Crocodile International Pte Limited v Lacoste HC Wellington CIV 2009-485-2534
[2010] NZHC 1427
•12 August 2010
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV 2009-485-2534
CIV 2009-485-2536
UNDER the Trade Marks Act 1953 and 2002
IN THE MATTER OF Appeals from the decisions of the Assistant
Commissioner of Trade Marks dated 16
November 2009
AND
IN THE MATTER OF New Zealand Trade Marks Nos. 717557
CARTELO and 604957 CROCODILE
BETWEEN CROCODILE INTERNATIONAL PTE LIMITED
Appellant/Respondent
ANDLACOSTE Respondent/Appellant
Hearing: 4 August 2010
Counsel: B Brown QC and B M Sullivan for Crocodile International
J G Miles for QC and K J Duckworth for Lacoste
Judgment: 12 August 2010
JUDGMENT OF SIMON FRANCE J
CROCODILE INTERNATIONAL PTE LIMITED V LACOSTE HC WN CIV 2009-485-2534 12 August 2010
Table of Contents
Paragraph No.
Introduction [1] Assistant Commissioner’s decision on CROCODILE [6] (i) Background [6] (ii) Decision [11] (iii) The Appeal [24] Assistant Commissioner’s decision on CARTELO Logo [26] (i) Background [26] (ii) Decision [28] (iii) Appeal grounds [31] Other procedural events before the Assistant Commissioner [34] And so the present application [41] Applicable principles on the admission of fresh evidence [50] Evidence : the Lacoste employees’ evidence of confusion [65] Evidence : Kristina Mathieson [78] Evidence : Messrs Tyson and Blood [86] Evidence : Mr Blanc, first declaration [93]
Evidence : Mr Blanc, second declaration [114] Conclusion [124]
Introduction
[1] Lacoste and Crocodile International both made applications to register trade marks.
[2] Lacoste wished to register the mark CROCODILE.
[3] Crocodile International wished to register two marks. It is necessary to set out only one of these marks because the second is the same but colour specific:
[4] Each company successfully opposed the other’s application with the result that none of the marks gained approval. Both sides have appealed. This ruling deals with a preliminary matter, namely an application by Lacoste to call extensive further evidence on the appeal.
[5] It is necessary to set out the key aspects of the rulings under appeal in order to assess the merits of the fresh evidence application.
Assistant Commissioner’s decision on CROCODILE
(i) Background
[6] Lacoste applied to register the mark CROCODILE. Crocodile International opposed first on the basis that the proposed mark would be likely to deceive or cause confusion.[1] In support, Crocodile International identified five marks for which it
[1] There was the inevitable accompanying challenge of “contrary to law” on the basis of a breach of the Fair Trading Act 1986. I do not need to address this separately.
held registrations in various jurisdictions. It detailed a long standing history of sales and advertising, primarily in Asia. One of its trade marks was “Crocodile”, being the same word but not in block capitals.
[7] The second basis of challenge was what is called “proprietorship”. Crocodile
International submitted:
a) Lacoste did not have a legitimate claim to proprietorship of the trade mark CROCODILE;
b) at common law Crocodile International was the owner of the mark;
c) the applicant has not used, and did not have a sufficiently definite intention to use, the CROCODILE trade mark in New Zealand;
d) Lacoste was fraudulently claiming to be the proprietor.
[8] Lacoste filed a counter-statement. It is not necessary to detail its contents, but given the evidence it now seeks to lead on appeal, it is necessary to note Lacoste claimed proprietorship.
[9] The application date is 13 December 1999. The application was put on hold for several years while Lacoste dealt with a company that already held the trade mark sought. The application was revived in September 2004, and advertised in March 2005.
[10] In terms of the issue of “freshness” of the new evidence, it can be noted that Crocodile International filed its objection on 24 June 2005, and Lacoste its counter statement on 28 September 2005. So by late 2005 the specific issues in dispute in New Zealand had been identified.
(ii) Decision
[11] The Assistant Commissioner concluded first that Crocodile International had established that as of December 1999 there was a sufficiently substantial awareness of two Crocodile International marks in the New Zealand market. The two marks
were CROCODILE and another logo:
[12] The evidence that supported this was Crocodile International’s prominence in Asia, and the amount of people traffic between New Zealand and Asia. The migration figures from the relevant countries to New Zealand were noted. Surveys conducted much later showed that in 2007, 10% of New Zealand people surveyed were aware of the CROCODILE brand and that in 2006 17.9% were.[2] Given this level of awareness in the Crocodile International marks, it was concluded that confusion was likely.
[2] The different figures reflect different surveys by different companies
[13] The Assistant Commissioner then moved on to consider the proprietorship challenge. She identified the following well established requirements against which disputes about proprietorship are assessed:
1.there is no prior use or prior assertion of proprietorship (i.e. by someone else);
2.the applicant is using or has a sufficiently definite intention to use the mark;
3. there is no fraud or breach of duty involved.
[14] It will be recalled that in its opposition Crocodile International had specifically put in issue the last two elements.
[15] The Assistant Commissioner found for Lacoste on the first and third elements. The second issue was, and remains, the contentious one. The judgment under appeal displays some uncertainty as to whether Lacoste was relying on existing use or a future intention to use. The formal written record suggests the latter, and Mr Miles QC, who was not counsel before the Commissioner, submits that was always the basis.
[16] Mr Brown QC accepts that, but says that at the hearing Lacoste for the first time floated the idea that it might have been using the mark in New Zealand prior to December 1999. Over Mr Brown’s objections, the Assistant Commissioner decided to consider both limbs.
[17] The possibility that Lacoste might already have been using the mark CROCODILE in New Zealand prior to 13 December 1999 needs some elaboration. Lacoste produces a wide range of apparel. A well known item is the polo shirt, and Lacoste views its white L1212 polo as its flagship – it is the iconic Lacoste polo. The L1212 model of the polo shirt is produced in many colours but the white one is regarded as special.
[18] The white polo, like all the polos, has only the well known crocodile logo on the left front chest area. However, it also has a swing tag attached which has on it the following detail:
L1212001
EURO SIZE 6
AUS SIZE XL
$115.00 [BARCODE] CROCODILE
[19] Lacoste says that the word CROCODILE as used on the tag is a trade mark use. That is disputed by Crocodile International and was rejected by the Assistant Commissioner. Even if it were, however, in order to found a claim of existing use, Lacoste would have to show that the swing tag was in use in New Zealand prior to December 1999.
[20] It is here that Lacoste accepts it cannot meet that onus. Whilst it might be able to establish sales of the shirt in New Zealand, those shirts were manufactured, as I presently understand it, first in Australia and then later in New Zealand. It cannot be shown that these Australasian manufactured shirts, unlike the international equivalent, had the swing tag affixed to them.
[21] As noted the Assistant Commissioner decided to address both limbs of the second test of proprietorship. Concerning existing use, she observed:
Having considered this swing tag evidence, I find that Lacoste has not established that it has used the relevant mark (as a trade mark) at, or since the relevant date because the case that it relies on occurred between July 2005 and the date of the Smith declaration (which is after the relevant date; and the use that it relies on is, in my view, not trade mark use. In my view the use of the word “CROCODILE” on the swing tag is simply the style of the polo shirt ...
[22] There is some ambiguity in the language. For the purposes of assessing the admissibility of the fresh evidence Lacoste now seeks to introduce, I take this passage to amount to findings by the Assistant Commissioner both that:
a) there is no evidence of use prior to December 1999; and
b) the swing tag use that has occurred in New Zealand after
December 1999 is not anyway trade mark use.[3]
[3] This is a different reading of the passage than that which Lacoste advances in its appeal notice. Mine is not a definitive conclusion but rather for the time being gives it the widest possible reading against which relevance of the fresh evidence can be assessed.
[23] To summarise then the key findings on the CROCODILE application, it was held that:
a) Crocodile International had established sufficient awareness of two marks in the relevant market;
b)as a consequence, when the marks are compared, there is a sufficient risk of confusion;
c) in any event Lacoste failed on proprietorship because it had not shown a definite intention to use the mark;
d)alternatively, if Lacoste was claiming existing use, the evidence did not establish that;
e) one aspect of evidence that Lacoste relied on as relevant to either limb of the second step in the proprietorship test – namely use of the word CROCODILE on the swing tag – was not a trade mark use of the word.
(iii) The appeal
[24] Lacoste appeals. Concerning the confusion finding it disputes that it was established that Crocodile International had a sufficient reputation in the New Zealand market.
[25] Concerning proprietorship, the appeal notice treats the Assistant Commissioner’s judgment as saying that Lacoste was relying solely on existing use. However, Lacoste must have moved on in its thinking since the appeal notice as it now supports admissibility of the fresh evidence on the basis that its admission is necessary in order to respond to the Assistant Commissioner’s finding that Lacoste did not have a settled intention to use the mark. That the Assistant Commissioner did address the topic of future intended use is beyond dispute - see [91] of the ruling under appeal.
Assistant Commissioner’s decision on CARTELO Logo
(i) Background
[26] Lacoste’s primary ground of opposition to the CARTELO application was the likelihood of confusion, given Lacoste’s established reputation in its crocodile device. Passing off, and the Fair Trading Act 1986, were also pleaded, as was the proposition that the proposed logo had no distinctive character, given Lacoste’s brands. Finally, Lacoste relied on s 25(1)(c) – prejudice to a well known mark, and s 25(1)(b) – similar goods/similar mark.
[27] Crocodile International responded in its counter statement that its proposed trade mark was a visually distinctive word and device mark that was clearly distinguishable from any existing registered mark. It emphasised the word feature of the mark, CARTELO.
(ii) Decision
[28] It was held that Lacoste had established a reputation in two trade marks, and also in the word LACOSTE as a name, mark and brand. The two trade marks in which sufficient reputation was established were the crocodile device, and the crocodile device with LACOSTE in block capitals situated underneath the crocodile.
[29] Concerning confusion, the Assistant Commissioner accepted that the Crocodile devices were similar, but was of the view that the addition of the word CARTELO was significant. She would not have held the marks on their own would be likely to cause confusion, but when other factors such as Lacoste’s reputation in the crocodile device were factored in, confusion was likely.
[30] As for other challenges, because of her view the marks were dissimilar, the challenge based on s 25(1)(b) failed. However, consistent with the emphasis given to Lacoste’s reputation in its crocodile device, the challenge based on s 25(1)(c) – the damage to a well known mark ground – was successful.
(iii) Appeal grounds
[31] Crocodile International has appealed each of the adverse findings. The challenges dispute the weight given to various items of evidence, but also claim that one of the two Lacoste trade marks was not pleaded, and anyway was not well known (this is the crocodile with the word LACOSTE underneath).
[32] The challenge to the “well known mark” finding focuses on the issues of similarity, likely prejudice, and connection in trade.
[33] Lacoste has cross appealed the Assistant Commissioner’s decision to exclude some of its evidence. It also challenges every finding adverse to it.
Other procedural events before the Assistant Commissioner
[34] The process for the filing of evidence at one of these trade mark hearings is that the party objecting to the trade mark files first. Accordingly, Lacoste filed evidence in support of its opposition. The Assistant Commissioner grouped the evidence filed by Lacoste under these headings:
a) evidence from Lacoste and its lawyers. The primary declaration was by Christian London, the then legal director at Lacoste. It provided the history of Lacoste, its trade marks, its sales both worldwide and particularly in New Zealand, details of its advertising, and of its worldwide efforts to enforce its trade marks;
b) evidence from trade witnesses;
c) survey evidence.
[35] Crocodile International’s evidence in support of its application was grouped under:
a) evidence from Crocodile International and its lawyers;
b) evidence from members of the public;
c) expert evidence, being a critique of the survey and opinion evidence filed by Lacoste.
[36] The Regulations then allow for the opponent who filed first to “file evidence strictly in reply”. Lacoste accordingly filed further evidence under each of the headings earlier described:
a) Mr London filed two more declarations:
i)the first provided information on Lacoste’s New Zealand trade mark registrations, Lacoste’s registrations of CROCODILE around the world, advertising marketing and sale information on goods bearing the crocodile device and on the word CROCODILE, comments on the use of the mark “alligator”, his assessment of Crocodile International’s claims around the world to the word CROCODILE, and further information on the history of the disputes between them;
ii)the second London reply declaration attached some pages missing from his earlier declaration;
b)a declaration from a New Zealand lawyer (Ms Smale) concerning the number of travellers between Australia and New Zealand;
c) three declarations from Mr Stephen Stern who is an Australian solicitor with primary responsibility for Lacoste litigation there (and, as I understand from the hearing, in New Zealand at least as regards these proceedings):
i) the first Stern declaration responded to specific paragraphs of a
Crocodile International declaration;
ii)the second Stern declaration appended seven declarations that had been filed by Lacoste in equivalent Australian proceedings about these marks;
iii)the third declaration responded to a second declaration from a Crocodile International witness that IPONZ had allowed to be filed out of time. Mr Stern’s declaration explained how Lacoste had sought to obtain information on consumer confusion by sending questionnaires to Lacoste employees in Asia. The declaration then provided a summary of the questionnaire results and gave examples of consumer confusion in three specific countries;
d)Mr Smith describes what Lacoste apparel his company has brought into New Zealand since 2005;
e) next two witnesses – Braha and Fayet – appended the questionnaires earlier referred to;
f) expert evidence (Benzie) on a new survey Lacoste had ordered;
g) then a different solicitor (Ms Weibel) from the main Lacoste legal team filed a declaration commenting (in response) on litigation occurring in China, United Arab Emirates and Japan;
h)finally, two Lacoste experts (Brodie and Fougere) filed replies to the Crocodile International expert’s criticisms of Lacoste’s survey evidence.
[37] Crocodile International objected to all the reply evidence, saying it was not strictly in reply as required by the Regulation.
[38] The Assistant Commissioner ruled that the declarations of the two witnesses that appended the questionnaires amounted to double hearsay and were inadmissible for that reason. Mr Stern’s third declaration, which summarised the questionnaires, was inadmissible for the same reason.
[39] The second Stern declaration, as well as those of Ms Smale, and Mr Benzie were assessed to be not strictly in reply and were therefore inadmissible for that reason.
[40] Most of the other evidence was admissible, except for a few paragraphs.
And so the present application
[41] After that necessarily long setting of the context, I turn now to describing the evidence concerning which special leave is sought to admit it on the appeal. It consists of two substantial bound volumes, Mr Brown observing that that size is achieved only by double siding. To be fair much of the bulk comes from appendices of advertisements and the like.
[42] The application groups the new evidence under two headings and I will use those. First there is “Evidence addressing confusion and deception”. This consists of declarations by ten of the employees who had originally filled out the questionnaires, the admissibility of which had been rejected by the Assistant Commissioner. In addition to the ten declarations, Mr Stern provides a declaration explaining the process by which the evidence was obtained.
[43] The second group of evidence is “Evidence addressing intention to use and use of CROCODILE by Lacoste”. This evidence consists first of two declarations by Mr Frederic Blanc who is the intellectual property manager for Lacoste. He notes he has read the Assistant Commissioner’s decision, and proceeds to comment on why some of her conclusions are factually incorrect. The internal headings of his declaration are:
a) History of Lacoste’s use of the Crocodile Trade Mark; b) Lacoste’s intention to use the Crocodile Trade Mark; c) Lacoste’s New Zealand Distributors;
d)Lacoste’s New Zealand and Australian Trade Mark applications for the CROCODILE Trade Mark;
e) Lacoste’s further use of the CROCODILE Trade Mark in
New Zealand;
f) Lacoste’s recent use of the CROCODILE Trade Mark in Australia. [44] The declaration is substantial.
[45] Mr Blanc’s second declaration covers two matters. First, it appends what is said to be a recent admission by Crocodile International that the white L1212 swing tag is a trade mark use by Lacoste of the word CROCODILE. Second, the declaration appends two further Lacoste advertisements (published in overseas publications) which Mr Blanc says provide examples of the use of the CROCODILE trade mark. They are from the early to mid 1980s.
[46] The next declarations submitted under this heading of “evidence showing an intention to use CROCODILE” are from Mr John Blood and Mr Bill Tyson. It can be recalled that at the original hearing Lacoste unsuccessfully tendered a declaration by Mr Stern which sought to introduce as evidence in New Zealand seven declarations that had been filed in the equivalent Australian proceedings. Mr Blood and Mr Tyson are two of those seven declarants.
[47] Mr Tyson recounts his history of dealing in Australia and New Zealand with Lacoste products. He was general manager of Active Leisure which in late 1993 took over distribution of Lacoste in Australia and New Zealand. He records that the L1212 polo shirt was the centre-piece of products sold.
[48] Mr Blood’s involvement was through Sportscraft. He records the history of manufacture of the Lacoste shirts in Australia through the 1980s and confirms it included the L1212 polo. He recalls it being sold in New Zealand.
[49] Finally there is an affidavit from Ms Kristina Mathieson. She was an original deponent. A paragraph from her declaration was used by the Assistant Commissioner in her judgment. Ms Mathieson has filed an affidavit to say that the Assistant Commissioner has misunderstood what she meant.
Applicable principles on the admission of fresh evidence
[50] Counsel are at odds over the applicable rules. No doubt doing neither justice, I summarise the competing positions this way. Mr Miles submits special rules apply in the trade mark area. This is because there is a public interest in a pure register and this public interest overrides any unfairness that might arise between the particular parties because of further evidence being admitted. (Not that he concedes there is unfairness.) Mr Brown contends that the usual approach to fresh evidence on an appeal applies, and takes support from recent legislative developments, particularly what he describes as a tightening of the procedures in the Trade Mark Regulations 2003.
[51] The starting point must be s 172(2) of the Act which says that:
Appeals must be heard only on the materials stated by the Commissioner unless a party, either in the manner prescribed or by special leave of the Court, brings forward further material for consideration of the Court.
[52] The equivalent provision in the 1953 Act, s 27(8), was identically worded.
[53] The primary authority relied on by Mr Miles is Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50 (CA). In that case Cooke J (as he then was) had, on a High Court appeal, declined to admit further evidence. The Court of Appeal took a different view.
[54] The case concerned registration in New Zealand of a mark, HY-LINE. Hy-Line Chicks was an Australian company seeking to register it in New Zealand. Hi-Bred Corn was an American company that used the mark there, and based its claim of confusion on the advertising it did in publications distributed in New Zealand.
[55] Before the Assistant Commissioner there had been evidence about awareness in New Zealand of the brands of both companies. However, the evidence was vague as to whether the surveyed consumers had in mind the date of application as the relevant date for when they had to comment about awareness of the brand. The fresh evidence sought to clarify this oversight.
[56] Richardson J observed that there were three factors favouring admission. The third was the lack of prejudice, it being accepted by Hy-Line Chicks that it was credible evidence to which it would not seek to reply. The others were (at 73):
First, the object of s 16 is to protect the public interest. The proceedings are not simply for the benefit of the respective parties ... Within reasonable limits it furthers that public interest to allow consideration of any available evidence that will assist in providing a clearer picture of awareness of rival marks as affecting the likelihood of deception and confusion. Second, the evidence sought to be adduced is evidence that would assist in resolving ambiguities in material furnished to the Assistant Commissioner.
[57] It is this passage on which Mr Miles most relies, supported as it is by similar comments by Woodhouse J (at 56). Before moving on to note the other cases cited by Mr Miles I observe that Mr Brown notes that the Richardson J Pioneer Hi-Bred passage is prefaced by the Judge’s observation that:
I consider that in the special circumstances of this case the further evidence should be admitted.
[58] Mr Miles next referred to Indtex Trading Limited v The Otago Rugby Foodball Union HC Auckland AP 23-SW 01, 1 June 2001. That also was a ruling on fresh evidence. His Honour observed that it was important that such proceedings be determined with all the appropriate relevant evidence before the Court so as “to ensure that whatever monopolistic rights survive the process survive because of a full evaluation on all appropriate evidence”.
[59] In Daimler AG v Sany Group Co Limited HC Wellington CIV 2008-485-2333, 22 April 2009, Miller J, the new evidence consisted of pages from the SANY website, and a photo of a SANY truck.[4] Miller J observed:
[4] Mr Miles would add to these Amadeus Global Travel Distribution SA v Sabre Inc HC Wellington AP126/02, 14 March 2003, Ronald Young J. I observe of that case that it dealt with “further” evidence prior to the matter being heard by the Commissioner.
[6] Counsel debated whether the approach in trade mark cases is more flexible, and I will cite cases to which I was referred: Pioneer Hi-Bred Corn Company v Hy-Line Chicks Pty Ltd [1978] 2 NZLR 50; Indtex Trading Limited v The Otago Rugby Football Union HC AK AP 23-SW 01 1
June 2001; AMI Insurance Limited v The New Zealand Automobile
Association Inc HC WN CIV 2003-485-836 28 November 2003; Betterware v Commissioner of Trade Marks HC WN CP19/02 6 May 2002. I accept
that trade mark cases display features that make the applicant’s task a little
easier in practice. A trade mark is a monopoly, and there is a public interest in ensuring that it is not conferred in error. The onus is on the applicant for the mark to show that it will not cause confusion. The evidence may not require a new trial in the appellate Court, with credibility issues needing to be determined and witnesses cross-examined.
[60] In his competing submissions, Mr Brown referred to the Trade Mark Regulations 2003. He noted that they had adopted a carefully prescribed regime for the filing of evidence. Its clear purpose was to ensure that these disputes were progressed in an orderly and timely way. He emphasised regulations 82–85 which set firm timeframes for each stage of the receipt of evidence and the use of the words “strictly in reply” in regulation 85. Mr Brown submitted the integrity of this system, and of IPONZ application of it, was threatened if on appeal there was a common practice of allowing further evidence that could and should have been called at the initial hearing.
[61] I do not particularly differ from Miller J’s summation of the situation. I am wary, however, of the idea that Pioneer Hi-Bred created a special rule for trade mark cases. First, I doubt it is special in that it is not a unique proposition to suggest that the public interest component of an issue means that factors other than the strict merits between the parties are relevant to the outcome. Second, Richardson J referred to it as a special case, and the evidence in issue was genuinely correcting or clarifying particular evidence that had been led at the initial hearing. On its own facts it is a relatively modest example of allowing further evidence. As will be
apparent I consider that much of what is proposed here goes well beyond the contemplation of the Judges in Pioneer Hi-Bred.
[62] A common theme of the cases that have allowed further evidence is the idea that a monopoly should not be conferred in error. Here the applicant has been denied a monopoly and is seeking to strengthen on appeal its position.
[63] Mr Miles submits that the concern is a pure register and this is so regardless of who is seeking to lead further evidence. The principle applies either way. Whilst the validity of that may seem apparent, it can be noted that an unsuccessful applicant can apply again (as Lacoste has done). All that is lost is the priority date. Further, the applicant can still use their mark; it is just that they cannot prevent, through trade mark law, the use of similar marks by others. However, the laws of passing off and fair trading remain available.
[64] I do not consider any decision in this case turns on the point but I have noted it because it was addressed by counsel. I turn then to consider the various items of evidence which Lacoste seeks to introduce.
Evidence : the Lacoste employees’ evidence of confusion
[65] Before describing this evidence I note that Lacoste has already succeeded on this ground in that the Assistant Commissioner held on both applications that there would likely be confusion.
[66] The evidence in issue here are the ten declarations of Asian employees of Lacoste. In those declarations the employees detail instances of customer confusion between Lacoste and Crocodile International labels. Although sometimes it is hard to assess, on my reckoning the first instance of confusion that each employee refers to occurred respectively in 1999, 2000 (x2), 2001, 2004 (x3), 2005, 2007 and 2008.
[67] The obvious point that can be made about this is that it is largely evidence that has always been available to Lacoste, so one must ask why it belatedly sought to introduce it at the hearing in hearsay form, and now in a different form (still hearsay, however) on the appeal.
[68] Mr Stern’s declaration seeks to explain it from Lacoste’s viewpoint. As I understand it, the key is said to be that it was not originally appreciated evidence of overseas confusion, as opposed to confusion in New Zealand, would be an issue. Mr Stern identifies the source of this belated awareness as the late affidavit filed, with permission, by Crocodile International. That affidavit appended judgments on the Lacoste/Crocodile International dispute from courts in China, Japan and the United Arab Emirates. Those judgments, Mr Stern says, dealt with the issue of confusion. It was at this stage that Lacoste set out to obtain this contrary evidence.
[69] During the hearing I took the opportunity to read the late evidence in question, both the declaration and the appended decisions from overseas jurisdictions. Having done so, it was not apparent to me that they represented the shift in focus to which Mr Stern referred. I asked Mr Miles about it, but he was not in a position to advance matters further.
[70] The late declaration in issue was filed by Mr Lim Kong-Boon. Paragraph 13 of the declaration is one of the paragraphs specifically identified by Mr Stern as raising this issue of overseas confusion. It reads:
On 3 December 2007, the Japan Patent Office issued a declaration maintaining the registration of my company’s trade mark [the CARTELO mark]. In particular the JPO found that my company’s trade mark:
(a) is not confusingly similar to Lacoste’s marks in terms of appearance, sound and meaning and this cannot be confused with Lacoste’s marks;
(b) would not be associated with Lacoste’s goods and therefore, will not cause confusion as to the origin of the goods; and
(c) is not used for unfair purposes such as free riding on the honour and fame of Lacoste’s marks or to gain unfair profits (unfair competition).
[71] It can be seen all the paragraph is doing is describing the findings of the Court. It does not provide a basis for Lacoste’s application to admit reply evidence. (I must observe I am far from convinced that it is permissible to seek to put these judgments in as evidence. Perhaps some form of evidence is needed to verify translation, but the judgments themselves are not evidence, and cannot be relied on as such.)
[72] Turning from freshness to cogency, it is to be noted that the witnesses are talking about consumer confusion between the crocodile devices standing alone. However, none of the New Zealand applications now under appeal involve either company’s crocodile device, standing alone. The Cartelo application does have the crocodile device, but it is accompanied by the word CARTELO.
[73] Mr Miles submits that the relevance of the evidence is that Lacoste wishes to show there is confusion between the two devices standing alone (a point already accepted by the Assistant Commissioner). It will then be argued that the device, and not the word CARTELO, is the predominant theme, and therefore that CARTELO does not overcome the inherent confusion.
[74] This is a legitimate process, but again it is hardly new. If that is the Lacoste approach, then establishing confusion between the two devices was always an essential first step.
[75] I do not consider the case for admission as fresh evidence has been made out. It is evidence that could have been led from the outset. The submission made in support of the proposition that it only belatedly became an issue is not, in my view, correct. The tendered evidence relates to confusion in a different market and in relation to different marks from those for which registration is sought. It relates to a matter on which Lacoste is presently successful, albeit an appellate Judge must reach his or her own conclusion. On normal principles the evidence does not come close to meeting the tests for admissibility on appeal, and I see no particular public interest in its admission given it is not directly responding to a matter arising from the judgment.
[76] I note for completeness that Mr Brown supported this conclusion on another basis. He relied on an English decision Dualit Limited v Rowlett Catering Appliances Limited [1999] FSR 865, Laddie J for the proposition that evidence ruled inadmissible at the original hearing should not be accepted on appeal because a form deficiency has now been corrected (here the double hearsay aspect). I see the consideration as a factor that goes to the need for weighing in the mix the need to maintain the integrity of the Tribunal’s processes by not allowing new or different trials to occur on appeal. As Laddie J observes (at 870) the hurdle for admissibility cannot be set too low. Beyond that I consider it is not a principle as such, and the public interest concern remains a central feature.
[77] I decline to admit the evidence of the ten witnesses[5] and the accompanying declaration of Mr Stern dated 11 May 2010.
Evidence : Kristina Mathieson
[5] The names will be recorded formally in the conclusion to the Ruling.
[78] Ms Mathieson was at one time the owner of two retail outlets in Auckland that sold Lacoste clothing. In her original declaration she explained her familiarity with Lacoste, and then how her Lacoste store worked. Under a heading “Crocodile International” she said:
29.Because of my involvement with Lacoste, I first heard of Crocodile International as a clothing manufacturer in off-shore markets a long time ago. I have never heard of or seen their products for sale in New Zealand. My understanding of the Crocodile International brand is that it is a “rip-off” of Lacoste clothing.
30.On several occasions when we had the Lacoste store in Queen Street, people came into our shop wearing Crocodile International clothing that they had bought overseas and commented that the Crocodile International clothing looked just the same as the Lacoste clothing.
[79] In her CROCODILE judgment the Assistant Commissioner lists various items of evidence that support the conclusion that there was awareness in New Zealand at the relevant date of the Crocodile International marks. Point six of the list is the large migration to New Zealand of people from countries where
Crocodile International is prominent. Point seven is that there are witnesses from Malaysia and Singapore, now living in New Zealand, who depose as to knowing Crocodile International’s brand.
[80] Point eight is that:
... the Mathieson declaration also notes a connection back to the
New Zealand market at paragraph 30.
[81] Obviously it will be an issue on the substantive appeal whether Ms Mathieson’s paragraph 30, as written, does stand for what the Assistant Commissioner says it does. Concerned, however, at the idea that its evidence is being read in that way, Lacoste has filed a further affidavit from Ms Mathieson clarifying her meaning. She says she intended to say in paragraph [30] that the customers came in thinking that what they were wearing was Lacoste.
[82] Mr Brown is sceptical of the change. He objects to the new evidence, and if it is to be admitted wishes it to be limited strictly to clarification, and wishes the right to cross-examine.
[83] I consider it is a situation where fresh evidence should be allowed. It is easy to misstate things, or not appreciate how others might read them. I see no problem with the true intent of the paragraph being clarified.
[84] The evidence will be limited to clarification. All that is needed are paragraphs 1, 8 and 9 of the proffered affidavit. I see no basis on which the witness should be able to amplify the evidence she intended to give.
[85] Concerning cross-examination, the starting point is that the new evidence is now limited to the witness explaining what she meant to say in the original paragraph, or indeed what she thought she was saying. Had it been expressed correctly in the first place, there would have been no cross-examination. Further, at this point it does not appear to be particularly crucial evidence. It was referred to by the Assistant Commissioner as one of the facts on which she relied, but the judgment is limited to the very brief comment cited earlier. For these reasons I do not consider that at this point a case has been made out to allow cross-examination.
Evidence : Messrs Tyson and Blood
[86] As earlier described these declarations refer to events of the 1980s and early
1990s. They explain the licensing and sale arrangements for Lacoste that existed in
New Zealand through that period.
[87] Mr Miles submits they assist by amplifying material that was contained in the first London declaration. He states in his written submissions:
It is necessary for Lacoste to clarify the use made of its CROCODILE trade mark prior to the opposition hearing because of incorrect factual conclusions the Assistant Commissioner made about that evidence, namely that Lacoste did not intend to use the word CROCODILE as a trade mark, and had not used it as a trade mark, in particular the use on the L1212 swing tag was not trade mark use. Accordingly, the evidence of Blood, Tyson and the first affidavit of Blanc assist in clarifying the existence of Lacoste’s ongoing intention to use its CROCODILE trade mark in New Zealand.
[88] The first point to note is that Lacoste accepts it cannot establish that it had used the L1212 swing tag in New Zealand prior to the application date. One needs to read “on-going intention to use” against that background. Second, as Mr Brown notes, neither Mr Blood nor Mr Tyson actually mention the word CROCODILE in their affidavits. They speak of the L1212 while polo shirts being on sale in New Zealand over these periods but that is all.
[89] The evidence does not do that which it is claimed to do, and which is said to justify its admission. The evidence was plainly available long before the hearing, and indeed these witnesses were witnesses for Lacoste in the Australian hearing, so have long been available to Lacoste.
[90] It is important to record again that Lacoste’s intention to use the trade mark was an issue disputed by Crocodile International when it first filed its objection. Further, it is accepted and indeed asserted by Lacoste that its application has always been premised on the proposition that it intended to use the trade mark, not that it was using it. It is difficult to see how this evidence helps as regards these issues.
[91] The idea of “amplifying” evidence on a central issue in the original hearing must be viewed with caution. The time to lead that evidence is at the outset; unsuccessful parties should not expect that having lost on the point, the appeal presents an opportunity to lead in aid of its appeal more evidence that was always available.
[92] To summarise, I consider the evidence does not reflect the basis for admissibility advanced by Lacoste. Its admission is rejected as lacking sufficient cogency. Further, however, I do not consider the public interest requires admission of amplifying evidence on a central topic when that evidence was always available to the applicant. Finally I observe that Mr Brown would also advance the “Dualit” reason that the same evidence was ruled inadmissible in a different form at the original hearing.
Evidence : Mr Blanc, first declaration
[93] In my view significant portions of this declaration amount to submissions by Mr Blanc as to why the Assistant Commissioner was wrong to conclude that the use of the word CROCODILE on the L1212 white polo tag was not trade mark use, and why Lacoste did have a settled intention to use its sought trade mark. To the extent that the declaration is submission it is inadmissible without need for resort to any rules about freshness, or public interest. It is simply not evidence.
[94] What falls under this label? There is a section entitled “History of Lacoste’s use of CROCODILE trade mark”. One might immediately think that a surprising topic for fresh evidence at the appeal stage. After all, the case is about Lacoste’s application for a CROCODILE trade mark. When one ventures into the content of this section of the declaration, the validity of my label of submission becomes apparent. This section of the declaration begins:
The history of the adoption by Lacoste of the CROCODILE Trade Mark dates back to 1927 and has been described in the Declaration of Christian London ...
[95] That London declaration is of course already part of the evidence before the Assistant Commissioner. Then, after some paragraphs which seemingly just summarise Lacoste’s position on use, paragraph 11 says:
From Lacoste’s inception, Lacoste has always used and intended to use the CROCODILE trade mark as a trade mark. By way of example, and as described in the London declaration ... (my emphasis).
[96] There then follow nine points. Five of these are supported by reference to the same London declaration, two by fresh exhibits being copies of advertisements from the 1960s and 1970s, and two points are simply submission/assertion without reference to anything.
[97] One final example illustrates the point, and then I will simply identify the paragraphs I rule out on this basis. Paragraph 12 reads:
As described below, and in the declaration of David Smith, Lacoste has made extensive use of the CROCODILE trade mark since in or about July 2005.
[98] There is no basis on which a Court should allow this material to be placed before it under the claim of evidence, and I decline to do so. I accordingly exclude paragraphs 4–12 and 19–20.
[99] Sandwiched in amongst those two groupings are paragraphs 13–18. These address the Assistant Commissioner’s conclusion that the use of CROCODILE on the L1212 swing tag was not trade mark use. These paragraphs depose to the following:
a) “up until very recently” the CROCODILE Trade Mark was not applied to clothing other than the L1212 swing tag;
b)CROCODILE is one of a number of “secondary trade marks”. The L1212 polo comes in white (CROCODILE on swing tag) and lots of other colours (all of which have CAIMAN on the tag). Other styles of polo have different names on the tag – the L1232 has LOOK, the L1203 has LISTE and so on;
c) an example of the use of these secondary trade marks is the appended categories for Autumn/Winter and Spring/Summer of 1991.
[100] Paragraph 18 concludes:
Lacoste’s use of the CROCODILE trade mark (whether on the white L1212 polo shirt swing tags or otherwise) is thus not intended by Lacoste to be used as and does not serve as a description of the crocodile device trade mark as suggested by Assistant Commissioner Walden. The CROCODILE Trade Mark is a standalone trade mark.
[101] The Assistant Commissioner had found that:
The reference to CROCODILE as the style of the polo shirt is purely descriptive of the saurian device that appears on the left breast of the polo shirt and would be taken as such by the relevant market.
[102] There are two levels to the evidence which raise different issues. First, shorn of comment, and of claims to trade mark use and “secondary trade marks”, I consider the evidence would be properly admissible to correct the Assistant Commissioner’s finding. The evidence does appear to show that the linking of the word CROCODILE on the swing tag to the crocodile device on the front of the shirt was incorrect. I would allow the evidence to be admitted for this purpose.
[103] The second level of the evidence is Mr Blanc’s claim that these are secondary trade marks. That concept troubles Mr Brown, who suggests it opens up a whole level of inquiry and disclosure/discovery. For myself, I am unsure what is meant by the term. It is not clear to me whether it is just another way of saying that the words on these labels are also a trade mark use – which can be the subject of submission – or if it is also saying these are in fact all registered trade marks. I have not been pointed to evidence giving the detail of these trade marks.
[104] As it stands I see the position this way. I believe it is not in dispute that the word CROCODILE has traditionally been used on the swing tag of the L1212 white shirt. Up until recent times that is the only way in which CROCODILE has been used on Lacoste apparel. Since 2005 those CROCODILE L1212 tags have been used in New Zealand on the white polos.
[105] I would allow fresh evidence to show that where CROCODILE appears on the white L1212 tag, on the coloured L1212 CAIMAN appears, and on other polo shirts other WORDS are used. That would mean I rule as admissible, for that purpose, paragraphs 13(a), 14, 15, 16 and 17.
[106] However, I do not allow the evidence as it stands that these are secondary trade marks. If they are indeed formal registered trade marks, I would consider an application to admit evidence to that effect, with proper evidence about where and when they were registered. There could then be an opportunity to properly assess the significance or otherwise of such evidence, and a fair chance for Crocodile International to oppose, and to identify what prejudice it would suffer.
[107] The next section to consider is that headed “Lacoste’s New Zealand Distributors”. The evidence in this section is a description of Lacoste’s history of distributors in New Zealand. It appears repetitive of some evidence already in the bundle, and refers to a declaration (Starckjohann) that does not seem to have been in evidence. The purpose seems to be to explain that for a period between 1996 and
2003 there was no distributor for New Zealand.
[108] Whilst I see no good reason why it was not filed originally, I will allow the paragraphs in an amended form. My amendments are designed to limit the content solely to information which is of assistance in completing the formal description of licensing arrangements:
• Paragraph 21 is admissible from line three, commencing “Lacoste entered into ...”.
• Paragraph 22 is admissible. The first sentence of paragraph 23 is inadmissible. The balance of 23 and 24 are admissible.
[109] The next section is headed “Lacoste’s New Zealand and Australian Trade Mark Applications for the CROCODILE trade mark”. I am unsure why this evidence is here at all. It appears to explain why the New Zealand trade mark application stalled for a period. I am unaware of what issue it is responding to, and
decline its admission as lacking sufficient relevance to be admitted on appeal. I
exclude paragraphs 25–31.
[110] The next section is “Lacoste’s further use of the Crocodile Trade Mark in New Zealand”. This describes the opening in Auckland of a dedicated store in October 2009. Then in January 2010 Lacoste started affixing to clothing, bags, footwear and belts a new additional tag. It is white and has CROCODILE stamped on either side. The inference I take from the declaration is that this extra tag is something happening only in New Zealand. I checked this with Mr Miles but he was not in a position to assist. I therefore proceed on the basis that I read it, and indicate my agreement with Mr Brown that such usage cannot possibly be relevant to assisting with Lacoste’s intentions in 1999 in New Zealand. Perhaps it may be intended to assist with the renewed application but its occurrence, only in New Zealand and following on from the Assistant Commissioner’s decision, cannot assist on an appeal from that decision. I therefore exclude paragraphs 32–36. I exclude paragraph 37 (a different new CROCODILE use) for the same reason.
[111] Next the declaration has a section on Lacoste’s recent use of the CROCODILE trade mark in Australia. The contents are true to label and describe Lacoste’s recent initiatives in Australia, including its apparel arrangements at the Tennis Open.
[112] There is, as noted, a dispute between the parties about what relevance Lacoste’s post 1999 activity has to showing its intention at the time of the application. I cannot determine that in advance of the substantive hearing so proceed on the basis that conceptually such conduct might assist Lacoste’s case. I was next going to make the assumption that activities in Australia are relevant to New Zealand because of the high level of visitor exchange. However, I realise that is irrelevant to this present issue which is not about Lacoste’s reputation in New Zealand but about Lacoste’s on-going intentions. I am, however, prepared to assume for present purposes that evidence of a push of the trade mark CROCODILE in Australia could well support an inference of likely similar conduct in New Zealand.
[113] The evidence in this section is pretty much all fresh. One could quibble that some of it covers a period prior to the hearing, but by and large it meets the freshness test. Given that I am assuming relevance for now, I consider this evidence can be admitted. This part of the declaration is refreshingly limited to evidence, and does not engage in commentary and submission. Its admission does not carry any particular prejudice that I can see. Accordingly, I rule paragraphs 38–59 admissible. I emphasise I am making no conclusion either way on the probative value of this evidence, or the similar evidence covering earlier post-1999 periods that has already been filed.
Evidence : Mr Blanc, second declaration
[114] Lacoste and Crocodile International reached an agreement in Singapore. Recently, Crocodile International wrote complaining about a breach of that agreement. The complaint was that the L1212 white polo was being sold in Singapore with CROCODILE on the swing tag. I infer that the Singapore agreement must reserve CROCODILE to Crocodile International.
[115] Letters were exchanged. The author of the Crocodile International letters is Mr Lim Keng Boon, who is the Assistant General Manager. He is a deponent in the New Zealand case and therein describes himself as the Legal and Administration Manager. I am unsure but assume they are just different ways of describing the same position.
[116] So to a three page letter dated 25 June and sent by Mr Lim Keng Boon. The contents of most of it have been blanked out. Mr Brown has not seen the full letter. Separated by half a page of, at the moment, blank paper are the sentences:
Lacoste’s [ blank ] has used CROCODILE word mark not only in
Singapore but in other countries in the territories.
And
[ blank ] it has [ blank ] used its CROCODILE trade mark on the swing tags of the white L1212 shirts in Singapore and other countries.
[117] The evidence is tendered as some form of admission by Crocodile International that contrary to the Assistant Commissioner’s conclusion, the use of the word CROCODILE on the swing tag is a trade mark use.
[118] Mr Brown objected on the basis of relevance in that it occurs in the context of a dispute in another jurisdiction. He also submitted it was unclear what legal purpose Lacoste claimed it could put the alleged admission to.
[119] I agree that this has not to date been made plain, but am not prepared to deny
Lacoste the opportunity to make of it what they can.
[120] I am troubled by the redacted form of the letter. Mr Blanc says it is because the deleted parts contain other irrelevant factual allegations against Lacoste by Crocodile International.
[121] My ruling is that the evidence is admissible. It is open to Crocodile International to put the full letter in if it considers the use being made of it by Lacoste is unfair for context reasons. This ruling, as with that on the Australian advertising, makes no final conclusion on its ultimate relevance or on the probative value of the evidence.
[122] Paragraphs 7, 8 and 10 of the declaration are inadmissible as commentary/submission.
[123] Paragraphs 15–18 address a separate topic and seek to put in yet more advertising from the 1980s. On the simple basis that at some point enough is enough and the constant adding to evidence must end, I rule paragraphs 15–18 inadmissible.
Conclusion
[124] The following decisions are made in relation to the fresh evidence:
a) the declarations/affidavits of Stephen Stern, Mi Sook Byun, Sun Hwa Lee, Jae Sook Seo, Sun Hoo Jeong, Hae Jin Gwak, Suk Gun Jeong, Tonari Tomoko, Weihua Zhu, Candice Fernandez, and Relyn Cortez are not to be admitted on the appeal;
b)paragraphs 1, 8 and 9 of the affidavit of Ms Kristina Mathieson are admissible. The balance of the affidavit is inadmissible. Leave to cross-examine is declined;
c) the declarations of Messrs Tyson and Blood are inadmissible;
d) in relation to the first declaration of Mr Frederic Blanc:
i) paragraphs 1–3, 13(a), 14–17, 38–59 are admissible;
ii)paragraphs 21–24 are admissible subject to the amendments identified in [108] of this judgment;
iii) the balance of the declaration is inadmissible;
e) in relation to the second declaration of Mr Fredric Blanc:
i) paragraphs 1–6, 9, 11–14 are admissible;
ii)Crocodile International may file an unredacted copy of the letter of 25 June 2010 if it considers that the proper meaning of the words relied on by Lacoste as an admission is affected by the deletions;
iii) the balance of the declaration is inadmissible.
[125] Costs are reserved.
Simon France J
Solicitors:
B W F Brown QC, PO Box 5161, Lambton Quay 6145, email: Brendan[email protected]
B M Sullivan, Henry Hughes & Co, PO Box 356, Wellington 6140
email: [email protected]
J G Miles QC, PO Box 4338, Shortland Street, Auckland 1140 email: [email protected]
K J Duckworth, Baldwins Law Limited, PO Box 852, Wellington 6140 email: kate[email protected]
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