New Zealand may have beaten France in the Rugby World Cup quarter finals, but one French sporting icon is winning a strategic branding war in New Zealand.

For the third time in four years, the High Court of New Zealand has overturned the decision of the Assistant Commissioner of IPONZ and acknowledged the breadth of Lacoste’s trade mark rights in the Crocodile, as both a device and a word trade mark, in the face of repeated attacks by Crocodile International PTE Ltd.

The most recent decision of Justice Clifford relates to Crocodile International’s opposition to Lacoste’s Application No. 837027 for the Crocodile Logo (below), and traverses not just key issues of trade mark law, but also copyright and registered designs. The decision also raises interesting issues in relation to the scope of monopoly granted by a trade mark registration in New Zealand, and the impact that delay in enforcing rights can have on an opponent’s case.

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The Parties

This multi-jurisdictional dispute between Lacoste and Crocodile International has a long history. In 1923, the famous tennis player, René Lacoste, made a bet with his Davis Cup team captain involving a crocodile-skin suitcase. The subsequent win and the associated bet was reported in an article in the Boston Evening newspaper, earning René Lacoste the nickname of ‘the Crocodile’, as a reflection of his tenacity on the tennis court. This nickname stuck, with a blazer designed for René to play in, featuring the following embroidered crocodile.

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In 1933, René and his business partner founded Lacoste to distribute a new style of shirt, being the now famous white L1212 polo shirt with the embroidered Crocodile logo. The L1212 design was regarded as revolutionary at the time for the ‘daring decision to use short sleeves’.

Lacoste subsequently expanded its business abroad, becoming known around the world as ‘the Crocodile’ brand. Lacoste owns and uses a large number of trade marks in 137 countries around the world, including Australia and New Zealand, incorporating various forms of the Crocodile logo and word mark. For example:

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Over the years, Lacoste has used the Crocodile logo in various styles and branding campaigns, including the following.

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The predecessor to Crocodile International was a family business established by members of the Tan family. Crocodile International went on to become a significant clothing brand throughout Asia. One family member, Dr Tan Hian Tsin, gave evidence that in 1947, he designed the Crocodile Logo to be applied to neck labels of shirts ultimately manufactured and sold by the family business in Singapore in 1949.

Lacoste inferred in evidence that Dr Tan may have created the Crocodile Logo by copying the initial Lacoste trade mark. Lacoste filed evidence that during the 1940s, the French Davis Cup team toured extensively throughout Asia. These games attracted significant international and local attention, with the players wearing Lacoste L1212 polo shirts in matches. Lacoste filed evidence from one of the players, Robert Abdesselam, who recalled the locals gathering around the players after each game admiring the Lacoste L1212 shirts with the embroidered crocodile.

By the 1950s, the Tan family business had expanded across Asia and was subsequently divided up amongst the family members. A separate corporate entity, Crocodile Garments, was incorporated in Hong Kong in 1951, in addition to Crocodile International in Singapore.

Importantly, Dr Tan was a promoter, director and shareholder of Crocodile Garments in Hong Kong. In 1961, Crocodile Garments filed trade mark applications for the Crocodile Logo in various jurisdictions, including New Zealand (Registration No. 70068).

Neither Crocodile International nor Crocodile Garments has ever traded or used the Crocodile Logo in New Zealand.

In 1999, Lacoste applied to remove Crocodile Garments’ Registration No. 70068. As part of a settlement, Crocodile Garments assigned the Registration to Lacoste. This assignment triggered a number of hard fought trade mark cases between Lacoste and the Singaporean entity, Crocodile International in New Zealand.

CROCODILE – opposition to Lacoste’s Application No. 604957

In March 2011, Justice France allowed a High Court appeal by Lacoste of the decision of the Assistant Commissioner of IPONZ with respect to Crocodile International’s opposition to Lacoste’s Application No. 604957 for the CROCODILE word trade mark filed in Class 25 for clothing, footwear and headgear.

Justice France allowed the appeal on the basis that Crocodile International did not have either a commercial presence or sufficient ‘spillover’ reputation in New Zealand to substantiate a ground of opposition based on awareness of its trade mark by a substantial number of consumers in New Zealand. Further, at the time of filing the Application, Lacoste had already used the CROCODILE word mark as a trade mark in New Zealand. The CROCODILE word mark featured on swing tags attached to the L1212 polo shirts offered for sale and sold in New Zealand, and there was evidence of years of advertising using the word ‘crocodile’ in various contexts.

Crocodile Logo – revocation of Lacoste’s Registration No. 70068

The battle ground then shifted to the Crocodile Logo Registration assigned by Crocodile Garments to Lacoste. On 25 September 2014, Justice Collins of the High Court of New Zealand allowed Lacoste’s appeal of a decision of the Assistant Commissioner to revoke the Registration.

While Lacoste had not filed evidence of use of the exact Crocodile Logo depicted in the Registration, Justice Collins found there was no basis for the Registration to be revoked. Lacoste’s evidence of use of its various Crocodile trade marks was considered to be sufficient under section 7(1)(a) of the Trade Marks Act 2002 (NZ) to constitute use of the Crocodile Logo, being ‘use in a form differing in elements that do not alter the distinctive character of the trade mark in the form in which it was registered’. Justice Collins’ decision is currently being appealed by Crocodile International and will proceed to a Court of Appeal hearing in February next year.

Crocodile Logo the Sequel – opposition to Lacoste’s Application No. 837027

On 10 February 2011, Lacoste filed a new Application for the Crocodile Logo (Application No. 837027) in Class 25 for articles of clothing.

This Application was opposed by Crocodile International on the grounds that:

  1. the use of the trade mark would be contrary to law, as Dr Tan owned copyright in the Crocodile Logo, and any use by Lacoste would constitute copyright infringement (section 17(1)(b) of the Trade Marks Act (NZ));
  2. the Application was made in bad faith (section 17(2));
  3. Lacoste was not the owner of the Crocodile Logo (section 32(1)); and
  4. Lacoste did not use or intend to use the Crocodile Logo as a trade mark (section 32(1)).

In a decision handed down last year, the Assistant Commissioner granted Crocodile International’s opposition on the ground that Lacoste had not used or had no intention to use the Crocodile Logo in New Zealand.

Both Lacoste and Crocodile International appealed this decision to Justice Clifford of the High Court of New Zealand.

Despite the complex fact scenario, Justice Clifford found on 6 October 2015 that this matter could be determined based on two central issues:

  1. Crocodile International’s assertion that Lacoste’s use of the Crocodile Logo would be contrary to law as an infringement of copyright; and
  2. Lacoste’s challenge to the Assistant Commissioner’s finding that it lacked an intention to use the Crocodile Logo in New Zealand.

Copyright Infringement?

Justice Clifford upheld the Assistant Commissioner’s finding that copyright in the Crocodile Logo did not subsist in New Zealand.

Clause 28 of Schedule 1 to the Copyright Act 1994 (NZ) provides that copyright does not exist in an artistic work made before 1 April 1963 that, at the time the work was made, constituted a design capable of registration, and the work has been or was intended to be used and multiplied by an industrial process. Clause 28 describes a design being applied through an industrial process as including when a design is copied or intended to be copied on more than 50 single objects, or when the design is applied to or intended to be applied to textile-piece goods.

Dr Tan gave evidence that he created the Crocodile Logo as a trade mark to be applied on garments manufactured and sold by the business from 1949 onwards. Crocodile International attempted to argue that this use of the Crocodile Logo on a neck label for shirts could not perform the function of a design, being an ornament having ‘eye appeal’, as it would not have been seen by the consumer when the article was in use.

Justice Clifford rejected this argument based on both the factual evidence, and the previous decisions of Ferrero’s Design Application [1978] RPC 473 and Sutton v Bay Masonry Ltd (High Court of New Zealand, CIV-2003-470-260) that confirm that the design need not be visible at the time of purchase nor beyond, provided it was visible at some point and impacted on the purchaser’s decision. In any event, the evidence indicated that the Crocodile Logo on the neck label was prominently placed when garments were advertised and offered for sale by Crocodile International in Asia.

His Honour held that the Crocodile Logo was, when created, a design capable of registration under the Patents, Designs, and Trade Marks Act 1921-1922 (NZ) and copyright therefore did not exist in New Zealand in the Crocodile Logo by virtue of the operation of Clause 28 of Schedule 1 to the Copyright Act 1994 (NZ).

Although nothing turned on it given the finding that copyright did not exist, Justice Clifford stated that, even if Dr Tan was found to be the owner of copyright subsisting in the Crocodile Logo in New Zealand, Dr Tan was a director of Crocodile Garments at the time of filing Registration No. 70068 and could be taken to have authorised the use of the Crocodile Logo as a trade mark.

I am more than a little attracted to a very general proposition that the owner of copyright in a trade mark who agrees to another person registering the trade mark in a particular jurisdiction is taken to have given the necessary authorisation to the registrant of that mark to enable it to use the mark in that jurisdiction, unless there is an explicit reservation to the contrary.’

His Honour also indicated that delay and acquiescence by Crocodile International would have been taken into consideration had copyright been found to subsist in the Crocodile Logo. Sections 73 to 75 of the Trade Marks Act 2002 (NZ) provides for declarations of invalidity on the application of a person aggrieved, and Dr Tan and Crocodile International could have applied at any time from 2002 onwards to have Registration No. 70068 invalidated on the basis of copyright infringement.

Intention to Use?

Turning to the second central issue of Lacoste’s intention to use the Crocodile Logo, Lacoste argued that, while it had not used the Crocodile Logo in the exact form depicted in the Application, Justice Collins’ decision in respect of Registration No. 70068 should apply, as Lacoste had used and intended to continue to use, the Crocodile Logo in the context of the definition of use in section 7 of the Act.

Justice Clifford agreed with Justice Collins’ decision and overturned the Assistant Commissioner’s finding that Lacoste did not intend to use the Crocodile Logo as a trade mark. His Honour found that in light of Lacoste’s substantial evidence of use, and the evidence that it intended to continue to develop different ways in which to use the Crocodile as device and word trade marks in the future, to hold that it had no intention to use a trade mark ‘made up of these two very things would, in my view, place an onus on proving intention that has been rejected by the courts.’

Bad Faith?

Justice Clifford confirmed the Assistant Commissioner’s finding that Lacoste’s Application was not made in bad faith, regardless of it being filed in the context of a pending revocation proceeding for Registration No. 70068.

His Honour held Lacoste had been legitimately assigned Registration No. 70068 in 2003, and at the time of filing, it was and continues to be the registered owner of numerous New Zealand trade marks featuring Crocodile logos and the CROCODILE word marks. His Honour was not prepared to infer bad faith in light of the fact that Lacoste had applied to register a mark that it already owned, comprising the two main features of the other trade marks that it also already owned.

Ownership?

Justice Clifford confirmed that Crocodile International had not established that Lacoste was not the owner of the trade mark, and went so far as to state that, in light of his findings regarding copyright, delay and acquiescence, there could be little argument that Lacoste was the owner of the Crocodile Logo in New Zealand.

The Final Death Roll?

Eyes on both sides of the Tasman are now awaiting the outcome of the appeal of Justice Collins’ decision in February 2016 by Crocodile International in relation to the revocation application for Lacoste’s Registration No. 70068.

However, with three separate decisions in four years by three different judges of the High Court of New Zealand on various points of trade mark, copyright and designs law, it is difficult to see how Crocodile International will be able to outplay René Lacoste’s tenacious Crocodile.