Trademark Infringement and Geographical Boundaries: Lessons from Lacoste v. Crocodile Case

31st August, 2024 - 5:49 am Categories: Trademark Infringement 0 Comments

Introduction

It was an auspicious August for the French luxury fashion brand Lacoste. Global headlines were made with Novak Djokovic, the foremost brand ambassador of Lacoste, winning the Paris Olympics Gold, which was followed by success in a two-decade-long trademark infringement case in Delhi High Court against internationally renowned Singapore-based company Crocodile International[1]. Decided on August 14, 2024, by Hon’ble Justice Sanjeev Narula, this judgement has indeed sent reverberations across the fashion industry. A decree for a permanent injunction has been issued in favour of Lacoste, restraining Crocodile International and anybody acting on their behalf from manufacturing, selling, offering for sale, advertising, or in any manner using the disputed trademark. Six weeks from the decree, Crocodile International will have to provide their financial statements containing the account of profits earned from the sale of goods under the disputed trademark from August 1998 till the date of cessation of use. Mr Amar Nath, a retired District and Sessions Judge, has been appointed the Local Commissioner in the case. An advanced fee of the Local Commissioner amounting to Rs. Lacoste shall pay 3 Lakh for any additional spending that may arise during the review process. Crocodile International will have to submit their financial statements and affidavits within six weeks to the Local Commissioner to assess damages, who shall then record their statements and submit a report within four months. Lacoste shall be entitled to recover actual costs from the defendants[2]. After Lacoste has filed their bill of costs[3], the matter shall be listed before the Taxing Officer for computation of costs recoverable from Crocodile International. After completing this process, Lacoste shall be compensated for their litigation expenses and the profits earned due to trademark infringement. Until either business chooses to take the case further, the subject matter of the issue has now been resolved.

Lacoste’s Arguments

Lacoste began manufacturing knitted shirts tailored for sporting activities in 1931. These shirts were called Chemise Lacoste, crafted by Mr. Robert George in France, with a crocodile symbol on the front. April 27, 1933, was the date when, in Troyes, France, the first trademark was filed for the crocodile device by Lacoste, bearing registration no. 207916. Lacoste had registered the copyright for the artwork of crocodile device in India under No. 62692/2002.[4] Lacoste also holds trademarks of the right-facing crocodile device and its formative variant in class 25 under No. 400265 and No. 400267 respectively. Registered in 1983, these trademarks have been in extensive and open use in India since October 1993. Crocodile International, through a joint venture, commenced using the disputed trademark in India two years prior to the institution of the suit in 2001. The impugned mark, which is affixed on the pockets of shirts and t-shirts without the brand name of Crocodile, mirrors how Lacoste uses their registered trademark, causing consumer confusion. Lacoste also alleged misrepresentation by Crocodile International for they used the symbol ‘R’ alongside the disputed trademark without having independent registration with appropriate authorities in India.

Defence Taken by Crocodile International

The Crocodile trademark was first registered in Singapore in 1949, followed by registrations in several other countries, such as Malaysia, Indonesia, Japan, Korea, and India. In India, the trademark of Crocodile (which had Crocodile written beside the Crocodile facing left) was registered on June 12, 1952, under No. 154397 in class 25 for shirts and singlets. This trademark was assigned to K.L. Narayansa and Associates (predecessors of Defendant No. 2) for the commercial launch of Crocodile products in India. After intense advertising, these items were first launched in South India in 1988. After this, Crocodile International expanded its business to India, asserting that it acquired exclusive rights to the Crocodile device due to their time-hallowed use. References were made to the 1983 Agreement that allowed both parties to coexist in markets and the 1985 Letters that claimed that this understanding was extended to India among other countries, which made Lacoste liable to the contractual obligations entered into with Crocodile International, rendering the suit untenable. The defence also submitted that the court lacked territorial jurisdiction as neither Crocodile International nor its collaborators conducted business in Delhi. They argued that Lacoste’s Indian entity did not own the copyright in question and, therefore, could not maintain the suit. The mention of the symbol ‘R’ on Crocodile International’s products was accepted as an oversight in a few batches. These products were registered in other countries, where the symbol was valid and exported to India later on. They submitted to the court that they had taken steps to remove the symbol from their products.

Copyright Infringement

In the present case, we see that Lacoste alleged a copyright and trademark violation by Crocodile International; the court meticulously examined whether there was a copyright violation without blurring the clearly defined lines between trademark and copyright infringement clearly defined by law. Copyright violation includes protection of the original works of authorship and artwork against unethical distribution of the copyrighted work without the copyright holder’s authorization. Trademark, on the other hand, involves protection against unsanctioned use of an identical or similar trademark on goods and services in the commercial realm as that would lead to misleading consumers and a cut in the profits of the trademark holder. The court held that the mirror resemblance of the disputed trademark does not point towards an infringement of copyright. Lacoste had provided that they are the original copyright holder of the crocodile device and that the reproduction of the design by Crocodile International in India led to the alleged copyright violation. The court said that the copyright Act safeguards the originality in depicting and representing the artistic elements and not the novelty of the concept. The expression dichotomy in the copyright law has given rise to the ‘merger doctrine’ laid down in the Herbert Rosenthal Jewellery Corporation v. Kalpakian case. [5] The merger doctrine holds that when an idea and its expression are so intrinsically intertwined so much so that they are indistinguishable, a creator cannot be given a monopoly over the idea which forms that foundation for its creative expression. In the present case, both parties’ crocodile designs were artistic works with unique elements from the same abstraction that distinguished it as a copyright creation, hence entitled them to protection from the law. In the Allen v. Academic Games League of AM case, [6] the court stated that the ideas in a copyrighted work may be freely used if the copyright expression is not wholly appropriated. The court held that the work of Crocodile International did not violate Lacoste’s copyright.

Passing Off Claims

A passing-off action aims to safeguard the goodwill or reputation that a trademark has accrued over time. The notion forbids one party from deceitfully operating their business as another’s to protect the public interest. To establish that Crocodile International is guilty of passing off by misrepresenting its products as belonging to Lacoste, the plaintiffs must provide clear evidence that they meet the requirements of the traditional trinity test, which was first established in the seminal Reckitt and Colman Products Ltd. v. Borden Inc. case[7] and then reaffirmed by the Supreme Court in the Laxmikant V. Patel v. Chetanbhat Shah case[8]. Three prongs make up the test:

(a) Plaintiff’s reputation;

(b) Defendant’s deception of the public; and

(c) harm to Plaintiff’s goodwill or reputation.

Goodwill is established through the trust and confidence instilled in the company by the consumers, which translates into a consistently growing business and competitive advantage. The court made this assessment by assessing the situation two decades ago, relying on the evidence produced by Lacoste. The standard for judging the ‘reputation and goodwill’ in passing off cases is stringent, and the onus lies on the party alleging passing off[9]. In the present case, the court denied the passing of claims due to non-conformity with Section 65B of the Evidence Act, which states that a certificate is mandatory for the production of electronic evidence, which needed to be followed by Lacoste. The court, keeping up with the established Indian jurisprudence of trademark law, held that the striking resemblance of the disputed trademark constituted a case for infringement by Crocodile International. However, Lacoste failed to prove the established reputation in India through properly authenticated evidence, which resulted in the court denying the passing off claims.

Laches and Acquiescence 

A suit is hit by laches when delay causes some detriment to the party and not merely due to delay in filing the suit. Crocodile International argued that Lacoste’s claims are barred due to delay and laches since they began using the crocodile device in India in 1997. Lacoste objected only in December 1998, which caused a three-year delay before instituting the 2001 suit. The alleged delay was not considered excessive, especially in trademark and copyright disputes requiring complex considerations and thorough investigation before litigation. Further prompt action by Lacoste in sending a legal notice to Crocodile International and subsequent lawsuit indicated a proactive stance rather than passive acquiescence.

Geographical Limitations and Territorial Jurisdiction

Both parties in this dispute were initially established on the opposite ends of our planet. Lacoste was founded in 1933 by tennis player Mr Jean Rene Lacoste (ingeniously called ‘Le Crocodile’ by fans and media) and entrepreneur Louis Emile Andre Gillier[10], while Crocodile International was established in 1947 in Singapore by Dato Dr Tan Hian Tsin. [11] Both the companies grew and penetrated markets where they had conflicts concerning intellectual property. Suits have been filed and fought in numerous jurisdictions worldwide, such as China, Myanmar, Sri Lanka, etc. In 1971, Lacoste faced legal action in Japan, where the court ruled in favour of Lacoste, stating that their mark was distinguishable from Crocodile International’s. In 1983, both parties agreed to avoid further legal loggerheads and delineate the use of their respective crocodile devices. This Agreement included provisions for mutual coexistence in various countries. Due to their intrinsic territoriality, trademark rights are only recognized in the countries where they are granted and upheld. Unless established explicitly through international agreements or treaties, the territoriality principle guarantees that a trademark registered in one nation does not automatically confer rights to the holder in another. Within the framework of the 1983 Agreement, the express enumeration of certain nations denotes a deliberate attempt to restrict the Agreement’s reach to those regions alone. This goal is furthered by the omission of any reference to India or any clause allowing for its inclusion at a later time. This is consistent with the idea that rights and duties about trademarks cannot be assumed to extend beyond.  The court concluded that the 1983 Agreement and the 1985 Letter do not extend to India or cover using the disputed trademark. Despite Crocodile International’s claims of an extended coexistence agreement, the lack of mutual consent and specific references in these agreements and Lacoste’s persistent efforts to protect their trademark indicate that Lacoste is not obliged to these contracts.

Trademark Infringement Under Trade and Merchandise Marks Act, 1958

The present suit was initiated on May 1, 2001. At the time of the initiation of the suit, the Trademarks Act 199 was notified (on December 30, 1999) but was not enforced. Section 159(4) of the Trademarks Act, 1999 stipulated that the Trade and Merchandise Marks Act, 1958, shall govern all proceedings instituted before the enforcement of the 1999 Act. The documentary evidence filed in the case indicated Lacoste’s trademark rights over the crocodile device. A mark is deemed deceptively similar under Section 2(1)(d) of the Trade Marks Act, 1958 if it “so nearly resembles that other mark as to be likely to deceive or cause confusion.” Judicial rulings have clarified the concept of “likelihood of confusion,” which justifies a review of the contested marks that emphasizes their similarities rather than their differences. The Supreme Court held in Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. case[12] that the evaluation of deceptive similarity goes beyond a side-by-side comparison and considers the overall impression given by the marks and the imperfect recollection of an average consumer. This ruling reinforced the ruling in Amritdhara Pharmacy v. Satya Deo Gupta case. [13]

Conclusion and Lessons Ahead

Insights from the Lacoste v. Crocodile International case are abundant for international companies, especially for those in the fashion and luxury products industries. The need to register a trademark as soon as possible in all possible markets is the most essential teachings. Lacoste’s legal triumph was primarily attributed to its earlier registration of crocodile invention in India. Rather than being a reactive action, companies should see trademark registration as a proactive approach that protects their intellectual property rights well before they enter new markets. This strategy discourages possible infringers and offers legal protection. The case also emphasizes the intricacies and geographical restrictions of international trademark agreements. The 1983 coexistence agreement between Lacoste and Crocodile International did not include India, and only permitted coexistence in specific markets. This emphasizes companies’ need to design international trademark agreements precisely and thoroughly. Businesses should be clear about their regions and consider incorporating provisions dealing with potential future market expansions. To make sure these agreements align with present and future company plans, companies should also evaluate and update them regularly.

[Image Sources: Shutterstock]

The court’s distinction between copyright and trademark infringement provides another substantial lesson. Businesses cannot rely only on copyright protection for their trademarks or designs, as demonstrated by the court’s adoption of the “merger doctrine” in dismissing Lacoste’s claim of copyright infringement. Businesses should safeguard their intellectual property in various ways, using trademark and copyright laws as needed. This two-pronged strategy can give a more robust defence against possible infringers and other legal options. The case also emphasizes how crucial it is to keep accurate records and follow stringent regulations for admissibility. Lacoste’s inability to uphold its well-established reputation in India due to its noncompliance with Section 65B of the Evidence Act respecting electronic evidence is a clear reminder of the technical nature of judicial procedures. It is recommended that businesses use stringent documentation procedures to guarantee that all proof of trademark usage, market standing, and brand identification is appropriately verified and conserved. This entails maintaining thorough records of all sales, marketing initiatives, and customer recognition surveys, essential for building trust and credibility while making false claims. More importantly, businesses are reminded to periodically scan the market for potentially infringing marks by the court’s consideration of the “likelihood of confusion” approach for determining trademark infringement. Businesses should consider marks that can confuse typical customers in addition to searching for exact copies of their trademarks. This attention to detail should focus on the packaging, advertising materials, and general image of the brand, among other product presentation areas.

In conclusion, the case highlights the possibility of drawn-out court cases involving trademark conflicts. Firms must be ready to commit for the long haul when safeguarding their intellectual property rights, as demonstrated by the two-decade fight. When planning their budgets for intellectual property protection and enforcement, businesses should consider the possibility of drawn-out legal processes. Businesses should also develop partnerships with knowledgeable intellectual property attorneys who understand international trademark law and can resolve complicated disputes involving many jurisdictions.

Author:  Ishita Singh, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

[1] Lacoste v. Crocodile International Pte Ltd., 2024 SCC OnLine Del 5591.

[2] Commercial Courts Act, 2015 and Delhi High Court (Original Side) Rules, 2018, read with Delhi High Court Intellectual Property Division Rules, 2022.

[3] Rule 5 of Chapter XXII of the Delhi High Court (Original Side) Rules, 2018.

[4] Copyright Act, 1957 and Copyright (Amendment) Act, 1994.

[5] Herbert Rosenthal Jewellery Corporation v. Kalpakian 446 F.2d 738 (1971).

[6]Allen v. Academic Games League of AM case 89 F.3d 614 (9th Cir. 1996).

[7] Reckitt and Colman Products Ltd. v. Borden Inc. [1990] 1 WLR 491.

[8]  Laxmikant V. Patel v. Chetanbhat Shah (2002) 3 SCC 65.

[9] Section 101 to 104, Evidence Act 1872

[10] https://corporate.lacoste.com/our-history/.

[11] https://www.crocodileinternational.com/content/4-about-us.

[12] Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. (2001) 5 SCC 73.

[13] Amritdhara Pharmacy v. Satya Deo Gupta 1962 SCC OnLine SC 13.