Italian language trade marks raise tough questions again in Australia

Ten years after the well-known decision in Cantarella Bros v Modena Trading, the Federal Court of Australia has engaged with another case about the consumer understanding of trade marks with Italian language elements. On Friday, the Full Court delivered its judgment in Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCAFC 156. In assessing the infringement claims and the cross-claims for invalidity, the Federal Court found that Australian consumers would not understand the word "mercato" (market or marketplace), but could probably recognise the meaning of "centrale" (central).

The Facts

AU Trade Mark No. 1299144
("Red Man Logo")

Caporaso operates a family-owned, Italian-themed supermarket, restaurant and wine retail business in Adelaide. Caporaso owned three registered trade marks that incorporate the word MERCATO, including a plain word mark, a fancy word mark in curly script, and the Red Man Logo (see image right). The first two registrations contained an endorsement that “The applicant has advised that a translation of the ITALIAN word MERCATO appearing in the trade mark is MARKET”, but the Red Man Logo registration did not.

Mercato Centrale operates a retail food and beverage business in the Melbourne city centre under the name "Il Mercato Centrale". Having been announced in 2022, the Italian-style food hall and marketplace was yet to launch when the case first went to trial, but finally opened its doors in September this year. Caporaso claimed that the use of Mercato Centrale's unregistered marks that incorporated the word "mercato" had infringed its registered marks.

Cancellation of the Word Mark

Mercato Centrale counter-claimed that Caporaso's trade marks lacked distinctiveness on the grounds that "mercato" was descriptive of 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.

The Italian language is widely spoken in Australia, and more than one million Australians claim to have Italian ancestry.  However, at first instance, Mercato Centrale focused their argument on the claim that the word "mercato" had come to be recognised by ordinary Australian consumers, and would be as familiar to English speakers as the words "spaghetti" or "cappuccino". The judge applied the decision in Cantarella Bros v Modena Trading, which concerned the Italian words "oro" (gold) and "cinque stelle" (five stars). Considering the evidence from Australian dictionaries and experts, the judge found that the word "mercato" did not bear any ordinary signification in Australia to relevant English-speakers, and therefore the descriptiveness argument failed. This point was not appealed.

Mercato Centrale also counter-claimed that the word mark should be cancelled on the ground that it was accepted for registration on the basis of evidence and representations that were false in material particulars (s 62(b) of the Trade Marks Act). For example, when applying for the MERCATO registration, John Caporaso submitted a declaration that the family initially established a commercial deli in 1972 under the name "Imma and Mario’s Mercato", but in fact, the deli was known as "Imma and Mario’s Continental".

On appeal, the Full Court found that this provision addresses threats to the integrity of the process of examination and acceptance. The Full Court disagreed with the first instance judgment and held that the provision "is concerned with representations that are false in a way that was material to the decision to accept the application for registration." The misrepresentations about the history and use of the MERCATO mark were noted by the examiner as a factor in the decision to accept the registration, so the plain word mark was cancelled.

Infringement

Mercato Centrale's
unregistered logo

While the parties accepted during the appeal hearings that the Australian public would not recognise the word "mercato", the question turned to the consumer understanding of the word "centrale".

At first instance, the judge had placed considerable weight on the proposition that, in ordinary English, adjectives do not follow nouns. On appeal, the Full Court disagreed, noting that there are many examples of adjectives that follow nouns, which is especially common practice for sub-brands like Pepsi Max or Nescafé Gold.

Since English-speakers could recognise the word "centrale" as meaning "central", the Court determined that a substantial number of consumers would look at the mark MERCATO CENTRALE and consider that the word "centrale" is a descriptive addition to that mark, connoting either a variant or sub-brand of MERCATO. Therefore, there would have been infringement if the plain word mark had not been cancelled.

Caporaso's fancy word mark (No. 1255041)

What did this mean for the other marks? The Full Court held that an essential feature of the fancy word mark was that it is in a curly typeface: "The monopoly it secures is not a monopoly over the plain word mercato. Rather, it secures a monopoly over that word as rendered in the fancy script depicted on the Register." 

Likewise, an essential and central feature of the Red Man Logo was the red man it contained. Mercato Centrale's marks had no feature that even approximated the Red Man Logo. The Full Court noted that:

The notional consumer, with an imperfect recollection of the registered mark, would not have cause to wonder whether these marks denote the same commercial source as the Red Man Logo. Further, it would take exceptional carelessness or stupidity to look at the Mercato Centrale Logo and wonder whether, because it contains the word mercato and a device with a red dot in its centre, the Mercato Centrale Logo and the Red Man Logo denote the same commercial source. [emphasis added]

Therefore, neither of the surviving marks had been infringed.

Concluding Thoughts

Italian immigrants had a massive impact on the food culture in Australia, but as this case shows, this has not necessarily translated to much knowledge of the language amongst the general public. Australia does not have any rule that approaches the American doctrine of foreign equivalents, but this Full Court decision suggests that the judge at first instance had still been too restrictive in her assumptions about English grammar and the capacity for consumers to understand close cognate words like "centrale". 

Meanwhile, with this victory and a costs order in their favour, Il Mercato Centrale can now focus on their nascent business operations. Buona fortuna! [for my fellow Australians, that means, "Good luck!"]