Lacoste is the registered trade mark owner. Crocodile International Pte Limited (Crocodile International) applied to revoke the trade mark registration on the basis of non-use. This New Zealand Court of Appeal judgment (Wild, French and Kós JJ) relates to an appeal by Crocodile International from the earlier High Court judgment of Collins J, who allowed Lacoste's appeal against the original decision by the Assistant Commissioner of Trade Marks to revoke the trade mark registration.
The Trade Mark
The trade mark in issue was New Zealand trade mark number 70068 for the following logo:
(the Registered Mark).
Background and Issues
Under section 66(1)(a) of the Trade Marks Act 2002 (NZ), a registered trade mark may be revoked if it has not been genuinely used as a trade mark in the course of trade for its relevant goods or services for a continuous period of 3 years. (Note that the timing for when a non-use application can be brought differs between Australia and New Zealand. In New Zealand, an application can be brought any time after 3 years has elapsed from the date the trade mark was actually entered onto the Register (not the date the application was lodged). In Australia, the period is 5 years after the date the application was lodged.)
Section 7 of the Trade Marks Act 2002 confirms that use of a trade mark 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". This has generally allowed trade mark owners to make minor variations to their use of their trade marks over time in commercial operations without fear of their corresponding trade mark registrations being revoked for non-use.
Crocodile International applied to revoke the Registered Trade Mark on the grounds of non-use.
Lacoste admitted that it had never used the Registered Mark, but argued that its use of the following marks amounted to use of the Registered Mark "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" pursuant to section 7, thereby entitling it to maintain the registration of the Registered Mark:
(the Lacoste Marks).
The Assistant Commissioner, who only considered the first of the above Lacoste Marks, held that its use did not constitute use of the Registered Mark as contemplated by section 7.
However, the High Court, considering the two device Lacoste Marks, overturned the initial decision and held that use of the device Lacoste Marks constituted use of the Registered Mark within the meaning of section 7.
Crocodile International appealed the High Court decision, claiming that Collins J had taken the wrong approach in assessing the marks. In particular, Crocodile International claimed that Collins J failed to identify essential elements of the Registered Mark when comparing it to the Lacoste Marks and applied principles of comparison which are relevant only to cases of passing off, infringement or deception.
The Court of Appeal dismissed Crocodile International's appeal, holding that use of the Lacoste Marks was sufficient use of the Registered Mark within the meaning of section 7. The Court confirmed that the correct two-stage enquiry had been applied by Collins J, being to:
- assess the points of difference between the marks as used and the mark as registered; and
- ascertain if the differences alter the distinctive character of the mark as registered.
The Court acknowledged that there were differences between the Registered Mark and Lacoste Marks, including: (i) the crocodile is facing in opposite directions; (ii) the Registered Mark and Lacoste Marks use different fonts; (iii) the placement of the words "crocodile" and "Lacoste" are different relative to the crocodile image; and (iv) the two device Lacoste Marks do not contain the word "crocodile" – one has the word "Lacoste" while the other has no word at all.
However, the Court held that "in terms of the overall impression these differences are insignificant and do not alter the distinctive character" of the Registered Mark "which is dominated by the image of the crocodile. The crocodile is the central idea and message."
According to the Court, the images of the crocodiles used in the Registered Mark and Lacoste Marks are similar and share the same key features – including that the crocodile used in all marks has its mouth ajar, body arched, is drawn side-on, has jaws open slightly and has its scales, eyes, claws and teeth visible. The use of the stylised word "crocodile" in the Registered Mark only served to reinforce the dominant element of the Registered Mark and added little or nothing to the distinctiveness of the Registered Mark.
On the above basis, the Court held that Lacoste had used the Registered Mark within the meaning of section 7 by virtue of its use of the Lacoste Marks. Crocodile International's appeal was dismissed and registration of the Registered Mark was maintained.
The Supreme Court of New Zealand has granted Crocodile International leave to appeal the decision of the Court of Appeal. The question to be resolved on appeal is: "Did the Court of Appeal err in upholding the High Court decision to set aside the order made by the Assistant Commissioner of Trade Marks revoking trade mark 70068?"
By focussing on the "central idea and message" of the marks, the Court of Appeal appears to have broadly applied section 7 to maintain registration of a trade mark on the basis of the use of conceptually similar marks. This decision may pave the way for New Zealand trade mark owners to rely on the use of conceptually similar trade marks to defend non-use actions and may make it more difficult to remove trade marks for non-use. Accepting use of conceptually similar trade marks for the purposes of defending a non-use action would result in a significant departure from the stricter approach previously taken in New Zealand and currently taken in other countries including Australia.
It will be interesting to see if the Supreme Court overturns this ruling on appeal. The final decision on this case will no doubt be anticipated with much interest.
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