ARTICLE
23 October 2024

The Crocodile Conundrum: Lacoste V. Crocodile International Explained

LS
Lakshmikumaran & Sridharan

Contributor

Lakshmikumaran & Sridharan (LKS) is a premier full-service Indian law firm specializing in areas such as corporate & M&A/PE, dispute resolution, taxation and intellectual property. The firm, through its 14 offices across India works closely on litigation and commercial law matters, advising and representing clients both in India and abroad.
Trademark battles seldom last decades, however when they do, they give rise to a complex set of issues to address and adjudicate.
India Intellectual Property

Trademark battles seldom last decades, however when they do, they give rise to a complex set of issues to address and adjudicate. One such case led to the recent judgement in Lacoste & Anr. v. Crocodile International Pte Ltd & Anr. CS(Comm)1550/2016, wherein the Delhi High Court ruled upon a two-decade long conflict between so-called 'mirror' logos of a crocodile/ saurian i.e., 1533920a.jpg '' v. ''1533920b.jpg. Interestingly, the dispute forms part of a larger ongoing global conflict between the two parties in various jurisdictions such as Philippines, China, Singapore, New Zealand, etc. As one may expect, verdicts differ in different countries, however in India, the matter (which includes a myriad of facts, involving co-existence agreements, complexities in prior use, letters of consent, evidentiary lacuna, etc.) has been decided, atleast in the first instance, in favour of Lacoste. The judgement touches upon various important principles, such as anti-dissection, initial interest confusion, idea-expression dichotomy, merger doctrine, etc. Before delving into the same, a brief understanding of the facts is necessary.

Brief facts

Both Lacoste ('plaintiff') and Crocodile ('defendant') lay claim to crocodile/ saurian logos that appear to mirror each other: 1533920c.jpg vs 1533920d.jpg , respectively. Both parties have been using these logo devices on their clothing articles around the world, including India. The plaintiff instituted a suit for trademark infringement, copyright infringement, and passing off against the defendant's use of the mark. In defense, the defendant claimed that the present suit breaches the mutual understanding and contracts signed by the parties to maintain peaceful co-existence regarding their respective marks. Further, the defendant claims honest and concurrent use on account of a co-existence agreement signed between the parties in 1983 and a letter dated in 1985. In deciding the present matter, these two main documents, as well as several contemporaneous documents were scrutinized by the Court. The analysis presented by the Court gives an insight into the realm of IP enforcement, and the need for complete and holistic agreements.

A. The 1983 Agreement (dated 17 June 1983)

Applicability of the 1983 Agreement to India

The plaintiff and the defendant entered into a co-existence agreement on 17 June 1983, ('1983 Agreement') for co-existence between their saurian marks in specified markets. 'Territories' specified in Article I of the Agreement included Taiwan, Singapore, Indonesia, Malaysia (Malaya, Sabah, Sarawak), and Brunei. The same was also mentioned in the Preamble of the Agreement, and further Article II of the Agreement emphasized on the operational limits of the Parties within these defined territories. However, the Recitals of the Agreement also spoke of intentions of the Parties to cooperate in other parts of the world wherever possible.

The tenor of the Agreement and its specific clauses clearly delineates the rights of the Parties with respect to defined territories in Article I of the Agreement. Basis the same, the Court opined that there was no substantive, contractual or documentary support in the Agreement to show India or any other country was implicitly covered under the ambit of the Agreement.

The Court emphasized in the judgement that contracts are to be expressed in precise and unambiguous terms. No analogous terms or purported notions of 'understanding', 'spirit of goodwill', 'cooperation' can imply an understanding in the Agreement to extend to territories other than the ones explicitly mentioned in Article I of the Agreement.

The Court stressed that factors such as prevailing law, specific right and obligations, parties conduct, and explicit agreements should be considered at the time of adjudication of a matter, and the same is not to be adjudicated on the basis of implied or purported spirit of the Agreement. Hence, the Agreement was considered to be not binding qua India.

Territoriality of trademarks

Trademark rights are territorial and the jurisdiction in which they are granted and enforced play a key role. Rights granted in one country does not automatically confer rights in another, unless explicitly stated via agreement or treaties. Specification of the countries in the Agreement signifies clear intention to limit the scope of the Agreement in the specified territories only. This is clear from the fact that the plaintiff enforced its rights via legal proceedings in other countries, not specified in the Article 1 of the 1983 Agreement, such as in Myanmar and China, indicating the restrictive territorial scope of the Agreement.

Partial Arbitral Award of 15 August 2011

Further reliance was placed by the Court upon the Partial Arbitral Award given by the Arbitral Tribunal in Singapore on 15 August 2011, for the interpretation of the 1983 Agreement such as:

  1. Obligations of the Agreement (as per Article II) were confined only to the five territories which are listed as 'the territories' in Article I of the Agreement. Hence the Agreement did not obligate the Parties to consent to registrations in countries outside the specified territories. Further, the Preamble did not give rise to any other agreement.
  2. Contractual obligation surpassed the territorial limits of the Agreement only for 'technical cooperation' between the Parties to combat third party infringers outside the Territories, as illustrated by the plaintiff. The same did not affect other aspects of the Agreement. Hence, technical cooperation between the Parties which are directed against third parties does not obligate the Parties to not object the other Party's marks

The Tribunal also considered the Parties' conduct by the fact that multiple disputes outside the Territories of the Agreement were instituted.

Basis the same, it was concluded by the Court in the present matter that there was an absence of an express provision in the Agreement, regarding the Parties having to co-exist and cooperate in India. The Court opined that the ambit of the Agreement did not apply to the Parties in India and hence, the defendant could not assert its rights emanating from the 1983 Agreement in the Indian jurisdiction, and such an attempt by the defendant was labelled by the Court to lack legal basis and to be inconsistent with the territorial nature of trademarks.

B. 1985 Letter (dated 22 August 1985)

The next major document relied upon by the defendant, was the Letter dated 22 August 1985 (1985 Letter), wherein it was stated that the defendant allowed the use of the marks by the plaintiff in Korea, and that the defendant would issue consent letters to the plaintiff for the plaintiff's marks to be registered in India, Pakistan and Bangladesh. Basis the 1985 Letter, the defendant contended that without its consent, the plaintiff could not have registered its marks in India. It was further contended that this Letter was issued after an offer made by the plaintiff to the defendant, proposing to exchange market presents in Korea, for the plaintiff's position in India.

However, the plaintiff stated that the 1985 Letter was not addressed to them, nor did they respond to it, nor was the said Letter signed by them, and accordingly claimed that the Letter did not constitute a mutual agreement which extended the 1983 Agreement to include India in its ambit. Moreover, the plaintiff asserted that they had already registered its trademarks in India, and they never required any consent letter from the defendant in the first place.

Court's interpretation

As there was no documentary or oral evidence regarding the events which preceded the issuance of the 1985 Letter, there could not be any inference that the same extended the scope of the 1983 Agreement to India.

The Court highlighted the need for absolute clarity in trademark agreements, which should be 'clear', 'specific' and 'actionable'. Factors such as:

  1. Lack of precise legal documentation backing the 1985 Letter;
  2. The plaintiff's actions in opposing the defendant's mark and rejecting their requests in different countries such as in Hungary, Japan, Myanmar, Uganda, India, Pakistan, Vietnam, Cambodia, Laos, Italy and China;
  3. The elusive and vague responses of the witnesses who were cross-examined regarding 1985 letter and the 1983 Agreement.
  4. Lack of evidence demonstrating the plaintiff's need, demand or subsequent use of the said 1985 Letter to get its marks registered in India;
  5. The Partial Arbitral Award of 2011 which recognised the 1983 Agreement to only apply to the Territories mentioned in its Article I,

negated the claims of the defendant, regarding the 1985 Letter being an extended understanding for the 1983 Agreement, to apply to India as well.

This reinforces the necessity of clarity and specific context in trademark agreements, to enable effective enforcement.

C. Contemporaneous documents

The defendant further adduced certain contemporaneous documents to substantiate its claims, however most of these documents and letters were rejected by the Court as evidence of any binding agreement applicable to the use of the defendant's saurian logo '1533920e.jpg' in India, as the defendant was unable to share the originals of these documents, and because, the arguments and assertions made within these letters and documents pertained primarily to regions explicitly outside of India. However, the documents that were admitted in evidence further demonstrated the plaintiff's disinclination to sanction continuous use of the defendant saurian logo '1533920e.jpg' without the 'Crocodile' signature, showing the plaintiff's intent to protect their trademark rights and limiting the scope of co-existence.

Accordingly, the Court concluded that neither the 1985 Letter nor the admissible contemporaneous documents were accepted as extensions to the 1983 Agreement covering the defendant's devices especially the saurian logo '1533920e.jpg' in India. Accordingly, basis the finding of no intent of co-existence between the Parties in India, the Court went on to address the issues of prior rights, infringement and passing off which is discussed below:

1. Complexities of prior rights

Before answering the questions of infringement and passing off, any suit necessitates the establishment of whose rights are prior.

plaintiff's rights in India

defendant's rights in India

1983 – Date of earliest Indian registration no. 400267 for the standalone saurian logo '1533920g.jpg'

1993 – plaintiff's proven claim of first use of its standalone saurian logo in India.

1952 – Date of earliest Indian registration no. 154397 for the mark '1533920f.jpg', which comprises the saurian logo along with the word 'CROCODILE'.

1997 – defendant's claim of use of the saurian logo in India.

1998 – defendant's proven first use in India of a composite mark i.e., comprising both the saurian logo and the words 'CROCODILE'/ 'CROCODILE INTERNATIONAL'.

Based on the findings above, the Court held that while the defendant has prior rights in its composite mark (i.e.,1533920f.jpg, which comprises both the word 'CROCODILE' and the saurian logo), however these rights only extend to the composite mark as a whole i.e., not extending to the standalone saurian logo per se. Thus, even though the plaintiff's registration (1983) and first use in India (1993) of the standalone saurian logo is subsequent to the defendant's composite registration (1952), the plaintiff was titled the prior adopter and user of the saurian logo as the defendant's earlier registration merely comprises the saurian in addition to other elements and thus, does not entitle it to rights over the saurian alone.

This finding of the Court reaffirms the fundamental principle of anti-dissection in trademark law i.e., a mark must be considered as a whole and not in pieces to assert rights. It reaffirmed the rights of proprietors and asserts that no matter how complex the background of a case may be, the anti-dissection principle cannot be compromised on.

2. Holistic assessment of likelihood of confusion: a win for trademark infringement

The Court thereafter analyzed the similarities and dissimilarities between the conflicting marks of the parties.

plaintiff's mark 1533920a.jpg

defendant's mark 1533920b.jpg

Analysis of the similarities

  • Identical shape and posture, indicated by horizontal position, upwardly curved tail, side view portraying legs/ tail/ feet/ claws in similar fashion.
  • Open mouth with visible teeth, placement and shape of teeth nearly alike.
  • Arrangement and pattern of scale on the back is similar.
  • Overall silhouette is indistinguishable.
  • Similar aggressive stance.

Analysis of dissimilarities

  • Certain distinction in the limbs and other features, however the positioning of defendant's logo mirrors that of plaintiff's logo.
  • Orientation of the crocodiles (plaintiff's crocodile is facing right, whereas defendant's crocodile is facing left) carries minimal weight and will be perceived as insignificant by the consumers

Based upon the above analysis, the Court held that the similarities between the two saurian logos are 'not only numerous, but also substantial' such that they create a strong overall ocular and conceptual resemblance, which overshadows the minute directional difference of the logos. Accordingly, the Court held that this would cause 'initial interest confusion' i.e., an average consumer might initially believe that the defendant's goods originate from the plaintiff, even if this confusion may not persist throughout the transaction. Thus, given the similarities between the marks and the identical goods to which they pertain, the Court affirmed the finding of significant likelihood of consumer confusion. Given the same along with the established prior rights of the plaintiff in the standalone saurian logo, it was held that there is a strong case for trademark infringement under Section 29(1) of the Trade Marks Act, 1999.

3. The value of evidence in passing off

While the plaintiff prevailed with respect to trademark infringement, their claim of passing off did not sustain. Any claim of passing off to be established, the plaintiff must successfully establish (a) reputation (b) misrepresentation to the public by the defendant (c) damage to plaintiff's goodwill or reputation by the defendant's actions. However, the plaintiff in this matter was unable to pass the first threshold, due to their failure to meet evidentiary requirements.

The Court defined reputation as 'recognition and standing that a trademark has acquired in the relevant public', and promulgated that reputation is built over time through consistent use, quality assurance, and marketing efforts. This can only be proven through convincing evidence. In this case, the plaintiff presented two witnesses proclaiming extensive reputation of its saurian logo, articles, advertisements, study conducted on the awareness of the saurian logo, Chartered Accountant certificate endorsing the sale/ promotional expenses, ex-parte ad-interim injunction orders against other third parties using the saurian logo, computer generated prints of newspaper articles, endorsement by celebrities, etc. However, despite the evidence provided, the Court emphasized that the standard for assessing reputation is stringent and held that the plaintiff's oral and documentary evidence does not establish their exclusive reputation in the saurian logo. This was because the plaintiff failed to provide the certificate required under Section 65B of the Indian Evidence Act, 1872 (now Bharatiya Shaksya Adhiniyam 2023). The 65B certificate is necessary for the admissibility of electronic evidence in court proceedings as it serves as proof that the electronic evidence is authentic and has not been tampered with.

By submitting electronic copies of print articles, advertisements, etc., the plaintiff had, in the present case, presented electronic copies of the primary evidence. Accordingly, the Court mandated the requirement for a Section 65B certificate. In holding so, the Court stipulated that 'digital scans stored on a computer are treated as electronic records, and copies made therefrom are considered to be derived from electronic records. The absence of originals or certified copies of these print articles impinges the evidentiary value of these copies. Without a Section 65B certificate, these documents cannot fulfil the threshold of reliability and authenticity required by law, significantly weaking the plaintiffs' case'. Thus, the lack of original copies along with failure to provide the 65B certificate resulted in rejection of the electronic evidence provided by the plaintiff. As regards the other evidence furnished by the plaintiff, the Court held as follows:

(i) Survey Report regarding recognition of the saurian logo lacked background documents detailing how the survey was conducted, data collected, methodology employed. Thus, the report was uncorroborated and self-serving.

(ii) Chartered Accountant certificate was accepted by the Court as high sales figures/ promotional expenses corroborated reputation. However, this was not supplemented with other supporting documents to prove the sales and promotions.

Thus, by inter alia failing to provide Section 65B Certificate, the plaintiff's evidence was refused to be taken on record. The remaining evidence was insufficient/ self-serving to prove reputation. Due to failure to prove reputation, the plaintiff's case of passing off did not find favour with the Court.

4. Limited expression: No copyright infringement

In so far as copyright infringement was concerned, here too the plaintiff failed, albeit on merits. The plaintiff asserted that it held copyright in its saurian logo, (under Reg. No. A-62692/2002) and that the defendant's saurian logo amounted to unauthorized substantial imitation of its artistic work and therefore, infringement thereof.

The Court emphasized that resemblance in the logo trademarks does not necessarily mean that copyright in the said trademarks has also been infringed. An independent assessment is necessary, under the tenets of copyright law, as per the Court. Therefore, the Court referred to the concept of idea-expression dichotomy i.e., copyright protects the expressions of creativity of the author and not the idea or the concept of the work. Reliance was also placed on the 'merger doctrine', which stipulates that 'when an idea and expression are so entangled that they are indistinguishable, a creator cannot be accorded monopoly over the idea which forms creative expression. Simply put, when the manner of expression of a concept is restricted, the Courts will not confer exclusive rights on the idea itself'. Applying the idea-expression dichotomy and merger doctrine to the present case, the Court held that the underlying concept of both works (the plaintiffs' and the defendants') is identical i.e., a ferocious crocodile in aggressive stance. This concept has very limited forms of expression, inasmuch that any depiction of a ferocious crocodile in aggressive stance will invariably include common features that form part of the works in question as well (tail, limb, open mouth, pointed teeth, scale, claws). Thus, due to the limited way in which the underlying idea can be expressed, no infringement of copyright can be constituted.

Conclusion

The judgement presents an interesting read given it is an amalgamation of plethora of branches of IP i.e., infringement, passing off, IP enforcement through agreements, territoriality of trademarks, etc. The judgment also highlights the test of the various principles and procedures, which lie in disputes that are subject to trial. Given that the bulk of India's IP jurisprudence is based on interim stage decisions, we need more such post-trial judgments to understand and appreciate nuances of IP law and Civil Procedure.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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