In her recent decision in Caporaso Pty Ltd v Mercato Centrale Australia Pty Ltd [2024] FCA 138 (Caporaso v Mercato), the Honourable Justice Charlesworth of the Federal Court of Australia has demonstrated how Australian courts approach the use of non-English words as trade marks in Australia.

Background

The applicant in Caporaso v Mercato, Caporaso Pty Ltd (Caporaso), owns several registered trade marks comprising or incorporating the word mercato, meaning ‘market’ in Italian. Those marks are registered in respect of several classes of goods and services, including but not limited to services for providing food and drink and retail services.

Caporaso claimed that the respondent, Mercato Centrale Australia Pty Ltd (Mercato Centrale), infringed a number of those registered marks by promoting and offering for sale goods and services by reference to three trade marks, namely:

• the word mark ‘Mercato Centrale’;
• the word mark ‘Il Mercato Centrale’; and
• a logo mark featuring the words ‘Il Mercato Centrale’.

Mercato Centrale denied that it had infringed Caporaso’s marks and, by cross-claim, sought orders for removal or rectification of several trade marks owned by Caporaso.

The cross claim raised several questions, including:

• whether Caporaso’s word mark ‘mercato’ is 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; and
• whether, in the minds of English-speaking Australians, the word mercato was understood to mean ‘market’ or ‘marketplace’ and accordingly, use of the word ‘mercato’ as a trade mark is likely to confuse the minds of consumers.

Decision

Ultimately, the original application was dismissed and the cross claim was largely dismissed.

On the questions of descriptiveness and confusion, Justice Charlesworth held that whilst “over time a foreign word may come to have a commonly understood meaning in an English speaking country because of its repeated and consistent use … there must be a proper evidentiary basis for drawing an inference that that has occurred”.

Her Honour remarked that “the absence of the word makes it considerably more difficult … to establish that the word in its ordinary signification is directly descriptive”, and determined that the Mercato Centrale had not submitted sufficient evidence to establish that ‘mercato’ is directly descriptive of the relevant goods and services.

Interestingly, the judgment has recently been appealed by Caporaso, with a cross-appeal also lodged by Mercato Centrale. A decision on the appeals will likely follow in late 2024.

Key Takeaways

Justice Charlesworth’s decision in Caporaso v Mercato, and in particular her remarks in response to these two questions, revealed a lot about how the Australian courts will approach the use of non-English words as trade marks in Australia.

The decision confirmed that Australian courts will treat non-English word trade marks (in the context of infringement and revocation) on the evidence, and importantly, will not assume that Australian consumers will understand that meaning of non-English words.