Trademark for “Israel Franchise Portal” Successfully Opposed

A Mr Adi Chami, through his company Adi Avihu Chami  Management and Marketing Real Estate Investments LTD.,  filed an Israel trademark application number 233872 for פורטל הזכיינות של ישראל – Portal Zakhyanut Shel Israel, literally, “Israel Franchise Portal”. The mark included a graphic element and is shown below:

Portal

The application was for business administration services by franchising on the internet, all included in class 35.

On publication, MATI, a government-owned non-profit that provides franchising services via a wholly owned subsidiary called Fran-Ex Business Consulting LTD  together with the subsidiary, jointly opposed the mark.

MATI was established in 1991, and opened a dedicated branch called “The Center for Promoting Franchising in Israel” back in 2002. MATI also registered their own trademark (no. 161956 in 2004) for the “Center for Promoting Franchising” as shown below:

zachyanut

In 2010, following reorganization, MATI established Fran-Ex Business Consulting LTD, as a wholly owned subsidiary dedicated to franchising.

the applicant, Adi Avihu Chami  Management and Marketing Real Estate Investments LTD., is wholly owned by Mr Adi Chami, who also wholly owns another company called “Israel Franchise Portal LTD.”, and also directly owns a website: www. zakhyanut.co.il

MATI claimed to be the central body dealing with franchising in Israel, providing information to some 1500 people a year, and to academic institutions, foreign embassies and the Israel Parliament.

MATI claimed to use the term “Portal Zakhyanut Shel Israel”, literally, “Israel Franchise Portal” but had not registered it, considering it descriptive and therefore not registerable under section 11(10), and the inclusion of the word Israel rendered it a geographic indication and thus not registerable under Section 11(11). However, were it to be considered registerable, MATI felt that as a long term user of the term, and provider of services, it should be awarded the mark.

Adi Chami argued that MATI, as a government non-profit should not be able to challenge a commercial company for ownership of a trademark which is a commercial property. Since MATI had spun off  Fran-Ex Business Consulting LTD, MATI had no standing. Furthermore, he argued that there were loads of marks registered that included the word Israel and therefore this should be considered a geographical indication under Section 11(11). Finally, he argued that the mark in question was totally different to Israel TM 161956.

In his ruling, Commissioner Assa Kling ruled that MATI had standing as the Section 24 of the Trademark Ordinance and the relevant regulation (regulation 35) empowers anyone to oppose a trademark application. He went on to rule that there was no flaw in MATI having set up a wholly owned subsidiary to carry out franchising related work.

The issue, in the opinion of Commissioner Kling, was whether the Applicant was trying to free-ride on the reputation of the non-profit. He agreed with MATI that it was of little relevance if they had registered their franchising website or were using it as an unregistered trademark. The fact that MATI referred to their site a website and Chami  referred to his as a portal was also considered of little relevance since the two words were more or less synonymous as far as internet sites were concerned.

Kling considered that Chami had provided little evidence of providing franchising services, and certainly not through the present applicant ‘Adi Avihu Chami  Management and Marketing Real Estate Investments LTD.’ which dealt with real estate.

Since the applicant had written to Fran-Ex Business Consulting LTD claiming that their usage of their website was confusingly similar to his trademark, he was estopelled from claiming that the marks were not confusingly similar.  Various other actions by the applicant indicated inequitable behaviour and the  Commissioner consequently refused the registration of the mark and awarded costs of NIS 15000 to the opposers.

Opposition to Trademark Application 233872 for “Portal haZakhyanut Shel Israel” MATI and Fran-EX vs. Adi Avihu Chami…, Ruling by Assa Kling 11 March 2013. 

COMMENT

Under Israel Law, inequitable behaviour is given very high weight, so once he considered applicant as acting inequitably, it was not surprising that the application was rejected. However, if we are looking at the issue of equitable behaviour, one wonders why MATI considered “Center for Promoting Franchising” to be registerable and indeed registered a trademark for it, but considered “Israel Franchise Portal” to be descriptive and therefore not registerable?  It appears that they didn’t consider registering a trademark for this until someone else got there first, and arguably this is not the most equitable type of behaviour.

Having registered a company called “Israel Franchise Portal LTD.” is, of course, irrelevant since company names have to be original and different from each other, but do indicate that the name may be registered as a trademark. If Chami had shown wide usage of the company name in actual trading, I suspect he would have been able to register the name as a trademark. Although the mark applied for is descriptive, so is the “Center for Promoting Franchising”.  Furthermore, the mark includes a graphic element that adds an element of distinctiveness. for some reason, Commissioner Kling seems to have ignored this element in his ruling. Personally, I would prefer if both govt. Non-profits and private individuals used names that revealed who they were and not merely what they do, and that trademarks were awarded accordingly.

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