Kappa Costs Capped


Israel Trademark Number 213924 to the Karelia Tobacco Company is for the word mark KAPPA and covers Cigarettes, tobacco and tobacco products, lighters, matches and smokers requisites; all included in class 34.

Basic Trademark S.A. who own the well-known Kappa mark for sportswear shown above, successfully filed to have the mark canceled and our report of the decision may be found here. 

Having won their case, Basic Trademark S.A. filed for costs, which they claimed amounted to 237,165.57 Shekels which is $62,228.59 US  at today’s exchange rate.

The attorney’s for Basic Trademark S.A. were Seligsohn, Gavrieli and Co. and the request for actual costs was accompanied by an affidavit from Adv. Gavrieli (presumably Nachum) that asserted that costs had added up to 200,692.15 Shekels in legal fees for over 185 hours work by some four attorneys of the firm. Debit notes and receipts were also appended. The remaining 29,719.2 Shekels exc. VAT was for Italian counsel’s fees, legitimately incurred as the case was international. Furthermore, a final 6,754.2 Shekels was incurred in preparing the request for costs, and a debit note was appended for this as well.

The Attorneys for Karelia (Reinhold Cohn) argued that Basic Trademark S.A. and their attorneys had not provided sufficient detail to justify the costs which were excessive. There were alleged contradictions between the bills by foreign counsel and the sums requested and the invoices from foreign counsel were not supported by an affidavit. Karelia’s attorneys alleged that the costs were excessive, included unnecessary work, were unreasonable, and weren’t even incurred in the current proceedings.

In her ruling, Ms Yaara Shoshani cited Bagatz Tnuva (891/05) noted that [in Israel] it is an established rule that the losing side should pay costs for the victor. The actual costs that the winning party paid out or agreed to pay out are, however, examined for reasonableness, proportionality and whether they were necessary in the circumstances. For the courts to access whether costs were fairly incurred, it is required to provide sufficient details regarding the invoices. Citing the costs request in the Opposition to IL 140492 Unipharm vs. Abbott, Where the requested costs are unusually high, the amount of details required to establish that the costs are reasonable in the circumstances will also be more.

In this instance, in the main ruling of the opposition procedure, Israel trademark no. TM 213924 was rejected, and thus the Opposer is entitled to costs from the Applicant. Nevertheless, the requested costs are subject to judicial scrutiny.

Regarding the invoices from the Israeli law firm (Seligsohn, Gabrieli & Co.) examination thereof does not reveal a breakdown of the costs in terms of the work done and the number of hours spent. It is not sufficient to just record a shopping list of actions performed without context and by merely providing a total. This is insufficient for judicial critique. The number of hours certain actions took and who performed them were not detailed, nor was the date that actions were taken, so the invoices were considered insufficiently detailed.

The Agents of the Applicant correctly noted that the Opposer’s receipts were to the associate IP firm and were not linked to specific invoices or indeed to work for the specific client. Although pro forma invoices are acceptable, if receipts are also submitted, the connection between the two should be clear.

The Opposer engaged an Italian firm that engaged the local Israel counsel to represent them. The costs submission also included a request for foreign counsel’s costs. In the opinion of Ms Yaara Shoshani Caspi, the affidavit by Adv. Gabrieli was insufficient as his personal knowledge regarding the actions of the main counsel abroad was not first hand knowledge. A supplementary Affidavit from the foreign counsel, with their invoices attached should have been submitted.

It is not just a lack of clarity however. Even were all the invoices to be fully detailed and supported by affidavits, it would be difficult to establish that the costs were necessary and reasonable as required by Bagatz Tnuva. In particular, she saw a problem in the request for a further 29,719.20 Shekels for services from the foreing attorneys. This request was not sufficiently detailed and therefore it was not clear that it was necessary and unavoidable. Since these costs were not established as necessary and essential, they should be deleted from the total costs. Thus the sum to be considered is 200,692.15 Shekels, i.e. the costs incurred for services provided by the Israel Attorneys of record.

The invoice 20402 is an acceptable submission in that it appears to relate to the subject proceedings, however it is insufficiently detailed to be considered reasonable.

Invoices 22941 and 25138 relate to a correction of the statement of case and to an appeal to the district court that was rejected. Neither of these actions, though related to the case, can be considered essential and required.

The invoice number 24018 relates to contacts between the Israel Attorneys of record and the local distributor, and to a request to suspend patent office proceedings until the court ruled on the appeal.

Invoices 25658, 27986, 28932 and 30483 relate to charges connected to fling evidence and summations. These are certainly billable actions for which compensation is due, but the level of detail in the invoices is insufficient to establish that the charges were reasonable, proportional and necessary.

Invoice 27986 relates to attempts to negotiate a settlement and should not be obtainable via the patent office costs procedure (which relates to costs from the legal action), Nor should costs incurred for negotiating a procedural agreement be obtainable as part of patent office ruling incurred costs

That said, despite similarities between Opposer’s statements in different jurisdictions, the Opposer had to write a statement for use in the Israel proceedings and this involved Israel attorney time and is billable.

The amount of work and evidence submitted by Kappa was, however, considerable and tool time. That said, the mark was dropped prior to a hearing on the evidence which presumably saved expenses.

In consequence of the above, actual costs were not ruled. Rather Ms Shoshani Caspi weighed up the amount of work and based on the above analysis estimated a fair cost ruling. In conclusion, costs of 50,000 Shekels including VAT were awarded to Kappa.

Ruling on costs incurred in Opposition to Israel Trademark Number 231924 to Karelia Tobacco Company Inc., Opposed by Basic Trademarks S.A. Ruling of 23 June 2015  

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