbourne with ASIC. He later made contact with the President and Marketing Manager for MC Italy. A number of emails were exchanged by which Mr Muto provided MC Italy with information about the proposal, including a profile of a proposed place for the business in a building situated at 544-546 Collins Street (Collins Street premises).
240 On 8 December 2020, Mr Muto sent a Business Plan to MC Italy’s representatives (including Mr Umberto Montano), the content of which is discussed below. Non-disclosure agreements were signed around the same time and negotiations continued throughout 2021, but no final agreement had been concluded by the end of that year.
241 On 3 May 2021, Mr Muto caused an existing company under his control to change its name to Mercato Centrale Australia Pty Ltd. On 22 July 2021, Mercato Centrale entered into a lease of the Collins Street premises.
242 In January 2022, Mr Muto (on behalf of Mercato Centrale) and Mr Montano (on behalf of MC Italy) signed a terms sheet setting out the fundamentals of an arrangement in relation to the project. From October 2022, steps were taken to establish “what will be 3000sqm of grocer and food hall retail over three storeys” of the Collins Street premises. The business activities are described by Mr Muto in the following terms:
43. The ground floor will house bakeries where fresh bread, pizzas and sweets will be made fresh on-site daily. The artisans operating the various stalls within the Mercato Centrale in Melbourne will include butchers, seafood stalls, pasta shops and cheesemakers all selling their produce each from uniquely identified stalls or shops. There is no central shopping area where general supermarket or grocery items are sold. The ground floor will also contain a 15 metre long bar serving alcoholic and non-alcoholic drinks.
44. The first level will feature two restaurants with kitchens made without stainless steel, designed to mimic a traditional kitchen at home where diners can eat around the kitchen table.
45. There is also a 500-square-metre event space on the second level where activities like educational programs, cooking classes, and book and film reviews will take place.
46. Designed by Alberto Torsello, a renowned Italian architect from Venice, the Melbourne Mercato Centrale food hall will be close in style to MC Italy’s Rome food hall, reflecting Italian life and culture throughout. It will be a distinctively Italian venue, branded with the Mercato Centrale look and feel, yet incorporating cultural elements and art from the city of Melbourne.
47. Consumers will be able to attend and purchase fresh produce such as cheeses, smallgoods, and meats, fresh baked goods such as breads, pastries and pizzas and order and eat authentic Italian food such as an array of pastas and consume coffees, wines and other beverages.
243 At the time of making his affidavit, stall holders for the cheese, meat, fish, pasta, patisserie, restaurant and cocktail bar operators had all been secured. According to Mr Muto, the business will be a true, authentic Italian food market experience “no different from the other sites in Italy”.
244 Mercato Centrale and MC Italy entered into a Project Agreement “in respect of the MC Italy business model and concept in Australia using consulting services to be provided by MC Italy” to Mercato Centrale on 7 October 2022. Mr Muto described the Project Agreement as ensuring “customisation of building, marketing and training activities to MC Italy’s requirements”. The Project Agreement is not in evidence and no applications for discovery or production have been made in relation to it.
245 Mr Muto emphasised the Italian theme of the business. He said that signage would appear in English and Italian for each stall or shop. An artist’s impression of the “what the interior of the Mercato Centrale food hall in Melbourne will look like” is contained at [55] of the affidavit. The image shows signs reading “Salami”, “Gelato e Dolce” and “Formaggi”, but does not depict any of the Mercato Centrale Marks. Mr Muto said (and I accept) that the signage would include some fancy script as used in MC Italy’s stores (not in issue in these proceedings), as well as MC Italy’s logo, which is identical to the Mercato Centrale Logo depicted at [29] of these reasons.
246 The forthcoming opening of the business was promoted by a press release issued by MC Italy in Australia in mid 2022. Since then media articles have appeared to promote it, but no paid advertising has been placed (other than the expenses of the press launch). The opening of the business has been referred to on websites found at www.mercatocentrale.com.au from mid 2022.
The evidence of Mr Montano.
247 Mr Montano is the “founder and creator” of the Il Mercato Centrale food chain of market food halls in Italy. His evidence concerning the business included the following:
9. I have always had a profound appreciation for the artisans of Italy - their experience, their capacity to describe each one of their carefully crafted products, and the devotion they apply to the preparation of their products. From there, grew my idea of a food market hall which gives identity to the extraordinary patrimony of Italian food culture. There is the baker, the fishmonger, the cheesemaker, and those who work with cured meats, all of whom produce what they serve. Il Mercato Centrale revives the ancient market concept of bringing everyone together, but it differs from a standard food hall in that all the artisans come together under one coordinated brand identity: that of Il Mercato Centrale.
10. Selecting the right people to bring together is what creates the magic of our market concept. The Il Mercato Centrale market food halls enable the stories told by these amazing artisans to be communicated to a broader audience than had previously occurred.
11. Mercato Centrale is more than just a design concept, it is a system. That system is original and supported by a strong organization that is solely responsible for coordinating, managing and implementing each project. This includes location selection, utilising central historical sites where possible, designing the space and infrastructure, selection and vetting of artisans, branding and communication, marketing and public events.
12. The Il Mercato Centrale website, www.mercatocentrale.com, which has been online since December 6th, 2018 and is available in both English and Italian, contains the following excerpt on the landing page under the heading WHAT IS MERCATO CENTRALE:
‘Mercato Centrale is a place where food is lived, told and prepared by artisans who respect it and know it deeply. It’s a space to be lived and shared and a container that becomes cultural and social content itself, without losing spontaneity and simplicity.’
248 Throughout his affidavit, Mr Montano used the words “Mercato Centrale” to describe the overall business and its outlets at various locations, without the additional “Il”.
Business Plan
249 Caporaso’s submissions in relation to threatened trade mark use are mostly based on the Business Plan provided by Mr Muto to Mr Montano for his consideration in December 2020. I do not consider it to be a reliable foundation for the drawing of inferences as to the actual or threatened use of signs as trade marks in connection with the Mercato Centrale business, for three reasons. First, the Business Plan must be understood as having been provided by Mr Muto to Mr Montano in December 2020 for his consideration. That occurred more than 12 months before in-principle terms were signed by them and nearly two years before the Project Agreement was entered into. Second, Mr Muto gave affidavit evidence about the intended use of signs in relation to goods and services, including evidence about (for example) the internal appearance of the food hall. He was not challenged on that evidence and I accept it. In the absence of cross-examination on the same topic of the intended business activities and the use of signs as trade marks in respect of them, I decline to draw inferences contrary to the evidence on the basis of the Business Plan. Rather, there is a disclosed intention to use the Mercato Centrale Logo as a trade mark in connection with the whole of the precinct in which the stalls for the sale of goods by artisan producers will be situated.
Trade mark applications
250 As identified at the outset of these reasons, Mercato Centrale has applied to register the Mercato Centrale Logo as a trade mark in the classes specified earlier in these reasons. The goods and services in respect of which registration of that mark is sought do not include franchising or business consultancy services.
251 Two other trade mark applications (which did relate to franchising and business advisory services) have been withdrawn at Mr Muto’s direction.
Mercato Centrale website and Facebook page
252 There is evidence of actual use of trade marks on the Mercato Centrale website and Facebook page. They prominently display the words “IL MERCATO CENTRALE” and the statement “A brand new Mercato Centrale in Australia”. It is relevant that the website address itself uses meractocentrale rather than ilmercatocentrale.
Conclusions as to actual and threatened use
253 In its supplementary closing submissions, Mercato Centrale accepted that there was actual or intended use of each of the Mercato Centrale Marks in relation to:
(1) fresh baked goods such as breads, pastries and pizzas;
(2) cheese, smallgoods, and meats;
(3) other goods sold by butchers, seafood stalls, pasta shops and cheesemakers;
(4) other authentic Italian food;
(5) alcoholic and non-alcoholic drinks, including coffee, wine and other beverages; and
(6) restaurant and bar services.
254 That acknowledgment makes it unnecessary to consider other arguments concerning the use of each sign as a trade mark in connection with the specifically named produce (as opposed to the precinct more generally), and I will proceed on the basis of it.
255 Within the concept of “other authentic Italian food” I include “edible ices” and “confectionary” in Class 30, as the artist’s impression of the interior of the Mercato Centrale business premises contained at [55] of Mr Muto’s affidavit includes an image of a confectioner and a reference to gelato.
256 In addition, it is plain that the Mercato Centrale Marks will be used as trade marks in relation to the overall business precinct, being retail services and food and drink services in Class 35, specifically “retailing … of goods (by any means)”. I include in that conclusion the uses of the combined words mercato centrale and il mercato centrale independently of the Mercato Centrale Logo, as evidenced on the website and Facebook pages. That conclusion may be reached without reference to the Business Plan created in December 2020: descriptions of the proposed business given by Mr Muto independently of that document are sufficient to support the finding.
257 In addition, it is relevant to take into account the verbal use of the words mercato centrale (standing alone) to describe the retail services to be provided by Mercato Centrale. Those words are of course a contraction of the words il mercato centrale, and they have already appeared in that contracted form to promote the forthcoming opening of the premises to the public. It may readily be inferred that in spoken word advertising or promotions the same combined words (without the preceding il) is intended to be used as a badge of origin of (at least) the retail services to be provided by Mercato Centrale so constituting an aural representation of the same marks: TMA, s 7(2). Each of Mr Muto and Mr Montano used mercato centrale at least as often in their evidence as the full phrase il mercato centrale.
258 The evidence does not support a finding that any one of the Mercato Centrale Marks has been used or is intended to be used by Mercato Centrale as a trade mark in relation to services in Class 35 described as “the administration of business affairs of franchises; business advisory services relating to the establishment of franchises; business assistance relating to the establishment of franchises” (franchising services). In support of its case on that topic, Mercato Centrale relied in part on the evidence of Mr Montano at [9] – [12] of his affidavit, extracted at [247] above. However, that evidence relates to the franchising activities of MC Italy. Together with other evidence, it is capable of supporting a finding that MC Italy and Mercato Centrale are a relationship of franchisor and franchisee respectively. It does not warrant a finding that Mercato Centrale is itself intending to provide franchising or retail consultancy services to persons seeking them in Australia.
259 In addition, Caporaso relied on Mercato Centrale’s trade mark applications numbered 2272358 and 2272266, made in respect of services in Class 35, including descriptions of some of the franchising services. However, those trade mark applications have been withdrawn at Mr Muto’s direction. The remaining trade mark application is not in respect of the franchising services or any one of them.
260 In describing the scope of the business, Mr Muto did not state that he had any intention to cause Mercato Centrale to provide any such services and there is no evidence in the website or Facebook page extracts to support a finding of any such intention. Nor does the evidence of Mr Montano suggest that the legal relationship between MC Italy and Mercato Centrale is such as to permit Mercato Centrale to provide franchising services of any kind by reference to any one of the Mercato Centrale Marks to any third party. In the absence of cross-examination on the topic I do not consider the withdrawn trade mark applications to evidence any present intention to use any one of the Mercato Centrale Marks in connection with the provision of services of that kind.
261 The conclusions I have reached in this part of my reasons do not exhaust all of the combinations and permutations of goods and services put forward by Caporaso in respect of the threatened or intended use of the Mercato Centrale Marks. I do not consider it necessary to resolve each and every one of them, for two reasons.
262 First, I do not consider the relevant trade context to be markedly different between those goods and services that are the subject of my findings thus far and those that remain undetermined. The enquiry into deceptive similarity can proceed on the basis of the goods and services in respect of which the Mercato Centrale Marks have been found thus far to have been used or that, on my findings, are intended to be used. A finding that the relevant trade marks are not deceptively similar in the context of the determined goods and services will render it unnecessary to go on to determine the remainder.
263 Second, the findings thus far encompass 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 Work Mark (mercato), registered in respect of the same retail services. I will now explain why that particular infringement allegation is not established.
Alleged infringement of the Plain Word Mark by use of the sign mercato centrale
264 By the time of closing submissions Caporaso did not persist with any allegation that the marks mercato and mercato centrale were “substantially identical” within the meaning of s 120 of the TMA. The submissions instead focused on whether they were “deceptively similar”. 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”: TMA, s 10.
Principles
265 Assessing whether a trade mark has been infringed is a “separate and distinct exercise” from the task of assessing whether a trade mark is registrable: Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; 97 ALJR 388 (at [21]).
266 The correct approach for determining deceptive similarity has been articulated in various ways in the authorities. They are conveniently summarised in Caporaso’s written submissions at [403] and [404], largely reproduced here:
(1) 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: Self Care (at [26]); Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd [2022] FCAFC 157; 407 ALR 93, Yates, Abraham and Rofe JJ (at [69]).
(2) “Causing confusion” may merely involve “perplexing or mixing up the minds” of potential customers: Self Care (at [30]); Coca-Cola Company v All-Fect Distributors Ltd (1999) 96 FCR 107 (at [39]), quoting Pioneer Hi-Bred Corn Co v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (at 62).
(3) In evaluating the likelihood of confusion, the marks must be judged as a whole, taking into account both their look and their sound: Self Care (at [26]); Cooper Engineering Co Pty Ltd v Sigmund Pumps Ltd (1952) 86 CLR 536 (at 538).
(4) The marks are not to be compared side by side: Self Care (at [27]); Australian Woollen Mills Ltd v F S Walton & Co Ltd (1937) 58 CLR 641 (at 658, 659); Optical 88 Ltd v Optical 88 Pty Ltd (No 2) [2010] FCA 1380; 275 ALR 526 (at [111]).
(5) The effect of spoken description must be considered: Self Care (at [27]); Australian Woollen Mills (at 658, 659); Optical 88 ([111]).
(6) In considering the likelihood of confusion or deception, “the court is not looking to the totality of the conduct of the defendant in the same way as in a passing off suit”: Self Care (at [33]); New South Wales Dairy Corporation v Murray-Goulburn Co-operative Co Ltd [1989] FCA 124; 86 ALR 549 (at 589), approved in CA Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539: 52 IPR 42 (at [44]); Hashtag Burgers Pty Ltd v In-N-Out Burgers Inc [2020] FCAFC 235; 385 ALR 514 (at [64]), Combe International Ltd v Dr August Wolff GmbH & Co KG Arzneimittel [2021] FCAFC 8; 157 IPR 230 (at [27]); PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (2021) 285 FCR 598 (at [97] and [111]) and Swancom (at [73]).
(7) 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 minds of potential customers: Self Care (at [28]); Australian Woollen Mills (at 658).
(8) 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 or services covered by the registration), with the impression that the notional buyer would have of the alleged infringer’s mark (as actually used): Self Care (at [29]); Shell Co (at 415). See also Wingate Marketing Pty Limited v Levi Strauss & Co (1994) 49 FCR 89 (at 128); MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236 (at 245).
(9) It is not necessary to establish that confusion persists up to the point of sale or that actual purchasers will ultimately be deceived: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 (at 595 – 596).
267 In addition, in Self Care the High Court (Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ) confirmed that the reputation of a registered trade mark is not relevant in the assessment of deceptive similarity under s 120(1). The High Court did however have regard to the conduct of the respondent to the extent that it was relevant to determining the actual use of the allegedly infringing mark. It seems that earlier statements to the effect that the Court is not looking to the conduct of the alleged infringer “as if it were a passing off case” are to be understood as being so qualified. To the extent that there remains any uncertainty about that, nothing in the present case requires any further consideration of it.
268 The submissions of each party focussed heavily upon cases in which the application for the principles resulted in an outcome that they favoured, Caporaso drawing the Court’s attention to cases in which one mark had been found to be deceptively similar to another, Mercato Centrale focussing on cases where the opposite finding was made. 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. With that caution in mind, I have had regard to the authorities cited by Caporaso, in which the following trade marks were found to be deceptively similar:
(1) THE CIRCUIT SPORTS CAFÉ and THE SPORTS CAFÉ: The Sports Cafe Ltd v The Registrar of Trade Marks [1998] FCA 1614; 42 IPR 552, Wilcox, Heerey and Lindgren JJ;
(2) CRAZY RON’S and CRAZY JOHN’S: Crazy Ron’s Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196; 209 ALR 1, Moore, Sackville and Emmett JJ;
(3) STAR REALTY and STARR PARTNERS: Starr Partners Pty Ltd v Dev Prem Pty Ltd [2007] FCAFC 42; 71 IPR 459, Lindgren, Emmett and Finkelstein JJ;
(4) BAREFOOT RADLER and BAREFOOT: E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2009) 175 FCR 386, Moore, Edmonds and Gilmour JJ;
(5) HUGGIE MUMMY and HUGGIES: Kimberly-Clark Worldwide Inc v Goulimis [2008] FCA 1415; 253 ALR 76, Jagot J;
(6) CHATSWOOD BBQ KING and BBQ KING: Anakin Pty Ltd v Chatswood BBQ King Pty Ltd [2008] FCA 1467; 250 ALR 620, Branson J;
(7) LUCKY DRAW or LUCKY DREAM and LUCKIES: NV Sumatra Tobacco Trading Company v British American Tobacco Services Ltd (2011) 198 FCR 435, Greenwood J; and
(8) Each of SUNNY ROO, SUNNY ROO PRODUCTS, SUNNY ROO FROM BYRON BAY or SUNNY ROO AUSTRALIA and SUNNY BOY: SMA Solar Technology AG v Beyond Building Systems Pty Ltd (No 5) [2012] FCA 1483, Perram J.
(9) LA FAMIGLIA RANA and LA FAMIGLIA: Goodman Fielder, Burley J.
269 To that list I would add reference to MOTHER and MOTHERSKY: Energy Beverages LLC v Cantarella Bros Pty Ltd [2023] FCAFC 44; 407 ALR 473 (Yates, Stewart and Rofe JJ).
270 I have had particular regard to the reasoning of Burley J in Goodman Fielder, being the only authority concerning a registered trade mark comprised of foreign words. His Honour there said (at [344]):
Consumers will read the words ‘LA FAMIGLIA RANA’ on the packaging and, having an impression (which may be imperfect) of the 473 word mark, likely notice that the words ‘LA FAMIGLIA’ in both are the same. They are the first two words of the impugned use and they look and sound the same. They also mean the same thing. In my view these aspects are likely to form a strong impression on consumers. Only the word ‘RANA’ distinguishes the two marks. It is rendered in large letters in a different font to ‘LA FAMIGLIA’. However, in my view the presence of ‘RANA’ will not prevent a substantial number of consumers from wondering whether it might not be the case that products bearing the impugned mark come from the same source. Many will consider that that mark has been entirely used on the packaging, and that the word ‘RANA’ is an addition, connoting either a variant or sub-brand of ‘LA FAMIGLIA’.
271 In the cases relied upon by Mercato Centrale, the following trade marks were found not to be deceptively similar:
(1) JAZZ CORNER HOTEL and CORNER HOTEL: Swancom Pty Ltd v The Jazz Corner Hotel Pty Ltd (No 2) [2021] FCA 328; 157 IPR 498 (Swancom No 2), O’Bryan J;
(2) THE AGENCY and THE NORTH AGENCY: The Agency Group Australia Limited v H.A.S. Real Estate Pty Ltd [2023] FCA 482; 174 IPR 153, Jackman J;
(3) MULOL and MONSOL: Mond Staffordshire Refinery Co Ltd v Harlem (1929) 41 CLR 475, Knox CJ, Isaacs, Gavan Duffy, Rich, Starke JJ;
(4) RAIN MASTER and RAIN KING: Cooper Engineering, Dixon, Williams, Kitto JJ;
(5) THERMO KING and FRIGIKING: Frigiking Trade Mark [1973] RPC 739, Whitford J;
(6) THE CHIFLEY and CHIFLEY TOWER: MID Sydney; and
(7) AMG and AMH: Australian Meat Group Pty Ltd v JBS Australia Pty Ltd (2018) 268 FCR 623, Allsop CJ, Besanko and Yates JJ.
272 As briefly summarised below, it was relevant in each case to consider the allegedly infringing sign as a whole. The existence of common words as between the two signs was relevant but not determinative.
273 In Swancom (No 2), O’Bryan J observed that the words “Corner Hotel” had an ordinary signification to English speakers in Australia as the description of a hotel located on a street corner, and that this was the same signification when used in relation to live music. Additionally, his Honour held that the word “Jazz” was itself an English word with a commonly understood meaning that brought a distinct sound and meaning to the composite phrase “Jazz Corner Hotel” in the allegedly infringing mark. His Honour’s conclusion and reasoning was upheld by the Full Court.
274 In Agency Group, Jackman J found that “The Agency” and “The North Agency” (both relating to real estate agencies) were not deceptively similar. His Honour found that “The Agency” and “The North Agency” contained words with common meanings amongst English speaking consumers. His Honour (at [54]) also found that the “word ‘agency’ is plainly a description of the nature of a real estate agent’s business”. His Honour’s decision at first instance was upheld by the Full Court.
275 In Mond Staffordshire, the majority (Knox CJ, Gavan Duffy and Starke JJ) upheld the primary judge’s decision that “Mulsol” was not deceptively similar to “Monsol”. Both marks were used within the medicine and pharmaceutical industry, in which the suffix “-sol” or “-ol” was commonly used. Additionally, other registered trade marks in Australia included marks with the prefix “Mul” such as “Mulsine” and “Mucol”. The majority found that the primary judge had not erred in considering the usage of other marks within the medicine and pharmaceutical industry using a similar prefix or suffix.
276 In Cooper Engineering, the High Court held that “Rainmaster” was not deceptively similar to “Rain King” as the words “Rain”, “Master” and “King” were all commonly used and understood words within the English language that were incorporated within other trade marks including “Rainwell”, “Rainmaker” and “Rain Queen”.
277 In Frigiking, Whitford J held that “Thermo King” was not deceptively similar to “Frigiking”. His Honour reasoned (at [753]) that the word “king” connotates excellence and was not a “highly distinctive word” when used in combination with another word in the context of goods.
278 In MID Sydney, the Full Court held that “The Chifley” when used in respect of hotels was not deceptively similar to “Chifley Tower”, as used in respect of property management services. In relation to deceptive similarity, the Full Court upheld the decision at first instance that the reasonable person would associate “Chifley” to a number of contexts including the former Prime Minister Ben Chifley, the Canberra suburb of Chifley, and Chifley Square in Sydney.
279 In Australian Meat Group, the Full Court held that the mark “AMG” was not deceptively similar to the mark “AMH”. The Full Court accepted evidence that the letters “AM” were commonly used in the Australian meat industry to delineate “Australian meat”. Cited acronyms included AMPC (Australian Meat Processor Corporation) and AMIC (Australian Meat Industry Council). The Full Court found (at [85]) that this common use was:
… a relevant consideration when considering the question of deceptive similarity … because it affects the significance and weight to be given to the element ‘AM’ that is found in each of the competing marks. …
Submissions and conclusions
280 Caporaso submitted that mercato is the only word in each of the Caporaso Marks and so is the central feature in each of them. For present purposes it is enough to observe that the word is the only feature of the Plain Word Mark. It may be accepted that even an imperfect recollection of the notional use of the mark would encompass the word mercato in its written or aural representations. The submission about the central feature of the other Caporaso Marks will be considered in due course.
281 It was then submitted, in comparing the mark mercato centrale:
… it is well established that the first part of a mark is ‘as a rule, far the most important for the purpose of distinction’. …
282 The case cited for the quoted passage was Conde Nast Publications Pty Ltd v Taylor [1998] FCA 864; 41 IPR 505, Burchett J (at 511), in turn citing a passage from In the Matter of London Lubricants (1920) Limited’s Application to Register a Trade Mark (1925) 42 RPC 264, Sargant LJ (at 279). The passage cited hardly establishes or evidences a rule to which this Court is bound. It concerns the emphasis that may be placed on the first syllable of a word in a particular case. To my mind, the question of whether the first part of a mark is “far the most important” must turn on the facts of the particular case. There can be no rule about that.
283 It was then submitted that the word centrale does not make the mark mercato centrale so distinguishable so as to diminish the likelihood of confusion, for two reasons. First, it was said that the word mercato was impactful and so more memorable. Second, it was said that the word centrale would be more readily understood by ordinary Australians as being a foreign word which translates to central given the obvious visual and aural similarities between the Italian and English words. It was submitted that the target audience may well understand the word centrale to be a “descriptive add-on”. I do not wholly accept those submissions.
284 The allegedly infringing mark must be considered as a whole. It consists of two Italian sounding words, not one. Neither word has a proven meaning in English, at least on the evidence before me. 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.
285 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.
286 It was submitted (perhaps rhetorically) that if the sign mercato centrale was not deceptively similar to mercato, then what would be? That submission appears to me to involve an assumption that there exists an absolute monopoly with respect to the word mercato unhinged from the test for infringement, such that use of any sign that included mercato with the addition of another word must necessarily infringe the Plain Word Mark. It also fails to acknowledge that the word centrale is itself distinctive and so differentiates the sign mercato centrale from the Plain Word Mark.
287 Mercato Centrale submitted that the enquiry for deceptive similarity was to be undertaken having regard to the relevant trade context. I accept that submission to the extent that trade context informs the factual enquiry as to the actual use of the allegedly infringing mark. Mond Staffordshire is an example. Australian Meat Group is another. The trade context does not include any refence to the registered owner’s reputation in its registered mark, nor the extent of its actual use of its own mark, and I have not had regard to such factors. On that side of the comparison, the focus is upon the registered owners notional, not actual use.
288 Mercato Centrale went on to submit that the relevant trade context included the extensive trade use of the word mercato in connection with retailing services, food and drink services, shopping centres, cafes, restaurants and pizzerias. I have already rejected that characterisation of the evidence relating to trade usage of the word mercato more generally. I do not accept that the word has been used so extensively that there exists any compelling ‘trade context’, including any basis to find that the word has a commonly accepted meaning among any significant portion of the target audience. I do not accept (as was submitted by Mercato Centrale) that the evidence of Professor Melnyk on that topic was “compelling”. It was not. But it remains that there is no evidence that the word centrale has a commonly understood meaning so that it can be put aside as merely descriptive, and I accept Mercato Centrale’s submissions to that extent.
289 In all of the circumstances, I am not satisfied that the infringement case based on a comparison between the notional use of the Plain Word Mark and the actual or threatened use of the sign mercato centrale is established. The compared marks are not deceptively similar within the meaning of s 120 of the TMA, assessed reference to the same retail services.
Other comparisons
290 Given the distinguishing features as between the Plain Word Mark and the remaining Mercato Centrale Marks, I am not satisfied that the Plain Word Mark has been infringed in fact, nor is threatened use established in respect of the other registered goods or registered services in issue. The evidence does not support the claim for injunctive relief for threatened infringement of the Plain Word Mark.
291 Caporaso’s infringement case is weaker still in the remaining Caporaso Marks (to the extent that a case for infringement of them is pressed). The Fancy Word Mark has visual features that the Plain Word Mark does not, so supplying an additional reason to find that the sign mercato centrale is not deceptively similar. The Red Man Logo contains the word mercato, but that is the only feature in common between that sign and the Plain Word Mark. In critical respects, Caporaso’s submissions in support of the remaining comparisons involved little more than a contention that the word mercato was a central feature of the Caporaso Marks such that use of the word within any one of the Mercato Centrale Marks constituted infringement. That is too simplistic an approach.
292 In my view, the most striking and distinguishing feature of the Red Man Logo is the illustrated red man character. The Mercato Centrale Marks are not deceptively similar to that sign, notwithstanding that they may have some similar features.
293 It follows that the infringement action must be dismissed.
PROCEDURAL ORDER AND RULINGS
Procedural order of 10 July 2023
294 On 10 July 2023 I dismissed an interlocutory application by which Mercato Centrale sought an extension of a deadline previously fixed for the filing of affidavit material upon which it proposed to rely at trial. Oral reasons for dismissing the application were given on that day. In very short summary, I was not satisfied that Mercato Centrale had provided an adequate explanation for requiring the extension of the deadline and in all of the circumstances I did not consider that the order would best promote the overarching purpose of the Court’s civil practice and procedure provisions in accordance with s 37M and s 37N of the Federal Court of Australia Act 1976 (Cth).
295 In written closing submissions, Mercato Centrale requested that I provide formal written reasons for refusing its application to extend the deadline to file further affidavit material in advance of the trial. I have reflected upon that request and conclude that it should be refused. The order is procedural in nature. It went to an issue commonly dealt with in this Court. If formal written reasons were required to be produced when variations to case management deadlines were refused, the work of this Court may well grind to a halt. It is enough to emphasise that variation of an earlier deadline was sought, without providing an adequate explanation for non-compliance with it. The oral reasons made plain the other matters taken into account, and a transcript of those oral reasons can be provided to the parties if that has not been done already. I will not provide formal written reasons unless an appellate court forms the view that such reasons would facilitate the exercise of its functions.
Rulings on objections to admissibility
296 In the course of the trial, rulings on objections to the admissibility of the following categories of evidence were reserved:
(1) documents recording company and business names including the word mercato, obtained from databases kept by ASIC, forming annexures EM-2 and EM-3 of Mr Muto’s first affidavit; and
(2) extracts from websites, including evidence of trade mark use in the nature of historical extracts from websites captured by use of the Wayback Machine.
Company and business name searches
297 Documents tendered by Mercato Centrale show the results of searches conducted on ASIC databases using the search term mercato. The documents are in the form of lists of entities or names that have been registered, deregistered or cancelled. In unchallenged evidence, Mr Muto stated (and I accept) that the lists are in fact the results of searches that he caused his solicitor to carry out on public databases.
298 In written closing submissions, Caporaso did not appear to maintain any objection to the admissibility of these records. I have concluded that business names are capable of evidencing the use of the name (or a part of it) and the search results are therefore relevant. It is not necessary to consider submissions as to whether they meet the description of an official record of the Commonwealth in accordance with s 155 of the Evidence Act. That is because s 155 is facilitative of the production and proof of such records, but does not limit the ways in which such documents can be produced or tendered.
299 In the present case, I have accepted the evidence of a witness as to the nature and provenance of the list of search results. Whilst admissible, the lists of search results are to be approached with some caution because, as Burley J explained in Goodman Fielder the registration of a name does not necessarily support a conclusion that the name has been used, let alone used as a trade mark.
300 I reach the same conclusion with respect to a business name search relating to annexure NMS-5 to the affidavit of Ms Smythe, being a business name record relating to Ettos Café Mercato.
Website extracts
301 There is some replication in this material as between the first affidavit of Mr Muto (particularly at [27] and EM-4) and the affidavit of Ms Smythe (at [3], [4] and [6] and some annexures referred to there). Caporaso does not maintain an objection to some of it (specifically that relating to the business trading as Henrys Mercato).
302 Objections are maintained in connection with screen shots from a number of websites, including the following historical extracts said to have been captured by the Wayback Machine:
(1) www.ilmercato.com.au (said to have been archived on various dates);
(2) www.mercato.com.au (said to have been archived on various dates);
(3) www.gradimercato.store (said to have been archived on 27 September 2020);
(4) www.napolimercato.com.au (said to have been archived on 27 February 2016);
(5) www.pfmercato.com.au (said to have been archived on 19 April 2022);
(6) www.piazzamercato.com.au (said to have been archived on 16 September 2021); and
(7) www.qvm.com.au (said to have been archived on 6 January 2006).
The hearsay rule and exceptions
303 Caporaso’s principal submission is that the website extracts are hearsay evidence and so inadmissible in accordance with s 59 of the Evidence Act. The general exclusionary rule is that evidence of a previous representation made by a person is not admissible to prove the existence of a fact that can reasonably be supposed that the person intended to assert by the representation.
304 Section 60 of the Evidence Act provides that the hearsay rule does not apply to evidence of a previous representation that is relevant for a purpose other than proof of the asserted fact. If admissible under s 60, the evidence is admissible for all purposes (including hearsay purposes).
305 Nor does the hearsay rule apply to documents meeting the description of a “business record” under s 69 of the Evidence Act.
306 Notwithstanding the hearsay rule, the Court may make an order under s 190(3) of the Evidence Act that (relevantly) the hearsay rule does not apply in relation to evidence if:
(a) the matter to which the evidence relates is not genuinely in dispute; or
(b) the application of those provisions would cause or involve unnecessary expense or delay.
Application of s 219 of the TMA
307 Subject to some exceptions that do not presently apply, the Evidence Act does not affect the operation of any other Act: Evidence Act, s 8.
308 Section 219 of the TMA provides:
In an action or proceeding relating to a trade mark, evidence is admissible of the usage of the trade concerned and of any relevant trade mark, trade name or get-up legitimately used by other persons.
The emphasis is mine.
309 The short answer to Caporaso’s objection founded on the hearsay rule is that where a document or thing evidences the use of a relevant trade mark, the document or thing is admissible under s 219 of the TMA notwithstanding any exclusionary rule in the Evidence Act that might otherwise have operated to render it inadmissible. To hold otherwise would be to act contrary to s 8 of the Evidence Act.
310 Section 219 operates in accordance with its terms. When it applies, it is unnecessary to ask whether the same evidence would prima facie contravene the hearsay rule, and hence unnecessary to identify an exception to that rule, whether in the Evidence Act or elsewhere. As the Full Court said in Commissioner of Patents v Sherman (2008) 172 FCR 394, in which the Full Court stated (at [16]):
…where a provision of the Evidence Act is expressly and directly inconsistent with the provision of some other enactment, the provision of the other enactment will prevail. …
311 I am satisfied that s 219 of the TMA applies to all of the website extracts, whether or not obtained by the use of the Wayback Machine and whether or not the extracts contain representations of fact adduced to prove their truth.
312 With respect to the Wayback Machine extracts, the witnesses Ms Smythe and Mr Muto depose to the use of the archive to produce the extract. With some exceptions (discussed below), the extracts are evidence of trade use, including to the extent that they contain representations as to the dates on which the website pages appeared as they are shown in the extracts. In other words, the date evidence forms a part of the evidence of trade mark use and is therefore admissible in accordance with s 219 of the TMA, irrespective of whether it would otherwise have fallen foul of the hearsay rule to prove the fact that the website took a particular form at a particular date.
Application of s 190 of the Evidence Act
313 The exceptions are the extracts relating to businesses trading from the various market precincts in Melbourne (including one extract obtained by use of the Wayback Machine). Those extracts do not appear to relate to the use of mercato or any other relevant trade mark and I am not satisfied that s 219 of the TMA applies to them. It is unclear what point Mercato Centrale seeks to make of that evidence. If it is intended to show that food products are typically sold in or around marketplaces, that point is hardly controversial. I would admit the evidence (for what it is worth) under s 190 of the Evidence Act even if it was adduced for hearsay purposes, but it has had no material bearing on the outcome of either the infringement action or the cross-claim, because its relevance is marginal.
314 I would otherwise apply s 190 of the Evidence Act to the Wayback Machine evidence and other website extracts should I be wrong in my conclusion that s 219 of the TMA applies to them. In the present case, Caporaso has itself adduced a multitude of website extracts, referred to at [56] of the affidavit of Mr Caporaso and annexed to it. Mr Caporaso deposed to personally recognising the many extracts as accurately representing the website pages as they appeared at the archived dates, obtained by use of the Wayback Machine. By that evidence Mr Caporaso himself confirmed that the Wayback Machine could be used to obtain historical extracts from a website, that the dates of the extracts appear on the pages, and that he considered the extracts to reliably reproduce the website pages as he recalled them. The Court can act on that evidence to infer that the Wayback Machine can reliably extract webpages from an historical archive. In my view, the reliability of the Wayback Machine in extracting and reproducing webpages at specific capture dates cannot be said to be genuinely in dispute. Separately and apart from that consideration, proof of the appearance of the various websites as at the historical dates shown in them would involve unnecessary expense and delay.
315 In the circumstances, I consider it necessary to work through the parties’ submissions concerning the exceptions to the hearsay rule in s 60 and s 69 of the Evidence Act, including a submission advanced by Mercato Centrale that some of the evidence could be admitted for relevant non-hearsay purposes and was hence admissible for all purposes.
316 All of the objections to admissibility are overruled.
ORDERS
317 As I have mentioned earlier, the parties will be heard as to the form of the order for the rectification of the Register of Trade Marks. The cross-claim will be allowed to the extent recorded in that order, but will otherwise be dismissed. The originating application alleging infringement of the Caporaso Marks will also be dismissed.
318 The parties should be heard as to costs.
I certify that the preceding three hundred and eighteen (318) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Charlesworth. |
Associate:
