In Ceramiche Caesar S.P.A. v Caesarstone Ltd [2020] FCAFC 124, the Federal Court of Australia (Full Court) overturned the decisions of the primary judge and refused registrations on two of Caesarstone Ltd’s applications.

Federal Court of Australia (Full Court)

Judges: Nicholas, Burley and Thawley JJ

Date of Judgment: 28 July 2020

Appeals from: Caesarstone Ltd v Ceramiche Caesar S.p.A. (No 2) [2018] FCA 1096 and Caesarstone Ltd v Ceramiche Caesar S.p.A. (No 3) [2019] FCA 7

Ceramiche Caesar S.p.A (Ceramiche Caesar) is a manufacturer of ceramic tiles for indoor and outdoor flooring and wall claddings. Ceramiche Caesar promoted, manufactured and sold tile products in Australia since 1988. With effect from 23 November 2004, Ceramiche Caesar registered “” (Caesar Device Mark) in class 19 for products covering “ceramic tiles for indoor and outdoor use”. 

Caesarstone Ltd (Caesarstone) is an Israeli company that manufactures and sells large quartz slabs. Since 1987, the slabs bear the “Caesarstone mark” on the underside of all their Caesarstone slabs. From 2003, large slabs were distributed by Tessera Stores and Tiles Pty Ltd and its sub-licensee Carilstone Pty Ltd in Australia. The subsidiary of Caesarstone Ltd, Caesarstone Australia Pty Ltd (Caesarstone Australia) was formed in 2006. Tessara and Carilstones sold large slabs to Stonemasons to be finished into products such as benchtops and counter tops, vanities and surrounds and splashbacks which were then sold to consumers. 

The appeals arose from (i)the primary judge’s decision to direct word mark TM 1058321 CAESARSTONE (Caesarstone Goods Word Mark) to proceed to registration for a certain class 19 floor and wall goods, (ii) the primary judge’s decision to order TM 1211153 “” stylized Caesarstone mark to proceed to registration for certain goods and services in classes 19, 35, 37 (Caesarstone Device Mark), (iii) the primary judge’s decision to allow the TM 1211152 for the word mark CAESARSTONE to remain in the Register for services in classes 35 and 37 (Caesarstone Services Word Mark) on grounds that ss 88(2)(a) and (c) have been made out. (The primary judge exercised discretion pursuant to ss 88 and 89 to allow the mark to remain on the Register).

For appeal in (i) in relation to TM 1058321, Ceramiche Caesar contended that the primary judge had erred in the following:

• Finding there was honest concurrent use for certain goods designated in class 19
• Finding that prior use of the mark was authorised use under Caesarstone’s control
• Allowing registration of TM 1058321 under s 44(3)(b) ‘because of other circumstances’

The issue was if the primary judge should have exercised discretion to remove the mark from the Register. 

The primary judge erred in finding that Caesarstone exercised control over the designated goods, whether by the exercise of quality control or “on a wider basis”. 

Ceramiche Caesar S.P.A. v Caesarstone Ltd [2020] FACFC 124 at [77]

Was there honest concurrent use for designated goods in class 19

The appellant submitted that the primary judge’s findings of honest concurrent use of goods belonging to floor panels and wall claddings were goods in the nature of tiles. The appellant submitted that the phrase ‘none of the foregoing being in the nature of tiles’ in the respondent’s specification of goods meant that none of the designated had been in use prior to and after the priority date. The Full Court accepted the appellant’s arguments and held that the goods that were found to be in “honest concurrent use” were in the nature of tiles and the phrase ‘none of the foregoing being in the nature of tiles’ has effectively ruled out all the goods covered. The Full Court held that the primary judge had erred in his assessment of honest concurrent use for the designated goods in class 19.

Was there Authorised use of the mark under Caesarstone’s control

The Full Court found that large slabs of quartz were sold to Stonemasons to be finished. The appellant advanced arguments that there was no evidence to support the findings that Caesarstone had exercise any form of ‘control’ over Stonemasons and hence challenged the primary judge’s finding that the use of the mark was authorised use. The Full Court found no evidence that Caesarstone had inspected or exercised any form of ‘control’ over the finished product by Stonemasons or ‘on a wider basis’. The Full Court held there was no control exercised by Caesarstone and there was no authorised use under s 8 of the Trade Marks Act 1995 (Cth). 

Should the application for “CAESARSTONE Goods Word Mark” be registered pursuant to s 44(3)(b)

Caesarstone submitted that the mark has been used for walling and flooring products and there had been no actual instances of confusion in the mark. Caesarstone further submitted that if the mark be refused registration, it would cause great inconvenience to the company. The Full Court in finding that there was no honest concurrent use for designated goods in class 19 did not think it’s proper to invoke s 44(3)(b) to allow the mark to proceed to registration.

Consequently. the final issue of whether the discretion should have been exercised in favour of the respondent need not be considered. 

For the appeal in (ii), the Full Court noted that the “” (Caesarstone Device Mark) was not used before its August 2007 priority date hence the Caesarstone Device Mark cannot be allowed to proceed to registration under honest concurrent. The Caesarstone Device Mark should not be allowed registration to overcome the prior mark Caesar Device Mark operating as an obstacle under ss 44(1) and (2). The appeal was allowed.

As for the appeal in (iii), the Full Court took the view the outcome of the appeal for (iii) should follow the outcome of the appeal in (i) and (ii). The Full Court ordered TM 1211152 CAESARSTONE to be cancelled on grounds that ss 88(2)(a) and (c) have been made out and discretion need not be exercised in favour of Caesarstone. 

Disclaimer: The above is provided to assist in the understanding of the decision by the Federal Court of Australia (Full Court). It should not be relied upon as legal advice. Any errors or omissions are the author’s. For queries related to the article, please contact the author here.