IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
CIV-2014-485-9300
[2015] NZHC 2432
UNDER
the Trade Marks Act 2002
IN THE MATTER
of Trade Mark Application No 837027 in
Class 25
IN THE MATTER
of an appeal from the decision of the
Assistant Commissioner of Trade Marks
dated 23 June 2014
BETWEEN
CROCODILE INTERNATIONAL PTE
LTD
Appellant
AND
LACOSTE
Respondent
CIV-2014-485-9302
UNDER
the Trade Marks Act 2002
IN THE MATTER
of an appeal from the decision of the
Commissioner of Trade Marks dated 27
June 2014
IN THE MATTER
of New Zealand Trade Mark No 837027
BETWEEN
LACOSTE
Appellant
AND
CROCODILE INTERNATIONAL PTE
LTD
Respondent
Hearing:
18 February 2015
Counsel:
G J Miles QC, A M Wallis and T A Huthwaite for
Appellant/Respondent
G Arthur for Respondent/Appellant
Judgment:
6 October 2015
CROCODILE INTERNATIONAL PTE LTD v LACOSTE [2015] NZHC 2432 [6 October 2015]
JUDGMENT OF CLIFFORD J
TABLE OF CONTENTS
Introduction ............................................................................................................. [1]
Background ............................................................................................................ [12]
The challenged decision – an overview ............................................................... [39]
The Appeal – an overview .................................................................................... [42]
Lacoste ................................................................................................................ [42]
Crocodile International ...................................................................................... [44]
Central issues ..................................................................................................... [46]
Copyright, registered designs and trade marks – a brief overview .................. [52]
Copyright ............................................................................................................ [52]
Registered designs .............................................................................................. [57]
Registered trade marks ....................................................................................... [62]
Issue one: Does copyright in the Crocodile Logo exist in New Zealand –
was the Crocodile Logo when made capable of registration as a design? ....... [69]
The Assistant Commissioner’s decision ............................................................ [69]
Appeal ................................................................................................................. [77]
Crocodile International ....................................................................................... [77]
Lacoste ................................................................................................................ [80]
Analysis ............................................................................................................... [82]
Result: Issue one ................................................................................................ [99]
Issue two: If copyright did exist, would use by Lacoste of the Crocodile
Logo in New Zealand infringe Dr Tan’s copyright? ........................................ [100]
The Assistant Commissioner’s decision .......................................................... [100]
Originality ......................................................................................................... [102]
Use contrary to law as infringement ............................................................... [112]
Analysis ............................................................................................................. [116]
Result: Issue two .............................................................................................. [124]
Issue three: Use and intention to use ................................................................. [125]
The Assistant Commissioner’s decision .......................................................... [125]
Appeal ............................................................................................................... [129]
Lacoste .............................................................................................................. [129]
Crocodile International ..................................................................................... [131]
Analysis ............................................................................................................. [132]
Issues four and five: ownership and bad faith.................................................. [141]
Result ................................................................................................................... [146]
Costs ..................................................................................................................... [147]
Introduction
[1]
These proceedings are the continuation of a long-running dispute relating to
the ownership and use of two, similar, trade marks:
(a)
(the Lacoste Logo); and
(b)
(the Crocodile Logo).
[2]
Lacoste, a French corporation, owns and trades under the Lacoste Logo, the
word mark CROCODILE and related marks in New Zealand and many parts of the
world. Lacoste first registered the Lacoste Logo as a trade mark in New Zealand in
August 1969 (NZ No. 91098).
[3]
Crocodile International PTE Limited, a Singapore company (Crocodile
International), owns and trades under the Crocodile Logo, and related marks in
Singapore and elsewhere in Asia.
Crocodile International does not trade in
New Zealand.
[4]
Crocodile Garments Ltd, a Hong Kong company whose links with Crocodile
International are explained below (Crocodile Garments), registered the Crocodile
Logo as a trade mark in New Zealand in December 1961 (NZ No. 70068).
[5]
In June 2004 Lacoste became the registered owner in New Zealand of that
trade mark by assignment from Crocodile Garments.
[6]
In June 2008 Crocodile International filed an application under s 66 of the
Trade Marks Act 2002 for the revocation of that trade mark because of non-use by
Lacoste.
The
Assistant
Commissioner
granted
that
application
on
19 February 2014.1
Lacoste successfully appealed that decision to this Court.2
Crocodile International is currently appealing that decision to the Court of Appeal.
[7]
On 10 February 2011 – pending the hearing of Crocodile International’s
revocation application – Lacoste applied to register the Crocodile Logo (a trade mark
identical to registration NZ No. 70068) in class 25 for articles of clothing. That
application, NZ No. 837027, was opposed by Crocodile International. In a decision
given on 23 June 2014 the Assistant Commissioner upheld Crocodile International’s
opposition on the ground that Lacoste had not used, and had no intention to use, the
Crocodile Logo in New Zealand.3
[8]
Lacoste now appeals that decision (the Challenged Decision).
[9]
At the same time, both Lacoste and Crocodile International appeal and
cross-appeal against other findings the Assistant Commissioner made in the
Challenged Decision.
[10]
The factual context of this dispute has already been recorded in judgments of
the New Zealand courts in some detail. As Simon France J observed in 2011:4
[4]
There is a long history to the dispute. Crocodile International is a
significant clothing manufacturer in Asia. Its business was established in the
1940s and the evidence I saw leaves little doubt it has significant market
awareness in Asia. Crocodile International owns and uses a large number of
marks, but a common feature is that they almost all contain a reference in
some way to a crocodile. Crocodile International holds registrations for this
CARTELO mark in other countries.
[5]
The crocodile is also a key component of Lacoste’s large
international business. Its products are prominently marketed by reference
to the crocodile and evidence shows it is known by many as “the Crocodile”
brand.
[6]
And so the companies have fought registration battles on a
worldwide stage. In Asia, where Crocodile International had established a
significant presence, there have been agreements reached and the companies’
marks co-exist. Elsewhere, registrations are disputed.
1
2
3
4
Lacoste v Crocodile International Pte Ltd [2014] NZIPOTM 11.
Lacoste v Crocodile International Pte Ltd [2014] NZHC 2349 [Collins J decision].
Lacoste v Crocodile International Pte Ltd [2014] NZIPOTM 26.
Crocodile International Pte Ltd v Lacoste HC Wellington CIV-2009-485-2534, 1 March 2011
[Simon France J decision 1].
[11]
These appeals and cross-appeals, however, raise particular issues, including
the relationship between copyright and trade mark law, that have not previously been
considered by a New Zealand court in cases involving Lacoste and Crocodile
International. In that context, there are aspects of the history of long dispute which
need to be recorded again in this judgment. It is to those matters that I turn first.
Background
[12]
Lacoste has its origins with the French tennis player, René Lacoste, who
achieved top rankings in world tennis during the mid-1920s. He was nicknamed
“the Crocodile”. A crocodile was embroidered on the blazer he wore on the tennis
court.
In 1933 he established La Chemise Lacoste to distribute polo shirts
embroidered with the Lacoste Logo. That same year La Chemise Lacoste registered
the Lacoste Logo, and the word “Crocodile”, as trade marks in France. La Chemise
Lacoste was subsequently incorporated, and later became known as Lacoste in 2005.
[13]
Crocodile International and Crocodile Garments both have their origins in the
trading activities in Asia of six brothers of the Tan family. That family, comprising
seven sons and a daughter,5 moved with their parents6 from China to Vietnam in
1938. Their father started a garment business. The Second World War brought that
business to an end. During and after the War, two brothers established businesses in
Singapore (Tan Siew Huy – Li Sing Min Company) and in Hong Kong (Chan Shun –
Li Wah Mun Firm).
[14]
Another brother, Tan Hian Tsin (Dr Tan), has deposed in these proceedings
that in 1947, whilst in Singapore, he designed the following two trade marks for Li
Sing Min Company to use on garments manufactured for it in Hong Kong by Chan
Shun and Li Wah Mun Firm:
(a)
5
6
Tan Siew Huy, Chan Shun, Tran Phong, Chensy Kiat Phong/Visid Toktangvanich/Chen Kefen,
Tan Hian Tsin, Tan Hian Kwang, Dr John Chan Yin Sing/Chen Yin Shing, Chen Sinn Ai.
Tang Keng Huy (father) and Ong Boi Huy (mother).
(the Li Sing Min Crocodile); and
(b)
[15]
the Crocodile Logo.
Tan Siew Huy and another, trading as Li Sing Min Company, registered the
Li Sing Min Crocodile as a trade mark in Singapore as from 13 January 1947
(S No. 10840). Tan Siew Huy and Dr Tan, trading as U Sing Factory, registered the
Crocodile Logo as a trade mark in Singapore as from 13 December 1951
(S No. 14669). The Crocodile Logo was first published in Singapore in July 1949,
by being printed on the neck labels of shirts and released through the sale of
merchandise by Li Sing Min Company.
[16]
Li Sing Min Limited was incorporated in Singapore in 1952 to take over the
business of Li Sing Min Company, including (I infer) the Singapore trade marks
S No. 10840 and S No. 14669. Tan Siew Huy and Dr Tan were its directors and
shareholders. Li Sing Min Limited changed its name to Crocodile International PTE
Limited in 1983.
[17]
Chan Shun, on behalf of Li Wah Mun Firm, registered the Crocodile Logo as
a trade mark in Hong Kong as from 26 October 1951 (HK No. 19520299). Dr Tan
has deposed in these proceedings that registration was at his request. Li Wah Mun
Company Limited was incorporated in Hong Kong in December 1953 to take over
the business of Li Wah Mun Firm. The Crocodile Logo HK No. 19520299 was
assigned by Li Wah Mun Firm to Li Wah Mun Company Limited in 1954.
[18]
Following the death in 1954 of their father, Tang Keng Huy, the five trading
brothers agreed to divide the family businesses in the following way:
(a)
Singapore, Malaya, Saba Saraba, India,
Pakistan, Indonesia and Brunei
Tan Siew Huy and
Dr Tan
(b)
Hong Kong and Macau
Chan Shun
(c)
Vietnam
Tran Phong
(d)
Thailand
Chensy Kiat Phong
[19]
The eighth brother, Chen Yin Shing, and the sister, Chen Sinn Ai, were in
school and did not take part in the businesses, although they were supported by their
brothers. I infer that the fifth brother, Tan Hian Kwang, had by this time died.
[20]
Later in 1954 Li Wah Mun Company Limited assigned HK No. 19520299 to
Tan Siew Huy, Chan Shun and Dr Tan trading as United Shirts Factory. That mark
was assigned to Tan Siew Huy, Chan Shun and Dr Tan in their personal capacities in
1956.
[21]
Crocodile Garments was incorporated in Hong Kong in 1961. Dr Tan has
deposed in these proceedings that:
(a)
he and his brothers were the promoters, shareholders and directors of
Crocodile Garments; and
(b)
the intention of incorporating Crocodile Garments was to take that
company public.
[22]
It was shortly after its incorporation that Crocodile Garments applied for and
obtained registration of the Crocodile Logo as a trade mark in New Zealand.7
[23]
The Hong Kong trade mark registration of the Crocodile Logo
(HK No. 19520299) was assigned by Tan Siew Huy, Chan Shun and Dr Tan to
Crocodile Garments in June 1971. Crocodile Garments was listed on the Public
Stock Exchange in Hong Kong in 1972. At that time its directors included Dr Tan
and his brothers Tan Siew Huy and Chan Shun. Various members of the Tan family,
including Dr Tan, were significant shareholders. Dr Tan resigned as a director of
Crocodile Garments in 1975. He and three brothers sold their shares in Crocodile
Garments in 1977-78.
Lai Sun Group.
7
Noted at [4] above.
Crocodile Garments was subsequently managed by the
[24]
In the late-1970s Lacoste started selling its products in Asia. Disputes arose
between Lacoste, Crocodile International and Crocodile Garments based on the
similarities between the Lacoste and Crocodile Logos, and related trade marks.
[25]
Lacoste and Crocodile Garments entered into a settlement of their dispute in
May 1980. As part of that agreement, Crocodile garments undertook not to register
any trade mark confusingly similar with the Lacoste Logo outside of Hong Kong,
such prohibition to apply to all classes of products.
[26]
Lacoste and Crocodile International entered into a settlement of their dispute
as regards Taiwan, Singapore, Indonesia, Malaysia and Brunei (the territory) in June
1983.
It was agreed that the two logos could co-exist in the market without
confusion, and that the companies would co-operate with each other to protect their
own marks in the territory.
[27]
Those agreements, and the ongoing relationship they established between
Lacoste, Crocodile International and Crocodile Garments, did not prevent further
disputes arising. These relate (amongst other things) to:
(a)
As between Lacoste and Crocodile Garments, Crocodile Garments’
use of the Crocodile Logo in China and, more relevant here, to the
previously undisclosed fact of the registrations by Crocodile
Garments of the Crocodile Logo as a trade mark in New Zealand.
(b)
As between Lacoste and Crocodile International, disputed registration
applications by each of them for the Crocodile Logo. In this appeal
Crocodile International made specific reference to one such dispute in
China. There, Crocodile International opposed Lacoste’s application
to register the Crocodile Logo as a trade mark. Its opposition based
on trade mark rights was not successful. Crocodile International also
opposed on the basis of copyright protection, by reference to a
February 2000 application by Dr Tan for copyright in China in the
Crocodile Logo. That ground of opposition succeeded in 2005.8
[28]
In 1999 Lacoste applied to have the Crocodile Logo New Zealand trade mark
(No. 70068) revoked for non-use by Crocodile Garments.
[29]
In October 2003, and before that application for revocation had been
finalised, Lacoste and Crocodile Garments entered into a further settlement
agreement. In that agreement, Crocodile Garments agreed and accepted that the
Crocodile Logo:
… and any or all other representations of a crocodile device, whether alone
or in combination with the word “crocodile”, or with any transliteration in
Chinese characters of the word “crocodile” or with any other word, are
worldwide confusingly similar with the [Lacoste Logo] and agrees to never
claim otherwise…
[30]
Arrangements were also made for Crocodile Garments to continue trading,
using the Crocodile Logo and a range of related marks, in China and Macau.
Crocodile Garments surrendered to Lacoste its ownership of the Lacoste Logo in
Hong Kong.
As for the New Zealand Crocodile Logo registration, Crocodile
Garments agreed to assign to Lacoste:
… any trade mark registration, application, copyright or other intellectual
property right (including, but not limited to registration no. 70068 in New
Zealand and registration no. 92/80 in Saudi Arabia) it may own directly or
indirectly in the [Crocodile Logo] and any and all other representations of a
crocodile device (other than the Croco Marks), whether alone or in
combination with the word “crocodile”, or with any transliteration in
Chinese characters of the word “crocodile” or with any other word outside of
the Territory9 and Hong Kong.
[31]
Crocodile Garments’ assignment of the New Zealand registration of the
Crocodile Logo mark (NZ No. 70068) to Lacoste was registered on 29 June 2004.
[32]
More recently hostilities broke out in New Zealand between Crocodile
International and Lacoste.
8
9
State Administration for Industry Commerce Trademark Bureau, Opposition No 00352 Award in
Respect of Grounds of Opposition concerning the Trademark “Crocodile and Device”, 23 March
2005 (Case on Appeal 4859).
China and Macau.
[33]
In March 2011 Simon France J in this Court:
(a)
Dismissed an appeal by Crocodile International against a decision of
the Assistant Commissioner refusing, based on Lacoste’s opposition,
to register in Crocodile International’s name the trade marks:
(b)
Allowed an appeal by Lacoste against a decision of the Assistant
Commissioner refusing to register in Lacoste’s name the word trade
mark CROCODILE.10
[34]
Simon France J dismissed Crocodile International’s appeal because he agreed
with the Assistant Commissioner that:
(a)
Lacoste had discharged its onus as opponent to show there was a
sufficient awareness in New Zealand of the Lacoste Logo; and
(b)
the Cartelo marks shared compelling similarities with the Lacoste
Logo, so that registration and use of the Cartelo marks in
New Zealand would be likely to cause confusion.
[35]
Simon France J allowed Lacoste’s appeal because, contrary to the Assistant
Commissioner’s findings, he concluded that Crocodile International did not have
sufficient reputation in New Zealand in its marks to allow it to object to the Lacoste
application and that, at the time it applied, Lacoste did have an intention to use the
trade mark CROCODILE. That second finding was based on the use of the trade
10
Simon France J decision 1, above n 4, and Lacoste v Crocodile International PTE Ltd HC
Wellington CIV-2009-485-2536, 1 March 2011 [Simon France J decision 2] respectively.
mark CROCODILE on “swing tags” attached to “the L1212 white polo Lacoste
Crocodile shirts”.11
[36]
Most recently, again in this Court, Collins J allowed Lacoste’s appeal from a
decision of the Assistant Commissioner in which she revoked Lacoste’s registration
NZ No. 70068 of the Crocodile Logo trade mark for non-use at Crocodile
International’s application.12 In doing so, the Judge found, by reference to Lacoste’s
use of the Lacoste Logo and other related marks, that Lacoste had used the Crocodile
Logo during the relevant period. In reaching that decision, Collins J also relied on
the distinctive similarities between the Crocodile Logo and the Lacoste Logo, and
other trade marks actually used by Lacoste during the relevant period.13
[37]
Lacoste’s 2011 application to register the Crocodile Logo challenged in these
proceedings (NZ No. 837027) therefore appears to be a response to Crocodile
International’s revocation application.
That that is the case is supported by a
consideration of the decision of the Privy Council in Cussons (New Zealand) Pty Ltd
v Unilever PLC and Unilever New Zealand Limited.14 There, faced with a possible
non-use revocation application, Unilever re-registered (as it were) the at-risk mark.
It did so to obtain the protection implicit in s 35(1) of the Trade Marks Act 1953 (as
amended in 1994), which provided:
11
12
13
14
35
Removal from register and imposition of limitations on ground
of non-use
(1)
Subject to the provisions of section 36 of this Act, a registered trade
mark may be taken off the register in respect of any of the goods or
services in respect of which it is registered on application by any
person aggrieved to the Court or, at the option of the applicant and
subject to the provisions of section 67 of this Act, to the
Commissioner, on the ground that up to the date one month before
the date of the application a continuous period of 5 years or longer
elapsed during which the trade mark was a registered trade mark and
during which there was no bona fide use thereof in relation to those
goods or services by any proprietor thereof for the time being.
Simon France J decision 2, above n 10, at [53].
Above n 1.
Collins J decision, above n 2.
Cussons (New Zealand) Pty Ltd v Unilever PLC and Unilever New Zealand Limited [1998]
1 NZLR 396, [1998] AC 328, [1998] 2 WLR 95, [1998] RPC 369, [1997] UKPC 56.
[38]
That is, any non-use revocation application depends upon there having been
non-use for a continuous period of five years or longer. If a mark has been freshly
“re-registered”, the Privy Council held that precondition for a successful revocation
application could not be met.
The challenged decision – an overview
[39]
Crocodile International opposed Lacoste’s 2011 application on four grounds:
(a)
That Dr Tan owned the copyright in the Crocodile Logo. Therefore,
any use by Lacoste of the Crocodile Logo as a trade mark in
New Zealand would infringe that copyright and hence registration of
the Crocodile Logo as a trade mark would be contrary to New
Zealand law (Trade Marks Act, s 17(1)(b)).
(b)
Lacoste’s application was made in bad faith (s 17(2)).
(c)
That Lacoste did not own the Crocodile Logo trade mark (s 32(1)).
(d)
That Lacoste did not use or intend to use the Crocodile Logo trade
mark (s32(1)).
[40]
The Assistant Commissioner found:
(a)
That although the Crocodile Logo was an original work by Dr Tan in
which copyright in New Zealand could subsist, no copyright did
subsist as the work was a design capable of registration under the
Patents, Designs, and Trade Marks Act 1921-22 (the PDTMA 1922).
(b)
That Lacoste’s application was not made in bad faith.
(c)
That Crocodile International had not established that Lacoste did not
own the mark.
(d)
That Crocodile International had established that Lacoste did not
intend to use the mark, hence Lacoste’s application was declined.
[41]
The Assistant Commissioner further found that, if she was wrong and
copyright in the work that constituted the Crocodile Logo did subsist:
(a)
That Dr Tan would have been the owner of that copyright.15
(b)
That use of the Crocodile Logo would have constituted copyright
infringement, and would have been contrary to New Zealand law.
(c)
That Lacoste had not established (as it alleged in response to
Crocodile International’s opposition) that Crocodile International was
estopped from alleging copyright infringement, and nor had it
established similar arguments in acquiescence or laches, or
non-derogation of grant.
The Appeal – an overview
Lacoste
[42]
Lacoste says the Assistant Commissioner was:
(a)
right to come to the conclusions that copyright did not subsist in the
Crocodile Logo, that Lacoste did not apply in bad faith and that
Lacoste had prior assertion to ownership; but
(b)
wrong to conclude that there was insufficient evidence of Lacoste’s
intention to use the Crocodile Logo and that this Court should
therefore, on appeal, allow its registration application.
15
Lacoste did not question Crocodile International’s entitlement to oppose its registration of the
Crocodile Logo as a trade mark in New Zealand based on copyright owned, not by it, but by
Dr Tan. I therefore proceed on the basis that, although Crocodile International does not own the
copyright it claims would be infringed by any use by Lacoste of the Crocodile Logo as a trade
mark in New Zealand, and although Dr Tan is not a party to these proceedings, Crocodile
International nevertheless may so assert. I note that Crocodile International states Dr Tan
assigned it the relevant copyright in 2012, but acknowledges that this is after the relevant date of
application for this case.
[43]
Lacoste also says the Assistant Commissioner was wrong to find the
Crocodile Logo was an original artistic work, and wrong in the conclusions she said
she would have reached if copyright did subsist in that work.
Crocodile International
[44]
Crocodile International says that the Assistant Commissioner was:
(a)
right to come to the conclusion that Lacoste did not intend to use the
Crocodile Logo as a trade mark; but
(b)
wrong to conclude that copyright in the Crocodile Logo did not
subsist in New Zealand, that Lacoste did not make its application in
bad faith, and that it had not established that Lacoste did not own the
New Zealand Crocodile Logo trade mark.
[45]
At the same time Crocodile International
supports the Assistant
Commissioner’s conclusions that: if copyright did subsist, Dr Tan would be the
owner, that use of the Crocodile Logo as a trade mark by Lacoste in New Zealand
would constitute copyright infringement and therefore would be contrary to
New Zealand law, and that Crocodile International was not estopped from alleging
copyright infringement.
Central issues
[46]
Given the number of overlapping appeals and cross-appeals that are raised in
these proceedings, it is easy to lose sight of the central issues of the dispute. I also
note something of a tension within Crocodile International’s grounds of opposition.
On the one hand, it says that Lacoste has no intention to use the Crocodile Logo, and
opposes registration on that ground. On the other hand, it says that use by Lacoste of
the Crocodile Logo would infringe its copyright. The two points can, however, be
argued in the alternative. Of more interest, perhaps, is a tension in the position taken
by Lacoste. On the one hand, it argues that the Crocodile Logo is a copy of the
Lacoste Logo. On the other hand, it argues that copyright cannot subsist in the
Crocodile Logo because it was registrable under the PDTMA 1922. But to be
registrable under that Act, a design must be “new or original” (see s 52(1)). Those
tensions can be seen in part as reflecting the overlap that exists between the legal
concepts of copyright, registered designs and trade marks.
That overlap is
particularly noticeable in this area of “emblems” or “logos” applied to clothes to
indicate not only (for informational purposes) the origin of the product, but also to
give that product broader brand values of exclusivity and fashionability. The use in
the early 1930s of the Lacoste Logo on polo shirts produced and sold by La Chemise
Lacoste would appear to be a very early example of what has become a widespread
practice in the clothing and other fashion industries.
[47]
Standing back, I consider that there are two central issues in this dispute.
First, there is Crocodile International’s assertion, on the basis of copyright it says
Dr Tan owns, that use by Lacoste of the Crocodile Logo trade mark in New Zealand
would be unlawful.
Secondly, there is Lacoste’s challenge to the Assistant
Commissioner’s finding that Lacoste had not established it intended to use that mark
in New Zealand.
[48]
I deal first with the issues raised by Crocodile International’s claim to
copyright in the Crocodile Logo. I find that copyright in the Crocodile Logo does
not exist in New Zealand. I agree with the Assistant Commissioner that, in terms of
sub-cl (1) of cl 28 of sch 1 of the Copyright Act 1994, the Crocodile Logo was, when
created, a design capable of registration under the PDTMA 1922. I consider that
question, as did the parties in their submissions, without reference to the question of
originality referred to at [46] above. I go on to conclude that, even if copyright in
the Crocodile Logo does exist in New Zealand, and that copyright was owned by
Dr Tan and has now been assigned to Crocodile International, Crocodile
International cannot maintain a claim that use by Lacoste of the Crocodile Logo as a
trade mark in New Zealand would constitute an unlawful infringement of that
copyright. In reaching that conclusion, I consider the essentially factual dispute
between Lacoste and Crocodile International relating to the creation of the Crocodile
Logo and its subsequent registration as a trade mark, including the issue of
originality.
[49]
I then find, upholding Lacoste’s principal ground of appeal, that the Assistant
Commissioner was wrong to come to the conclusion that Lacoste did not intend to
use the Crocodile Logo as a trade mark.
[50]
Finally, and in line with those conclusions, I agree with the Assistant
Commissioner’s conclusions:
(a)
that Lacoste’s application was not made in bad faith; and
(b)
that Crocodile had not established that Lacoste did not own trade
mark NZ No. 837027.
[51]
Before embarking on that analysis I outline an important aspect of the legal
context of this dispute, namely the nature of and rights attaching to the intellectual
property comprised by copyright, registered designs and registered trade marks.
Copyright, registered designs and trade marks – a brief overview
Copyright
[52]
Under the Copyright Act 1994, and its predecessors, copyright exists in an
original literary, dramatic, musical or artistic work,16 as a matter of law and without
the need for registration or any other legal process.17 The terms literary, dramatic,
musical, and artistic work are variously defined in the Copyright Act, including by
reference to other defined terms.
[53]
Copyright gives the author of an original work exclusive right over the
subject matter of the work; or more correctly, the right to prevent others from
exploiting the subject matter.18 The purpose of copyright is to reward and encourage
authors and creators of original work.19
16
17
18
19
Copyright Act 1994, s 14.
Ian Finch (ed) James and Wells on Intellectual Property (2nd ed, Brookers, Wellington, 2012) at
[6.3.3].
Mary Vitoria and others Laddie, Prescott and Vitoria: the Modern Law of Copyright and
Designs (4th ed, LexisNexis, London, 2011) at [1.9].
At [1.9].
[54]
The requirement of originality in a work does not mean that there must be
some artistic merit or novelty.
Originality connotes original, in that a work
originates from its author. 20 The work must not be copied.21 It must have sufficient
time, skill and labour involved in its creation.22
[55]
Copyright gives the author of a work the exclusive right to do, or authorise
others to do, the acts listed in s 16(1) of the Copyright Act, in relation to the work or
subject matter:
[56]
16
Acts restricted by copyright
(1)
The owner of the copyright in a work has the exclusive right to do,
in accordance with sections 30 to 34 of this Act, the following acts
in New Zealand:
(a)
to copy the work:
(b)
to issue copies of the work to the public, whether by sale or
otherwise:
(c)
to perform the work in public:
(d)
to play the work in public:
(e)
to show the work in public:
(f)
to communicate the work to the public:
(g)
to make an adaptation of the work:
(h)
to do any of the acts referred to in any of paragraphs (a) to (f)
in relation to an adaptation of the work:
(i)
to authorise another person to do any of the acts referred to in
any of paragraphs (a) to (h).
Copyright in traditional subject matter generally expires 50 years after the
death of the author.23
20
21
22
23
Finch, above n 17, at 240.
Copyright Act 1994, s 14(2).
University of Waikato v Benchmarking Services Ltd (2004) 8 NZBLC 101,561 (CA), cited in
Finch, above n 17, at 240.
Section 22(1).
Registered designs
[57]
The Designs Act 1953 provides for the registration of certain designs,
commonly referred to as industrial designs.
[58]
Section 2 of the Designs Act defines a design in the following way:
“Design” means features of shape, configuration, pattern, or ornament
applied to an article by any industrial process or means, being features which
in the finished article appeal to and are judged solely by the eye; but does not
include a method or principle of construction or features of shape or
configuration which are dictated solely by the function which the article to
be made in that shape or configuration has to perform.
[59]
In order to be registered, a design must have local New Zealand novelty, in
that it has not been made available to the public in New Zealand before the
application date.24
[60]
Registration of a design gives the registered owner a limited copyright in the
registered design. Section 11 of the Designs Act provides:
Right given by registration
(1)
The registration of a design under this Act shall give to the registered
proprietor the copyright in the design, that is to say, the exclusive
right in New Zealand to make or import for sale or for use for the
purposes of any trade or business, or to sell, hire, or offer for sale or
hire, any article in respect of which the design is registered, being an
article to which the registered design or a design not substantially
different from the registered design has been applied, and to make
anything for enabling any such article to be made as aforesaid,
whether in New Zealand or elsewhere.
…
[61]
Design copyright lasts for an initial period of five years, and may be extended
as of right for two further five year periods.25
Registered trade marks
[62]
The Trade Marks Act 2002 provides for the registration of trade marks. The
Trade Marks Act defines a trade mark in the following way:
24
25
Designs Act 1953, s 5; see Finch, above n 17, at [6.1].
Section 12.
trade mark(a)
means any sign capable of –
(i)
being represented graphically; and
(ii)
distinguishing the goods or services of one person from
those of another;
…
[63]
The registrability of a trade mark depends upon a number of grounds.
Section 17 of the Trade Marks Act provides absolute grounds for declining
registration in the follow terms:
Absolute grounds for not registering trade mark: general
(1)
(2)
The Commissioner must not register as a trade mark or part of a
trade mark any matter—
(a)
the use of which would be likely to deceive or cause
confusion; or
(b)
the use of which is contrary to New Zealand law or would
otherwise be disentitled to protection in any court; or
(c)
the use or registration of which would, in the opinion of the
Commissioner, be likely to offend a significant section of the
community, including Maori.
The Commissioner must not register a trade mark if the application
is made in bad faith.
…
[64]
Under s 32 of the Trade Marks Act, marks must be registered in relation to
particular goods and services. It is possible to apply to register a mark under more
than one class.
[65]
Under s 10(1) of the Trade Marks Act, the owner of a trade mark has
exclusive right to:
10
Rights that attach to registered trade marks
(1)
The owner of a registered trade mark has, in relation to all or any of
the goods or services in respect of which the trade mark is registered,
the rights and remedies provided by this Act and, in particular, has
the exclusive right to—
[66]
(a)
use the registered trade mark; and
(b)
authorise other persons to use the registered trade mark; and
(c)
assign or transmit the registered trade mark (either in
connection with the goodwill of a business or not); and
(d)
give valid receipts for any consideration for any such
assignment or transmission.
Trade mark registrations expire after ten years.26 There does not appear to be
a limit on the number of times a registration can be renewed.
[67]
The basic difference, therefore, between the different types of intellectual
property protection is that copyright is inherent in a qualifying work: it exists
without the requirement of a legal process. Rights of both registered trade marks and
registered designs, on the other hand, come into existence only through a legal
process of application and registration. The different types of rights aim to protect
different aspects of work or property, but they can, and do, co-exist.
[68]
I now consider the issues before me.
Issue one: Does copyright in the Crocodile Logo exist in New Zealand – was the
Crocodile Logo when made capable of registration as a design?
The Assistant Commissioner’s decision
[69]
Section 19 of the Copyright Act 1994 provides that a work qualifies for
copyright in New Zealand if it is first published in New Zealand or in a prescribed
foreign country. Singapore is such a country. Copyright could, therefore, exist in the
Crocodile Logo in New Zealand. Given the date of the Crocodile Logo’s first
publication (July 1949) it is necessary, however, to consider whether the exception
from general copyright protection of certain designs, now found in cl 28 of sch 1 of
the Copyright Act 1994, applies.
[70]
26
Clause 28 provides:
Section 57.
28
Artistic works made before 1 April 1963
(1)
No copyright exists in an artistic work that—
(2)
[71]
(a)
was made before 1 April 1963; and
(b)
at the time when the work was made, constituted a design
capable of registration under the Designs Act 1953 or under
the enactments repealed by that Act; and
(c)
has been used as a model or pattern to be multiplied by an
industrial process or is intended to be so used.
For the purposes of subclause (1)(c), a design shall be deemed to
have been used, or to be intended to be used, as a model or pattern to
be multiplied by any industrial process—
(a)
when the design is copied or is intended to be copied on
more than 50 single objects, unless all the objects in which
the design is copied or intended to be copied together form
only a single set of articles as defined in section 2(1) of the
Designs Act 1953; or
(b)
when the design is applied to, or is intended to be applied
to,—
(i)
printed paper hangings; or
(ii)
carpets, floorcloths, or oilcloths, manufactured or
sold in lengths or pieces; or
(iii)
textile-piece goods, or textile goods manufactured or
sold in lengths or pieces; or
(iv)
lace, not made by hand.
The scheme of the first general copyright law (the Copyright Act 1913)
created the potential for a considerable degree of overlap between general (artistic)
copyright and design copyright. Section 30 of that Act was designed to limit that
overlap. It provided:
30.
(1)
This Act shall not apply to designs capable of being registered
under the Patents, Designs, and Trade-marks Act, 1911, except
designs which, though capable of being so registered, are not
used or intended to be used as models or patterns to be
multiplied by any industrial process.
(2)
Regulations may be made under section one hundred and
twenty-three of the Patents, Designs, and Trade-marks Act,
1911, for determining the conditions under which a design shall
be deemed to be used for such purposes as aforesaid.
[72]
That express exception was not continued in the Copyright Act 1962. A
complex set of statutory provisions now governs the relationship between artistic and
design copyright. But, for works created before that date, the old scheme continues
to apply. Clause 9(1) of the First Schedule to that Act, the precursor of cl 28 of sch 1
of the Copyright Act 1994, provided:
9.
[73]
(1)
Copyright shall not subsist by virtue of this Act in any artistic
work made before the commencement of this Act which, at the
time when the work was made, constituted a design capable of
registration under the Designs Act 1953, or under the
enactments repealed by that Act, and was used, or intended to
be used, as a model or pattern to be multiplied by any industrial
process.
(2)
The provisions set out in clause 3 of the Second Schedule to
this Act (being the relevant provisions of the Designs
Regulations 1954) shall apply for the purposes of subclause (1)
of this clause.
In terms of the reference in cl 28 to “the Designs Act 1953 or under the
enactments repealed by that Act”, the PTDMA 1922 is the relevant Act for
determining whether the Crocodile Logo was a design capable of registration.
[74]
Section 52 of the PTDMA 1922 provided for the registration of “any new or
original design not previously published in New Zealand”. A “design” was then
defined in terms similar, but not identical, to the definition now found in the Designs
Act:
“Design” means only the features of shape, configuration, pattern, or
ornament applied to any article by any industrial process or means, whether
manual, mechanical, or chemical, separate or combined, which in the
finished article appeal to and are judged solely by the eye; but does not
include any mode or principle of construction, or anything which is in
substance a mere mechanical device:
[75]
An article was similarly defined as follows:
“Article” means (as respects designs) any article of manufacture and any
substance, artificial or natural, or partly artificial and partly natural:
[76]
Based on her consideration of Dr Tan’s evidence that he had created the
Crocodile Logo as a trade mark on clothes manufactured in Hong Kong for sale by
Li Sing Min Company, and of the decision of the Privy Council in Interlego AG v
Tyco Industries Inc,27 the Assistant Commissioner reasoned that the Crocodile Logo
was, when created, capable of registration as a design. Hence copyright did not exist
in that work. She concluded:
110.
I consider that the work meets all of the essential characteristics
which would qualify it as a design i.e. the work is a pattern or
ornament, which relies solely on eye appeal, and that is to be applied
by an industrial process (printing on a label, which is sewn to the
neck) of a garment (shirt), which was to be manufactured in a
factory in Hong Kong on instructions issued on behalf of Li Seng
Min Company in Singapore. At the time it was made, it appears that
the clear intention was that the work would be used, and actually
was used, for the purpose of industrial reproduction.
Appeal
Crocodile International
[77]
In challenging that conclusion Crocodile International refers to the historic
hostility of trade mark law to the notion that there was overlap between registered
trade marks and registered designs. Whilst that hostility had eroded over time, it was
contrary to historical principles and inconsistent with the law as it stood in 1947 to
conclude that that which was properly considered a (registered) trade mark also
could be a registrable design, or vice versa. Crocodile International argues that a
registrable design is something applied to an article to enhance the visual
attractiveness of the article and which attracts the eye. By contrast, trade marks
indicate the source of the goods. Crocodile International refers to the following
expression of the economic policies underlying trade mark law:28
… the economic model of trade marks that is used in law is one in which
trade marks lower search costs and foster quality control … it follows that
the protection of genuine, well-established trade marks … from free-riding
competitors is in the public interest and pro-competitive rather than the
reverse…
[78]
There was a clear distinction between logos and devices used as trade marks
and shapes or patterns applied to articles to enhance appearance. The Court must,
therefore, look to the intended use of the device at the time it was created. Dr Tan’s
evidence was that he created the Crocodile Logo for use as a trade mark on the neck
27
28
Interlego AG v Tyco Industries Inc [1988] 3 All ER 949, [1989] AC 217.
Levi Strauss & Co v Kimbyr Investments Ltd (1993) 5 TCLR 307 at 337.
labels of shirts. Even if it were a pattern or ornament, the device also has to appeal
to the eye in order to be registrable as a design. A trade mark on a neck label is
hidden from sight and, therefore, could not perform that function.
[79]
Further, a design is defined as something “applied to an article”. While
Crocodile International accepts that the Crocodile Logo was applied to articles – the
neck labels of singlets and sweatshirts – the issue is whether the original artistic
work (the design simpliciter) was applied to an article. It was not, and would not
therefore have been capable of registration as a design.
Lacoste
[80]
Lacoste argues that, contrary to Crocodile International’s submissions,
intellectual property rights can and do overlap. Device trade marks, in particular, do
not solely serve the function of informing the consumer, but also of enhancing the
visual attractiveness of the object to which they are applied.
[81]
The Crocodile Logo was, Lacoste says, a feature of pattern or ornament
applied to articles (shirts and the like) by an industrial process. Moreover, that logo
had eye appeal. Accordingly, it was a design. The Crocodile Logo had been applied
to an article, having been reproduced upon articles en masse. The deeming provision
found in cl 28(2) is also applicable. Dr Tan’s own evidence showed he had clearly
intended the Crocodile Logo to be applied to clothing. Crocodile International had
ignored evidence of the application of the Crocodile Logo to locations on clothing
other than the neck label, such as the chest or left breast of men’s shirts, swing tags,
packaging and advertising.
The Crocodile Logo was, therefore, “capable of registration” as a design at its
creation. In Interlego, the Privy Council regarded that requirement as being satisfied
where the design, when it was made, possessed the essential characteristics which
would qualify it as a design.
Analysis
[82]
Crocodile International’s challenge to this aspect of the Assistant
Commissioner’s decision is based on what it calls the “traditional hostility” of trade
mark law to dual registration as both a design and a trade mark.
[83]
Given that Crocodile International’s central argument is based on an assertion
that any use by Lacoste of the Crocodile Logo would breach Dr Tan’s copyright, it is
difficult to follow the logic of the proposition that says trade mark law is hostile,
conceptually, to the limited copyright provided by registration as a design. Rather,
the limited copyright provided to registrable designs, along with the exclusion of
artistic copyright in designs capable of registration but not registered, was designed
to delineate copyright boundaries. Clause 28 does not relate to trade marks: it is
concerned with the subsistence of copyright in relation to designs.
[84]
The history of the overlap between artistic copyright and design copyright is
long and complex.29 It is sufficient for the present purposes to note that artistic
copyright and design copyright do overlap.30
[85]
The relationship between artistic copyright and registered trade marks is
similarly not straightforward. Lacoste and Crocodile International assert two quite
different views of that relationship:
(a)
Lacoste:
Normally copyright would be included in an assignment of a trade
mark. Without the right to reproduce (ie copyright) the usefulness of
the trade mark is significantly reduced, in fact virtually to zero.
(b)
Crocodile International:
When purchasing a trade mark there is no assumption that the
purchaser also acquires copyright. The submissions of Lacoste
imply that ownership of registered trade mark necessarily includes
ownership of copyright. There is no basis for that implication.
29
30
For a short history, see Martin Howe (ed) Russell-Clarke and Howe on Designs (8th ed, Sweet
and Maxwell, London, 2010) at [1-012] and following.
Susy Frankel Intellectual Property in New Zealand (2nd ed, LexisNexis, Wellington, 2011) at
468.
Registered trade marks and copyright are separate intellectual
property rights.
[86]
Neither Lacoste nor Crocodile International provides any authority for those
very general propositions.
[87]
The discussion in Shanahan’s Australian Law of Trade Marks and Passing
Off provides a useful summary of the position.31 I do not understand there to be
anything specific to Australian intellectual property law in the propositions asserted.
The learned authors note that there is no reason why a label or device trade mark
should not qualify for copyright protection as an original artistic work. They cite the
following passage from Pincus J in Roland Corp v Lorenzo & Sons:32
The underlying notion appears to be that a piece of intellectual property may
be deprived of protection in one category on the ground that it is more
appropriately dealt with under another … [t]he anomalous and inconvenient
consequences which may ensue from allowing trade marks whose protection
under the Trade Marks Act 1995 has come to an end to be the foundation of
copyright suits are such as to make one suspect that the legislature must be
taken to have intended some implied limitation …
In my view, the problem of the relationship between trade mark and
copyright protection is one of some practical complexity and I prefer to
follow what appears to be the orthodox assumption, that the two may
co-exist …
The authors conclude that different forms of intellectual property rights can
co-exist in the same subject matter, because each form of protection is created
by its own law.
Citing Jacob J in Philips Electronics NV v Remington
Consumer Products, they note that “[u]nless there is a specific provision
preventing rights from co-existing, then they just do”.33
[88]
As regards the complex overlap between trade marks, industrial designs and
artistic copyright, the authors state:34
The copyright protection of certain trade marks that are capable of
registration under the Designs Act 2003 (Cth) and have been “applied
industrially” may be limited by ss 74 to 77A of the Copyright Act 1968
31
32
33
34
Mark Davison and Ian Horak (eds) Shanahan’s Australian Law of Trade Marks and Passing Off
(5th ed, Thomson Reuters, Sydney, 2012) at [10.4005].
Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111.
Philips Electronics NV v Remington Consumer Products (1997) 40 IPR 279 at 299 (Ch D).
At 89 (footnotes omitted).
(Cth). However, two-dimensional trade marks applied as surface designs,
for example, on labels, packaging or signage should retain full copyright
protection.
In any event, registration as a design may exist at the same time as trade
mark registration or be the precursor to trade mark registration. The design
owner may use its rights of exclusive use to use the design as a trade mark
and acquire any necessary distinctiveness through use within the meaning
of s 41.
[89]
I acknowledge the following discussion by Professor Frankel in Intellectual
Property in New Zealand, on which Crocodile International relies:35
8.4.1
Registered trade marks and designs
Registered trade marks include logos and devices that may be loosely
referred to as designs, but that are not usually protected under the Designs
Act 1953 because they fall short of the requirements of the definition of
“design”; that is, they are not “features of shape, configuration, pattern, or
ornament applied to an article”. The law covering design of a product or its
packaging now has an overlap with registered trade mark law. However, for
a long time registered trade mark law was hostile to the notion that it had any
overlap with design law. The refusal to register the shape of the Coca-Cola
bottle is perhaps the most obvious example of this hostility. Lord
Templeman, in his judgment refusing the registration, noted that the shape of
the Coca-Cola bottle had been registered as a design, and that registration
had now expired. He regarded the attempt to register the shape as a trade
mark as “another attempt to expand on the boundaries of intellectual
property and to convert a protective law into a source of monopoly.
[90]
As can be seen, however, the point in Re Coca-Cola36 was not whether a
particular design was capable of registration under the Designs Act: rather, the
question concerned a design that had been so registered, whose registration had
expired and for which registration as a trade mark was then sought. As already
noted, the “capable of registration” exception was intended to delineate the
boundaries between artistic copyright and design copyright. The issues raised where
an expired registered design is sought to be registered as a trade mark are
conceptually different questions.
[91]
The first issue is, therefore, what is meant by a design “capable of
registration” in cl 28(1)(b).
The cases are clear that the words ‘capable of
registration’ do not require the design to actually be capable of registration at the
35
36
Frankel, above n 30 (footnotes omitted).
Re Coca-Cola Co [1986] 2 All ER 274 (HL).
exact time it was made. Rather, it must have all the elements of a design, and could
be, without significant alteration, be registered as a design. 37 In Interlego AG v Tyco
International Inc, the House of Lords stated:38
…the words “constituted a design capable of being registered”…refers to
designs possessing, when they were made, those essential characteristics
which qualify them as designs.
[92]
The test is therefore whether the work in the Crocodile Logo possesses the
essential elements of a design as defined in the PDTMA 1922.
[93]
The parties are agreed that the relevant design feature here would be
ornament. The work is not a feature of shape or pattern or configuration.
As
Crocodile International’s submissions on ornament and eye appeal are similar, I will
deal with both elements together.
[94]
The “eye” in the test of being judged solely by the eye is that of an informed
ordinary customer.39 Crocodile International submits that since the Crocodile Logo
was intended to be applied to neck labels, it cannot be an ornament or have eye
appeal, as it cannot be seen by the consumer when the article is in use. In my
judgment, this is an incorrect application of the concept of eye appeal. The cases
show that there is no requirement that the design be visible at all times. In Ferrero’s
Design Application,40 it was held that a chocolate egg, comprising a layer of dark
chocolate outside a layer of white chocolate, did have eye appeal and, further, there
was no requirement that the article should appeal to the eye at the time of purchase.
In Sutton v Bay Masonry Ltd,41 Williams J rejected the argument that a Z-shaped
fence post had no eye appeal because once the fence was installed, the Z shape was
invisible to the eye. Williams J stated that the case was no more than the reverse of
the Ferrero decision. The conclusion from these cases is that the design need not be
visible at the time of purchase nor beyond purchase, provided that it was visible at
one point and impacted on the purchaser’s decision to buy the goods.42
37
38
39
40
41
42
King Features Syndicate v O & M Kleemen Limited [1941] AC 417 at 430.
Interlego AG, above n 27, at 364.
D A Lewis & CO Ltd v Thorn Bros Ltd (1984) 1 TCLR 236 (HC).
Ferrero’s Design Application [1978] RPC 473.
Sutton v Bay Masonry Ltd HC Tauranga CIV-2003-470-260, 28 May 2004.
Finch, above n 17, at 376.
[95]
In this case, the Crocodile Logo would have been visible to the customer’s
eye at purchase because it was on neck labels. The evidence shows that when the
shirts were advertised, they were folded so that the neck label with the Crocodile
Logo was in a prominent position. It would therefore have the requisite eye appeal.
[96]
For similar reasons, the Crocodile Logo is also a feature of ornament. An
“ornament” is something used to adorn, beautify or embellish. While the neck label
could not be seen when the shirt was being worn, it would have enhanced the visual
attractiveness of the shirt, or embellished it, when the consumer saw it before
purchase. I am satisfied that Dr Tan wanted a device that would be appealing to
customers as well as informative.
[97]
The last issue is application to an article. Crocodile International submits that
the assessment under cl 28 should be made with regard to the “design simpliciter”,
that is, Dr Tan’s design as he drew it. The design would, therefore, fail the test of
being applied to an article.
[98]
I do not accept that submission. The work was clearly applied to an article,
and was intended to be so when Dr Tan created it. The evidence is that the work was
intended to be applied to articles of clothing through an industrial process.
Crocodile International’s submission here contradicts the rest of its submissions on
cl 28, particularly in relation to the design being applied only to neck labels. If it is
the design simpliciter that is to be assessed, that it was (allegedly) only applied to
neck labels is not relevant. What is relevant is that the Crocodile Logo was intended
to be applied to an article through an industrial process. The application to the neck
label is evidence of that intention.
Result: Issue one
[99]
I therefore dismiss Crocodile International’s appeal against the Assistant
Commissioner’s decision that, due to the operation of cl 28 of sch 1 of the Copyright
Act, copyright did not subsist in New Zealand in the Crocodile Logo.
Issue two: If copyright did exist, would use by Lacoste of the Crocodile Logo in
New Zealand infringe Dr Tan’s copyright?
The Assistant Commissioner’s decision
[100] The Assistant Commissioner’s found that, if copyright did exist, use by
Lacoste of the Crocodile Logo would be contrary to law because:
(a)
Dr Tan was the creator of the work;
(b)
use of the Crocodile Logo by Lacoste would infringe that copyright;
and
(c)
Crocodile International was not precluded from asserting Dr Tan’s
ownership of copyright by equitable estoppel, acquiescence, laches or
the principle of non-derogation of grant.
[101] I deal with Lacoste’s challenge to those findings in turn.
Originality
[102] The threshold for originality for copyright purposes is relatively low. The
threshold requirement of an “original” work has been interpreted as not imposing
objective standards of novelty, usefulness, inventiveness, aesthetic merit, quality or
value:43
A work need only be “original” in the limited sense that the author originated
it by his efforts rather than slavishly copying it from the work produced by
the efforts of another person …one has to consider the extent to which the
“copyist” is a mere copyist – merely performing an easy mechanical
function. The more that is so the less is his contribution likely to be taken as
“original”…In the end, the question is one of degree…
43
Sawkins v Hyperion Records Ltd [2005] EWCA Civ 565, [2005] 1 WLR 3281, [2005] RPC 32 at
[31], [83].
[103] Lacoste argues that Dr Tan created the Li Sing Min Crocodile and the
Crocodile Logo by copying the Lacoste Logo. The Crocodile Logo is not, therefore,
an “original” artistic work44 in which copyright can exist.45
[104] Lacoste bases its allegation of copying first on the fact that international
tennis players wore Lacoste shirts at tennis tournaments in Saigon in 1946 and 1951.
This provides an evidential basis for the conclusion Dr Tan had in fact seen and
copied that emblem.
Second, it relies on the objective similarity between the
Lacoste Logo and the Crocodile Logo.
[105] The factual basis for Lacoste’s allegation of copying is found in a statutory
declaration of Frederic Blanc dated 2 May 2012.
Mr Blanc is an in-house
intellectual property manager at Lacoste. Mr Blanc states, without any supporting
documentation, that:
…Lacoste (being a prominent French brand) and in particular its Crocodile
Device trade mark [the Lacoste Logo] were already known in Vietnam at
that time [1947 when Dr Tan says he created the Li Ming Sin Crocodile and
the Crocodile Logo], due, primarily, to the fact that Vietnam was a French
Colony from the mid-1800s until the commencement of World War II.
Mr Blanc also states that the Lacoste Logo had been used and displayed by Lacoste
on articles of clothing relatively extensively (for that era) in Vietnam in the 1940s
and had attracted significant attention in that market.
[106] Those assertions are a little difficult to reconcile with other aspects of
Mr Blanc’s evidence, namely that:
(a)
the Lacoste business closed during the Second World War and only
resumed in France in 1946;
(b)
exporting to neighbouring countries like Italy did not start until 1951
and did not extend to the United States until 1952; and
44
45
Copyright Act 1994, s 14(1).
Lacoste and Crocodile International agree that copyright in a work created in Singapore can
subsist in New Zealand. Section 19(1)(b) of the Copyright Act 1994 states that an artistic work
qualifies for copyright in New Zealand if it was first published in a prescribed foreign country.
Singapore is a prescribed foreign country (cl 7 of sch 1 of the Copyright (Application to Other
Countries) Order 1995.
(c)
distribution and marketing into Southeast Asia did not occur until the
1980s.
[107] Mr Blanc also asserts that members of the French Davis Cup Tennis Team
toured extensively through Asia, including Vietnam, in the 1940s and constantly
wore their Lacoste polo shirts, which were the subject of much admiration by the
locals. In making that assertion, Mr Blanc refers to a statutory declaration from
Monsieur Robert Abdesselam, a French tennis player in the 1940s who became
Lacoste’s company lawyer in 1949. Monsieur Abdesselam’s evidence does not go as
far as Mr Blanc’s categorisation of it. Monsieur Abdesselam’s evidence was that he
recalled participating at a tournament in French Indochina, and played in Saigon and
Phnom Penh. He also participated in a tour of several cities in India which then
ended in Saigon in February 1950. He and three other Davis Cup players (one
French and two Belgians) all wore the Lacoste shirt. He remembers the sports club
members in the audience gathering around him after each game to admire and feel
the animal on the shirt.
[108] In my view, that evidence falls a considerable distance short of establishing
actual copying by Dr Tan.
[109] Dr Tan has stated that he created both the Li Sing Min Crocodile and the
Crocodile Logo in 1947, and the former before the latter. The Li Sing Min Crocodile
was registered as a trade mark in Singapore in 1947, whilst the Crocodile Logo was
not registered as a trade mark in Singapore until 1951. Whilst it has been asserted
for Crocodile International that the Crocodile Logo was used on garments sold by
Li Sing Min Company “since at least 1949”, there is no evidence of that use before
1952, when advertisements did begin appearing in Singaporean newspapers for shirts
of that brand.
[110] The Li Sing Min Crocodile is, as can be seen, quite different to the Lacoste
Logo. It comprises two crocodiles, not one. The crocodiles themselves, particularly
by showing three feet or claws, are different in appearance and the presence of the
words “Li Sing Min” and “Crocodiles Brand” further distance that mark from the
Lacoste Logo.
I acknowledge that the Crocodile Logo, and in particular the
representation of the crocodile in that logo, comes far closer to the Lacoste Logo.
Nevertheless, I am satisfied that a sufficient degree of originality is shown on the
face of the Crocodile Logo relative to the Lacoste Logo to preclude – in these
circumstances – an inference of copying.
[111] Lacoste also relies on Simon France J’s finding of “deceptive similarity”
between the Lacoste Logo46 and the Crocodile Logo, and Collins J’s similar
conclusion.47 At this point it is sufficient to note that the concepts of originality in
copyright law, and the concepts of deceptive similarity in trade mark law, are
different.
Use contrary to law as infringement of copyright
[112] The issue is whether use by Lacoste in New Zealand of the Crocodile Logo
would infringe the copyright that I am prepared to assume, for this purpose, does
subsist in the Crocodile Logo and is owned by Dr Tan.
[113] Lacoste does not challenge the general proposition that, if Dr Tan owns the
copyright in the Crocodile Logo, use of that logo as a trade mark could infringe that
copyright.
Rather, Lacoste at this point argues that Crocodile International is
precluded, by estoppel, acquiescence, laches and the principle of non-derogation of
grant (relating to the 2003 assignment of NZ No. 70068 to Lacoste), from opposing
Lacoste’s application by reference to Dr Tan’s copyright. Lacoste points to:
(a)
the circumstances in which Crocodile Garments, at that time owned
and controlled by Dr Tan and his brothers, applied for and obtained
registration of the Crocodile Logo as a trade mark in New Zealand;
(b)
that Crocodile Garments was, in effect, allowed to retain its
ownership of the Crocodile Logo trade mark in New Zealand when, at
the initiative of Dr Tan and his brothers, it went public and, later,
when Dr Tan and his brothers sold out of that company;
46
47
Simon France J decision 1, above n 4.
Collins J decision, above n 2.
(c)
that Crocodile Garments remained the registered owner of the
Crocodile Logo trade mark from 1961 until 2004, when its assignment
of that mark to Lacoste was registered in New Zealand, without any
challenge from Crocodile International;
(d)
the terms of that assignment; and
(e)
the unreasonable delay by Crocodile International, and Dr Tan, in
asserting the alleged copyright.
[114] Lacoste argues that Dr Tan would have been well aware of the various
dealings between the companies. By allowing Crocodile Garments to apply to
register and use the Crocodile Garments trade mark in New Zealand he must have
authorised use of the relevant copyright. Use of the Crocodile Logo was implicit in
Crocodile Garments’ registration of that trade mark in New Zealand. Crocodile
International is, therefore, now estopped in equity from asserting that use by Lacoste
of the Crocodile Logo trade mark in New Zealand would infringe Dr Tan’s
copyright.
Lacoste had relied on that acquiescent conduct of Crocodile
International/Dr Tan, and would suffer if Crocodile International were now able to
contradict it. The assertion by Crocodile International of infringement by use also
invokes the principle of non-derogation of grant.
[115] Crocodile International argues that there is no estoppel: Dr Tan had not made
any representation to Lacoste, and Lacoste knew when it acquired the Crocodile
Logo trade mark in New Zealand that Crocodile International asserted ownership of
copyright and other rights. Lacoste had not relied on any alleged representation.
The terms of the assignment between Crocodile Garments and Lacoste could not add
to Crocodile Garments’ rights. It did not purport to assign copyright in the Crocodile
Logo to Lacoste: all it assigned were such rights as it had in the Crocodile Logo.
There is, therefore, no issue of any derogation of grant. There had been no conduct
to which Crocodile International had acquiesced.
As for laches, Crocodile
International asserted copyright infringement at the first opportunity, that is, in this
case in opposition to Lacoste’s application to register the Crocodile Logo as a trade
mark in New Zealand.
Analysis
[116] As Crocodile International argues, it is difficult to find all the necessary
elements of equitable estoppel in the factual construct here. Lacoste characterises
the core elements for an estoppel here as being that:
102.1 A belief or expectation has been created or encouraged through some
action, representation, or omission to act by Crocodile International
through Dr Tan.
102.2 The belief or expectation has been reasonably relied on by Lacoste
(judged by a reasonable person in Lacoste’s position);
102.3 Detriment will be suffered by Lacoste if the belief or expectation is
departed from;
102.4 It would be unconscionable for Crocodile International to depart
from the belief or expectation.
[117] Crocodile International, correctly in my view, submits that there are two
further elements, namely:
68.1
The action, representation or omission must be made by the party
against whom the estoppel is asserted, or its agent; and
68.2
The action, representation or omission must have caused the party
asserting the estoppel to have acted in a manner causing loss.
[118] The principal difficulty for Lacoste can be seen where it refers to an omission
or act “by Crocodile International through Dr Tan” giving rise to unconscionability
“for Crocodile International to depart from the belief or expectation”. I recognise the
commercial realities of the position. Clearly Dr Tan had a close relationship with
Crocodile International and, at relevant times, with Crocodile Garments also.
Moreover, he was – in his own words – a “promoter, shareholder and director” when
Crocodile Garments applied for and obtained registration of the Crocodile Logo as a
trade mark in New Zealand. Crocodile Garments would, therefore, be in a better
position than Lacoste to argue equitable estoppel. Nor do I place much weight, if
any, on Crocodile International’s submission that it was an oversight for Crocodile
Garments not to transfer the trade mark to Dr Tan. Dr Tan’s actual statement was
that “the application [for registering the Crocodile Logo as a trade mark in New
Zealand] might have been intended to facilitate export to New Zealand however
possibly due to oversight the registration was not duly assigned to Tan Siew Huy and
me” (my emphasis). The subsequent history, particularly of Crocodile Garments’
public float, at which time it remained the owner of the Crocodile Logo trade mark
NZ No. 70068, counts against that explanation.
[119] As I see it, the label of equitable estoppel aside, Lacoste in effect argued that
it was “implicit” in Dr Tan’s agreement or acquiescence to the registration by
Crocodile International of the Crocodile Logo as a trade mark in New Zealand that it
could, in fact, use that mark, notwithstanding (as is accepted for these purposes) that
Dr Tan owned the copyright and had not assigned it. In many ways, this is an
argument for an implied term albeit, I acknowledge, in a contract to which it was not
a party but on which it relies.
[120] Based on the record, I find first that Dr Tan cannot argue that he did not agree
to Crocodile Garments’ registration of NZ No. 70068. Registration, as Crocodile
International itself argues in this case, requires intent to use. In my view, in terms of
s 16(1)(i) of the Copyright Act, Dr Tan is to be taken, by his agreement to
registration, to have authorised Crocodile Garments, and any subsequent owner of
the Crocodile Logo trade mark in New Zealand, to do the acts referred to in
paragraphs (a)-(h) of s 16(1) that are necessarily and reasonably associated with that
use.
It is not a question, as the Associate Commissioner analysed matters, of
whether or not Dr Tan assigned copyright to Crocodile Garments. 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 that trade mark in a particular
jurisdiction is to be 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 (or, in appropriate circumstances, implicit) reservation to the contrary. It is
not necessary, however, to go that far in this judgment. Rather, I base my conclusion
on the particular facts and circumstances that exist here.
[121] There will be circumstances where such a conclusion would not be drawn, for
example, a person might own a trade mark without owning or having a legal interest
in the copyright necessary to use the mark.
The copyright may, however, be
expiring. In those circumstances that person could transfer the mark to another for
value, which would crystallise when copyright had expired. But this is not such a
situation.
[122] In my view, therefore, use by Lacoste of the Crocodile Logo trade mark in
New Zealand would not infringe Dr Tan’s copyright, and Crocodile International
therefore cannot argue that it would.
[123] There are also, in my view, issues of delay and acquiescence that stand in
Crocodile International’s way. Crocodile International argues that it had raised the
issue of Dr Tan’s copyright at the earliest possible opportunity, namely Lacoste’s
application to register the mark. I do not accept that proposition. Sections 73-75 of
the Trade Marks Act provide for applications for declarations of invalidity. Such a
declaration may be made on the grounds that, or to the extent that, a trade mark was
not registrable under Part 2 at the deemed date of its registration. The absolute
grounds for refusal under s 17, which includes unlawfulness due to copyright
infringement, will, therefore, provide the basis for an application for revocation. In
my view, Crocodile International could have applied to have the registration of the
Crocodile Logo as a trade mark, by Crocodile Garments and by assignment
thereafter to Lacoste, declared invalid at any time from the passage of the Trade
Marks Act 2002 onwards if – as is now after all this time argued – use would
infringe in some way copyright owned by Dr Tan. If necessary, I would therefore
have found this basis of Crocodile International’s opposition unavailable by reason
of delay and acquiescence.
Result: Issue two
[124] I therefore allow Lacoste’s appeal against the Assistant Commissioner’s
conclusion that Crocodile International was not precluded from arguing that use of
the Crocodile Logo would infringe Dr Tan’s copyright.
Issue three: Use and intention to use
The Assistant Commissioner’s decision
[125] Section 32(1) provides:
A person claiming to be the owner of a trade mark or series of trade marks
may, on payment of the prescribed fee (if any), apply in the prescribed
manner (if any) for the registration of the trade mark or series of trade marks
used or proposed to be used in respect of … particular goods or services …
[126] Use, or intention to use, is a requirement for a legitimate claim to
proprietorship.48
[127] Lacoste acknowledges that it has not used the Crocodile Logo in the exact
form depicted in its trade mark application. It argues, however, that it has used or
has an intention to use that mark in the sense of the word “use” provided in s 7 of the
Trade Marks Act.
[128] In concluding that Lacoste had not established a sufficiently definite intention
to use the Crocodile Logo mark, the Assistant Commissioner reasoned:
(a)
There was no evidence of any actual use by Lacoste of that mark
itself.
(b)
To the extent Lacoste relied on its use of the Lacoste Logo, and
related marks including the word ‘crocodile’, that use did not
constitute use of the Crocodile Logo because the distinctive character
of those marks was different to that of the Crocodile Logo: that is, the
essential visual, aural and conceptual qualities of the marks differed.
(c)
That if the fact of application was prima facie evidence of intention to
use, that presumption had been rebutted because of Lacoste’s pleaded
position, which was that it was intending to use and continue using its
registered trade marks, including the Crocodile Logo, where the
evidence on that point was, in the Assistant Commissioner’s
assessment, equivocal.
48
Aqua Technics Pool and Spa Centre New Zealand Limited v Aqua-Tech Limited [2007] NZCA
90 at [15].
Appeal
Lacoste
[129] Section 7 provides that “use” includes “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”. Pointing particularly to the analysis and findings of Simon France J
and Collins J, the overall impression is that the two marks are “the same and that the
points of difference between the Lacoste Logo and the Crocodile Logo (and related
marks) are minor”, Lacoste says it cannot be established that it has not used the
mark, or does not intend to do so.
[130] It notes further, as Miller J confirmed in Effem Foods,49 that an application
itself is prima facie evidence of intention to use, which can obviate any need to
enquire into the applicant’s intention in every case.
Crocodile International
[131] Crocodile International argues that Lacoste has, in effect, admitted that it has
no intention to use the Crocodile Logo: indeed, why would it do so as use of that
mark in New Zealand would be inconsistent with its interests in the Lacoste Logo
and associated marks? Moreover, s 7 of the Trade Marks Act does not apply in this
context: that definition of “use” is only applicable in relation to a mark that had
already been registered.
Analysis
[132] Section 7 defines use in the following terms:
7
Meaning of use of trade mark
(1)
In this Act, unless the context otherwise requires, use, in
relation to a trade mark, includes—
(a)
49
See below at [134].
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; and
(b)
applying the trade mark to goods or services or to
materials for the labelling or packaging of goods or
services in New Zealand solely for export purposes;
and
(c)
the application in New Zealand of a trade mark to
goods or services to be exported from New Zealand,
and any other act done in New Zealand in relation to
those goods or services that, if done in relation to
goods or services to be sold or otherwise traded in
New Zealand, would constitute use of a trade mark
in relation to those goods or services for which the
use is material under this Act or at common law; and
…
[133] Neither Lacoste nor Crocodile International cite authority on the applicability
of the s 7 definition of “use” in this context. I see no reason, however, why the reach
of that definition should be restricted in the manner suggested by Crocodile
International. Crocodile International bases its argument on the words in s 7(1)(a)
which refer to the distinctive character of the trade mark “in the form in which it was
registered” (emphasis added).
It argues that the use of the past tense “was
registered” shows that the definition only applies where the mark in question has
been registered, and it is use after registration that is in issue.
[134] At the point of application it is appropriate to adopt a broad interpretation of
intention to use. In Effem Foods v Cadbury, Miller J accepted that filing a trade
mark application is prima facie evidence of intention to use, and rejected any idea of
interpreting the legislation in terms of specific burdens of proof.50
In Effem Foods,
the presumption was rebutted by the applicant’s own evidence that it applied for
registration as a defensive measure.51
[135] The provision in s 66 for revocation after three years of non-use reflects this
broad approach to intention to use. This section allows for an aggrieved party to
apply for revocation of a trade mark if it has not been used for three years. The s 66
provision is there in order to ‘clean’ the register.52
It directly contemplates a
situation where an applicant registers a trade mark but does not end up using it. In
50
51
52
Effem Foods Limited v Cadbury Limited HC Wellington CIV-2005-485-1487, 21 March 2007 at
[34].
At [35].
Frankel, above n 30, at [9.3.6].
Aston v Harlee Manufacturing, the High Court of Australia suggested the possibility
that an applicant could register several marks, with the intention to only use two of
them, and not knowing which two would be used. The ones the applicant did not use
would be later expunged under the equivalent of s 66.53
[136] In this case, the Assistant Commissioner decided that while an application is
prima facie evidence of intention to use, this was displaced by Lacoste’s pleadings:
its case was that it had used the Mark in New Zealand in either its exact form or in a
way not differing from the essential character of the mark, that is, in terms of s
7(1)(a). The Assistant Commissioner held that this pleading had effectively rebutted
the presumption of intention to use created by the application. Lacoste needed to
then provide some evidence of its intention to use the Mark at the date of its
application.
[137] In my judgment, this conclusion by the Assistant Commissioner is incorrect.
Lacoste’s pleadings on this point were in line with the relevant case law and
statutory wording around intention to use on application for registration.
The
Assistant Commissioner’s decision effectively creates an onus on any applicant who
pleads intention to use – a requirement for registration – to provide some evidence of
this. This kind of onus has been rejected. This case is not like Effem Foods, where
the applicant’s own evidence suggested a lack of intention.
[138] Lacoste owns several crocodile devices and word devices relating to
crocodiles in New Zealand. Its brand is based on the image of a crocodile, and
arguably, the word ‘crocodile’, too. Mr Blanc’s evidence is that Lacoste intends to
develop different ways in which to use crocodile device and word trade marks in the
future. To hold that it had no intention to use a mark that was made up of these two
very things would, in my view, place an onus of proving intention that has been
rejected by the courts.
[139] I therefore also uphold Lacoste’s appeal against the Assistant Commissioner’s
finding that, as the applicant for registration of NZ No. 837027, it had not
established use or intention to use the Crocodile Logo.
53
Aston v Harlee Manufacturing Co [1960] HCA 47, (1990) CLR 391 at [21].
[140] In reaching that conclusion, I expressly adopt:
(a)
the conclusions of Simon France J54 and Collins J55 on the issues of
similarity and essential features as regards the Lacoste Logo and the
Crocodile Logo; and
(b)
those of Collins J56 as regards use of the Crocodile Logo by Lacoste.
Issues four and five: ownership and bad faith
[141] It follows from my conclusions above that I agree with the Assistant
Commissioner’s conclusions on the issues of bad faith and of ownership.
[142] Although not mentioned in s 17, it is generally accepted that a false claim to
ownership will be treated as an absolute ground of refusal to register a trade mark. 57
Lacoste has been the registered owner of NZ No. 70068, a trade mark identical to the
one in this case, since 2004. It would be difficult to suggest, particularly in light of
my conclusion as to copyright, delay and acquiescence, that Lacoste cannot claim to
be the owner of the Crocodile Logo in New Zealand.
[143] Section 17(2) prohibits the registration of a trade mark where the application
is made in bad faith. While bad faith does not have to reach the standard of
dishonest conduct, this does not mean a conclusion of bad faith can be easily drawn.
As Simon France J stated in Zoggs International Ltd:58
The fact that the bad faith test may be satisfied by something less than
dishonesty should not mask the fact it remains a serious allegation, requiring
clear evidence and careful analysis. Ultimately, the standard of proof is the
balance of probabilities but I consider there remains value in the words of
Mr Thorley QC, the Appointed Person, in Royal Enfield Trade Marks, where
of a bad faith allegation he observed:
It should not be made unless it can be fully and properly pleaded and
should not be upheld unless it is distinctly proved and this will rarely
be possible by a process of inference.
54
55
56
57
58
Simon France J decision 1, above n 4.
Collins J decision, above n 2.
Collins J decision, above n 2.
Finch, above n 17, at [7.7.(1)(a)].
Zoggs International Ltd v Sexwax Inc [2013] NZHC 1494 at [36] (footnotes omitted).
[144] Lacoste was assigned the identical NZ No. 70068 in 2003. Further, Lacoste
owns New Zealand trade marks featuring crocodile devices and the word
‘CROCODILE’. To apply to register a mark that is identical to one it already owns,
and that comprises two of the main features of its brand, does not amount to bad
faith on Lacoste’s part.
[145] As the authorities state, it would be rare to draw a conclusion of bad faith by
inference. This would ignore the subjective requirement of the test. There is no
evidence that Lacoste applied for registration in bad faith in order to block Crocodile
International from trading in New Zealand. I acknowledge that this application can
be seen as a response of sorts to the pending appeal of Crocodile International’s
application to revoke NZ No. 70068 for non-use. In my view, however, this falls
short of the requisite dishonest conduct, particularly in light of Lacoste’s ownership
of the registration of NZ No. 70068 since 2004.
Result
[146] The result is that Lacoste’s appeal is allowed, and Crocodile International’s
appeal is dismissed.
Costs
[147] Costs will follow the event. I see no reason why the parties should not be
able to agree on 2B costs. If agreement is not reached, focused memoranda are to be
filed within one month of the date of this judgment.
________________________
Clifford J
Solicitors:
Baldwins Law Ltd, Wellington for Appellant/Respondent
Henry Hughes Law Ltd, Wellington for Respondent/Appellant