Mr. Tan Hian Tsin and the Crocodile International PTE Ltd v La Chemise Lacoste
People’s Republic of China Shanghai No. 2 Intermediate People’s Court. March 25, 2004
The PRC court ruled to protect the copyright in the Crocodile device associated with the Singaporean-based Crocodile International, deciding that the Lacoste’s registration of Crocodile International’s Crocodile device (not Lacoste’s own Alligator device) as a defensive trademark in China on Class 3 goods constitutes copyright infringement and ordering Lacoste to make a public apology and awarding damages of US$1.
Co-plaintiffs Mr. Tan Hian Tsin and the Crocodile International PTE Ltd (together “Crocodile International” or Plaintiffs) alleged that Mr. Tan created the work of a combination of the handwritten “Crocodile” and a crocodile design (“Crocodile device”) in 1947. As a Malaysian citizen at that time and through the Berne Convention, the copyright in the Crocodile device enjoyed by Mr. Tan should be protected under PRC Copyright Law. Mr. Tan applied for the trademark registration for the Crocodile device in Singapore in 1949, which was approved in 1951. Following this, Mr. Tan exclusively licensed Crocodile International, his own business, to use the Crocodile device work and transferred the trademarks to the company as well. In November 2000, Mr. Tan registered the copyright in the Crocodile device with the National Copyright Bureau of China. Plaintiffs also alleged that French clothing manufacturer La Chemise Lacoste (Lacoste, or Defendant) knowingly applied the Crocodile device with the State Trademark Office of China for trademark registration in Class 3 in 1995 (the mark was registered in 1999) and caused the Crocodile device to be copied and distributed (in the Trademark Gazette through which all trademarks are published), thereby infringing Plaintiffs’ copyright.
In response Lacoste argued that Plaintiffs’ claimed Crocodile device does not have any originality and actually copies the Lacoste trademark (the “Lacoste alligator device”), which was created in 1933. Moreover, Mr. Tan did not provide sufficient evidence to show he was the rightful creator of the Crocodile device. The Defendant further argued that Mr. Tan did not present adequate evidence showing when he had become a Malaysian citizen and as a resident of Singapore, Mr. Tan’s Crocodile device could not enjoy copyright protection in China in 1995 because that Singapore joined the Berne Convention only in 1998.
Lacoste also claimed that its Class 3 trademark application was a defensive filing – Defendant had never used the Crocodile device, and the registration therefore did not infringe Plaintiffs’ rights or harm society-at-large. Further, Lacoste argued that the Trademark Gazette issued by the State Trademark Office was an administrative document and the copy and distribution of any such document should not constitute any infringement.
The Shanghai No.2 Intermediate People’s Court (the Court) focused on three questions: 1) whether Mr. Tan enjoyed copyright in the Crocodile device; 2) whether Plaintiff’s behavior to file for registration of the Crocodile device constituted copyright infringement; and 3) whether Plaintiff’s request for US$1 was based on reasonable grounds.
In deciding whether Mr. Tan enjoyed copyright in the Crocodile Device, the Court looked at three underlying issues: (i) Mr. Tan’s status as the author, (ii) the Crocodile device as an original creation, and (iii) its copyright protection in China through the Berne Convention.
(i) The Court held that, without any counter-evidence, the Copyright Registration Certificate sufficiently proved authorship, ownership and time of the creation of the Crocodile device.
(ii) In regards to the originality question, the Court compared Lacoste alligator device with Plaintiffs’ Crocodile device and the possible influence of one on the other. The Defendant could only prove the fact that the Lacoste Alligator device was registered as a trademark in 1933 and those world circuit players at that time wore clothing branded with Lacoste’s Alligator trademark. The Court held that it could not prove Mr. Tan’s actual access of Lacoste’s Alligator device even though it was possible that Mr. Tan had watched tennis game. As for the essential similarity, the Court held that Plaintiffs’ Crocodile device was different from Defendant’s Alligator device in terms of the combined elements and words, as well as the shape and expressions of the reptiles. Based on these, the Court ruled that the Crocodile device is original.
(iii) The Court held that as Mr. Tan obtained Malaysian nationality in 1972, Malaysia joined the Berne Convention in 1990 and China joined in 1992: therefore the Crocodile device should enjoy copyright protection in China from 1992.
In deciding on copyright infringement, the Court held that copying the Crocodile device for trademark filing is a type of commercial action and Lacoste’s action constituted copyright infringement. The State Trademark Office’s publishing of Plaintiff’s work was caused by Defendant’s filing and therefore Defendant should still bear the liability. The Court further ruled that even defensive registrations should not infringe another’s prior right.
The Court also held that the reasonable cost of the Plaintiff obviously exceeded US$1 and therefore the Plaintiff’s request for US$ 1 was reasonable.
The Court ruled that Lacoste should cease its infringement of Plaintiffs’ device, make public apology in two Chinese newspapers and pay the requested compensation of US$1. The litigation fee of RMB1, 000 should also be paid by Defendant.
Apart from the copyright arguments put forward by Plaintiffs in this case, there are other grounds and procedures available to counter Lacoste’s registered trademark. In this decision, despite the Court ordering Defendant to “stop copyright infringement”; a cancellation must be filed with the Chinese Trademark Office. Another option for Crocodile International is to file a trademark cancellation based on well-known trademark and/or prior copyright before the Chinese Trademark Office. Although the time period of a Trademark Office administrative procedure will take longer than that the first-instance litigation, an attack on the registered trademark directly may lead to the cancellation of the disputed mark. The supporting evidence for prior copyright may be similar to the current litigation and can indeed quote the Court’s decision. As a side issue, Plaintiff’s burden of proof will be more difficult if Crocodile International wants its trademark to be recognized as a well-known trademark in China.
Unfortunately, China’s trademark laws make no specific statements about defensive trademark registrations. In practice, there is an unstated liberal interpretation of “use of trademark”: a simple advertisement in newspapers can be recognized as “commercial use” to resist accusations of non-use by third parties, which could lead to cancellation of the trademark. In this case, Defendant admitted that its only purpose in registering the disputed Class 3 mark was to prevent others from registering the trademark in that class, and Defendant did not use the disputed mark in normal business activities since the mark was registered.
It is interesting that although the Trademark Office made copies when the disputed mark was published in the Trademark Gazette, the Trademark Office was not held to have infringed Plaintiff’s copyright: that responsibility for the illegal copying was put squarely on Defendant.
Most importantly, this case confirmed the value of the voluntary copyright registration in China. It is widely accepted that copyright need not be registered to be enforced. However, this case indicated that copyright registration in China may be an easy and convenient method to produce evidence on both the creation time and ownership of copyright for foreign litigants before a Chinese court. Crocodile International registered its copyright to the Crocodile device, in effect making a declaration about its copyright before a Chinese copyright administrative authority. Such copyright registration, though in need to submit supporting documentation, but such documentation was not supposedly to be substantial examined or challenged as that before a court. Due to this lack of examination, Lacoste challenged the validity of such declaration-like registrations but the Court rejected this claim unless Defendant could produce counter-evidence proving Plaintiff’s copyright claim is faked or void. Thus the seemingly useless copyright registration in China turned out to be a “shortcut” to providing evidence.
As the time of writing, Defendant already appealed to Shanghai Supreme People’s Court and this author is watching closely the progress of the case.
Rouse & Co International