Cantarella Bros. v. Espresso Enterprises – Good coffee but bad faith

The decision handed down in mid-2014 by the Australian Trade Marks Office in Cantarella Bros Pty Ltd v. Espresso Enterprises Pty Ltd dealt with the notion of ‘bad faith’ under Section 62A of the Trade Marks Act 1995 as a ground of opposition. The ‘take-away’ message from the Trade Marks Registrar was that it is one thing to imitate your rival’s advertising campaign but quite another to seek to acquire registered trade mark rights featuring your rival’s advertising tag line.

Before we sit down with Cantarella Bros and Espresso Enterprises for a cup of good coffee, let us explore some background on ‘bad faith’.

The first judicial consideration in Australia of the concept of bad faith under s62A was Fry Consulting v. Sports Warehouse Inc. (No. 2). It was concluded by the Federal Court that bad faith in the context of s62A does not require (although it includes) dishonesty or fraud. Bad faith is a wider notion potentially applicable to a diverse species of conduct including:

• dishonesty
• fraud
• conduct of an unscrupulous, underhand or unconscientious character, and that
• mere negligence, incompetence or lack of prudence to reasonable and experienced standards do not in themselves suffice.

Further consideration of bad faith by the Federal Court was in the case of DC Comics v. Cheqout Pty Ltd. Cheqout applied to register SUPERMAN WORKOUT as a trade mark for exercise classes, fitness clinics, and health club services. DC Comics opposed registration of SUPERMAN WORKOUT. DC Comics was unsuccessful under one ground of opposition as the SUPERMAN WORKOUT trade mark was held unlikely to be confused with DC Comics’ unregistered SUPERMAN trade mark. DC Comics’ opposition on the ground of bad faith, on the other hand, succeeded due to the allusion to the comic-book hero Superman which was drawn from Cheqout’s use of SUPERMAN WORKOUT together with a Shield Device which closely resembled DC Comics’ famous Superman Logo with its red, white and blue colours.

DC Comics v. Cheqout confirmed that:

• s62A does not require that use of the trade mark would result in deception or confusion
• all of the surrounding circumstances to register the mark are relevant
• there need not be any pre-existing relationship between the parties; and
• bad faith is “conduct falling short of standards of acceptable commercial behaviour observed by reasonable and experienced persons in the area”.

Now, for that coffee…

Espresso Enterprises filed applications in Australia to register the trade marks “Di Bella Coffee … we know coffee” and “Crop to Cup … we know coffee.”

Cantarella found these applications objectionable in view of Cantarella’s own use of the “we know coffee” tag line in advertising approximately two years prior to the applications being filed. Since 2010, Cantarella had been using the tag line in electronic, print, and related advertising for its VITTORIA brand of coffee including a promotional campaign featuring the well-known Hollywood actor, Al Pacino.

After submitting its trade mark applications, Espresso Enterprises commenced using the “we know coffee” tag line and other similar expressions on its social media pages.

Comparing the two companies’ advertising, we see:

Cantarella Bros.			Espresso Enterprises
Cantarella’s Pacino advertisements featured: Interview style with close-up shots of Al Pacino Sepia tone style featuring a gold colouring effect In one advertisement, Al Pacino says “I know coffee” In each advertisement, Al Pacino says “this is good coffee” Close up image of espresso cup marked with Cantarella’s VITTORIA Logo on an espresso machine Use of black and white image with the VITTORIA Logo in gold Use of the words “we know coffee” in Arial font			Espresso Enterprises’ advertisements featured: Likeness of a well-known Italian Hollywood actor (impersonator of Robert de Niro, not of Al Pacino) Interview style with close-up shots of the de Niro impersonator Sepia tone style featuring a gold colouring effect Impersonator says “I’m not Pacino” Impersonator says “I know coffee” Impersonator says “this is not good coffee… this is great coffee!” Close-up image of espresso cup marked with Espresso Enterprises’ brand Logo, on an espresso machine. Use of black and white images with Espresso Enterprises’ brand identifier in gold Use of the words “we know coffee” in Arial font

Cantarella complained that Espresso Enterprises’ activities “piggybacked” onto Cantarella’s Pacino campaign and Pacino advertisements featuring the tag line “we know coffee”.

Satire, parody… or just plain ‘bad faith’?

In response, Espresso Enterprises claimed its activities were a satire or parody of the Pacino advertisements and plainly sought to distinguish Espresso Enterprises’ coffee products from Cantarella’s products and those of other coffee manufacturers.

The Trade Marks Hearings Officer considered whether Espresso Enterprises’ conduct fell short of ‘standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular area’ and reviewed the facts in the DC Comics case before agreeing that Espresso Enterprises’ actions ‘cast significant doubt on its intentions in filing the Applications’. The Hearing Officer was satisfied that in all the circumstances, Espresso Enterprises’ actions fell short of the ‘standards of acceptable commercial behaviour’.

The Hearing Officer was satisfied that Cantarella had established the ground of ‘bad faith’ under s62A. Espresso Enterprises' trade mark applications were refused registration and costs were awarded against Espresso Enterprises.

Don’t forget your ‘take-away’…

It is one thing to imitate a rival’s advertising campaign but quite another to seek to acquire registered trade mark rights featuring that rival’s advertising tag line.