Lascoste loses a crocodile in New Zealand
revocation action- removal backdated 17
years - no discretion available
RELATED INDUSTRIES
Fashion, Architecture and Design
4 MAY, 2017
By Nick Holmes
RELATED SERVICES
The Supreme Court of New Zealand has held that there is no discretion to retain
a trade mark registration in the face of a successful revocation "non-use" action,
in Crocodile International Pte Ltd v Lacoste [2017] NZSC 14. The Court also
deemed the trade mark registration in this case to be revoked from 12
December 1999 – over 17 years before the decision issued!
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Background
Crocodile International Pte Ltd (Crocodile International) is a Singapore
Company, whose predecessors or related entities have used various crocodile
logos in relation to clothing in Asia, since 1947. In 1961 a related party
(Crocodile Garments) registered the Crocodile Logo shown below in New Zealand
for clothing, under Registration No. 70068.
Trade mark registration 70068 (Crocodile Logo)
Lacoste is a well known clothing manufacturer that also sells a range of clothing
under a crocodile logo, which had been sold in New Zealand since 1983.
In 2003 Lacoste and Crocodile Garments entered a settlement agreement to
resolve global issues relating to intellectual property and which assigned rights
to the Crocodile Logo from Crocodile Garments to Lacoste, effective June 2004.
Why were the parties in the Supreme Court?
In 2008 Crocodile International sought revocation of Lacoste's Crocodile logo on
the basis that Lacoste had not used the logo - including during the period 12
December 1996-12 December 1999, a time period when Crocodile Garments was
actually the owner of the registration.
Lacoste accepted that it had never used the Crocodile Logo in that specific form,
but maintained that it had used similar crocodile trade marks that had the same
distinctive character as the Crocodile Logo, including the logo shown below:
(Lacoste Logo)
The proceeding is the latest in a number between Crocodile International and
Lacoste in New Zealand, as the parties have wrestled over ownership of
crocodile images in relation to clothing.
In the first instance, in a hearing before the Trade Mark Registry the Assistant
Commissioner found in favour of Crocodile International, rejecting Lacoste's
argument that the "central message" of the Crocodile Logo and the Lacoste Logo
were the same and finding that consumers would perceive differences between
the marks as sufficiently striking and memorable to alter the distinctive
character of the trade mark.
However that decision was overturned by Collins J. upon appeal in a decision
upheld by the New Zealand Court of Appeal, on the basis that the Lacoste Logo
and others were sufficiently close to the Crocodile Logo for that registration to be
maintained. The case was then further appealed to New Zealand's highest court,
the Supreme Court of New Zealand.
How similar must a trade mark be, to constitute use of the
registered mark?
A critical issue in the case was whether the Lacoste Logo was sufficiently close to
the Crocodile Logo to constitute use of that logo, notwithstanding that the former
does not include the stylised word "CROCODILE".
The Supreme Court rejected the concept of focussing upon a "central idea and
message" (as has been previously applied by the High Court and Court of
Appeal), preferring the Assistant Commissioner's approach of a "global
appreciation" of the trade mark. It held that the Lacoste Logo omitted one of two
essential elements of the Crocodile Logo – namely the stylised word
"CROCODILE".
The Court distinguished the case from the Australian High Court decision in E&J
Gallo Winery v. Lion Nathan Australia Pty Ltd [2010] HCA 15, which had held that
the addition of the image of a foot to the trade mark BAREFOOT did not change
the identity of the BAREFOOT trade mark, as the products would still be
identified by the term BAREFOOT. The Supreme Court noted that in the
Australian case the word mark as registered remained as a core element, and
that
If the company had trademarked a particular image of a foot and
used a quite different image of a foot on their products, the result
would in our view have been different.
In contrast, the Supreme Court concluded the missing word element was
essential, and that use of the Lacoste Logo did not constitute use of the
Crocodile Logo:
In our view, the distinctive character of [the Crocodile Logo] has
two essential visual elements: the stylised word and the crocodile
device. The fact that one of the essential visual elements is
missing….would in itself likely mean that the use of the Lacoste
trade marks is in a form differing in elements which mean that the
distinctive character of [the Crocodile Logo] is altered. When the
significant differences in the depiction of the crocodile are added,
this conclusion is, in our view, inescapable.
Is there a difference between removing elements from a
registered mark rather than adding elements to that mark,
when assessing whether the mark has been "used"?
The Supreme Court held that the distinctive character of a registered mark is
more likely to be retained if elements are added to it, rather than if elements are
removed – "with each additional embellishment the totality of the trade mark
having a distinctive character is still present, whereas, if elements are removed,
the distinctive character in that totality may be more easily eroded".
Reputation matters, when assessing whether a mark has
been used
The Supreme Court also found that reputation plays a significant part in any
assessment of distinctive character, to conclude "that a strong reputation in a
trade mark may mean that greater changes can be made before distinctive
character is lost than would be the case for a less established brand".
This is a departure from existing New Zealand trade mark law. Whilst it may
create some legal uncertainty, it does perhaps better reflect the practicalities of
the modern marketplace and how consumers actually perceive trade marks
within the marketplace.
New Zealand Assistant Commissioners may know best, in
trade mark cases
Glazenbrook J. recognized the Assistant Commissioner's expertise in trade mark
matters, and acknowledge that
given the wide range of trade mark decisions that Commissioners
are called upon to make, they may be expected to have a broader
and more nuanced appreciation of the trade marks register than
judges … This may mean that, where an appeal raises this type of
issue, the Appellate Court should hesitate to depart from the
Commissioner's qualitative assessment
Is there any discretion to retain a trade mark registration, if
a non-use action has been established?
The Supreme Court went on to consider whether it had any discretion to retain
registration of the Crocodile Logo, in view of Lacoste's use of other Crocodile
trade marks in New Zealand. The notion of discretion was considered equivocal
in New Zealand, notwithstanding that a decision of the High Court had held that
there was indeed such discretion by virtue of the word "may" (rather than
"must") in the relevant section of the Trade marks Act 2002 (Cure Kids v National
SIDS Council of Australia Ltd).1
The Supreme Court held that there was no discretion in New Zealand to retain a
trade mark registration if the elements of a non-use action had otherwise been
satisfied. This finding is consistent with UK Law (from which the New Zealand Act
is derived), and provides greater certainty in relation to the application
interpretation of non-use actions in New Zealand.
The situation is different in Australia, as the equivalent Australian legislation
expressly provides for such a discretion, in certain circumstances. This has led to
some uncertainty in Australian non-use cases in which the Trade Mark Registrar's
discretion has often been applied to retain a trade mark registration, even if a
non-use case has been established.
Lacoste loses its crocodile – 17 years before the judgment!
The Supreme Court held in favour of Crocodile International and deemed
registration of the Crocodile Logo to be revoked from 12 December 1999 – over
17 years before the decision issued and when Crocodile Garments was recorded
as the owner of the Crocodile Logo.
Take home points for Trade Mark Owners
Owners of New Zealand trade mark registrations should ensure that their
registered marks have been used in New Zealand within three years of their
registration date or risk losing the registrations if challenged, as there is no
discretion once the non-use has been made out. The case also demonstrates the
extent to which a New Zealand trade mark registration can be removed
retrospectively - sometimes years before a revocation action has even been
lodged (as in this case), if appropriate circumstances exist to warrant
retrospective removal of the registration.
End notes
1. [2014] NZHC 3366
Filed Under: IP ARTICLE IP ARTICLES CASE STUDIES TRADE MARKS