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

Trade Marks and Plant Varieties

Dr. Victoria Longshaw and Mr. David Franklin

In the recent Federal Court decision, Mastronardi Produce Ltd v Registrar of Trade Marks [2014], Mastronardi Produce Ltd appealed the 23 October 2013 decision of the Delegate of the Registrar of Trade Marks which rejected its Trade Mark Application for “ZIMA” in class 31 for tomatoes.

This decision is of interest to Applicants and owners of Registered Trade Marks associated with plant varieties in Australia.

Background

Mastronardi is a Canadian company producing wholesale fruit and vegetables, including tomatoes. Mr Paul Mastronardi, the president of Mastronardi, coined the word “ZIMA” in early 2010 for a range of golden grape or orange grape tomatoes. The word “ZIMA” had no meaning in the English language, and had not been previously associated in any way with tomatoes in Australia or elsewhere.

Mastronardi obtained Trade Mark Registrations for ZIMA in Canada with effect from 26 April 2010, in the United States with effect from 30 July 2010, in Japan with effect from 27 July 2011, and in New Zealand with effect from 3 August 2011.

 

On 25 July 2011, Mastronardi filed Australian Trade Mark Application No. 1438732 to register ZIMA in class 31 for “tomatoes.” Between November 2011 and June 2013, the Registrar issued three official reports refusing acceptance and as a result Mastronardi requested a hearing to seek review of the refusal. The matter was heard on 12 September 2013.

 

In her decision of 23 October 2013, the Delegate rejected the Application, finding that “the word ZIMA appears to be a reference to a single kind of tomato plant and its fruit” and accordingly that it “lacks any inherent adaptation to distinguish the Applicant’s tomatoes as it appears to be an appropriate description of the goods in respect of which it is to be used,” and also finding that the Applicant’s evidence of use of the Mark “demonstrates that the Applicant uses the word ZIMA, and that the buying public regard the word ZIMA, as a reference to a particular cultivated variety of orange grape tomato.” Mastronardi appealed the decision on 14 November 2014.

 

Submissions

 

The Registrar as Respondent contended that the intended use of ZIMA by Mastronardi was not as a Trade Mark to distinguish its goods from those of others, but rather to distinguish its particular kind of tomatoes from other kinds of tomatoes. That is, it was “intended for use to distinguish one variety of tomato introduced by Mastronardi from the generality of tomatoes.” As such, it was likely to be required for use by other traders without improper motive to refer to tomatoes for instance with “ZIMA” characteristics. The Respondent relied on Wheatcroft Brothers Limited’s Trade Marks [1954] Ch 210, which concerned the rejection of a Mark intended to be used as the name of a single new variety of rose which would be characterised by that name in the Register of the relevant Rose Society.

 

mastronardi argued that ZIMA was not the name of the new variety of tomato and submitted unchallenged expert evidence that the word ZIMA is not used by retailers, suppliers or consumers to refer to a variety of tomato.

 

Mastronardi also submitted evidence that, in the case of tomatoes, there are hundreds if not thousands of different varieties in Australia, many of which are referred to in terms of broad category names such as cherry, truss, roma, grape and cocktail. It also submitted that often a very large number of cultivars are sold under a particular category such as the golden grape tomato. Suppliers typically assign a name (often an alpha-numeric code) to particular seeds and not the category name associated with that variety. Mastronardi submitted that it uses six different types of seeds to produce six varieties of golden grape tomato, all of which bear the ZIMA trade mark when sold.

 

Appeal Decision

 

The Court reversed the Delegate’s decision, and ordered that the Trade Mark should be registered.

 

Part of the problem appears to have been due to the use of the word “variety” by Mastronardi to market ZIMA tomatoes. The word “variety” in that context was considered by the Court to have more than one meaning, being a loose term used without precision and used differently in the retail and fresh foods industry compared to its botanical context. The Court found that of the six cultivars presently used by Mastronardi, only two were supplied exclusively to Mastronardi, and that other traders were not prevented from producing orange grape tomatoes from any one of the 50 cultivars available. The Court also considered that a number of descriptors were available to other traders for describing their tomatoes, such as “golden snacking tomatoes.”

 

The Court applied the test for assessing whether a Trade Mark is “inherently adapted to distinguish” as articulated by Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511, and concluded that it is unlikely that other persons, trading in tomatoes and being actuated only by proper motives, will think of the invented word ZIMA and desire to use it for tomatoes. The Court also confirmed the dicta of Gibbs J in Burger King v Registrar of Trade Marks (1973) 128 CLR 417 that actual use of the Trade Mark is irrelevant in assessing the inherent nature of the Trade Mark itself.

 

Take home message

 

This decision is a welcome confirmation that distinctive Trade Marks used in connection with fruit, vegetables and other plant varieties should not be automatically rejected as unregistrable if they are in fact used as a sign to distinguish the Applicant’s goods rather than as a plant varietal name. While this decision turned on the facts of the case, any Applicant finding themselves in a similar situation may wish to challenge any Section 41 rejection by the Registrar made on the grounds that the Mark is a varietal name or used as the name of a single kind of plant.

 

In summary, in circumstances where the Trade Mark is a distinctive Mark (such as an invented word) and is used as a Trade Mark by a trader to distinguish its fruit from the fruit of other traders, all things being equal the Trade Mark should be registrable. However, if the Trade Mark is used to denote a single plant variety, especially where the plant variety is on an official register with a varietal name identical to the Trade Mark, and other traders arguably need to use the Trade Mark to refer to that plant variety, it will be very difficult to register that Mark in Australia.

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