Posting costs in trademark opposition

Stern 3 stars and  four stats

It is not unknown for parties in contentious proceedings in general, and opponents in trademark oppositions in particular, to disappear when the proceeding has run its course.

The winning party may be awarded significant costs, but may not be able to collect. In my experience, representing counsel may be left with outstanding bills as well.

Y Stern, Diamond Design LTD., an Israeli company filed a cancellation procedure against four trademarks owned by H Stern Comercio e Industria S.A. a Brazilian Jewelry company that has a large presence in Israel.

The marks in question are TM 114030 and 114031 which are a cluster of three pentagram stars and a row of four pentagram stars respectively, 170325 (not shown in database for some reason) and 173999 STERN STAR. The marks are all for class 14.

H Stern Comercio e Industria S.A. claims that the initial stages of the rebuttal of the cancellation procedure cost them some NIS 80,000, and from an financial investigation they had concluded that in the event of them winning the case, they would not be able to collect from Y Stern, Diamond Design LTD.

Y Stern, Diamond Design LTD., argued that the so-called investigation was a minor debt owed to the Registrar of Companies that had since been taken care of. They went on to argue that not only had the Brazilian company failed to show that there was a financial problem, but they considered themselves in a good position to win in the main case, so would not have to pay costs anyway.

Y Stern, Diamond Design LTD. supplied financial information to show that their financial situation was stable and reasonable and asked that this information be considered confidential and not for publication.

In his ruling, the Deputy Commissioner, Ms Jacqueline Bracha noted that under Section 353a of the Companies Law, the courts were able to impose a bond of this nature, and previous patent office decisions such as 69909 (Bambino) had ruled that this was permissible. Furthermore, he noted that as a point of Law, neither side challenged that the patent office had the authority.

Ms Bracha went on to note that filing a bond if requested was standard and that not requiring a bond to be deposited if requested, was actually the exception.

In the circumstances, the question to be considered is whether the plaintiff had demonstrated the ability to pay costs should they lose. In this regard, he did not think the evidence to the contrary was sufficient. The company had managed to pay two liens against them and to pay off their debt to the company register and previous costs awarded against them in a separate case. However, their bank balance was in the red and previous creditors had had to initiate legal proceedings to collect debt, which did not auger well.

That said, Ms Bracha rejected the assertion that the cost to date was 80,000 Shekels and that it could reach 200,000 Shekels and she ruled that the plaintiff should deposit a bond of 20,000 Shekels within 14 days.

Decision Jacqueline Bracha in Stern vs. Stern 30 December 2013

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