Absence of express consent in co-existence agreements precludes permissive use defense against trademark and copyright infringement.

Plaintiff (Lacoste) is a French company renowned for apparel featuring a right-facing crocodile emblem, registered in India since 1983.

Defendant No. 1 (Crocodile International) is a Singaporean company using various left-facing crocodile marks, registered in India since 1952.

The dispute arose when the Defendants began using a standalone left-facing saurian device (the "impugned mark") in India around 1998 without the word mark "CROCODILE".

Lacoste alleged this was deceptively similar to their registered mark.

The Defendants relied on a 1983 Co-existence Agreement and a 1985 Letter, claiming these permitted the use of the impugned mark in India.

The Ld. Single Judge partially decreed the suit on 14.08.2024, finding trademark infringement but rejecting claims of passing off and copyright infringement.

Both parties filed cross-appeals.

1. Whether the use of the impugned mark by the Defendants amounts to infringement of Lacoste’s copyright?

2. Whether the Agreements dated 17.06.1983 and 22.08.1985 extend to India and entitle the Defendants to use the impugned mark?

3. Whether the use of the impugned mark in India amounts to trademark infringement and passing off?

4. Whether the suit is barred by acquiescence?

5. Whether the Ld. Single Judge erred in granting rendition of accounts and awarding costs?

The Court applied Section 14(c) of the Copyright Act, 1957, regarding the exclusive right to reproduce artistic works.

It relied on the 'originality' standard from Eastern Book Company v. DB Modak.

It relied on R.G. Anand v. Delux Films for the "lay observer" test in copyright piracy.

It relied on the Doctrine of Merger, which denies protection where an idea and expression are inseparable.

For trademark law, it applied Sections 2(h), 29, and 30 of the Trade Marks Act, 1999, concerning deceptive similarity and "permitted use".

The "classic trinity" test for passing off (goodwill, misrepresentation, damage) was drawn from Reckitt & Colman v. Borden and Laxmikant V. Patel v. Chetanbhai Shah.

Principles of territoriality in IP were reinforced via Toyota Jidosha Kabushiki Kaisha v. Prius Auto Industries.

The Court reversed the Single Judge’s finding on copyright, ruling that the Doctrine of Merger did not apply because there are numerous ways to depict a crocodile; the Defendants' "near-exact duplication" of Lacoste's specific artistic posture constituted infringement.

Regarding the contracts, the Court held the 1983 Agreement was expressly limited to five specific Asian territories excluding India.

The 1985 Letter was a unilateral communication lacking "absolute and unqualified acceptance" under Section 7 of the Contract Act.

On trademark infringement, the Court found the marks visually and conceptually identical, likely to cause "initial interest confusion" among average consumers.

However, the passing off claim failed because Lacoste’s evidence of Indian goodwill in 1998 (CA certificate and news articles) was inadmissible for lack of Section 65B IEA certification and failure to examine the Auditor.

Acquiescence was rejected as the three-year delay in suing did not constitute a "positive act" of encouragement.

1) The Defendants are permanently enjoined from using the impugned standalone saurian mark in India.

2) The 1983/1985 agreements do not extend to India.

3) The claim for passing off remains dismissed due to lack of admissible evidence on reputation.

4) The order for rendition of accounts is upheld under Section 135(1) of the TM Act.

5) The award of costs against the Defendants is set aside due to Lacoste’s own procedural delays.

The appeals were partly allowed.