Non-English words are increasingly used by Australian companies to market goods and services. In February, Justice Charlesworth of the Federal Court of Australia outlined the principles to determine whether foreign words can be protected as a trade mark in Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCA 138.

Background

The dispute involved two operators running Italian food related businesses; the Applicant, Caporaso Pty Ltd (Caporaso), a family-owned Italian themed supermarket, restaurant, and wine retail business; and the Respondent/Cross-claimant, Mercato Centrale Pty Ltd (Mercato Centrale), an operator of a soon to be opened Italian style food hall and marketplace.

Caporaso are the registered owners of various trade marks incorporating the Italian word ‘MERCATO”, the Italian word for market.

Caporaso sued Mercato Centrale, alleging that use of the various trade marks incorporating ‘MERCATO CENTRALE’, amounted to trade mark infringement based on deceptive similarity under sections 120(1) and (2) of the Trade Marks Act 1995 (Cth) (The Act). By way of example:

One of Caporaso’s registered stylised Trademark in class 45

One of Mercato Centrale’s applied for stylised marks in class 35 and 45

Mercato Centrale cross-claimed on several issues, notably seeking the cancellation of Caporaso’s marks on the basis they:

• Lacked distinctiveness – The Italian word “Mercato”, meaning “market” or “marketplace”, has the same ordinary signification in Australia to English speaking persons; and
• Were likely to deceive or cause confusion –  TheItalian word MERCATO is recognised by Australian consumers as having an ordinary meaning as it is already used many businesses across Australia.
  
   

Were the two marks deceptively similar?

Justice Charlesworth found that the infringement case failed as the two marks were not deceptively similar within the meaning of section 120 of the Act. Justice Charlesworth held that:
 

• MERCATO CENTRALE “must be considered as a whole”, and “consists of two Italian sounding words, not one”;
• The word CENTRALE was distinctive (and not merely descriptive), with neither MERCATO, nor CENTRALE having a “proven meaning in English”;
• MERCATO CENTRALE was “comprised of two words of equal significance and impact, both visually and aurally”, with a repetitive rhythm that the word MERCATO alone does not have; and
• The target audience would not consider MERCATO CENTRALE to be a sub-brand of MERCATO.

Did Caporaso’s marks lack distinctiveness and were they likely to cause confusion?

On the cross-claim, Justice Charlesworth found for Caporaso on both issues, dealing with them simultaneously. Justice Charlesworth stated both involve an enquiry into whether the “word mercato had an ordinary signification at the relevant time…[and] was commonly understood…to describe a market or marketplace”.

Justice Charlesworth held that “Mercato” does not have an ordinary meaning in Australia. Justice Charlesworth clarified that the enquiries into the ordinary signification of words should be conducted on the basis that “that Australia is an English-speaking nation”. While the English translation of a foreign word may be relevant, it is not necessarily critical. More important is “the meaning conveyed by a foreign word to those who will be concerned with the relevant goods”.

The decision was in line with Cantarella Bros Pty Limited v Modena Trading Pty Limited [2014] HCA 48 where the High Court found that the Italian words “Cinque Stelle” (five stars) and “Oro” (gold) were inherently adapted to distinguish coffee goods in Australia.

Justice Charlesworth drew upon the following evidence:

• Census data showing 400,000 Italian/Spanish speakers was “low” and “not significant” in the context of Australia’s overall population.
• The absence of the word ‘MERCATO’ in the Macquarie Dictionary, whereas common words of Italian origin such as cappuccino and spaghetti are contained.

Despite evidence of businesses using the word “Mercato”, Charlesworth J did not find the use of the MERCATO trade mark would cause confusion, noting:

• The degree to which Australian’s were exposed to the word “Mercato” was insignificant.
• Expert evidence tendered regarding trade usage focussed too heavily on Melbourne and Sydney, and not Australia as whole; and
• Evidence tendered did 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; it was more likely adopted due to “its subtle allusion to Italy”.

Key take-aways for the protection of non-English words

• The case reinforces that Australian courts will not assume the meaning of a non-English word will be understood by ordinary Australian consumers.
• Non-English words are more likely, but not certain, to be considered distinctive.

Bird & Bird Sydney will continue to provide updates as the recent ruling is pending appeal.