The Diamond of the Crown – No likelihood of Confusion between IGL and CGL

Israel’s diamond industry is estimated at around 4 billion dollars a year. Israel considered as one of the strongest players in the international diamond market. Naturally, there is fierce competition in the industry, a competition that sometimes reaches the court’s doorstep.

Recently the Israeli District Central Court has ruled a very important decision in trademark matters concerning the diamond industry.

IGL, a gemological laboratory that provides assessment, analysis and grading services of diamonds jewelry and gemstones under mark IGL, has sued another gemological laboratory for the use of the mark CGL.

IGL has claimed that the mark CGL is an infringement of the IGL registered trademark.

In addition to a monetary compensation of NIS200,000 and a permeant injunction,  IGL has also filed a motion for a temporary injunction to prevent the use of the mark CGL until the final decision by Court.

IGL’s claims

IGL has claimed that the use the mark CGL and the designed logo constitutes trademark infringement, passing off and unlawful exploitation of its reputation.

IGL also claimed that the use of the similar logos and colors (black and gold) causes confusion in the market.

Below are the design marks of IGL and CGL:

CGL’s claims

CGL, represented by Yossi Sivan & Co. Law Offices has claimed that the motion is groundless, and that its sole purpose was to temper the successful activities of CGL.

CGL has claimed and demonstrated that the use of the words I, G and L are a common practice in the gemological diamond industry and that the acronyms IGL are not identified exclusively with IGL.

CGL has also claimed that the use of a round designed seal next to three acronyms letters are a common practice in the gemological industry, therefore cannot be identified by the consumers as related specifically to IGL.

CGL further argued that there is no likelihood of confusion between the marks based on the triple test: The visual test, the phonetic test and type of goods and consumers test.

CGL further argued that they provide professional diamond and gemstone evaluation services primarily to diamond dealers and merchants and that this is a sophisticated audience that is well acquainted with the companies involved in the field and can distinguish very well between the services provided by the IGL and the services of CGL ie, professional evaluations of diamonds, which are also accompanied by different visual appearance.

CGL has also claimed that diamonds are considered to be the most expensive products and require careful examination, which eliminates any likelihood of confusion in the market.

In addition, CGL argued that it’s manager has a considerable reputation of almost 40 years in the diamond market therefore, there is no reasonable possibility that a diamond merchant will arrive to CGL’s laboratory and will erroneously believe that it is related to IGL, who are unknown in the field.

The Court’s Decision

Following the submission of pleadings, conducting cross-examination of the party’s witnesses and oral summaries, the Central District Court of Lod has decided as follows:

The Court has found that, despite the alleged similarity of the round shape that symbolize a seal, there are substantial differences in the decorations of the logo, which add additional differences in the letters and wording of the marks.

The Court stipulated that these differences exclude a reasonable possibility of visual likelihood of confusion between the marks.

Applying the type of goods and consumers test, the District Court has accepted the CGL’s position that gem and diamond assessment services are services based on professional criteria, which include careful examination of a laboratory, preparation of a report, evaluation and finally the issuance of an appropriate certificate.

The Court was impressed that providing such services will usually be accompanied by the purchase of precious stones in a considerable amount of money and that it’s not a “shelf product,” but rather a unique product, that is directed to a sophisticated customer, which reduces the likelihood of confusion.

The District Court was also impressed that the CGL’s owners are veteran and well-known in the diamond industry, and that these circumstances do not support the claims of IGL that CGL “rides” on the reputation of IGL, considering the relatively short period in which IGL operates in the diamond market.

The District Court also relies on many trademarks submitted by CGL’s attorneys, whose mark consists of a circular seal structure, three capital letters in English and an accompanying inscription to the side or below the combination of the letters and the logo.

Naturally, as befits gemstone products, the combination of colors with the same symbols and letters is done in gold, black and blue, colors that symbolize prestige.

The District Court also accepted CGL’s position that the initials in the IGL sign represent the words “international gemological and laboratory” and that these are generic names which, for the most part, enjoy less protection than arbitrary names.

Under these circumstances, the District Court held that the IGL’s registered mark has a weak inherent distinctive character, and that IGL did not present any significant evidence indicating that the registered mark had required a distinctive character, meaning that the consumers are linking it to the services provided by IGL.

In conclusion, the District Court held that the triple test did not support the claim of a likelihood of confusion.

The Court also rejected the passing off claim and ruled that there is no likelihood of confusion between the services and that CGL did not prove their reputation.

Applying the balance of convenience test, the District Court has ruled that it was not convinced that the use of the CGL mark would cause irreversible damage or serious damage to IGL.

In conclusion, the District Court rejected the motion for a temporary injunction and ordered IGL to pay legal costs of NIS 9,500 to CGL.

Disclaimer: Nothing in the foregoing shall constitute any legal advice or any opinion whatsoever. This is an informative article only and it is well recommended to consult with a specialized attorney.

CGL was represented by Yossi Sivan & Co. Law Offices

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