Crocodile International Pte Ltd v Lacoste

JurisdictionNew Zealand
CourtSupreme Court
JudgeGlazebrook J
Judgment Date21 February 2017
Neutral Citation[2017] NZSC 14
Docket NumberSC 47/2016
Date21 February 2017

[2017] NZSC 14

IN THE SUPREME COURT OF NEW ZEALAND

Court:

William Young, Glazebrook, Arnold, O'Regan and Ellen France JJ

SC 47/2016

Between
Crocodile International Pte Ltd
Appellant
and
Lacoste
Respondent
Counsel:

D A Laurenson QC, B M Sullivan and G F Arthur for Appellant

J G Miles QC, R M Wallis and T A Huthwaite for Respondent

Appeal against a Court of Appeal (“CA”) decision upholding a High Court (“HC”) decision to set aside the order made by the Assistant Commissioner revoking a trade mark, on the grounds of non-usage — the appellant had sought the removal of a trade mark for a crocodile — the respondent used a device mark of a different stylised crocodile — the appellant was a Singapore based company which made garments and used a crocodile trade marks since 1947 — the respondent was a French company which had used crocodile trade marks since 1933 — the Assistant Commissioner held that the respondent's use of the other trade marks did not constitute use of trade mark the appellant sought to revoke — the Assistant Commissioner's approach focussed on a “global appreciation” and the HC and CA focused on a “central idea or message” — what was the appropriate test under s7(1)(a) Trade Marks Act 2002 (meaning of use of trade mark) — whether deletions of elements were treated differently from additions of elements — what was the relevance of consumer recognition and reputation — what was the basis of the appropriate test — whether trade mark had been used by Lacoste and, if not, whether there was a discretion not to revoke?

Held: The appropriate test was Budejovicky Budvar Narodni Podnik v Anheuser-Busch Inc [2003] RPC 25 ( Bud and Budweiser Budbräu Trade Marks). In interpreting a definition of “use” effectively identical to that in s7(1)(a) TMA, it held “elements” did not mean “the basics or essentials of a matter” but must have a weaker sense of “features” or “details”. The distinctive character of a trade mark must be identified before it was possible to analyse whether any additions, alterations or deletions have altered that distinctive character.

Concentration on individual elements risked a lack of the required concentration on the trade mark as a whole. The focus on the central idea and message did not accord with the test in Bud and Budweiser Budbräu Trade Marks. The distinction between the Assistant Commissioner's approach of a “global appreciation” and the focus in the HC and CA on a “central idea or message” could have significant consequences. The “central message” approach also risked extending the rights of protection for a trader. Such extension would be counter to the balance created by the TMA.

There were significant visual differences between trade mark 70068 and the Lacoste marks. The distinctive character of trade mark 70068 had two essential visual elements: the stylised word and the crocodile device. The fact that one of the essential visual elements was missing from the Lacoste devices as used would in itself likely mean that the use of the Lacoste trade marks was in a form differing in elements which meant that the distinctive character of trade mark 70068 was altered. The survey evidence suggested that the crocodile device in trade mark 70068 and that in the Lacoste marks was associated in New Zealand with Lacoste to a reasonably significant degree.

Trade mark 70068 had never been used by Lacoste. All policy indications supported trade mark protection only when a trade mark was in use. Trade mark 70068 had not been used by Lacoste within the extended use definition of s7(1)(a) TMA. The trade marks used by Lacoste were sufficiently different from trade mark 70068 to have altered the distinctive character of trade mark 70068.

It could be seen as inconsistent with the specific exception in s66(2) TMA (grounds for revoking registration of trade mark — a trade mark may not be revoked for its non-use if its non-use is due to special circumstances that are outside the control of the owner of the trade mark) for there also to be an unlimited discretion not to revoke but with no statutory guidance as to when such a discretion should be exercised. Section 70 TMA (disclaimer of trade mark as condition of not revoking its registration) empowered the Commissioner or the court to require a disclaimer of exclusive rights as a condition of not revoking a trade mark. That could suggest that there was a discretion not to revoke contained in s66(1) TMA, but only to be exercised where there was a disclaimer. On the other hand, s70 TMA may be interpreted as itself providing a limited discretion. It was unlikely that Parliament intended a general discretion to allow the Commissioner or the court to retain trade marks on the Register that were deceptive or confusing to the public.

There was no residual discretion, even if there had been, it would not have been appropriate to exercise it. Lacoste had never used the trade mark anywhere in the world. Therefore there was no reason to retain it on the Register.

Whether CIP or any other trader could register a trade mark the same as, or similar to, trade mark 70068 was a different question, requiring consideration of s17 TMA (absolute grounds for not registering trade mark: general) and s25 TMA (registrability of identical or similar trade mark). The discretion to retain a registration had always been focussed upon the public interest. The public interest was broader and more complex than Lacoste's private interest in brand protection. The two questions of whether a trade mark had been used and whether another party could register a similar trade mark should be kept separate.

The appeal was allowed. Registration of trade mark 70068 was revoked from 12 December 1999, given there was no use in the three year period ending on that date.

A The appeal is allowed. Registration of trade mark 70068 is revoked from 12 December 1999.

B Costs of $25,000 plus usual disbursements are awarded to the appellant (to be fixed by the Registrar if necessary). We certify for two counsel.

C Costs in the courts below should be set by those courts in the light of this judgment, if they are not able to be agreed.

JUDGMENT OF THE COURT

REASONS

(Given by Glazebrook J)

Table of Contents

Para

Introduction

[1]

The legislation

[6]

Background

[12]

The survey evidence

[21]

The appropriate test

[29]

Lord Walker's test

[29]

Three stage test?

[34]

Our view

[37]

Are deletions treated differently from additions?

[38]

Submissions

[38]

Discussion

[40]

Relevance of reputation

[44]

Submissions

[44]

The authorities

[47]

Our assessment

[49]

Has there been use of trade mark 70068?

[53]

The decisions below

[54]

Comments on the decisions below

[59]

Appellate approach

[64]

Submissions

[67]

Our application of the test

[69]

Survey evidence

[76]

Policy considerations

[78]

Section 7(3)

[81]

Conclusion

[87]

Discretion

[88]

Submissions

[88]

Discussion

[92]

Result

[99]

Introduction
1

In 2008 Crocodile International Pte Ltd (Crocodile International) made an application, under s 66(1)(a) of the Trade Marks Act 2002 (the 2002 Act), to revoke trade mark 70068 (owned by Lacoste) on the basis that Lacoste had not used it for three years. 1

2

Lacoste accepted that it had never used trade mark 70068 in the form registered but maintained that it had used trade marks that differed in ways that did not alter the distinctive character of trade mark 70068. Therefore, on the basis of the extended definition of use of a trade mark in s 7(1)(a) of the 2002 Act, it had used trade mark 70068.

3

The Assistant Commissioner held that Lacoste's use of the one other trade mark she considered 2 did not constitute use of trade mark 70068. 3 That decision was overturned by Collins J, who also discussed two other trade marks used by Lacoste. 4 He held that the points of difference between the trade marks used by Lacoste and trade mark 70068 were insignificant and did not alter the distinctive character of trade mark 70068. 5 His decision was upheld by the Court of Appeal. 6

4

Leave to appeal to this Court was granted on 19 July 2016. 7 The appeal raises the following issues:

  • (a) What is the appropriate test under s 7(1)(a)?

  • (b) Are deletions of elements treated differently from additions of elements?

  • (c) What is the relevance of consumer recognition and reputation?

  • (d) On the basis of the appropriate test, has trade mark 70068 been used by Lacoste?

  • (e) If not, is there a discretion not to revoke?

5

Before we address these issues, we set out relevant extracts from the legislation, the factual background and the survey evidence.

The legislation
6

The 2002 Act repealed and replaced the Trade Marks Act 1953, which was considered no longer fit for purpose. 8 A significant driver of the reform was the internationalisation of intellectual property protection. 9 The wording of the 2002 Act is based on the Trade Marks Act 1998 (Singapore) (Singapore Act), which itself is based on the Trade Marks Act 1994 (UK) (UK Act). 10 The UK Act was in turn based upon a 1988 European Directive. 11

7

At the time of the application for revocation, ss 65, 66 and 67 of the 2002 Act read as follows: 12

65 Application for revocation of registration of trade mark

  • (1) An aggrieved person may apply to the Commissioner or the court for the revocation of the registration of a trade mark.

  • (2) The Commissioner or the court may refuse any application for the revocation of the registration of a trade mark that is vexatious.

66 Grounds for revoking registration of trade mark

  • (1) The registration of a trade mark may be revoked on any of the following grounds:

    • (a) that, up to the date 1 month before the date of the application...

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