Crocodile International Pte Ltd v Lacoste

• Jurisdiction: New Zealand
• Judge: Glazebrook J
• Judgment Date: 21 February 2017
• Neutral Citation: [2017] NZSC 14
• Docket Number: SC 47/2016
• Court: Supreme Court
• Date: 21 February 2017

Between

Crocodile International Pte Ltd

Appellant

and

Lacoste

Respondent

[2017] NZSC 14

Court:

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

SC 47/2016

IN THE SUPREME COURT OF NEW ZEALAND

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?

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

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 for the revocation of the registration of the trade mark, a continuous period of 3 years or more elapsed following the actual date of registration during which the trade mark was not put to genuine use in the course of trade in New Zealand, by any owner for the time being, in relation to the goods or services in respect of which it is registered:

  • (b) except as provided in subsection (3), that the use of the trade mark has been suspended for an uninterrupted period of 3 years:

  • (c) that, in consequence of acts or inactivity of the owner, the trade mark has become a common name in general public use for a product or service in respect of which it is registered:

  • (d) that—

    • (i) the article or substance was formerly manufactured under a patent or the service was formerly a patented process; and

    • (ii) a period of 2 years or more has elapsed since the expiry of the patent; and

    • (iii) the word is or the words are the only practicable name or description of the article, substance, or service:

  • (e) that, in consequence of the trade mark's use by the owner or with the owner's consent in relation to the goods or services in respect of which the trade mark is registered, the trade mark is likely to deceive or confuse the public, for instance as to the nature, quality, or geographical origin of those goods or services.

• (2) However, despite subsection (1), 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.

• (3) The registration of a trade mark must not be revoked on the grounds in subsection (1)(a) or (b) if that use is commenced or resumed after the expiry of the 3-year period and before the application for revocation is made.

• (4) Any commencement or resumption of use referred to in subsection

• (3) after the expiry of the 3-year period but within the period of 1 month before the making of the application for revocation must be disregarded unless preparation for the commencement or resumption began before the owner became aware that the application may be made.

67 Onus of proof for revocation of registration of trade mark for non-use

If an owner or a licensee intends to oppose an application for the revocation of the registration of a trade mark under section 66(1)(a) or (b), the owner or the licensee must, within the period specified by the Commissioner or the court,—

• (a) provide proof of the use of the trade mark if the grounds in section 66(1)(a) or (b) form the basis for the application; or

• (b) raise the special circumstances that justify the non-use of the trade mark if section 66(2) applies.

8 Section 7 deals with the meaning of use of a trade mark. The language in s 7(1)(a) of the 2002 Act is effectively identical to that in s 46(2) of the UK Act and s 22(2) of the Singapore Act. In relevant part, s 7 provides:

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

• …

9 We also set out ss 17(1)(a), 25(1)(b)–(c) and 70. The parties are agreed that these sections are not directly relevant to the issue of use. They are, however, indirectly relevant to Lacoste's argument that there is a residual discretion to refuse revocation. 13 Section 17(1)(a) provides: 14

17 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;

  • …

10 Section 25(1)(b) and (c) provide: 15

25 Registrability of identical or similar trade mark

• (1) The Commissioner must not register a trade mark ( trade mark A) in respect of any goods or services if—

  • …

  • (b) it is similar to a trade mark ( trade mark C) that belongs to a different owner and that is registered, or has priority under section 34 or section 36, in respect of the same goods or services or goods or services that are similar to those goods or services, and its use is likely to deceive or confuse; or

  • (c) it...