CROCODILE INTERNATIONAL PTE LTD v LACOSTE [2015] NZHC 2432 [6 October 2015]

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

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 Lacoste v Crocodile International Pte Ltd [2014] NZIPOTM 11.

2 Lacoste v Crocodile International Pte Ltd [2014] NZHC 2349 [Collins J decision].

3 Lacoste v Crocodile International Pte Ltd [2014] NZIPOTM 26.

4 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 parents

6 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 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. 6 Tang Keng Huy (father) and Ong Boi Huy (mother).

(the Li Sing Min Crocodile); and

(b) the Crocodile Logo.

[15] 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. Crocodile Garments was subsequently managed by the

Lai Sun Group.

7 Noted at [4] above.

[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 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). 9 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:

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.

11

Simon France J decision 2, above n 10, at [53]. 12

Above n 1. 13

Collins J decision, above n 2. 14

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

Copyright Act 1994, s 14. 17

Ian Finch (ed) James and Wells on Intellectual Property (2nd ed, Brookers, Wellington, 2012) at

[6.3.3]. 18

Mary Vitoria and others Laddie, Prescott and Vitoria: the Modern Law of Copyright and

Designs (4th

ed, LexisNexis, London, 2011) at [1.9]. 19

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:

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).

[56] Copyright in traditional subject matter generally expires 50 years after the

death of the author.23

20

Finch, above n 17, at 240. 21

Copyright Act 1994, s 14(2). 22

University of Waikato v Benchmarking Services Ltd (2004) 8 NZBLC 101,561 (CA), cited in

Finch, above n 17, at 240. 23

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

Designs Act 1953, s 5; see Finch, above n 17, at [6.1]. 25

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) 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.

(2) 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—

(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.

[66] 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] Clause 28 provides:

26

Section 57.

28 Artistic works made before 1 April 1963

(1) No copyright exists in an artistic work that—

(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.

(2) 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.

[71] 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. (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.

[73] 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

Interlego AG v Tyco Industries Inc [1988] 3 All ER 949, [1989] AC 217. 28

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

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. 30

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

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]. 32

Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 33 FCR 111. 33

Philips Electronics NV v Remington Consumer Products (1997) 40 IPR 279 at 299 (Ch D). 34

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

Frankel, above n 30 (footnotes omitted). 36

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

King Features Syndicate v O & M Kleemen Limited [1941] AC 417 at 430. 38

Interlego AG, above n 27, at 364. 39

D A Lewis & CO Ltd v Thorn Bros Ltd (1984) 1 TCLR 236 (HC). 40

Ferrero’s Design Application [1978] RPC 473. 41

Sutton v Bay Masonry Ltd HC Tauranga CIV-2003-470-260, 28 May 2004. 42

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

Copyright Act 1994, s 14(1). 45

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

Simon France J decision 1, above n 4. 47

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) 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

49

See below at [134].

(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

Effem Foods Limited v Cadbury Limited HC Wellington CIV-2005-485-1487, 21 March 2007 at

[34]. 51

At [35]. 52

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

Simon France J decision 1, above n 4. 55

Collins J decision, above n 2. 56

Collins J decision, above n 2. 57

Finch, above n 17, at [7.7.(1)(a)]. 58

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