Chaim Gavriel and Daniel Milstein own Israel trademark No. 199199. The mark in question is a word mark “I LOVE SIXTY SEVEN” and covers clothing, footwear, headgear; included in class 25.
Aymerich Inver, S.L. filed to have the mark canceled, and the mark owners requested that a bond of 200,000 Shekels be posted to cover legal fees in the event of the cancelation proceeding failing. The request was justified by noting that Aymerich is a limited company without assets in Israel, making collection of any award difficult. There is no way of knowing whether the company is on a sound financial footing. Aymerich responded by claiming that the company was financially sound, would have no difficulty in covering any costs awarded against it, and the mark holders had provided no evidence to the contrary.
Section 353a of the Company Law authorizes the courts to require that a bond is paid by foreign litigants and limited companies, and places the onus on the litigant to show that they have the financial resources. In 10905/07 Naot Oasis Hotels vs. Zisser, Judge Gronis (now head of the Supreme Court) explained that the underlining logic is to ensure that foreign litigants can’t file suit and then escape the consequences of losing. In Appeal 10376/07 L.N. Handasa vs. Bank HaPoalim, the three stages of determining liquidity in such cases is clarified. It is not enough to determine the financial state of the company, but also the chances of success in the litigation should be determined as should an appropriate bond in the specific circumstances.
Since the company filed suit in this case, the onus is on them to prove that they have sufficient finances to pay costs. The mere fact that there are no assets in Israel is insufficient to indicate a lack assets per se, but it is sufficient to indicate that the defendant, if successful, is unlikely to see their costs refunded. That is, after all, the logic behind requiring a bond from foreign plaintiffs. That said, the bond should be related to the likelihood of success and to the expected costs in the event of failure. The Adjudicator of Intellectual Property, Ms Yaara Shoshani Caspi ruled that a bond of 7000 Shekels was appropriate in this instance.