Lacoste wins battle at last in crocodile war

China

French company Lacoste has at last had some success in China in a long series of disputes over its crocodile logo. The Changsha Intermediate People's Court in Hunan Province ruled that Changsha Parkson Department Store (Parkson) infringed Lacoste's trademark by selling products bearing a crocodile device mark.

Although the defendant in the case was Parkson, the ultimate source of the products was a Singapore company called Crocodile International Pte Ltd. Crocodile International was founded by a Chinese-born Malaysian, Tan Hian Tsin, in 1947. Tan claims that he created the company's trademark, which consists of a crocodile device facing left and the word 'crocodile'. The mark was registered in Singapore in 1951.

Another trademark containing a crocodile device and the name Cartelo was created later and registered in many countries, including China.

Lacoste, on the other hand, owns the world-famous green right-facing crocodile device mark. Lacoste first registered its mark in France in 1933 and has now registered it in over 190 countries, including China, where it also registered its word mark LACOSTE in Latin and Chinese characters in Class 25 of the Nice Classification.

Disputes between Lacoste and Crocodile International started in the 1960s when Lacoste entered the Asian market. In 1983 the two companies reached an agreement under which their device marks were allowed to coexist in Brunei, Indonesia, Malaysia, Singapore and Taiwan. Under the agreement, Lacoste also paid Crocodile International $1.5 million. However, the aggressive expansion of both protagonists in China, the world's largest apparel market, led to renewed conflict.

One of these disputes stemmed from Parkson's sale of products - including wallets, belts and briefcases - bearing a left-facing crocodile device. Lacoste brought a suit against Parkson on the basis of its crocodile device registration in Classes 18 and 25. Lacoste applied for an injunction and damages of Rmb200,000 ($24,165).

The Changsha Intermediate People's Court ruled in Lacoste's favour. The court held that the device marks at issue contained realistic representations of a crocodile. Each is the mirror image of the other and there are no fundamental distinctions between the shapes of the two images. This, the court concluded, made the marks indistinguishable and identical under trademark law, leading to a likelihood of confusion. The court found that the way the crocodiles face was irrelevant and could be easily ignored. Parkson was ordered to stop the infringement and pay Lacoste Rmb5,000 in damages.

Parkson appealed to the Hunan Higher People's Court, which heard the case on January 12 2005. Crocodile International has stepped in at the appellate stage. It submitted a request on January 6 2005 to be added as a third party. It is believed that Crocodile International's request may be granted, which would turn this case into another marathon case.

Results are still pending in several lawsuits for trademark infringement and unfair competition brought by Lacoste to the Beijing Higher People's Court. In October 2003 Lacoste also filed a lawsuit with the Second Beijing Intermediate People's Court against Crocodile International, Shanghai Eastern Crocodile and Beijing Hualian Department Store for (i) infringement of its device mark and word mark in Chinese characters, and (ii) unfair competition. The main issue in that case was whether the two crocodile devices were similar enough to cause confusion among consumers. Both parties quoted previous agreements to support their claims.

Lacoste relied on the coexistence agreement reached in 1983, claiming that the agreement was proof that Crocodile International recognized that there was a similarity between the two marks. Lacoste also alleged that Tan made a statement in a public announcement in 1983 when Lacoste entered Asia regarding the similarity of the two trademarks.

Crocodile International, however, argued that the parties' trademarks would not cause confusion and relied on a settlement agreement reached as a result of a lawsuit in Japan in 1983, when each party acknowledged that the other's trademarks could coexist in the market and would not cause confusion.

There are no reports of any decisions from the Beijing courts in these cases.

For a discussion of another case involving these parties, see Crocodile chews up Lacoste in logo infringement win.

Horace Lam, Lovells, Beijing

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