Australia: Tile manufacturer Ceramiche Caesar succeeds in blocking Caesarstone’s trademark application
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In Ceramiche Caesar SpA V Caesarstone Ltd FCAFC 124 (July 28, 2020), the full Federal Court reversed the senior judge’s finding of honest concurrent use, given the evidence showing the use of property that had been expressly excluded from the claim, and the finding of prior continuous use, on the grounds that the prior use was not authorized under the control of the trademark owner.
Since 1988, Caesar ceramic, an Italian manufacturer of ceramic tiles for interior and exterior wall and floor coverings, promoted, manufactured and sold tile products in Australia. In 2004, Ceramiche Caesar applied for coverage
“ceramic tiles for interior and exterior” for the following mark, which then proceeded to the registration:
Since 1987, Caesarstone, an Israeli company, manufactured and sold large quartz slabs worldwide. From 2003, Caesarstone sold large slabs in Australia through two distributors who then resold them to stonemasons. Stonemasons processed the slabs into finished products for sale to Australian consumers.
In 2005, Caesartone filed for registration of the word mark
CAESARSTONE for “tiles, floor panels, floor coverings, wall coverings, floors and ceilings; non-metallic coverings for use with floors and parts thereof; floor profiles and skirting boards”. The examiner raised an objection to the registration on the ground that it was deceptively similar to the earlier mark of Ceramiche Caesar under Article 44 of the Trade Marks Act 1995 (Cth).
Exclusion of tiles
To overcome the objection, Caesarstone removed the tiles from its application by inserting the exclusion “None of the above is of the nature of tiles” and the request proceeded to accept.
Ceramiche Caesar was concerned that Caesarstone was attempting to extend its scope of protection to class 19 floor and wall coverings and opposed Caesartone’s request. The dispute therefore centered on whether Caesarstone should benefit from the trademark rights for floor and wall tiles.
In Ceramiche Caesar’s opposition to CAESARSTONE’s claim, Caesarstone relied on evidence of honest concurrent use of the mark to defend its claim. The delegate concluded that the marks are deceptively similar and did not conclude that “honest competitive use” and/or “other circumstances” justified granting Caesarstone’s application.
Caesarstone appealed the delegate’s decision and the lead judge, reversing the delegate’s decision, found “honest concurrent use” on the floor panels and wallcovering. This despite finding that the goods in use fell within the definition of “tiles”. The senior judge allowed Caesarstone’s application to proceed with the recording (subject to certain conditions or limitations to the scope of the wares).
Full Federal Court Decision
On appeal to the full Federal Court, the two main issues were:
(1) whether there has been honest concurrent use of the mark CAESARSTONE in the goods of Class 19; and
(2) whether the prior use of the CAESARSTONE mark was an authorized use under the control of Caesarstone.
Honest concurrent uses were all “in the nature of tiles”
The Full Court concluded that “[a] the finding of honest competing use must be a finding of use for goods which are in fact specified in the trademark application”. The senior judge found honest competing use on wares “in the form of tiles”, which were specifically excluded from the claim. Accordingly, the Full Court held that the lead judge had erred in finding honest concurrent use, found that Ceramiche Caesar’s earlier mark constituted an impediment to registration, and therefore determined that the CAESARSTONE application should not not register.
The Full Court also overturned the senior judge’s decision on this issue, finding that there had been no prior continuous use of the mark in Australia.
- Caesarstone had not itself sold any of the products specified in the application in Australia. He had only large solid slabs (being the raw material) to his distributors, which were resold to stonemasons, who used them to create the relevant designated goods. The skill and know-how of the stonemasons determined the quality of the designated products.
- There was no reason to infer control over the distributors’ use of the mark because they were unrelated to Caesarstone.
- Caesarstone had not exercised quality control over the use of the mark by distributors or the use of the mark by stonemasons:
- there were no brand guidelines or marketing approval mechanisms in place;
- there were no quality control standards or evidence that Caesarstone had ever performed quality control;
- the product manuals that Caesarstone had provided to distributors were declared optional;
- Caesarstone had no right of inspection;
- there was no evidence that Caesarstone ever inspected the stonemasons’ work; and
- Caesarstone had no contractual relationship with the stonemasons.
As such, there had been no prior continuous use of the mark in Australia.
Key points to remember
- Carefully monitor the Trademark Registry.In particular, monitor your competitors’ filings to ensure that the scope of protection offered does not extend to your area of activity (or future area of activity).
- Be careful what you exclude from your application.Removing conflicting goods/services may overcome an earlier trademark objection upon review. However, if you nevertheless use your mark on these excluded goods/services, you risk infringing the rights of third parties and not being able to rely on such use to establish honest concurrent use.
- Honest concurrent usemust be related to goods/services specified in your trademark application. Honest concurrent use of goods/services similar to the goods in your application will not suffice.
- Authorized use(including for the purpose of establishing prior continuous use) requires that effective control be exercised over the substance of the use of the mark in relation to the relevant goods/services specified in the application. In this case, Caesarstone did not have or exercise control over the stonemasons who created the subject goods from the raw material supplied by Caesarstone’s distributors.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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