A five-star debate

Author: Deborah R. C. Jackson (Allens)

Cantarella Bros Pty Limited v Modena Trading Pty Ltd [2014] HCA Trans 53, High Court of Australia, 18 March 2014

Journal of Intellectual Property Law & Practice (2014), doi: 10.1093/jiplp/jpu089, first published online: May 22, 2014

For the first time ever, Australia's highest court will consider the inherent distinctiveness of foreign laudatory trade marks.

Legal context

The capacity to distinguish foreign laudatory words has come under scrutiny by Australia's highest court. The ongoing legal battle between Cantarella and Modena concerns Cantarella's registered trade marks CINQUE STELLE and ORO in relation to coffee. CINQUE STELLE means ‘Five Star’ in Italian, and ORO means ‘gold’. At issue is whether, and to what extent, the English meaning of foreign laudatory words is relevant to determining the capacity to distinguish.


At first instance, Cantarella sued Modena for trade mark infringement, passing off and contravention of the Trade Practices Act 1974 (Cth) and Competition and Consumer Act 2010 (Cth). Modena countered that both trade mark registrations should be cancelled on the basis that neither mark was inherently adapted to distinguish coffee, and Cantarella had not used either mark for coffee. The crux of Modena's case was that each mark merely described the quality of coffee. Modena also argued that as its own use of each word was descriptive, it did not infringe either trade mark. Emmett J in the Federal Court dismissed the challenge to the registrations, finding that neither trade mark, as an Italian word, had an ordinary signification which would be understood by the Australian consumer as describing the quality of coffee. Further, as Modena had used the words CINQUE STELLE and ORO as trade marks for coffee, it had infringed each registration.

The Full Federal Court came to the opposite conclusion and, in a unanimous decision, held that CINQUE STELLE and ORO lacked any inherent adaption to distinguish coffee, as traders would understand each word to describe the quality of coffee. It pointed to the various uses by traders of ORO. The Full Federal Court also expressly stated that it is unnecessary for consumers to know what the words mean in English, but that in any event a sizeable part of the Australian community spoke Italian and would understand the meaning of each mark in relation to coffee. It ordered the cancellation of both registrations.


In oral argument in March 2014 before French CJ and Crennan J, it emerged that this was the first time Australia's highest court has had occasion to consider how to determine the inherent adaption to distinguish foreign words as trade marks. What precisely is the nature of the trade marks at issue? French CJ in the High Court recognized that both CINQUE STELLE and ORO were metaphors in relation coffee. While laudatory, coffee is not literally ‘gold’. ‘Five star’ and ‘gold’ for coffee do not stand in the same category as terms such as ‘excellent’, ‘superlative’ or ‘highest quality’, or their Italian equivalents. Crennan J also pointed out that ‘sheen’ was laudatory but nevertheless passed the test of distinctiveness.

Neither side disputed the nature of the test, but each differed on its characteristics. Canteralla's counsel argued that if the ordinary signification of each word was not such as to suggest that they were part of the common heritage in relation to coffee, how relevant is it that other traders used ORO in relation to coffee? What if much of this use occurred subsequent to the date of registration? Modena's counsel suggested that the law was flexible and involved a practical evaluation of foreign words' inherent distinctiveness, including of foreign words common in the trade, which meant that the Full Federal Court's decision was correct, in all the circumstances.

Practical significance

Aspects of this dispute go to the oft-times vexed question of how a trade mark's inherent adaptation to distinguish is to be assessed when it is laudatory, let alone when it is a foreign laudatory word. What, to add spice to the debate, if it is a laudatory word that catches on as a trade mark? To what extent does a multifactorial consideration of the issue help in regulating subsequent skirmishes in the marketplace? We are hopeful of five-star guidance on the freedom to use and protect foreign laudatory words in the Australian marketplace.

CJEU on communication to the public and national systems of collective rights management

Author: Eleonora Rosati (e-LAWnora—Copyright Law & Policy Consultancy)

Case C-351/12 Ochranný svaz autorský (OSA) pro práva k dílům hudebním o.s. v Léčebné lázně Mariánské Lázně a.s. (not yet published), 27 February 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu096, first published online: May 22, 2014

In this ruling the Court of Justice of the European Union held that TV and radio transmissions in spa guest rooms fall within the scope of the right of communication to the public, and that EU law does (or rather, did) not preclude per se national legislation that reserves the exercise of collective management of copyright and related rights in the territory of a certain Member State to a single copyright collecting society.

Legal context

This reference for a preliminary ruling from the Czech Republic concerned the following issues: (1) whether communication of protected works by a spa establishment through the intentional distribution of a signal by means of TV or radio sets in the bedrooms of its guests constitutes a communication to the public within the meaning of Article 3(1) of Directive 2001/29 (the ‘InfoSoc Directive’); (2) whether national legislations that exclude the right of authors to authorize or prohibit the communication of their works by a spa establishment, ie a business, through the intentional distribution of a signal by means of television or radio sets in the bedrooms of the establishment's guests are compliant with the InfoSoc Directive; (3) whether EU law—notably Article 16 of Directive 2006/123 and Articles 56 and/or 102 of the Treaty on the Functioning of the European Union—precludes national laws that reserve the exercise of collective management of copyright and related rights in the territory of a certain Member State to a single copyright collecting society, thus preventing users of works to choose a collecting society from another EU Member State.


Ochranný svaz autorský (OSA) is an authorized musical works copyright collecting agency in the Czech Republic. It also acts on behalf of other collecting agencies established in both the Czech Republic and a number of other Member States. Litigation ensued when a local health spa refused to pay the fees claimed by OSA in respect of works that the spa broadcast in its guest rooms by means of TV and radio sets. Among other things, the spa's refusal was based on the grounds that OSA had abused its monopoly position in the Czech Republic by charging fees that were higher than those charged in other Member States. The Plzeň Regional Court decided to stay the proceedings and seek guidance from the Court of Justice of the European Union (CJEU).


After observing that the principal objective of the InfoSoc Directive is to provide a high level of protection of authors, the CJEU reviewed earlier case law on communication to the public. It concluded that communication of protected works by a spa establishment through the intentional distribution of a signal by means of television or radio sets in the bedrooms of its patients falls within the scope of Article 3(1) of the InfoSoc Directive.

The Court then held that the exhaustive nature of the Article 5 list of exceptions and limitations precludes national legislation that excludes the right of authors to authorize or prohibit the communication of their works by a spa establishment, ie a business, through the intentional distribution of a signal by means of TV or radio sets in the bedrooms of its guests.

Finally, the CJEU considered whether national monopolies for the collective management of copyright and related rights are compatible with EU law. Among other things, the court held that, although legislation of this kind constitutes a restriction on the freedom to provide services, such restriction may be justified to protect IP rights. Further, legislation of this kind also permits the effective management of rights and an effective supervision of their respect in a given territory by means of reciprocal representation agreements. Overall, the court believed that, as EU law stood at the time of this reference, there was no other method that would allow the same level of protection as territory-based protection and territory-based supervision of copyright and related rights.

Practical significance

The CJEU decision further clarifies the scope of the right of communication to the public under Article 3(1) of the InfoSoc Directive. This has been at the centre of numerous references for a preliminary ruling in recent times. It is sufficient to recall the decisions in Case C-466/12 Nils Svensson and Others v Retriever Sverige AB, 13 February 2014; Case C-607/11 ITV Broadcasting and Others v TVCatchup Ltd, 7 March 2013; Case C-135/10 SCF v Del Corso, 15 March 2012; and Case C-162/10 Phonographic Performance (Ireland) Ltd v Ireland and Attorney General, 15 March 2012.

The most interesting part of the judgment, however, concerns collective management of rights. Although the court upheld the validity of laws like the Czech law in respect of EU law, this judgment per se does neither invalidate earlier decisions, such as that of the General Court in Case T-442/08 International Confederation of Societies of Authors and Composers (CISAC) v European Commission, 12 April 2013 (although in her Opinion, Advocate General Sharpston somehow re-assessed—if not scaled down—the overall relevance of the decision), nor prevent the emergence of new legislative solutions that would allow for more effective collective management.

Following the vote of the European Parliament, the Council formally adopted Directive 2014/26 of the European Parliament and of the Council of 26 February 2014 on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market (the ‘CRM Directive’). Member States have until 10 April 2016 to transpose this directive into their national laws. This new piece of EU legislation sets requirements that are necessary to ensure the proper functioning of the management of copyright and related rights by collective management organizations. To this end, it intends to increase the transparency and efficiency of these organizations. The directive also provides for multi-territorial licensing by collective management organizations of authors′ rights in musical works for online uses.

Article 5 of the CRM Directive imposes on Member States an obligation to ensure that right holders have a number of rights, including the right ‘to authorise a collective management organisation of their choice to manage the rights, categories of rights or types of works and other subject-matter of their choice, for the territories of their choice, irrespective of the Member State of nationality, residence or establishment of either the collective management organisation or the rightholder.’ This means that national legislation like the Czech law at stake in OSA will be no longer allowed under EU law once the deadline for the national implementations of the CRM Directive has passed. Thus, while the CJEU decision might have saved the legitimacy and position of traditional collecting societies that operate in a monopoly regime granted by national laws, this scenario is bound to be short-lived.

Bio-law articles now have two homes at OUP

JIPLP's new sister journal, the Journal of Law and the Biosciences (JLB), is the first fully open access peer-reviewed legal journal to focus on the advances at the intersection of law and the biosciences. A co-venture between Duke University, Harvard University Law School and Stanford University, this interdisciplinary online academic journal publishes cutting-edge scholarship in this important new field. Its content comprises original and response articles, essays, and commentaries on a wide range of topics, including bioethics, neuroethics, genetics, reproductive technologies, stem cells, enhancement, patent law and food and drug regulation. JLB is published as one volume with three issues per year.  New articles are posted online on an ongoing basis.

From time to time JIPLP receives articles on biopatenting that are of some merit but which, containing considerably more biotechnology than law, are not entirely suitable for our primarily legal and practical readership.  Potential contributors should think about submitting such articles initially to JBL rather than to JIPLP -- particularly since articles, once peered and accepted, are likely to be published more swiftly in a new journal than in a mature one (JIPLP has been going since 2005) where occasionally an increase the flow of accepted articles exceeds our ability to expedite publication.

Details of JLB can be found here

Disclosure: the editor of JIPLP is a member of the JLB editorial board.

Now that INTA is over ...

Last week's International Trademark Association Meeting in Hong Kong provided an excellent opportunity for members of the JIPLP editorial, production and sales team to meet contributors, subscribers and readers, and to hear what they had to say about the journal.

We were encouraged to hear that JIPLP's structure and content are both still finding favour, and that the format of the Current Intelligence notes is particularly appreciated. Contributions by practitioners are favoured over those from academics, though there is a clear expression of desire for more articles by authors whose experiences are in-house.

Several people who approached us at the Oxford University Press booth were surprised to discover that this is not a pay-to-publish journal; all articles are published at no charge to the author, but each must pass through a peer-review process before publication can take place. This is intended to ensure that the journal's content is based on merit and not on the author's ability to pay.

If you would like to write for JIPLP, do please get in touch with us so that we can discuss possible subjects, timing, length and other considerations with you.  Our Commissioning Editor is Sarah Harris, whom you can email here.

Two gaps instead of one: the CJEU's effect on Supplementary Protection Certificate jurisprudence

This is the Guest Editorial for the June 2014 issue of JIPLP, written by editorial board member Darren Smyth (EIP, London).
Two gaps instead of one: the CJEU's effect on Supplementary Protection Certificate jurisprudence

Richard Dawkins reports an observation of interactions with proponents of creationism, who point to gaps in the fossil record as showing that evolution by natural selection is not correct. If, Dawkins says, an intermediate species fossil is subsequently discovered, the creationists consider their position to be strengthened, not weakened, because “Now there are two gaps instead of one!”.

A similar pattern can be discerned in the realm of referrals to the Court of Justice of the European Union (CJEU) concerning the SPC Regulation (1) When a national judge makes a referral because there is a particular area of uncertainty, a judgment from the CJEU follows that fails to clarify the original uncertainty, and creates a new one. Now there are two gaps instead of one.

Thus, to take one example, when there was uncertainty about the meaning of whether a product is “protected by a basic patent” according to Article 3(a) of the Regulation, the Medeva Quintet (2) of cases gave not one but two answers, neither of which was illuminating. Depending on which judgment is read, the court enlightened the world that the product must be “specified”, or “identified”, in the wording of the claims. As to with what degree of particularity, or whether the two verbs meant the same thing or something different, answer came there none.

So further referrals ensued, resulting in the “Lilly Trio”(3), in which the CJEU spectacularly failed to clarify the point, adding further terms requiring judicial interpretation. For example, in the Lilly case itself, it was ruled that it is not necessary for the claims to specify a structural formula identifying the active ingredient, but that it is sufficient “that the claims relate, implicitly but necessarily and specifically, to the active ingredient in question”. What, in this context, is “necessarily” supposed to mean? Or, for that matter, “specifically”? In fact, the degree of particularity – the whole point of the referral – is not significantly illuminated by this answer.

There seem to be two possible solutions to this sorry state of affairs. Either national judges can stop referring, and just decide cases as best they can on the basis of the existing state of the jurisprudence: if this results in divergent decisions, then so be it. Or the EU legislature can rewrite the Regulation.

A report has reached JIPLP that, after the speeches in the combined hearing for the Lilly Trio of cases, the first question from the court, addressed to the representatives of the Commission, was whether there was any plan to amend or rewrite the Regulation. It seems that even the CJEU realises that the status quo is untenable (the answer from the Commission side was, naturally, non-committal). It seems that all political capital and goodwill relating to intellectual property in Europe has been squandered on the Unitary Patent and Unified Patent Court. It therefore appears scarcely likely that legislative time will be found for a new SPC law.

So, we invite the judges of Europe to consider (and maybe discuss at the next European Patent Judges' Symposium). You have all the guidance from the CJEU you are going to get. Every referral you make will result in more “gaps”, not fewer, in the legislative framework. Decide some cases; aim for consistency; but if there happen to be some anomalies, well, it is better than spending the time, effort, and money on a referral that will simply make the issues more complex than they were to begin with.

1 Regulation (EC) No 469/2009 of the European Parliament and of the Council of 6 May 2009 concerning the supplementary protection certificate for medicinal products.

2 Medeva BV ( C-322/10), Georgetown University (C-422/10), Yeda (C-518/10), University of Queensland (C-630/10), and Daiichi Sankyo (C-6/11).

3 Lilly (Case C-493/12), Actavis (C-443/12), and Georgetown (Case C-484/12).

June JIPLP now online: check it out!

The June 2014 issue of the Journal of Intellectual Property Law & Practice (JIPLP) is now available in full online.  You can read the contents list below or check it out on the JIPLP website here.  As usual, articles and other content are available to non-subscribers on a pay-as-you-read short term access basis. The print edition will be dispatched in a couple of weeks.

Darren Smyth's Editorial will be reproduced in full on this weblog on Monday morning.


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