SHANGHAI: Ang Boon Tian coughs in a meeting room at Beijing's Kunlun Hotel. It is clear that he isn't enjoying the capital's notoriously cold winter weather.

The second generation Malaysian-Chinese chairman of Singapore Crocodile International Private Ltd travelled to these colder climes in early January to speak to the Chinese press about the company's presence in China.

Singapore Crocodile continues to face the longstanding question of whether it's even worthwhile staying in China and co-existing with French rival Lacoste, which sells clothing with a similar crocodile logo. The decisive factor is whether Singapore Crocodile can continue using its trademark logo, which it has used for 12 years, albeit illegally until recently.

A Beijing court will reach a decision on this matter soon. If Singapore Crocodile loses the case, the company could face catastrophic losses.

"The 350 million yuan (US$44 million) we paid for our brand will go to waste, our 20 plants and 1,500 shops will close and 16,710 workers will be jobless," Ang says.

The company's new 120 million yuan (US$15 million) building, Cartelo Plaza in Shanghai, will be completed by the end of the year. As planned, it will move its global headquarters from Singapore to Shanghai next year.

Over the past 12 years, Singapore Crocodile has built one-third of its global business in China, capturing a much larger market share than Lacoste. If the company loses the court case, these efforts will have been in vain, Ang says.

It will also have to compensate its dealers throughout the country. The company has signed contracts with four dealers that have been sued by Lacoste for selling Singapore Crocodile sportswear, and has promised to compensate them for their losses if it loses the case.

"If we lose the case, we can't continue our business in China," says Yi Qianru, managing director of Shanghai Cartelo Garments Co Ltd, the company's China office.

Tit-for-tat

The case between Lacoste and the State Trademark Evaluation Commission opened on November 28, 2005. Lacoste took the commission to the Beijing No 1 Intermediary People's Court last July, and demanded that Singapore Crocodile be prevented from registering its trademark in China. Singapore Crocodile's logo faces the left while Lacoste's faces the right, but Lacoste does not believe this difference will be noticed by consumers.

  Even with 'Cartelo' written next to the logo, Lacoste insists that Singapore Crocodile's trademark looks no different from its own.

"You can't just add some letters and give the crocodile a different direction, then say your logo is different from mine," says Huang Hui, Lacoste's acting lawyer.

"If so, anyone could easily make different trademarks and abuse the crocodile logo. That's unimaginable."

The only possible path to reconciliation, Huang says, is based on the condition that Singapore Crocodile recognizes Lacoste's exclusive rights to the crocodile logo. This has happened in several disputes with other companies over the past year. Hong Kong-based Crocodile Garments Ltd and Zhejiang Crocodile Garment Co Ltd both agreed to give up their crocodile logos within an agreed timeframe, but Singapore Crocodile will not accept these conditions.

"That won't work," Yi says, adding that the exclusive rights to the crocodile logo should be decided by the court, rather than by Lacoste or another company.

If Singapore Crocodile demanded the same conditions in Japan, where it first registered its crocodile logo, Lacoste would never be able to enter that market.

Looking back

Both sides say they did not know about each other when Lacoste was expanding its sportswear business in Europe and Singapore Crocodile was registering its crocodile trademark throughout Asia. They realized they had similar logos when Lacoste started expanding into the Asian market in the 1960s.

When Lacoste tried to register its trademark in Japan, it found Singapore Crocodile had already registered a crocodile logo. The Singapore company objected to Lacoste's registration at first, but the French firm fought back by saying the two trademarks were different enough for customers to distinguish between them. After three years of lawsuits, the two reached an agreement.

    Ang says the Singaporean side believed competition was inevitable and that both sides should be given room to grow. Lacoste then registered its trademark in Japan. The company later proposed that the two sides sign an agreement covering the use of the crocodile logo in other Asian markets. In 1983, they agreed to co-exist in Singapore, Malaysia, Indonesia, Brunei and Taiwan. In return for permission to register its trademark in these markets, Lacoste paid US$1.5 million to the Singaporean company. Singapore Crocodile later also allowed Lacoste to register its trademark in other markets where it had registered first.

Ang and Yi have long been upset that Lacoste did not reveal when it signed the agreement in 1983 that it had registered the trademark on the Chinese mainland in 1980. This was not known until 1993, when Lacoste objected when Singapore Crocodile tried to register its trademark on the mainland.

The State Trademark Evaluation Commission ruled in 2003 that Singapore Crocodile's Cartelo crocodile trademark was distinguishable from Lacoste's and could therefore be registered. Lacoste objected to the ruling and asked for a re-examination, but a May 2005 ruling reinforced the decision.

It took the Singaporean company 12 years to register its trademark on the mainland, but the battle is still not over.

Lacoste filed a suit against the commission two months later, asking it to cancel the ruling.

Up in the air

"I don't know why Lacoste insists that our crocodile trademarks are similar in China while it agrees in other countries that they are different," Yi says.

Both sides are confident, and Lacoste says it was simply the first to have the trademark registered on the mainland.

Wei Yanliang, a researcher from the Research and Development Centre of the State Intellectual Property Bureau, says it is difficult to predict the outcome.

   It is still rare for Chinese courts to handle intellectual property disputes when with both sides are from foreign countries.

Wei says these kind of cases will become more common in the future as China further integrates into the global economy.

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