Unveiling Israel’s Most Important Trademark Decisions of 2023

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Gain insight into Israel’s trademark legal landscape with a focus on significant trademark decisions that shaped the year.

1.  Liability of Third Parties in Trademark Infringement Cases – Lifestyle Equities CV & others v. Rami Levi & others

One noteworthy case that stands out is Lifestyle Equities CV & others v. Rami Levi & others, a legal milestone with implications reaching beyond the courtroom.

A pivotal moment in Israeli trademark law this year was the ruling on the BEVERLY HILLS POLO CLUB international fashion brand. Lifestyle Equities C.V. and Lifestyle Licensing B.V., stewards of the renowned BEVERLY HILLS POLO CLUB (BHPC) brand, recognized for its iconic horse, rider, and polo stick logo, found themselves embroiled in a legal discourse shedding light on trademark infringement within the country.

Having entrusted an Israeli company with the license for BHPC products, the plaintiffs uncovered unauthorized underwear bearing their trademark in Israeli markets, distributed through Rami Levy stores by Yafiz.

Despite warnings and legal actions taken, the infringing products persisted on Rami Levy’s shelves, even following the termination of the license agreement. This initiated a legal process marked by extensive evidence, private investigator findings, and expert opinions.

Items sold by Rami Levy with BHPC trademark

On April 27, 2023, the Tel Aviv District Court issued a noteworthy decision, ruling that Rami Levy Shikma Marketing 2006 Ltd. and Yafiz Fashion Ltd. must compensate the BHPC brand custodians with an amount exceeding 3,000,000 NIS for trademark infringement—a significant award within Israel for this type of infringement.

Crucially, this case established a legal precedent, asserting that third parties can be held accountable for trademark infringement, and that the limitations set in a license agreement are enforceable against such entities.

It’s worth noting that the legal journey is ongoing, with an appeal to the Supreme Court currently in progress. Further insights into the legal findings of the case can be explored HERE.

This decision has garnered international attention, with WTR 2023 reporting: “A landmark ruling in Israel could help rights holders seek greater compensation and sets a precedent for retailer liability in trademark infringement disputes”.  READ MORE.

Lifestyle Equities CV was represented by Yossi Sivan Law Firm

2.  61865-03-17 Chloe S.A.S v. Oil le Amor Ltd – Use of Perfume Brand Names as Indicators

Our journey into pivotal trademark decisions in Israel continues with a compelling case that probes the question: Can the sale of perfumes featuring scents akin to renowned brands, using translated names as indicators, constitute trademark infringement?

In a recent ruling, an Israeli court scrutinized a scenario where a company manufacturing affordable perfumes asserted that their fragrances closely mirrored those of upscale counterparts.

The defendant strategically employed translated names (to Hebrew) of well-known perfume brands, including Chloe, Hugo Boss, Britney Jean Spears, Lancome, ZINO DAVIDOFF, and more, for association and identification.

Eschewing the use of logos or English names, the defendant incorporated the term “COMPATIBLE SCENT” in Hebrew alongside the translated brand names. The legal dispute revolved around the legitimacy of this practice and whether it amounted to trademark infringement.

The defendant contended that their actions were permissible, asserting that customers were fully aware they were purchasing their products, not those endorsed by the trademark owners.

The District Court dismissed the lawsuit, stating that directly using registered trademarks or imitating them with minor distinctions that lack substantial differences could potentially infringe trademarks. However, Israeli law permits referencing products with registered trademarks for similar goods, provided it doesn’t lead to consumer confusion.

In this case, the Court determined that the defendant’s actions did not infringe on the plaintiffs’ trademark rights, emphasizing the absence of confusion and the good faith presentation of brand names by the defendants. Moreover, the use of translated names was not considered “trademark use” under trademark law, precluding any claims of trademark infringement.

Perfume Brand Names as Indicators – Reasonable and True Use

The judge concluded that utilizing translated names was a reasonable and true use of the mark, supporting the fair use claim. The Court mandated practical adjustments for products sold in Israel, requiring the replacement of the English term “Compatible” on labels with its Hebrew equivalent in a larger font for enhanced visibility.

In summary, the Court ruled that the defendant’s practices did not constitute trademark infringement or any violation of other laws, such as publicity rights or unjust enrichment.

This case sheds light on the delicate balance between potential trademark infringement and the legitimate utilization of brand names as indicators. Intriguingly, within the past two years, the market has once again pushed the boundaries of trademark protection in the perfume domain.

A Trend in Perfume Cases – Prioritizing the Interests of Free Competition over the Rights of Trademark Owners

In a previous incident, a distinct case unfolded where defendants marketed original perfume liquids, bearing the “Channel” brand name as an indicator. Despite the District Court’s initial ruling that such sales did not amount to trademark infringement, the Supreme Court remanded the case for further assessment.

This episode underscores the Israeli courts’ tendency to prioritize the interests of open competition over the rights held by trademark owners, exemplifying a recurring trend in perfume-related legal disputes.

Further insights into the legal findings of the case can be explored HERE.

3.  Harnessing the Power of Word Marks: A Lesson in Trademark Protection

In the realm of intellectual property, filing a trademark application for a word mark emerges as a potent strategy for businesses and organizations eager to safeguard their brand. This article underscores the significance of Word Mark Registration in Israel, delving into its effectiveness and the recent case of the Israeli Trademark Office.

A word mark, distinct from a design mark, comprises words, phrases, or slogans, devoid of any design or symbol. Opting for a word mark over a design mark can offer businesses a more streamlined and potent means of brand protection.

The recent case involves a shoe store applicant filing a trademark application featuring a BUTTERFLY design in Class 25.

The Trademark Examiner, however, rejected the application, citing similarity to a registered word mark “BUTTERFLY” in Class 25 owned by Tamasu Butterfly Europa GmbH.

The Trademark Registrar employed the “triple test” to evaluate the potential for confusion, considering visual and sound elements, the type of goods and marketing channels, and specific circumstances. Emphasizing the dominant feature, the Registrar concluded that the word “BUTTERFLY” held sufficient strength in the fashion industry to protect against various designs.

Despite the addition of words like “SUPREME QUALITY” in the requested mark, the Registrar deemed them transparent to consumers. The application was rejected based on the likelihood of confusion with the registered word mark “BUTTERFLY.”

This case serves as a compelling example of why word mark registration is indispensable for brand owners, ensuring robust brand protection.

It also cautions against applicants, already using a trademark, seeking a hearing before the Trademark Registrar, as a decision indicating a likelihood of confusion may inadvertently support a potential infringement claim by the owner of the cited mark.

In navigating the complexities of trademark registration, the risk of potential infringement claims underscores the importance of securing a registration, a consideration that often outweighs the risks associated with forgoing it.

Further insights into the legal findings of the case can be explored HERE.

4. Navigating Trademark Oppositions: The Pitfalls of Global Reputation without Registration

MONTURE V. MONTURA

In a recent trademark opposition case in Israel, the question arises: Can a worldwide fashion label successfully oppose a similar mark without holding a trademark registration? The consequences of not registering a trademark in Israel are brought to the forefront in this compelling scenario.

Facts of the Case:

Tasci S.r.l, the proprietor of the globally recognized Montura brand, entered the Israeli market in 2017 without filing for a trademark. Operating without a specific store in Israel, Tasci S.r.l found itself in a trademark dispute with José Guillermo Treger, owner of the Panama fashion brand MONTURA, who filed a trademark application in Israel in 2019.

José Guillermo argued visual distinctions between the marks and emphasized that his brand caters to a different demographic and fashion category than Tasci S.r.l’s sport and hiking-oriented line.

The Trademark Commissioner’s Decision:

Despite visual and phonetic similarities, the Commissioner ruled in favor of José Guillermo. The key factor was Tasci S.r.l’s inability to prove its reputation and substantial sales in Israel. The evidence presented was deemed vague and insufficient, primarily reflecting global rather than local impact.

Insufficient evidence regarding the mark’s status as well-known further weakened Tasci S.r.l’s opposition. Consequently, the opposition was entirely rejected, and José Guillermo’s mark was approved.

Implications and the Importance of Registration:

This outcome, while potentially catastrophic for Tasci S.r.l, underscores the critical importance of registering a trademark in Israel. The rejection highlights the risk of relying solely on global reputation in trademark oppositions, particularly when evidence specific to the jurisdiction is lacking.

Notably, Tasci S.r.l’s subsequent filing of a trademark application may face challenges, given the Commissioner’s ruling on confusing similarity.

In defense, Tasci S.r.l faces a dilemma. Claiming no confusion contradicts their previous stance, emphasizing the need for a registered trademark in Israel for robust brand protection.

Conclusion:

This case serves as a stark reminder: relying on global recognition alone in a trademark opposition is fraught with risks. For businesses with a global footprint, filing a trademark application in Israel is not a choice—it’s a necessity.

Protect your brand, mitigate risks, and ensure comprehensive legal coverage by taking the crucial step of registering your trademark in each jurisdiction where you operate. Don’t leave your brand’s fate to chance.

Further insights into the legal findings of the case can be explored HERE.

Please be aware that the information provided in this article is intended for general informational purposes only and should not be considered legal advice. For specific legal matters, it is recommended to consult with a licensed attorney.

 

 

Items sold by Rami Levy with BHPC trademark

Record-Breaking Trademark Infringement Award In Israel – Good News for Brand Owners

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In a groundbreaking legal ruling that has captured attention, the Tel Aviv District Court has recently delivered a record – breaking trademark infringement award with far-reaching implications.  

Rami Levi, one of the biggest supermarket chains in Israel, has been ordered to compensate Lifestyle Equities, the owner of the iconic BEVERLY HILLS POLO CLUB, in one of the highest awards in Israel for trademark infringement.

This landmark decision sets an extraordinary precedent in Israel’s legal arena, representing a remarkable triumph in the realm of trademark infringement.

The court ruling concluded a long-standing dispute between the parties, which lasted nearly a decade.

Here’s the story in a nutshell:

General Background

The plaintiffs, Lifestyle Equities C.V. and Lifestyle Licensing B.V., own the rights to the well-known BEVERLY HILLS POLO CLUB (BHPC) brand, featuring the iconic horse, rider, and polo stick, marketed in many countries worldwide, primarily in the fashion, footwear, bags, and more.

The plaintiffs granted a license to an Israeli company for the design, production, and distribution of BHPC products in Israel, specifically in the category of underwear.

The license included various restrictions, including a prohibition on distributing the products in food stores and marketing products not approved by the plaintiffs.

In 2014, the plaintiffs discovered that underwear products bearing their trademark, which were not approved as required, were imported to Israel by Yafiz and sold in Rami Levy stores.

Items sold by Rami Levy with BHPC trademark

The plaintiffs also learned that the license holder transferred her operations to another company without informing the plaintiffs or obtaining their approval. Under these circumstances, it was alleged that the products sold in Rami Levy stores were infringing.

In 2014, the plaintiffs sent warning letters to Rami Levy and Yafiz, demanding they cease the distribution of the infringing products.

However, the infringing products continued to be sold in Rami Levy stores despite the plaintiffs’ warnings, and this continued even after the license agreement was terminated and a lawsuit was filed against the company, claiming that it had stepped into the shoes of the license holder.

When Rami Levy and Yafiz refused to cease the distribution of the infringing products, the plaintiffs filed a lawsuit in 2017 against Rami Levy, Yafiz, and other importers.

The lawsuits led to a prolonged and complex legal battle, during which numerous pieces of evidence were presented regarding the trademark infringement, including findings by private investigators and expert opinions.

In 2022, the parties agreed to submit the dispute to the District Court (Judge Guntevenik) for a decision based on oral summaries by the parties, without cross-examinations.

The Judgment

On April 27, 2023, the court issued its judgment in the case.

The Tel Aviv District Court ruled that Rami Levy Shikma Marketing 2006 Ltd. and Yafiz Fashion Ltd. must compensate Lifestyle Equities C.V. and Lifestyle Licensing B.V., the owners of the BEVERLY HILLS POLO CLUB brand, in the amount of over 3,000,000  ₪ (2,413,836 ₪  plus interest and expenses) for trademark infringement.

This is one of the highest amounts awarded in Israel in recent years in the field of trademark infringement.

This landmark case sets a new benchmark in Israel’s legal landscape, representing one of the most substantial trademark infringement awards in recent years.

According to attorney Yossi Sivan representing Lifestyle Equities, there are several important and interesting elements in the court’s ruling:

One of the Highest Awards in Israel for Trademark Infringement

Firstly, the trademark infringement award is one of the highest awarded in Israel in recent years for trademark infringement. It includes compensation of all gross profit made by the Defendants amounting to approximately 2.4 million ₪, plus additional amounts for the filing date of the lawsuit and reimbursement of expenses, totaling over 3,000,000 millions NIS.

Attorney Yossi Sivan: “One of the Highest Trademark Infringement Awards in Israel”

Third-Party May be Liable for Trademark Infringement

Secondly, the court ruling indicates that a commercial party that received warnings about products it distributes cannot evade responsibility for potential intellectual property infringements and cannot place all the responsibility on the product supplier.

Failing to conduct a thorough investigation of the allegations while continuing to sell the infringing products might exposes the distributor to liability for trademark infringement.

The Judgment marks the first trademark case law in Israel where a third party (a commercial client such as supermarket chain of stores, who purchased the products from a supplier) is held responsible for trademark infringement and grants the brand owner a substantial compensation, one of the largest ever given in Israel.

Distribution Limitation of a License Agreement May Be Enforceable Against Third Parties

The third, ruling acknowledges that Rami Levy’s chain stores are “food stores” according to the license agreement. This establishes that the distribution of products bearing the trademark in food stores is prohibited.

The court accepted the plaintiffs’ position in this context, stating that distributors and marketers who did not directly contract with the rights-holding company are subject to the terms of the license agreement following the notices. 

Compensation Based on Unlawful Enrichment – Good News for Brand Owners 

The court’s compensation mechanism in this case is truly groundbreaking. Unlike typical instances of trademark infringement, where compensation is often estimated due to the challenge of proving financial damages, the court took a different approach.

Through meticulous analysis, the court accurately calculated the defendants’ actual gross profit, taking into account operational expenses. The plaintiffs provided comprehensive data, including import records, invoices, and receipts, enabling a precise calculation of compensation.

Rather than relying on the traditional compensatory damages mechanism established by the Trademark Law, the court applied an alternative remedy based on the unlawful enrichment law. This approach ensures that the compensation is directly tied to the actual gross profit derived from the infringement.

“… It should be noted here that “the rights holder can demand an injunction and compensation, but as an alternative to compensation, they can claim the unjust enrichment on the basis of unlawful enrichment act”.

Licensing Royalties Should Not Be The Basis of Compensation

The court firmly dismissed the defendants’ argument that only reasonable royalties should be awarded for using the plaintiffs’ trademark. Instead, it deemed the disgorgement of profits as the appropriate remedy, considering the nature of the case and the relationship between the parties.

The court recognized the plaintiffs’ efforts to trace the actual profits made, reinforcing the principle that compensation for trademark infringement should reflect the third party’s actual gross profit from the unauthorized sale of products.

” In light of the circumstances, it seems that returning the profits is indeed the suitable remedy… Therefore, it does not seem appropriate to award compensation in the form of reasonable royalty fees, a place where the profits can be traced.”

Furthermore, the court ruled that Rami Levy and Yafiz are jointly and severally liable for compensation, despite being separate entities. Their close collaboration and intertwined business activities justified this decision.

It’s worth noting that Rami Levy and Yafiz initially attempted to prevent the publication of the court ruling. However, the district court sided with the plaintiffs, acknowledging that there was no valid reason to withhold the ruling from public knowledge.

This trademark infringement award was granted under the provisions of Section 79A of the Israeli Court’s Law, wherein both parties consented to the Court exercising its discretion and making a judgment based on the available evidence and pleadings, without conducting cross-examinations.

The plaintiffs in this landmark case were represented by our law firm: Attorney Yossi Sivan of Yossi Sivan Law Firm 

Case Number TA 13671-02-17 Lifestyle Equities CV and others v. Rami Levi and Others (Tel Aviv District Court).

We would like to express our gratitude to Attorney Avi Ordo of Shorowitz & Co., who successfully cooperated with our firm and jointly represented in this case.

An appeal to the Supreme Court has been filed.

Please be aware that the information provided in this article is intended for general informational purposes only and should not be considered legal advice. For specific legal matters, it is recommended to consult with a licensed attorney.

Difference Between National Registration and International Registration of Trademarks

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National registration and international registration are two ways to protect trademarks around the world, and both have advantages and disadvantages.

Advantages of National Registration:

  1. Cost: National registration is typically less expensive than international registration, as it only involves the fees associated with filing and prosecuting the trademark application in a single country.
  2. Simplified Process: National registration processes are often simpler and quicker than international registration processes. This is because they are designed to be familiar to local applicants, and the national trademark office is more likely to have a better understanding of local laws and customs.
  3. Better Protection: National registration provides better protection in the country where the trademark is registered. National registrations are subject to local laws, which may be more favorable to trademark owners, and trademark owners may have more resources available to enforce their rights.

Disadvantages of National Registration:

  1. Limited Protection: National registration only protects trademarks in the country where they are registered. This means that a trademark owner would need to file separate applications in each country where they wish to have protection.
  2. Language and Cultural Barriers: National registration can be challenging in countries where the language and culture are unfamiliar to the trademark owner. This may make it difficult to navigate the registration process or to enforce trademark rights in that country.

Advantages of International Registration:

  1. Protection in Multiple Countries: International registration provides protection in multiple countries with a single application. This is particularly useful for businesses that operate or plan to operate in multiple countries.
  2. Simplified Process: The international registration process is designed to be simpler and quicker than filing separate applications in each country. The international application is filed with the World Intellectual Property Organization (WIPO), which acts as a central registry.
  3. Cost-Effective: International registration can be cost-effective for businesses that wish to protect their trademark in multiple countries. The fees for international registration are typically lower than the fees for filing separate applications in each country.

Disadvantages of International Registration:

  1. Limited Scope of Protection: International registration only covers countries that are signatories to the Madrid Protocol. This means that there may be countries where protection cannot be obtained through an international registration.
  2. More Complex Process: The international registration process can be more complex than national registration, as it involves complying with the requirements of multiple countries and working with different national trademark offices.
  3. Dependence on Home Registration: International registration is dependent on the home registration, meaning that if the home registration is cancelled or invalidated, the international registration may also be affected.

In conclusion, both national registration and international registration have advantages and disadvantages, and the decision of which system to use depends on the needs and circumstances of the trademark owner. National registration may be more appropriate for businesses that operate in a single country, while international registration may be more appropriate for businesses that operate in multiple countries. Ultimately, it is essential to work with experienced trademark attorneys to determine the best strategy for protecting trademarks around the world.

MEET US AT THE INTA 2023 SINGAPORE

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Dear Clients and Colleagues,

We are thrilled to announce that we will be attending the INTA 2023 Annual Convention in Singapore from May 16th until May 20th.

The event is the premier gathering of trademark professionals from all around the world and is an incredible opportunity for us to connect with colleagues, clients, and partners, and to stay up to date with the latest trends and developments in our field.

We are excited to share our knowledge and experience with other industry leaders, and to learn from the best in the business. We look forward to catching up with old acquaintances, meeting new friends, and building relationships that will continue to thrive for years to come.

In addition to the convention, Singapore is a fascinating and dynamic city with a lot to offer. We suggest taking some time to explore the following attractions:

  1. Gardens by the Bay – This stunning 101-hectare garden features more than a million plants from around the world, including towering SuperTrees and a world-famous Flower Dome.
  2. Marina Bay Sands – The iconic three-tower hotel features an observation deck with breathtaking views of the city skyline, as well as a casino, a shopping mall, and a range of restaurants.
  3. Sentosa Island – This tropical island resort is home to a wide range of attractions, including Universal Studios Singapore, a water park, beaches, golf courses, and more.
  4. Chinatown – A vibrant cultural district filled with colorful shops, street vendors, temples, and traditional architecture.
  5. Merlion Park – A must-visit for first-time visitors to Singapore, this iconic statue features the head of a lion and the body of a fish, and is a symbol of the city’s history as a fishing village.

We can’t wait to see you at the INTA 2023 Annual Convention and to explore all that Singapore has to offer. If you have any questions about the convention or the city, please don’t hesitate to contact us.

Best regards,

Yossi Sivan Law Firm 

Summary of 2021 Israel Trademark and Patent Office Report

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Check Out the Latest Trademark Filing Statistics in Israel 2016 – 2021

1.      National trademark applications (3%) and international applications (14%) both increased in 2021.

2.      A total of about 9% more applications have been filed this year than the previous year.

3.      The number of applications submitted this year (2021) is the highest ever.

4.     48% of all trademark applications filed in Israel were national applications filed by local attorneys, which means trademark attorneys from other countries still prefer to file their trademark applications using local attorneys after seeking advice and counsel from local attorneys.

5.      Approximately 75% of trademark applications filed each year in Israel are from foreign applicants, meaning most come from outside Israel.

Registration of a trademark in Israel is best secured by working with local attorneys.

 

The Fatal Result of a Trademark Infringement Claim

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“Rules Written in Blood” is an old Israeli saying that perfectly sums up the need to learn from others’ mistakes before choosing the right path.

As a brand owner or trademark lawyer, taking enforcement action if you see any competitors or others using confusingly similar marks is the first step to consider.

However, suing for trademark infringement can sometimes result in a fatal result for the brand. 

One example can be found here.

What is an Indirect Attack ?

In Israel, the defendant may raise several defenses to a trademark infringement claim.

Indirect attack is one of the defenses.

In an Indirect Attack, a defendant may claim that the plaintiff’s trademark registration is invalid, or shouldn’t have been registered in the first place, and therefore should be cancelled.

The plaintiff could request cancellation based on a lack of distinctive character or descriptiveness of the trademark registration (absolute grounds).

This could be a majore risk for the brand owner.

Court is Examining The Registrability of the Mark

In a recent case brought by a cosmetic company, this risk was perfectly illustrated.

An infringement claim has been filed to the Israeli Tel Aviv Magistrates Court, in which the Plaintiff has claimed that the use of the mark “Messeia” by the defendants on cosmetic products constitutes trademark infringement.

The Plaintiff owns the trademark registration for the mark “Messiah” in class 3.

Photos of the Plaintiffs products and the Defendants are presented below:

Plaintiff’s Products:

Defandnat’s Products:

It should be noted that an indirect attack could be generaly initiated in a trademark infringement procedure within the framework of the infringement claim itself, even if no separate motion for cancellation has been filed to the Israeli Trademark Office or no separate declarative motion has been filed. 

In this case, the Court has taken one step further, and although the defendant did not specifically raise the claim of indirect attack, the Tel Aviv Court first examined the registrability of the plaintiff’s trademark registration.  

Court Ruled that the Plaintiff’s Trademark Should be Cancelled

The Court has ruled that according to Paragraph 11 (7) to the Trademark Ordinance, marks identical with or similar to emblems of exclusively religious significance are not registerable.

The mark “Messiah” is protected as a symbol with a clear and exclusive religious meaning, meaningful in both Jewish and Christian religions, therefore the mark is not registrable.    

Thus, the Court ruled that the Plaintiff’s trademark registration for the mark Messeia should be cancelled.

In order to formally cancel the mark, the Court requested to send a copy of the decision to the Trademark Office.

So, the Plaintiff sued for trademark infringement, but ultimately lost his registration.

A fatal result for the brand owner.

Owners of brands should carefully consider their risks before initiating a trademark infringement claim, including losing their registration.

 

Disclaimer: The above may not be considered as any legal opinion whatsoever and users are requested to get a professional advise.

5 Tips on How to Overcome Trademark Refusals in Israel

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There are several types of refusals typicaly issued by the Israeli Trademark Office.

We have decided to share with you our 5 important tips on how to overcome a Trademark Refusal in Israel based on our extensive experience in Trademark prosecution.

This is a must read for every trademark attorney who files Trademarks in Israel. 

Beware of What You Write in Your Response – All Trademark Files in Israel are Public

Since 2015 all trademark files in Israel, covering most of the examination process of trademark applications, are public and can be viewed easily online by others.

It is very important to understand that any claim you claim to overcome any refusal may be held against the client, either by a certain competitor or by any other third party who can easily gain access to the online files. Make sure no confidential information is subbmited in your response.   

For example, if you agree to limit the protection of your application just to overcome a certain refusal your limitation can be used by any third party to block any claim of trademark infringement against him.

Your pleadings in the prosecution process might negatively affect your enforcement options. Therefore, we always recommend asking a local attorney to provide a short brief of the respond by bullet points in English.     

Do Not Respond Immediately to an Office Action – Wait and Consider All Options First

Our first instinct as trademark attorneys is to ask a local attorney to respond to an  office action before the deadline. It is very important to consider all options before you do so. Such option can be for example to wait until the other side has responded.

For example, once you receive a refusal (Office Action) in which your application cannot be registered based on similarity to other application that hasn’t been accepted yet, you might want to wait until the owner of the cited application has answered, to see his respond and then to decide on the proper course of action.

In that case you can wait until a few days before the deadline expires to review the other side’s response first. Reviewing the claims of the representatives for the cited application first, can provide you with material advantage in the process.

Ask the Local Attorney to Demonstrate the Use of the Mark using Online Information

In cases of lack of distinctive character refusals, trademark attorneys are confronting claims against the character of the mark. It is very important to show the examiners the actual use in the market using online information.  

In many cases we were able to prove that the mark is distinctive by showing the specific use in the market and how the specific use in the market acquires a special character to the mark. 

Use Foreign Registrations   

In cases of lack of distinctive character refusals, if your client has foreign registrations from his Country of Origin for the same mark and for the same list of goods, then you can use Section 16 of the Israeli Trademark Ordinance and request that the new application will be based on the foreign registration. By doing so you can efficiently overcome a lack of distinctive character refusal.

Ask the Local Attorney to Call the Examiner BEFORE Responding the Office Action

Experience shows that in many cases a quick chat with the Examiner can do miracles and can be even more efficient than an elaborated response.

We recommend in some of the cases to ask the local attorney to have a short chat with the Examiner, to understand his views and specifically ask him what you can provide in order to change his mind BEFORE submitting a detailed response.

While investing the time and energy in talking with the Examiner can be time consuming, it is very important to understand that if you fail to convince the Examiner, the second phase would be traveling to Jerusalem, attending the hearing and persuading the Trademark Registrar, this could be very costly for the client even before appealing the decision to the relevant District Court.                        

Yossi Sivan & Co. Law Office is specialized in Trademark Prosecution and litigation in Israel.

 

Contact Us

 

 

The above shall not be considered as any legal opinion whatsoever and we recommend consulting with a professional attorney.

      

 

  

 

   

New Israeli Supreme Court Decision on Trademark Infringement by Parallel import

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Is the act of parallel import beverages from Ukraine to Israel, without the consent of the Israeli trademark owner (who differs from the rights holder in Ukraine), considered trademark infringement? The Israeli Supreme Court, through a distinctive judgment by Judge Stein, tackled this query.

In simpler terms: In situations of split ownership, where different owners possess the same mark in different countries, does bringing identical products from Country A to Israel under the same mark, without the approval of the Israeli trademark holder, amount to trademark infringement?

The Facts:

Yafora Ltd produces and markets soft drinks in Israel. Yafora Ltd owns the “Schweppes” trademark in Israel and in the territory of the Palestinian Authority.

In 2006, Yafora acquired the trademark “Schweppes” in Israel from Cadbury Schweppes PLC. “Schweppes” beverages, marketed by Yafora Ltd in Israel, are manufactured by Yafora in Israel.

Ben Shlush Ltd imports various products from abroad into Israel in a parallel import process. Products imported by a Ben Shlush include food and beverages.

The parlell import scheme can be presented as follows: 

On March 12, 2019, Ben Shlush Ltd imported the first shipment of beverage bottles with the “Schweppes” trademark, which they allegedly purchased from Supreme Trading LLC.

This company purchased the beverages from official resellers, who purchased them from the beverage manufacturer in Ukraine, European Refreshments Limited. Coca-Cola owns the rights to the “Schweppes” trademark in Ukraine through its subsidiary ERL.

Ben Shlush received a cease-and-desist letter from Yafora on April 29, 2019, stating that the marketing of Ukrainian beverages under the “Schweppes” trademark infringes on Yafora’s Israeli trademark registration “Schweppes”.

In light of the above, Ben Shlush filed a motion for a declaratory judgment asking the District Court to declare that Schweppes’ beverages imported from Ukraine, which were purchased from ERL, were lawful and did not infringe on Yafora’s Israeli trademark “Schweppes”.

The District Court Decision: 

On October 19, 2020 the District Court has accepted the motion for a declaratory judgment and ruled that the fact that Yipora manufactures its products in Israel and does not import them to Israel from abroad does not deprive Ben Shlush of the status of a legitimate parallel importer.

In this context, it was pointed out that a certain difference between the products, those of the owner of the trademark rights and those imported in parallel import from another country, does not detract from their originality for the purpose of protecting the parallel import, whenever the product manufacturer holds the trademark rights in that country.

Along with this legal determination in principle, it was determined that Yafora in any case did not prove to the required extent its factual claim regarding the difference between the products.

Split Ownership of the Same Brand

The district court ruled that the legal doctrine concerning the exhaustion of intellectual property rights also applies in situations of territorial split ownership of trademark rights.

In this context, the district court has argued that the parallel import was a commercial risk that Yafora had to consider while acquiring the rights to the “Schweppes” trademark from Cadbury – in view of its awareness of the territorial, voluntary and agreed split of the Schweppes trademark rights.

The District Court ruled that this split of ownership was made when Cadbury sold its rights to various entities in different countries.

Accordingly, the District Court has awarded Ben Shlush with a declaratory judgment in which Ben Shlush is entitled to import the products purchased by ERL under the “Schweppes” trademark and that it is not considered to be a trademark infringement.

Yafora has filed an appeal to the Israeli Supreme Court.     

The Supreme Court Decision:

Judge Stein has decided to accept the appeal together with Judge Elron, against the minority opinion of Judge Hendle.     

Majority Opinion (Judge Stein)

The Court has ruled that the basic mistake that the district court made was to attribute a notion of internationality to the Israeli trademark “Schwepps” and its affiliation with the global “Schweppes” brand, which in fact does not exist. It is a fact that the trademark “Schweppes” is no longer associated with Cadbury, which at the time sold it to Yafora.  

Second, and this is the point: a trademark – “Schweppes” in this case, is limited to the borders of the state in which it is registered and gives its owners exclusive territorial rights, as opposed to extra-territorial rights unrelated to the local mark. Thus, the trademarks of “Schweppes” that have been registered and recognized in countries outside Israel are not relevant at all – this is because their scope is essentially limited to the borders of each country and its laws.

When Cadbury controlled 50 or 100 Schweppes trademarks in 50 or 100 different countries – even then it did not hold any international-global trademark, but fifty (or one hundred) different local trademarks, that were distinct from each other and unrelated to each other.

This basic principle will be hereinafter referred to as the principle of territorial protection for trademarks or, in short, the principle of territorial protection.

The principle of territorial protection and the exclusive right that Yipora has in the marketing and distribution of “Schweppes” products in Israel, lead the court to the following conclusion: Such importation shall violate Yafora’s exclusive trademark rights, will harm the ability of consumers in Israel who wish to buy Yafora’s Schweppes’ products, , and will lead to the erosion of Yafora’s incentive to invest in the quality of “Schweppes” products that are sold in Israel.

The Supreme Court then continued to define what is considered to be a legitimate Parallel Import in Israel:

Parallel import is a legitimate commercial practice whenever it respects and does not infringe on the existing trademark regime. Parallel or other imports that infringe the rights of the trademark owner in his own country are illegitimate and shall not be permitted.

In this case, in the absence of a contractual relationship between Yafora and the rights holder of the “Schweppes” trademark in Ukraine, there is no basis for claiming that the sale of the products by the Ukrainian manufacturer – between them and Yafora products – exhausts Yafora’s rights in Israel.

The Yafora company exercises its trademark rights only when it sells its own beverages under the “Schweppes” brand – and this, of course, only in relation to the beverages it has sold and received in return. These drinks – and only they – can be put up for further sale in Israel without infringing Yafora’s trademark. The Ukrainian brand bearing the “Schweppes” mark is not related to the Israeli brand which is identified with Yafora through the trademark “Schweppes” owns by Yafora. Therefore, the Ben Shlush “Schweppes” drinks imported to Israel are considered as infringing goods.

Minority Opinion

Judge Hendler presented a different opinion.

In his opinion the use of the mark “Schweppes” by Ben Shlush should be considered as “true use” of the mark in accordance with section 47 of the trademark ordinance. Judge Hendler contended that the use of the “Schweppes” mark on the bottles, even though they were produced by the rights holder in Ukraine and not in Israel, provides real and valuable information for the consumer about the brand.

In his opinion, the legally split of ownership did not change the reputation of the “Schweppes” brand in the eyes of the consumers. The Schweppes bottles enjoyed the reputation of “Schweppes” prior to the transfer of ownership, and the reputation of “Schweppes” continues to accompany them. This is therefore a true use of the “Schweppes” mark.

Judge Hendler continued and explain his opinion that marketing the imported bottles as ” Schweppes ” should considered as true use of that mark. The reason for this is not because in Ukraine the use of the mark was lawful, nor because the name of the rights holder in Ukraine (or his predecessor) was indeed “Schweppes”. The reason is that both the rights holder in Ukraine and Yafora both acquired rights in the same mark with an international reputation. In such a case the mark “Schweppes” on the imported bottles contains the correct information about the same brand.

In view of this conclusion, Judge Hendler continued to evaluate whether such import may cause confusion in the market. In his opinion, the consumers probably did not know that there are two ” Schweppes ” manufacturers operating in Israel that are not currently legally related to each other.

There is also no guarantee, in these circumstances, that the taste or composition of the imported beverages is the same as some of the beverages produced by Yafora, or that such an identity will be preserved in the future.

Although the back of the bottles contains data about the manufacturer, it is highly doubtful whether this caption allows the consumer to know effectively about the existence of two different and independent manufacturers who legally use the “Schweppes” mark.

In these circumstances, and since Yafora produces its beverages independently, it was decided by Judge Hendler that the marketing of the bottles as they are, eventually  does not meet the criteria of “true use”, in view of the likelihood of market confusion test.

Nevertheless, Judge Hendler believes that this difficulty can be overcome by affixing a “Disclaimer” sticker to the front of the imported bottles, in a prominent place and adjacent to the “Schweppes” trademark.

The sticker must make it clear enough that the drink is produced by the rights holder in Ukraine, and that the taste of the drink may be different from that produced in Israel by the trademark holder in Israel. Judge Hendler believed that such a disclaimer should overcome the confusion test.

Judge Stein objected to Judge Hendler’s view. In his opinion the Court should not provide legal guidance to the defendant. Judge Stein sees no reason to give Ben Shlush legal advice regarding its future operations in the Israeli soft drink market. In his opinion, giving such advice is not part of the judicial role.                

Conclusion:

The Supreme Court has decided to accept the appeal in accordance with the majority opinion of Judge Stein and Judge Elron who agreed with Judge Stein.

The Supreme Court decided to set aside the district court’s ruling and award a declaratory judgment which states that Ben Shlush is not allowed to import products made in Ukraine bearing the trademark “Schweppes” without the permission of Yafora.

The Supreme Court has also ordered Ben Shlush to pay Yafora legal expenses in both instances in the total amount of NIS 70,000.

This new decision materially limits the scope of legitimate parallel imports in Israel and define the legal ruling for a situation of a split ownership of same brand by unaffiliated companies in different countries.     

Our estimation is that an additional hearing will be requested by Ben Shlush since this decision could potentially have a major influence on the parallel import market in Israel.

Disclaimer: Nothing in the above constitutes any legal opinion whatsoever and the user is required to get a professional legal consultation.       

Israel: New 2022 WTR Ranking for Yossi Sivan Law Firm

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We are glad to share with you that this year again, Yossi Sivan was ranked by the WTR 1000 with this amazing review:

”… A contentious ace who regularly racks up the wins before both courts and customs authorities, he runs his practice out of the eponymous Yossi Sivan & Co. … he won an unusual temporary seizure order on the real estate properties owned by the defendant’s shareholders.”

Yossi Sivan Law Firm was ranked in the following categories:

A. (Individual) Enforcement and litigation
B. (Individual) Prosecution and strategy

A big thank you to all of our clients and colleagues across the world. Contact Us.

 

Is There a Likelihood of Confusion Between EZ and EZ PUT?

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We are thrilled to share with you the fantastic victory our firm achieved in a recent trademark opposition case. The case centered on the use of a rapper’s merchandise in connection with his trademark, and whether it constituted use beyond his music services.

Our client, EZ PUT, a company specializing in mobile phone accessories, had their trademark application opposed by Israeli rapper, EZ, who claimed that the mark was too similar to his own, well-known mark in the music services category. EZ argued that his sales of shirts and hats with his trademark should broaden the protection of his mark.

However, EZ PUT countered that there was no likelihood of confusion between the two marks, citing differences in design, style, and meaning. They also contested that EZ’s trademark was not widely known and that the sale of fashion merchandise did not constitute valid trademark use outside of music services.

The TM Registrar ultimately dismissed the opposition, fully accepting EZ PUT’s arguments, including their use of the merchandise claim. As the Registrar noted, the purchase of a shirt with a band’s name is not meant to convey the quality or origin of the shirt, but to express the wearer’s musical preferences and cultural identity.

Our client was expertly represented by Yossi Sivan – Law Firm, and we are honored to have been a part of this successful outcome.