La Chemise Lacoste v. Alligator Company

• Decision Date: 21 March 1974
• Docket Number: Civ. A. No. 3876.
• Citation: 374 F. Supp. 52
• Parties: La CHEMISE LACOSTE, a French corporation, Plaintiff, v. The ALLIGATOR COMPANY, a Delaware corporation, Defendant and Third-Party Plaintiff, v. JEAN PATOU, INC., a New York corporation, Third-Party Defendant.
• Court: U.S. District Court — District of Delaware

374 F. Supp. 52

La CHEMISE LACOSTE, a French corporation, Plaintiff, v. The ALLIGATOR COMPANY, a Delaware corporation, Defendant and Third-Party Plaintiff, v. JEAN PATOU, INC., a New York corporation, Third-Party Defendant.

Civ. A. No. 3876.

United States District Court, D. Delaware.

March 21, 1974.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Thomas S. Lodge, of Connolly, Bove & Lodge, Wilmington, Del., W. Brown Morton, Jr., Donal B. Tobin and Donald N. Huff of Morton, Bernard, Brown, Roberts & Sutherland, Washington, D. C., Robert Abdesselam, Paris, France, of counsel, for plaintiff and third-party defendant.

Lewis S. Black, Jr. of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., Abraham G. Levin, Irving Constant, Brian L. Bilzin of Rubin, Wachtel, Baum & Levin, New York City, Arthur H. Seidel and Allen L. Greenberg of Seidel, Gonda & Goldhammer, Philadelphia, Pa., of counsel, for defendant.

OPINION

LATCHUM, Chief Judge.

La Chemise Lacoste, a French corporation ("LCL"),¹ instituted this action² against the Alligator Company, Inc. ("Alligator")³ seeking a declaratory judgment that it has the right to use a distinctive crocodile emblem⁴ as a trademark on toiletries distributed in the United States by the third-party defendant Jean Patou, Inc. ("Patou"). Alligator responded by asserting that the sale by LCL through Patou of toiletries in the United States bearing the crocodile emblem infringes upon Alligator's trademark rights and constitutes unfair competition.⁵

LCL further seeks relief from alleged breaches by Alligator of certain contractual obligations to LCL⁶ which arose out of a settlement of an infringement suit in 1958 brought by Alligator against LCL's then licensee, David Crystal, Inc. ("Crystal").⁷

LCL commenced the present suit on March 4, 1970 against Alligator in the Court of Chancery of the State of Delaware in and for New Castle County. The case was thereafter removed to this Court pursuant to 28 U.S.C. § 1441. La Chemise Lacoste v. Alligator Co., 313 F. Supp. 915 (D.Del.1970).

In the early 1950's LCL attempted to introduce into the United States a sport shirt called "Chemise Lacoste" which had the crocodile emblem affixed to the shirt over the left breast. In an effort to secure an effective means for distributing the "Chemise Lacoste" shirt, LCL sought the services of Crystal. LCL and Crystal first formalized their relationship in a License Agreement⁸ dated October 1, 1951 whereby LCL gave to Crystal the exclusive right to sell in the United States all tennis and golf shirts known as "Chemise Lacoste" made by LCL. At the same time, LCL granted Crystal the exclusive right to use in the United States all trademarks, trade names and insignia of LCL in connection with the advertising and sale of merchandise purchased by Crystal from LCL.

While LCL was establishing an effective means for distributing its goods in the United States, LCL was also attempting to secure a trademark registration by filing an application covering the crocodile emblem for use on shirts.⁹

The Patent Office entered a final rejection to this application on April 10, 1953, based on Alligator's trademark Reg. No. 251,201.¹⁰ Although LCL tried several times to secure Alligator's permission to register the crocodile emblem,¹¹ permission was withheld each time.¹² Thus, the sale of the "Chemise Lacoste" shirt with the crocodile emblem by Crystal continued in the United States without benefit of a formal trademark registration of the emblem.

On May 6, 1954 LCL filed an application for a trademark on the word "crocodile" in the form of the crocodile emblem (S.N. 665,827) for use on shirts, and on December 28, 1955 an application was filed by LCL on the same mark (S. N. 700,736) for use on socks, shorts and dresses.¹³ On December 19, 1955 LCL filed an application for a trademark on the crocodile emblem itself (S.N. 700,419) for use on sporting goods.¹⁴ All of these applications were opposed by Alligator.¹⁵

Alligator filed suit against Crystal on December 10, 1956 in the Southern District of New York, Civil Action 115-272 (the "1956 suit"),¹⁶ in which Alligator sought to enjoin Crystal's use of the crocodile emblem in the United States. After considerable negotiations, a settlement was reached between Alligator and Crystal which included the entry of a Consent Judgment on September 22, 1958.¹⁷ Since the dealings of LCL, Crystal and Alligator relating to the settlement of the 1956 suit form a major basis for LCL and Alligator's allegations in the present suit, it is necessary to consider the 1958 settlement in some detail.

The 1958 Settlement

Although Crystal was the only named defendant to the 1956 suit, Crystal, soon after suit had been brought, transmitted Alligator's complaint to LCL's United States trademark attorney for comments and suggestions.¹⁸ In addition, between January 2, 1957 and October 23, 1957 LCL cooperated with Crystal by supplying information which Crystal had requested for use in the defense of Alligator's suit.¹⁹

However, despite that cooperation, Crystal did not keep LCL posted on the developments of the 1956 suit. As explained by Robert Abdesselam, LCL's French attorney, "La Chemise Lacoste heard very little during that year, those two years, end of '56 to mid-'58, about what was going on."²⁰ Be that as it may, Crystal did request monetary aid from LCL²¹ and did ultimately receive $5,000²² to help defray Crystal's cost of defending the suit brought by Alligator.

In defense of Alligator's allegations of trademark infringement and unfair competition set forth in the 1956 suit, Crystal asserted, inter alia, (1) that two of Alligator's registered trademarks, upon which Alligator was relying, were invalid, (2) that Alligator was not the owner of and had no exclusive rights to the crocodile emblem, and (3) that Crystal's use of the crocodile emblem was not likely to cause confusion, mistake or deception with purchasers as to the source of Crystal's goods.²³ The 1956 suit never came to trial. Instead, Crystal and Alligator entered into a formal Settlement Agreement.²⁴ The Settlement Agreement had attached to it a Consent Judgment²⁵ to be entered by Crystal in the 1956 suit, a License Agreement from Alligator to Crystal,²⁶ and a Letter of Consent to be signed by LCL.²⁷ Signed copies of the Settlement Agreement together with the Consent Decree and License Agreement were exchanged between Crystal and Alligator on July 21, 1958 and held in escrow pending the receipt of the LCL Letter of Consent. Three days before the July 21, 1958 exchange, Alligator also agreed with Crystal to discontinue its opposition to LCL's trademark application on sporting goods, (S.N. 700,419), which later became Reg. No. 688,685.²⁸

The Settlement Agreement consisted of seven paragraphs. The first paragraph provided that the Consent Decree would be submitted to the New York District Court for approval to end the 1956 suit pending there. The second paragraph provided that the License Agreement would be executed by the parties upon approval of the Consent Decree by the New York District Court. In the third paragraph Crystal agreed to cooperate, short of suit, to prevent retailers from using the word "Alligator" or otherwise violating the License Agreement. The fourth paragraph provided for publication of the settlement in appropriate trade journals and to inform customers of Crystal directly by letter. In the fifth paragraph Crystal agreed to deliver to Alligator the Letter of Consent from LCL at the time of execution of the License Agreement. The sixth paragraph provided the parties would take reasonable action to make the Settlement Agreement effective. Finally, the seventh paragraph defined the term "articles of apparel" used in the Consent Decree and the License Agreement and included by way of illustration such things as: hosiery, gloves and corsetry.

The Consent Decree, which was attached to the Settlement Agreement as Exhibit "A", had four provisions. First, Crystal admitted that the two registered trademarks on which Alligator was suing were valid and that Alligator was:

". . . the owner of valid common-law trademark rights, which statutory and common-law rights give it priority and primacy over any alleged rights of defendant Crystal in connection with any use of the words `alligator' or `crocodile' or the name of any lizard-like reptile or pictorial representation of an alligator or crocodile or other lizard-like reptile as a mark or symbol to designate the source of origin of articles of apparel." Brackets added.

Second, Crystal admitted it had:

". . . sold articles of apparel bearing or being advertised in connecton with the word `crocodile' or pictorial representations of an alligator or crocodile as a mark or symbol to designate source of origin, and there is a likelihood of confusion in the mind of the public between plaintiff's Alligator's goods sold under or in connection with its above-recited registered and common-law trademarks and defendant's Crystal's goods sold as hereinabove recited as to the source of origin of the respective goods." Brackets added.

Third, Crystal and:

". . . its officers, agents, servants, employees and attorneys, and those persons in active concert or participation with them who receive actual notice of this decree, by personal service or otherwise, are hereby permanently enjoined from using the words `alligator' or `crocodile' or the name of any lizard-like reptile or pictorial representation of an alligator or crocodile or other lizard-like reptile as a mark or symbol for the purpose of or in a manner designating source of origin of articles of apparel in the United States, except as set forth in a written consent or agreement executed by plaintiff Alligator." Brackets added.

Finally, a counterclaim asserted by Crystal against Alligator was dropped.

The License Agreement, which was attached to the Settlement Agreement as Exhibit "B", had nine paragraphs of which...