Should an Initiator of Cancellation Proceedings be Required to Deposit Potential Costs Before a Hearing?

bar 9beach 9

Itay Sachir filed and received the two trademarks shown above for  cafes, pubs, restaurants and provision of food and drink services, all included in class 43.

Roi Leon instituted cancellation proceedings, and Mr Sachir requested that these be struck from the record unless Mr Leon posted a deposit of at least NIS 100,000 for covering legal fees in the event that the cancellation proceedings failed. The basis for this request was that there are outstanding costs of Nis 6500 from an earlier ruling that remained unpaid, and that in the response, Mr Leon gave an incomplete address and therefore should be considered as a plaintiff with no fixed abode to send the bailiffs to, should he lose the case and default on payment.

Mr Leon responded that the court records included his full address, that the outstanding debts were irrelevant and that depositing a bond was appropriate in only extenuating circumstances which did not apply here. Furthermore, he was confident that he would win anyway.

RULING

The Adjudicator of Intellectual Property, Ms Yaara Shoshana-Caspi ruled that the Israel Patent and Trademark Office sees itself authorized to order a deposit for paying costs. In this case, since the plaintiff is a private individual, regulation 519 of the Civil Proceedings Ordinance applies. The patent office certainly has discretion, but the law does not indicate what facts should be taken into account when deciding whether or not to order such costs. Nevertheless, access to the courts is a basic right, and requiring high deposits to be made adversely affects those rights, even if from time to time, costs will  not be made, or if plaintiffs do not have the financial wherewithal to pay legal costs.

That said, the mark holder also has rights. The applicant for cancellation has already lost twice before the patent office, resulting in costs of NIS 6500 being awarded against him. These include an attempt to register a trademark, and, when this failed, an attempt to revive the application. Since the applicant for cancellation is not financially challenged, but is simply ignoring  the patent office’s order to pay NIS 6500, the patent office takes the position that should he lose, the mark owner will indeed have trouble collecting.

Regardless of the strength of the applicant for cancellation’s case, the mark owner is justified in being worried about being able to collect. Nevertheless, the deposit requested is sufficiently high that it could prevent the applicant for cancellation from proceeding with his case. The mark owner is also correct that the applicant for cancellation is required to state his name and address clearly on his statement of case, regardless if this information is otherwise accessible.

In conclusion, the Adjudicator was satisfied that there were grounds to request a deposit, but considered the request for a deposit of at least NIS 100,000 as being excessive. The Adjudicator therefore ruled that applicant for cancellation should post a deposit of NIS 10,000 for the case to continue.

Interim Decision regarding cancellation proceedings concerning IL TM 243626 and 219665, before Ms Yaara Shoshani Caspi, 21 October 2013.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: