Israel Supreme Court Rules on Parallel Importing

November 19, 2014

Tommy Hilfiger

The Israel Supreme Court has issued a ruling concerning the rights and wrongs of parallel importing and related marketing and advertising. This is the first time that they have ruled on this issue.

The Supreme Court ruled that parallel importing is legitimate, as is marking the goods with the trademarks. The licensed importer or franchisee cannot prevent parallel importing, but it is important that the name of the company doing the parallel importing does not imply that the parallel importer has a relationship with the mark holder and has to actively take steps to make clear that they are not the licensed importer. The licensed importer does not have to guarantee or provide a service for the parallel imported goods and the parallel importer that the public are made aware that the parallel imported goods are not covered by the importer’s warranty and servicing obligations.

The Israel Supreme Court partially upheld the ruling of the Court of First Instance that the parallel importers had infringed the registered licensee’s trademark and were also guilty of passing off. This was due to the name of their business, not the parallel importing itself. The Supreme Court decreased both the damages award and the restrictions imposed by the Court of First Instance.

The Appellants, Elad Suissa and Importer Warehouse 42 LTD. imported clothing carrying the Tommy Hilfiger brand, despite not being the licensed importer registered in the Trademark Register and also not having any contractual relationship with the licensee. The Appellants purchased the goods abroad from legitimate suppliers in countries where the prices were lower than in Israel. They traded under the name ‘Importer’s Warehouse – Tommy Hilfiger’ and advertised themselves as selling premium bands at discounted prices. They operated a website www.tomm4less.co.il.

The licensed importer Sea & Shells LTD, together with Tommy Hilfiger Licensing LLC. Tommy Hilfiger USA INC. and Tommy Hilfiger Europe BV sued Elad Suissa and Importer Warehouse 42 LTD on  various grounds of unfair trade and trademark issues.

The Court of First Instance ruled that the parallel importers should pay 457,000 NIS in damages and issued a permanent injunction against them. The Appellants argued that they should not be restricted from parallel importing in circumstances where this is legal.

The Supreme Court partially accepted Appeal 7629/12 by the parallel importer, and rejected the appeal 8848/12 by Tommy Hilfiger.

The Ruling

The starting position is that parallel importing is legal. Parallel Importing is not trademark infringement and is not Unjust Enrichment by the Parallel Importer. However this does not mean to say that there are no restrictions on the parallel importer. The parallel importer is subject to trademark law, fair trading laws and the Law Against Unjust Enrichment.

In Pezachim, using the registered trademark in connection with legitimate goods carrying the mark was considered “True Use” under Section 47 of the Trademark Ordinance. In Toto Zahav, it was ruled that such a use of original goods is an infringement. The case-law of the District Court adopted tests from US case law: If the items cannot be identified without using the trademark it is legitimate to use the trademark. However, usage must be limited to that which is necessary to identify the goods as being genuine and no more, and there should be no indication that the retail outlet is sponsored by or affiliated to the mark holder. Toto Zahav did not relate to parallel importing and, in cases of parallel importing, the Toto Zahav ruling should be modified.

Parallel Imported genuine items do not fall under the guidelines of Toto Zahav. Their sale is not trademark infringement and the goods do not have to have been purchased directly from the rights owner. However, marketing activity relating to such goods may be considered trademark infringement. Servicing and maintenance services have to be recognized for the servicing laboratory to be able to use the registered trademark. Parallel imported goods are not subject to warranties and guarantees of the registered importer and parallel importer has to take care that it is clear that his parallel imported goods are not covered by such warrantees.

Passing Off requires a reputation of the rights holder, and, in addition to the mark owner, the legitimate importer or licensee may have rights in the brand and may be able to sue for passing off. The concept of ‘dilution’ does not apply to parallel importing and cannot be claimed by either the mark owner or the licensed importer. However, where the reputation is built on service and the like, sale of the goods by a parallel importer such that the service agreement does not apply, may be considered passing off.

In the present case, sale and publicity of the goods themselves and the website www.tomm4less.co.il are considered as being truthful. Using the company’s colours is also unlikely, in and of itself to cause confusion.

Trading under the name ‘Importer’s Warehouse – Tommy Hilfinger’ is considered trademark infringement of the rights of Tommy Hilfiger Licensing LLC. Tommy Hilfiger USA INC. and Tommy Hilfiger Europe BV.  This is not infringement of the rights of the licensed importer Sea & Shells LTD however, since they themselves do not have a reputation.

There is no additional element such as bad faith to warrant granting damages under the Law of Unjust Enrichment.

The Parallel Importer must cease to use the name ‘Importer’s Warehouse – Tommy Hilfinger’ and have to pay 100,000 Shekels as estimated damages for their infringing use and have to mention in their advertising that they are not a franchise or otherwise acting under the supervision of Tommy Hilfiger.

The costs awarded by the District Court are canceled and Tommy Hilfiger et al. have to pay 25,000 Shekels costs to the parallel importer.

7629/12 Appeal to Israel Supreme Court (ruling by Dalia Barak-Erez et al): Elad Suissa and Importer Warehouse 42 LTD vs. Sea & Shells LTD, Tommy Hilfiger Licensing LLC. Tommy Hilfiger USA INC. and Tommy Hilfiger Europe BV, 16 November 2014

 


Requests for Costs Must be Timely Filed

November 19, 2014

missed

Back in June 2014, I reported on a decision by the Israel Commissioner of Patents and Trademarks that the Chinese brand Lovol and the older and more established Swedish brand Volvo are not confusingly similar. Having persuaded the Israel Patent Office that their mark was registered in good faith and was not confusing, Hebei Aulion Heavy Industries LTD, who own the Lovol mark, were entitled to file a request for costs.

The request for costs should have been filed within two months, as per Patent Office Circular M.N. 80. Hebei missed this deadline and, three and a half months after the hearing, they filed a late request for an extension to file costs.

Volvo opposed this request.

Hebei argued that the delay was caused because they waited to see whether the ruling would be appealed. The Commissioner did not see that connection between a possible Appeal and the right to file, and the right to costs for one proceeding is quite independent of whether the ruling may eventually be appealed or overturned. Furthermore, appeals should be filed within one month of a trademark ruling, whereas a request for costs may be filed within two months of a ruling. Where an extension is requested in an ex-partes proceeding it should be requested in advance and not retroactively.

A further consideration submitted by Hebei’s agent-of-record (Wolf Bregman Goler) was that they were unaware of the Circular and their client should not be penalized for their ignorance in this manner.  The Commissioner noted that the Circular issued back in February 2010 and that the agent-of-record was experienced and regularly appeared before the patent office in hearings and the like.

Citing A. Goren on Civil Procedure, the Commissioner noted that ignorance of the Law may be an excuse if objectively the Law is unclear and there hasn’t been any case-law, or, if subjectively, the legal representative had made efforts to avoid the mistake. In this instance, no evidence or arguments were submitted to establish objective or subjective grounds for clemency.

The agent of record argued that his client had a basic right to costs, that the Trademark Ordinance and regulations doesn’t establish a deadline, and so the Circular should not be considered binding. The Commissioner rejected this argument, considering that the Circular filled a lacuna and gave certainty as to whether costs would be requested or not. He considered that different practitioners should be held to the same standards. Costs should be requested at the end of a proceeding and not any time thereafter. There were no good reasons to consider the two month period insufficient, so the request was thrown out.


Naomi Ragen Found Guilty of Plagiarism Again

November 17, 2014

Sacrifice   marriage made in heaven

On 11 November 2014, Judge Oded Shacham found Ms Naomi Ragen not guilty of Copyright infringement on a technicality, but nevertheless guilty of infringing the moral rights of another author in a book that she wrote that was ruled as plagiarizing a short story by the other author, a Ms Cynthia Rosengarten (now aged 82). The request for an injunction was denied. The damages awarded were 60,000 Shekels, which was rather less than the 2.5 million shekels requested in the statement of case.

Background

The plaintiff, Ms Cynthia Rosengarten published a short story entitled “A Marriage Made in Heaven” in an anthology of short stories written by various Hareidi (Ultra-Orthodox) women, that is titled: “Our Lives, An Anthology of Jewish Women’s Writing” which was published in 1991. The anthology was edited by Sara Shapiro.

Ms Rosengarten claims that the story is autobiographical and relates to the marriage match of her eldest son. The story is a 15 page personal account of her dealing with match-makers, and how, as a mother, she felt when a girl from Boro Park was suggested as a suitable match for her 18 year old son. On one hand she is aware of the need for her son to get married, but on the other hand, she considers all the potential brides inadequate. The story reflects reality in the Hassidic world.

Ms Rosengarten sued Ms Naomi Ragen and Keter Publishing LTD, claiming that Ragen’s best-seller “the Sacrifice of Tamar” which was published in 1997 includes elements from “A Marriage Made in Heaven” and infringes both commercial and moral rights therein. Ms Shapiro was mentioned as a formal plaintiff.

The Sacrifice of Tamar tells the story of Tamar Feingold, who grew up in an Ultra-Orthodox neighborhood of New York, and relates her internal conflicts with the community in which she lives.  Two years after getting married, Tamar Feingold is raped by a black (that is, African American – not Hareidi) rapist whilst staying with her sister. Later that night, Ms Feingold sleeps with her husband and hides the trauma she went through. She becomes pregnant and is unsure which is the father of the child. Chapters 1 to 22 of the book relate to the feelings of Tamar through the pregnancy, where eventually a white skinned child is born.

In Chapter 23, the son asks his mother to help him find a life match.  The son gets married and a year later his wife has a black skinned baby. The son accuses her of unfaithfulness and Tamar has to come clean about the rape. The son’s marriage dissolves and Tamar, the grandmother, adopts the grandson and leaves the Hareidi fold.

According to the Statement of case, Ms Ragen used parts of “A Marriage Made in Heaven” in Chapter 24 of her novel, thus violating the Copyright and Moral rights of the plaintiffs. They claimed damages and also requested an injunction.

Ruling

Because of the time-line, the ruling was given under the old Copyright Regulation of 1911 and not under the new Copyright Act 2008, but, considering the infringement as on-going, eventual damages took into account the statutory damage regimes under both law.

In the ruling there is a lot of discussion as to whether the copyright was actually transferred by Ms Rosengarten to Ms Shapiro and that it wasn’t transferred to the printing house. No assignment document was forthcoming. It was alluded to and was probably filed somewhere but was not produced.

Judge Shacham ruled that the copyright in “A Marriage Made in Heaven” belongs to Ms Shapiro and consequently the plaintiff Ms Rosengarten does not have grounds for financial Read the rest of this entry »


Freshly Squeezed Trademark Cancellation Frozen

November 9, 2014

Sachoot Tari

Sachoot Tari 2007 LTD has a graphic trademark no. 220623 for Sachoot Tari, which means freshly-squeezed. 

Eco Alpha LTD applied to have the mark cancelled, claiming that Schut Tri has no rights to the mark, that they are guilty of inequitable behavior and that they are not actually using the mark. Sachoot Tari responded by requesting that the cancellation proceedings be struck from the record.

Pri-fer LTD (Prefer?) previously owned the mark, and, in a bankruptcy proceeding, Sachoot Tari purchased it. Pri-fre themselves purchased the mark from the draftsman which now works for Eco-Alpha. There was a mediated agreement between Pri-fer and Eco-Alpha that was ratified by the courts, and there is an ongoing dispute between Sachoot Tari and Eco-Alpha before the District Court. 

Sachoot Tari (Mark owner)’s Claims 

Sachoot Tari  claims that the request to cancel the trademark is groundless. The claim of lack of rights was based on a secret agreement between Pri-fer and Eco-Alpha, that allowed them to return to manufacturing juices under the mark in question. However, since this agreement was not before the courts when the mediation agreement was ratified, it has no effect. Furthermore, this unenforceable agreement cannot be used as the basis of a claim of inequitable behavior of a third party. Schut Tri claimed that they purchased the mark in a disbanding of Pri-fer, clean fron all liens under Section 34a of the the Sales Law 1968, and so Eco-Alpha LTD has no rights to request a cancellation proceedings. Furthermore, based on 2209/08 to Gigiesse Confezioni S.p.A. vs. Vampom LTD. (23/3/2010), Sachoot Tari claims that Eco-Alpha are estopelled from claiming non-use whilst they themselves are infringing the mark.

Sachoot Tari claims that since there are two court rulings in this matter (142/06 Multipri LTD. vs Sachoot Tari , Natural Fruit Juice LTD 11/5/2006, and 5128/07 Sachoot Tari Natural Fruit Juice LTDcs. Pri-fer Nsatural LTD. et al. 30/4/2007) consequently, Eco Alpha cannot claim rights based on secret agreements.

Finally, the parties have an ongoing court case concerning alleged infringement of the mark, where similar issues are being discussed. That case is at the conclusion stage and so there is no place to open a further proceedings in this matter.

 

Eco-Alpha’s Claims 

Eco-Alpha claims that there are factual issues between the parties that require a ruling, and that throwing the case out will prevent such a ruling issuing. They claim that Section 34a of the Sales Law cannot detract from the rights of an owner of a property. They do not consider that there has been a definitive court ruling on this matter, in that the earlier court rulings addressed different issues, and there was no positive ruling that the mark was in use. As Eco-Apha was not a party to the earlier court proceedings, they are not bound by them.

Whilst noting that there is a degree of overlap between the ongoing court proceeding and this cancellation request, this is acceptable since Commissioner of Patents and Trademarks has exclusive jurisdiction on cancellation issues.

The Ruling 

The Deputy Commissioner, Ms Jacqueline Bracha noted that Sachut Tri was arguing that the earlier cases estopelled the current hearing but that the ongoing court case addressed other issues.

However, she considered that the fact that the Court was willing to hear an infringement proceeding was indicative that the Court did not consider the earlier cases as final rulings on the subject. Consequently, she was not prepared to throw the case out as already decided by the court or as being groundless.

Furthermore, she accepted Eco-Alpha’s contention that in order to rule on the substantive issues, it was necessary to clarify the facts and thus it would be inappropriate to throw the case out.

However, she accepted the counter-claim of the Eco-Alpha to freeze the proceeding pending the District Court ruling, thereby preventing duplication of work by different courts.

COMMENTS

I think ‘Sachoot Tari’, meaning freshly squeezed, is sufficiently generic that it cannot be used as an indication of origin. The fact that the mark has been used by different companies, including Pri-fer and Sachoot Tari strengthens myfeeling that the mark is generic and descriptive.

 

 


Astrologist Successfully Sued for Copyright Infringement of New Card Designs – She didn’t see it coming

October 20, 2014

Astrological cards

Zur-Klein is  an astrologist. Tal Rinkov is an artist who created 37 cards for the Astrologist in accordance with an agreement between them which, inter alia, related to the copyright ownership.  (Ms Rinkov was also the kindergarten teacher of Ms Zur Klein’s daughter, which is how they met (some would say it was fate).

Ms Zur-Klein ordered 40 card designs for a payment  of 5000 Shekels.  The cards were to be mass-produced and distributed with an instruction manual and a teaching movie. The parties entered an agreement on 5 September 2014 that established several principles:

  1. The original artwork and the copyright of the artwork was to remain that of the artist.
  2. The artist would not be entitled to royalties for packs of cards and other goods itemized in the agreement
  3. The Astrologist would only be entitled to use the images on specific listed items
  4. All internet images  would be reproduced at a low resolution only
  5. All pictures would carry Ms Rinkov,’s signature, her name, website and contact details

Ms Rinkov was hospitalized in November of that year and only delivered 37 designs, and the last three were completed by another artist. (For reasons not apparent, the medium missed this eventuality). The images were transferred to a graphic artist who made various graphical changes to make the images more suitable for printing.

After various commercial entities expressed interest in the images, Ms Zur-Klein contacted Ms Rinkov to try to negotiate a transfer of copyright but due to a difference of opinion, no agreement to transfer the copyright issued.

Ms Zur-Klein  publicized the images in various internet sites including her own and other people’s, in her blog, Facebook page and elsewhere.  In all reproductions of the cards on the Internet, the artist’s signature appeared, but her name and contact details were not given. Indeed, on some websites, Ms Zur-Klein presented herself as the creator of the card (the term יוצרת הקלפים is used, which is both creator and manufacturer so the term is somewhat ambiguous). Furthermore, Ms Zur-Klein allowed other astrologists to use the designs without giving any credit to Ms Rinkov. There was also a newspaper article featuringMs Zur-Klein that was illustrated with one of the card designs that was also not credited.

On 6 June 2012, Ms Rinkov sent Ms Zur Klein a Cease & Desist letter.

The basis of the ensuing court case was the agreement signed by the parties. It is translated below:

Tal prepares for Carni 39 pictures, which together with the picture already executed, provides a set of 40 pictures for cards and other purposes – payment 5000 Shekels.

Apart from the payment for the work, there will be no other royalties for selling packs of cards, books, CDs and other astrological items depicting the images of Tal Rinkov.

The astrological products that Karni is allowed to use the pictures on are: packs of cards, books, audio CDs, video for watching, a banner for a website, business cards and other articles on authorization from the creator. Karni may not manufacture or distribute artistic works such as pictures, mugs, key-rings and the like.

All material displayed on the Internet are at low pixel count.

The name, website and contact details of Tal Rinkov will appear on all products, including future products.

The pictures on the cards and elsewhere will include the artist’s signature.

The original artwork and copyright remains the exclusive property of Tal Rinkov.

Pictures and associated artistic products (that are not astrological) will be produced and distributed exclusively by Tal Rinkov.

Any deal that Karni creates for Tal will generate a 20% commission for Karni.

When Tal sells a product (book, CD, cards and the like) she will profit 20%. Tal will receive a present of a pack of cards.

 According to the plaintiff, the defendant wrote the contract after the negotiations. The defendant claims, however, that the contract was the plaintiff’s idea, and that the plaintiff had written most of the clauses to the detriment of the defendant, such as her not getting benefit from sale of the cards. However, the defendant agreed that she had printed out the agreement.

The defendant claimed that she was entitled to the status of co-creator in the cards as although Ms Rinkov executed the artwork, it was to her, Ms Zur Klein’s specification regarding the symbolism, colors and charms. The plaintiff considered this a change of direction in the defence and objected to it on principle.  The judge ruled that the claim that the defendant hand guided the artist appears in clause 31 of the defence, but is more a factual than a legal defence and so she was willing to contemplate it. The plaintiff countered that Carni Zur-Klein had not, in fact, instructed her, but that she herself had researched the elements and colours.  Both sides supported their contentions with emails and other evidence. It does seem that the astrologer gave guidelines for the design, but these are by way of astrological knowledge rather than artistic input.

RULING

In this instance, Judge Lemelstrich  did not consider that under section 1 of the Copyright Law 2007, the two parties could be considered co-owners of a joint creation. Section 64 creates a rebuttable assumption that the artist is the creator and each card design was signed by Ms Ronkov as the artist.

Section 5 of the Copyright Law notes that the idea, way to implement and facts are not copyright protected, only the  artwork itself is. According to Section 35a of the Copyright Law, a work for hire is the property of the artist in the first instance, unless otherwise agreed implicitly or explicitly. In this instance, both the Copyright Law and the contract  support the artist as owner of the copyright.

In the packs of cards, Ms Rinkov is acknowledged as the artist and Ms Zur-Klein is credited as an astrologer.

The parties agree that Ms Zur-Klein conceived the project, but the copyright in the images remain the property of Ms Rinkov.

Ms Zur-Klein apparently sold some 80 packs at 190 Shekels a pack.

the main issue sees to be the internet reproductions which do not provide the details of Ms Zur-Klein.

The ruling now relates to various astrological websites. Since I find this subject matter morally, ethically and religiously abhorrent, I am refraining from reproducing the links.

The important thing is that Judge Lemelstrich considers that the artist’s moral and financial rights were compromised in numerous infringements in various websites and internet campaigns. That said, the pictures on the Internet were not reproduced at a quality to enable them to be printed and used as playing quality cards.

The changes to the designs for subsequent printing by a graphic artist under the direction of Ms Zur-Klein were minor. These were considered insufficient to create a change to the copyright, in that the original work could not be considered defaced or the artist’s moral rights compromised. Nor did the amendments constitute a copyright protectable creation.

Ms Rinkov claimed 100,000 Shekels in statutory damages for copyright infringement and a further 100,000 Shekels for moral rights infringement, particularly noting the long and arduous legal proceedings and the multiple infringements.

Judge Lemelstrich noted that despite entering a clear contractual relationship to the contrary, Ms Zur-Klein acted as if the creations were hers to do what she liked with. She ruled 35,000 Shekels damages for infringing the moral rights, 15000 Shekels for infringing the material rights and a further 5000 Shekels for an article published after the Cease and Desist letter.

Judge Lemelstrich of the Haifa District Court ruled a permanent injunction against Ms Zur-Klein, her delegates, substitutes and others from performing any action that violates the September 2011 agreement or other rights as per the statement of case.

Ms Zur Klein will compensate Ms Rinkov 55,000 Shekels for copyright infringement, an also will pay 15000 Shekels legal fees. The money will be paid within 30 days.

Civil Ruling 15824-10-12 Tal Rinkov vs. Carni Zur-Klein, Haifa Court before Judge R. Lemelstrich, Ruling 13 October 2014

 

 


Israel Supreme Court Overturns Ruling Concerning Unjust Enrichment

September 16, 2014
Reversed Challa Cover!

Reversed Challa Cover!

Back in January 2012, then Jerusalem District Court Judge Yaakov Shapira issued a permanent injunction against a Merkaz Matanot 2006, a competitor and former client of the plaintiff, Karshi, prohibiting them from importing, exporting or otherwise trading in ceremonial ritual challah cloths that had a similar general design to those that produced and distributed by Karshi. Their client, Ami Motzrei Noi LTD and their owner were also injuncted and they were See here for more details.

Essentially Judge Shapira who is now the State Comptroller ruled that there was Unjust Enrichment, breach of contract and passing off. I was very critical of the decision, and particularly that Shapira gave a world-wide injunction which seemed to have been beyond his judicial competence.

I am pleased to announce that the Israel Supreme Court has now reversed the ruling.

Essentially, Karshi ordered these ritual cloths having the words ‘שבת קודש’ – ‘Holy Shabbat’ in a fairly standard font embroidered on a piece of chiffon with a more solid fabric border from China.

Judge Chayot ruled that since Merkaz HaMatanot labeled their cloths with a tag stating that the supplier was Merkaz HaMatanot, there was no case of passing off. Merkaz HaMatanot was a retail customer of Karshi as wholesaler and not an agent of theirs, there was no contractual relationship and thus no breach of contract.

Karshi made no attempt to register the design and there was no additional consideration to imply that Karshi had rights in the design. There was no case of inequitable behaviour to answer for so there was no grounds for sanctions under the Law of Unjust Enrichment.

Case: Civil Appeal 1898/12 Merkaz Matanot 2006 LTD vs. Karshi Intenrational LTD. before Judges Solberg, Natyot and Chayot.  Hearing 25/6/2013, decision, August 2014.

COMMENTS

It seems that A.Sh.I.R. is still good case-law, but the judges want some real indication beyond competition to rule Unjust Enrichment.

The cloths in question were variations on a well-known theme. It is suprising how many of these are sold. I suspect that a lot of ritual Judaica (probably including mezuzot and tefilin) are made in China. Being an importer does not create a monopoly. The original decision was wrong (as were decisions by Shapira concerning the Hallel wine trademark and concerning alleged copyright infringement by Naomi Ragen. I am pleased he no longer rules on IP issues. Whether or not he will be a good state comptroller is beyond the scope of this blog, and beyond my competence to comment on.

 


Trade Secrets in the Employer-Employee Relationship

July 21, 2014

forum shopping

In Israel, workers have freedom of occupation and can change jobs or set up their own businesses and may compete with their former employers. The work relationship often exposes the employee to trade secrets. Ex-employees are obliged to maintain confidentiality with regards to trade secrets and cannot compete with former employers by using such secrets. But was a legitimate trade secret?

Work related disputes are dealt with by the Labour Courts, but what establishes the employer-employee relationship?

Nissim Versano appealed an interim Decision of the Tel Aviv District Court given by Judge Ginat to refer the case to the Labour Court to decide whether or not there was an employer-employee relationship. Judge Amit of the Israel Supreme Court refused the Appeal.

On 25 March 2014, Nissim Versano filed suit in the Tel Aviv District Court, claiming that for a number of years he has been involved in the tobacco industry, and has developed contacts with a number of parties in the field. He claims that he took Moshe Ninio into the business as a partner, with a verbal agreement that Ninio wouldn’t use acquired knowledge against the wishes of Versano.

Versano claimed that Ninio set up a competing shop with similar design, stock and prices to Versano’s and that this created a situation of passing off, Unjust Enrichment and theft of trade secrets.

Ninio claimed that he was an employee of Versano and not a partner. He claimed that the District Court was thus not the correct forum to hear the case which should have been filed in the Tel Aviv Labour Court, and requested that the case be thrown out as not within the jurisdiction of the Tel Aviv Court. To substantiate his case, Ninio appended three salary slips testifying to him being an employee.

Judge Ginat of the Tel Aviv District Court referred the case to the Tel Aviv Labour Court to rule on the issue of whether there was an employee-employer relationship, and Versano appealed this referral.

Versano claimed that the District Court should decide whether it was competent to hear the case and, if not, should refer it.

The Supreme Court ruled that Ginat should either hear the case, refer it or throw it out. In other words, he should have ruled on whether or not it was a labour related dispute, and not referred that decision to the Labour Court. Cases cannot be batted back and forth.

However, the appeal was thrown out. The appellant should have appealed by right instead of requesting right of appeal. If a case is heard by District Court instead of by the Labour or Rabbinical tribunals, there is a right of appeal. However, if a case is transferred to a tribunal, one should appeal immediately.

The Supreme Court could use the Request for Right of Appeal as grounds to rule substantively on the Appeal, but did not see fit to do so.

The issue is a partial transfer, which is correctly seen as an interim decision and therefore there are grounds to file an interim appeal.

The Supreme Court related to a case transferred to the Rabbinical Court by a woman claiming financial support on the grounds of having acquired status of a wife by having had intercourse with a man in a manner establishing common law wife status as being an example of an interim decision that could be appealed, but ruled that in this case, the claim of employee – employer relationship should be heard by the labour tribunal who not only have sole discretion to hear labour disputes but also to rule on whether there is an employer-employee relationship.

Furthermore, cases concerning trade-related disputes having an employer-employee aspect are in the sole jurisdiction of the labour court. Trade secret related cases are also the sole jurisdiction of the labour court if there is an employment aspect to the case.

Once transferred to the Labour Courts, cases should stay there rather than be transferred on.

Appeal to Supreme Court  3930/14 Versano vs. Ninio, by Judge Amit, 26 June 2014

COMMENTS

Having one court only being the correct forum for hearing a case prevents ‘forum shopping’. This decision is likely to have repercussions on employee compensation for patents as well as for trade-secret issues. Many companies might be less than happy with this, since the Labour Courts are seen as being pro-employee. With the Iscar case (Plony vs. Company) on appeal to the Supreme Court, this could get interesting.


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