Ceramiche Caesar S.p.A. V Caesarstone Ltd [2020] FCAFC 124 (28 July 2020)
What happened in the first instance?
Ceramiche is a tile manufacturer based in Italy. Their “CAESAR” trade mark has been used in Australia since 1988 and was registered in Australia since 2004 for “ceramic tiles for indoor and outdoor use”.
Meanwhile, Caesarstone is a well-known Israeli producer of quartz surfaces (for benchtops, countertops, etc) which are developed into a finished product by stonemasons here in Australia. The Caesarstone trade marks (word and stylized) were applied for in 2005. They had already been distributing their quartz slab products in Australia since 2003.
In examination of the Caesarstone marks, the Examiner cited the Ceramiche CAESAR mark against Caesarstone’s applications. The Examiner believed the respective marks were deceptively similar and covered closely related goods.
In order to overcome this objection, Caesarstone amended the specification of the trade marks to exclude tiles, as follows:
“panels for floors, floor coverings, wall cladding, ceilings; non-metallic covers for use with floors and parts thereof; profiles and floor skirting boards; none of the
foregoing being in the nature of tiles”
Their amendment overcame the citation and the Caesarstone trade marks were accepted. However, this disclaimer came back to haunt Caesarstone in future proceedings.
Ceramiche opposed acceptance of the Caesarstone marks successfully.
First Appeal
Caesarstone appealed the opposition decision to the Federal Court.
The primary judge overturned the opposition decision, finding that whilst the marks were deceptively similar, there had been “honest concurrent use” of the Caesarstone mark on floor panels and wall cladding. The judge concluded that these goods fell within the meaning of “tiles”, as the disclaimer entered did not “subtract all content from the words which precede it”.
The judge also found that use by the distributors since 2003 was “authorised use”, and thus acceptable to satisfy the “honest concurrent use” provisions of the Trade Marks Act 1995.
Second Appeal
The Full Court reversed the primary judge’s decision, finding:
1. There was no honest concurrent use of the Caesarstone trade marks on the designated Class 19 goods of the amended application – as tiles had been
specifically excluded in the limitation; and
2. the prior use of the trade mark was not authorised use under Caesarstone’s control
In relation to the disclaimer, the Full Court held that it is a matter of plain English. It was stated that the words “none of the foregoing being in the nature of tiles” operate to limit the Class 19 goods to include only “panels for floors, floor coverings and wall claddings” which are not in the nature of tiles.
The Full Court held that honest concurrent use must be actual use in respect of the goods that are specified in the trade mark application. With the disclaimer/limitation of Caesarstone, goods “in the nature of tiles” were expressly excluded from the description of goods in the trade mark application.
Authorised Use
Given that the Full Court found there was no honest concurrent use by Caesarstone, it was not really necessary to deal with the issue of authorised use. However, they did mention it briefly.
Authorised use requires a trade mark applicant to establish “control as a matter of substance” – that is, the trade mark must indicate a connection in the course of trade with the owner.
Quality Control
The Full Court held that Caesarstone did not exercise quality control, because the control was not in relation to the designated goods, being panels for floor covering and wall covering.
Further, there was no contract between Caesarstone and the stonemasons who fabricated the slabs into the finished products and were ultimately responsible for the quality of the finished goods. There was no evidence that Caesarstone ever inspected the stonemason’s work or conducted any quality control regarding the final product. Accordingly, Caesarstone would have also fallen down on this aspect.
What this means for your clients
- Disclaimers in goods specifications are to be interpreted as a matter of plain English and to establish “honest concurrent use” you must prove use on the
goods covered by the application. Accordingly, consider this very carefully when attempting to overcome citations with disclaimers.
- Quality control is essential if use of the trade mark is to be considered authorised use that can be relied upon by a registered owner, for the purposes of
defending a non-use removal action or to support an application based on use. For example, a manufacturer needs to exercise control as a matter of
substance over the final product, in order to rely on use of a trade mark in respect of that final product.