Crocodiles in New Zealand: defending Trade Marks against revocation for non-use

Dr. Victoria Longshaw, Dr. Jim Onishi, and Mr. David Franklin

In a recent High Court decision in the long-running Court battle between Lacoste and Crocodile International Pte Ltd (“CIPL”) in New Zealand, Collins J allowed Lacoste’s appeal from an Intellectual Property Office of New Zealand decision to revoke the registration of a “Crocodile” and Crocodile Device Trade Mark on the grounds of non-use.

This decision is relevant to Trade Mark owners finding themselves in similar circumstances of defending a New Zealand trade mark registration against revocation for non-use where the Mark is in a different form to that used by the Trade Mark owner. But note the peculiar circumstances of this case – the Mark in question was previously owned by an associated company of CIPL and was only assigned to Lacoste as part of a commercial settlement.

Background

Since 1927, Lacoste and its predecessors have sold clothing bearing the Lacoste “Crocodile” Marks in many countries around the world. Various versions of the Crocodile Marks were registered in New Zealand, including the LACOSTE Word and Crocodile Device Mark, and the Crocodile Device Mark (both shown below), and a “CROCODILE” Word Mark. Lacoste clothing products bearing these Trade Marks have been sold throughout New Zealand since 1981.

croc1

On the other hand, CIPL, a Singaporean clothing company trading throughout Asia, and its predecessors have used the word Mark “CROCODILE” and Crocodile Device Marks since 1947 in various countries in Asia, although it seems not in New Zealand.

In 1961, Crocodile Garments Ltd, a related company of CIPL, registered “CROCODILE” and the following stylised Crocodile Device Mark, under New Zealand Trade Mark No. 70068.

croc2

Lacoste applied for revocation of Trade Mark No. 70068 from the New Zealand Trade Mark Register in 1999 on the grounds of non-use. Lacoste’s case was dismissed in 2002, and on appeal, was referred back to the Assistant Commissioner of Trade Marks.

However, before the matter proceeded to a further hearing, the parties settled in 2003 and, as part of their agreement, Crocodile Garments Ltd assigned Trade Mark No. 70068 to Lacoste. The assignment was registered on 29 June 2004.

Assistant Commissioner’s Decision

On 24 June 2008, CIPL applied for revocation of Trade Mark No. 70068 on the grounds of non-use. CIPL relied on three non-use periods: 12 December 1996 to 12 December 1999, 25 August 2001 to 25 August 2004, and 24 May 2005 to 24 May 2008. Importantly, Lacoste had only been registered as owner of Trade Mark No. 70068 since 29 June 2004, and so it could theoretically only show its own use (if any) of Trade Mark No. 70068 during the two most recent non-use periods.

Although Lacoste had taken an assignment of Trade Mark No. 70068, it simply continued to use its own well-known Marks and did not put Trade Mark No. 70068 as depicted into use. To defend Trade Mark No. 70068, Lacoste tendered evidence of use of its own very similar Marks.

On comparing the Marks, the Assistant Commissioner found a number of “striking and memorable” differences between Lacoste’s Device Mark and Trade Mark No. 70068, and quoting the relevant requirement when use of a “similar” Mark is relied on, that the differences in Lacoste’s Device Mark “altered the distinctive character” of Trade Mark No. 70068.

It was therefore held that Lacoste had not put Trade Mark No. 70068 to genuine use during the alleged non-use periods, and by inference had only used its own Marks. It was further held that there were no exceptional circumstances excusing this non-use and that Trade Mark No. 70068 should be revoked effective from 12 December 1999, the end of the earliest of the non-use periods identified.

Lacoste appealed the decision to the High Court.

The High Court Decision

Of the issues raised, the High Court focused on two questions: whether the Assistant Commissioner was correct in concluding that:

  1.  Lacoste had not established genuine use of Trade Mark No. 70068 between 24 May 2005 and 24 May 2008, and
  2. Lacoste must establish use of Trade Mark No. 70068 during each of the three non-use periods identified by CIPL.

In approaching the first question, the High Court applied the two-step analysis of Podnik v Anheuser-Busch Inc [2002] EWCA Civ 1534 RPC 25, required by section 7(1)(a) of the Act, and assessed whether Trade Mark No. 70068 had been used within the meaning of section 7(1)(a) which defines “use [of] a Trade Mark.” The “points of difference between the Mark as used and the Mark as registered” are to be assessed before it is ascertained whether the differences “alter the distinctive character of the Mark as registered.

The High Court found that the Assistant Commissioner should have also compared the other Marks Lacoste had been using with Trade Mark No. 70068 and not just with Lacoste’s Device Mark.

After comparing the visual and conceptual differences between Lacoste’s Device Mark and LACOSTE Word and Device Mark and Trade Mark No. 70068, the High Court found the main point of visual difference in the Devices to be the opposing directions in which the respective Crocodiles face. However, the Court found that this was not particularly relevant and considered that it and the various other points of difference were “minor” and insignificant. Therefore, they did not “alter the distinctive character” of Trade Mark No. 70068 which is dominated by the image of a crocodile very similar to the Lacoste Crocodile Device.

In respect of the second question, the High Court considered that it was only necessary for Lacoste to show use during the most recent three year period, that is, between 24 May 2005 and 24 May 2008, to avoid revocation. Notwithstanding this, the High Court was of the view that Trade Mark No. 70068 had been used in New Zealand by Lacoste throughout all the periods of non-use alleged, in view of the extensive evidence of use of distinctively similar Lacoste Marks submitted by Lacoste.

Accordingly, the appeal was allowed and the order revoking Trade Mark No. 70068 set aside.

Take-home message

Although in our respectful view, the High Court has incorrectly applied section 7(1)(a) to overturn the Assistant Commissioner’s decision, its application of the two-stage analysis of section 7(1)(a) may be useful to other Trade Mark owners who find themselves party to non-use proceedings.

This decision also indicates that when defending a revocation for non-use action in New Zealand where the Trade Mark depicted in the Registration is different to the actual Mark or Marks being used, it is possible to succeed if you can show the Marks in use are very similar and only have differences that do not detract from “the distinctive character” of the Trade Mark.

Also, this decision indicates that if more than one period of non-use is alleged, a Trade Mark owner only needs to demonstrate use within the most recent continuous period of three (3) years and not during all periods of alleged non-use.

This decision was open to appeal at the time of writing, and some of these issues will be re-examined if CIPL take the case to the New Zealand Court of Appeal