Karelia Tobacco Company Inc filed Israel trademark application 213924 for the word Kappa (non-stylized). The mark covers cigarettes, tobacco and tobacco products, lighters, matches and smoker’s requirements, all in class 34. The application was filed in August 2006, and was accepted in March 2010 and published for opposition purposes. Basic Trademarks S.A. opposed the application. Basic Trademarks S.A. has a brand of sports clothing Kappa – with the logo shown above.
Among other grounds, Basic Trademarks attempted to amend their statement of case to oppose the registration on the Section 7a(d) of the Law to Limit Advertising and marketing of tobacco products. This attempt was thrown out based on a ruling that limiting cigarette advertising was not grounds for preventing a trademark from being registered. Furthermore, tobacco brands could not fairly be considered unregisterable under grounds of Public Order.
Kappa appealed this interim ruling to the District Court (Appeal 15171-02-11) who ruled that public order was a consideration. The statement of case was then amended. The sides submitted their evidence, but forgo the need for a hearing, allowing the Israel Patent and Trademark Office to rule on the Opposition based on the written evidence and submissions.
The Opposer argued that they were a world leading clothing company that made shoes, clothing and head-wear for leisure wear, sports, and for sporty fashion. The mark was well known in the US, Europe, Canada, China and Israel.
The Opposer has 13 marks including the name Kappa in various classes, with and without the logo shown above, where the word Kappa is dominant. The Opposer claims to have invested significant resources in advertising and marketing, worldwide including Israel. The turnover reaches millions of Euros a year. The company promotes sports and international sports competitions.
Due to the advertising, Kappa is a well known mark, as the term is defined in Section 1 of the Ordinance, and thus under Section 11(14) the mark cannot be registered by others in other classes as this would create a linkage to the clothing manufacturer which would damage their reputation.
The mark was also not registerable under Section 11(6) as to register it would dilute the sports company’s mark, damage their reputation and be unfair competition.
Furthermore, following the appeal, the application should be refused under Section 11(5) as being against the public good – Section 7a(d) of the Law to limit advertising and marketing of tobacco products was legislated since tobacco is unhealthy. Finally, the applicant had not actually sold tobacco products under the Kappa brand and so would not suffer significant losses from having the mark refused.
Karelia Tobacco Company Inc argued that Kappa is famous only for the word together with the back to back male and female and the word itself is not well known.
Trademarks and branding for cigarettes is allowed in Israel and so public order considerations should be considered irrelevant. The word Kappa is similar, but there is no conceptual relationship between the goods. (What the argument is really saying is that since Kappa promotes a healthy sporty image and cigarettes don’t fit into that image, noone would think that Kappa cigarettes are a product of the sporty fashion company. Both marks are used with other elements and the possibility of damage to Kappa sportswear from Kappa cigarettes is not proven.
The distribution channels and customer base is very different. Kappa is a Greek letter and like Delta, although can be monopolized, cannot be monopolized across classes. For example, the word Kappa is in use by third parties in the print industry.
Both in Israel and abroad the same mark may be used for cigarettes and for sports goods with both marks coexisting. (This argument is plausible, however, no examples are given).
In conclusion, applicant rejects claims of confusion, unfair competition and dilution, and argued that Kappa had not proven that their mark is well known in the meaning of the term as far as well known marks is concerned. Furthermore, the advertising limitations on cigarettes cannot be applied to prevent the mark from registering.
Kappa submitted evidence of turnover and advertising expenditures and a Wikipedia excerpt concerning fashion cigarettes. It seems that Yves Saint Laurent, Givenchy, Versace, Pierre Cardin, Christian Lacroix and Cartier have, at one time, each allowed their name to be linked to cigarettes. It was argued that sine fashion brands do allow their names to be used with designer perfumes and cigarettes, a cigarette with the same name as a fashion brand could be considered as linked to the fashion brand, creating a confusion regarding origin.
Citing precedents, the Adjudicator Ms Shoshani Caspi ruled that in oppositions, the burden of proof lies with the Applicant. Nevertheless, the Opposer has to base their opposition on facts.
The parties forgo a formal hearing with cross-examination and allowed the Adjudicator to rule on the evidence submitted.
Firstly, Ms Shoshani Caspi examined whether Kappa could fairly be considered a well known mark for fashion at the time that Kappa was filed for cigarettes, allowing it to prevent marks from being registered in additional classes, i.e. not just for fashion accessories.
The determination of whether Kappa could be considered a well-known mark was based on market penetration in the relevant population sector, the extent of usage of the mark and its longevity, long term advertising, inherent distinctiveness, whether the mark was in exclusive use and to what extent the owners of the mark invest in combatting infringers. The mark had to be considered well-known in Israel and not just abroad.
Al the evidence pointed to the mark being well known, despite the fact that generally the name Kappa is generally used together with the logo. The mark has been in use since 1969 and is mostly used in connection with sporty clothing. The opposers have an international portfolio of 600 marks including the word Kappa alone, not just as part of Robe De Kappa or together with the emblem. They have sponsored various football teams in Italy, Holland, France and Spain. The brand has millions of dollars of annual income from sales in Israel and has sponsored various local football teams including HaPoel Tel Aviv and Betar Jerusalem. Thus the KAPPA mark was well-known in Israel as well.
The second issue is whether, due to the phenomenon of fashion cigarettes, whether the public would identify KAPPA cigarettes with the fashion brand. Here, when extending a mark into new categories of goods, there is a need to act sensitively and to weigh up the interests of the competing parties.
Ms Shoshani Caspi was impressed that both fashion and cigarette usage are susceptible to trends and found the phenomenon of fashion cigarette branding persuasive.
The fact that the cigarette brand had not yet launched strengthened this, and she was also convinced that a brand associated with the fashion house could do harm to the fashion house’ image.
Since the fashion house had a sixty year history and the cigarette company could not provide any reasonable explanation for the choice of name, she suspected inequitable behavior and considered dilution a real possibiliity.
In conclusion, MS Shoshani Caspi ruled that the Kappa fashion mark was well known, that fashion and cigarettes could confuse confusion and dilution and rejected registration of the Kappa brand for cigarettes and rejected the registrations under Section 11(14 and 11(6).
Ruling re Opposition to by Kappa clothing to Kappa as Israel Trademark 213924 “Kappa” for cigarettes, Ms Shoshani Caspi, 22 January 2015
The fashion brand argument ignores the fact that haute-couture and sports goods are not the same, and that fashion cigarettes are a relic of a bygone era when smoking was certainly socially acceptable, but more was actually considered cool and sophisticated, and not just among teenagers. Put another way, when cigarettes were fashion accessories, fashion houses were happy to have their names associated with cigarette brands. That is not the case now, as evidenced by Kappa’s arguments. That said, the decision seems reasonable.