In October 2013, Antifood Investments LTD filed Israel Trademark Number 260143 in for the words “Eden Winery” in class 33 covering alcoholic drinks. In July 2014, Eyal Alifaz filed Israel Trademark Number 267215 for Eden” also in class 33 covering alcoholic drinks. As the marks were considered by the Israel Trademark Office confusingly similar and co-pending, a competing marks proceedings under Section 29 of the Trademark Ordinance 1972 ensued. Under a Competing Marks proceeding the first to file is a consideration, but additionally, scope of usage and good faith are considered in determining which mark should proceed for examination first. Once that application is examined, if it is allowed, it is cited against the other mark which is typically abandoned. If, however, the first application to be examined is rejected for some reason, the second application is examined on its merits.
The parties were unable to come to an understanding, so on 3 November 2014, the Trademark Office requested that the parties submit their evidence so that it could determine which mark should continue to examination.
Alifaz filed two affidavits, one that he signed and another from a Mr Deri who failed to show for the hearing and thus this second affidavit was struck from the record at the request of Antifood and with Alifaz’ consent.
Antifood filed their evidence but without a proper affidavit by Mr Marchiano, the CEO of the company. On 29 July 2015 they requested leave to correct Mr Marchiano’s affidavit and to add evidence, arguing that Mr Marchiano was not legally represented. On 26 August 2015, Deputy Commissioner Ms Bracha agreed to the affidavit being corrected and allowed Alifaz to file evidence in response and both sides presented verbal submissions.
Antifood claims to manufacture 500,000 to 800,000 bottles of wine in the Hebron region each year, but only some of these include the Eden Winery mark which is used for three series, two of which have been marketed since 2013, and the third has not yet been used. They provided sales receipts as evidence of sale of wine under the marks Eden Quintessence and Eden Reserve. They argued that their mark should prevail as they were the first to file. They alleged that the second mark did not have regulatory approval and was not under Rabbinic supervision and thus accused Alifaz of inequitable behavior. They noted that Alifaz’ main witness was not available for cross-examination to enable clarification regarding his choice of mark. They also alleged that Alifaz’ evidence included contradictions. Furthermore, Antifood claimed that Alifaz’ alleged usage from 2007, but actually only started using the mark in 2008. However, Antifood’s evidence of use from 2013 was unquestionable. Finally, arguing different bottles and no overlap of clientele, Antifood argued that should their mark not be preferred, there was grounds to register both marks.
Alifaz claims that he and his spouse set up Eden in 2007 and consulted with Deri regarding branding. The name Eden is associated with the Biblical Garden of Eden and the roots of the religion. The name appeals to traditional and observant Jews and hints that the wine is Kosher. Finally, the name is an acronym of his and his wife’s names Eyal and Dana. The wine is a quality wine selling at 70 to 100 Shekels a bottle and is available at wine bars, wine shops and restaurants. Alifaz produced Internet publicity from 2009 to 2014 and showed total sales of 450,000 Shekels.
Alifaz considers regulatory approval and Kashrut supervision totally irrelevant to the question of equitable behavior regarding the trademark. Deri’s evidence of choice of mark is also irrelevant as there is n doubt that Alifaz was using the mark prior to Antifood (so could not be copying them or trading on their reputation). Alifaz did not deny that Antifood’s trademark application was the trigger for him registering his mark, but cited the decisions concerning 233874 and 235648 to Mars 019 Telecom vs Telzer International Telecommunication Services to support his argument that that this is not bad faith and should in no way should prejudice the ruling against him.
Alifaz showed that he had many clients and had both advertised and sold his wine from at least 2009. He argued that although Antifood was bigger, their usage of the Eden brand was minor and they could only produce sales invoices for 144 bottles carrying this label. He claimed that the balance of justice was in his favour and there was no grounds for coexistence of the two marks.
In her ruling, Ms Jacqueline Bracha cited Section 29 and then referred to 2498/97 Hugo Boss vs. Robby Boss, 90/70 Bacardi vs. Israel Patent and Trademark Office, and 8774/04 Yotvata vs. Tnuva before looking at the issues of first to file, scope of use and equitable behavior.
Deputy Commissioner Bracha noted that although Antifood was the first to file and had filed some months before Alifaz, this is the least significant of the three considerations. Alifaz had shown significant use prior to filing and indeed was the first to use the mark. Furthermore, Alifaz’ failure to submit a trademark registration until becoming aware of Antifood’s usage of the mark was due to a lack of awareness of the importance of trademarks.
As to equitable behavior, Ms Bracha ruled that the issue is limited with equitable behavior in filing trademarks and only in cases where one applicant is trying to benefit from the other’s reputation is this significant. In this instance, neither party acted inequitably. The choice of marks was independent.
The most important issue, therefore, is usage of the marks. In this regard, Antifood showed hundreds of thousands of Shekels of sales in 2014 and 2015, which weren’t made under the brand Eden, but the bottles carried this name. The bottles were mostly marketed in the US, China and the States and the labels were virtually all in English or French, with just one or two lines in Hebrew, showing that the wine was intended for export.
Since trademarks are territorial, the important issue is sales in Israel, not sales abroad. Then again, since the bottles labeled Eden Quintessence didn’t even carry the applied for mark of Eden Winery, it is not clear that these sales help the registration.
Antifood could only prove sales of 144 bottles of Eden Winery in Israel during 2014. In contrast, Alifaz could show accumulated sales of 450,000 Shekels over the period 2008 to 2014. His invoices carried the Eden mark which was evidence that the mark was in use from when he launched his business. Alifaz also provided additional evidence that his wine could be considered a boutique wine that was critiqued by chefs and wine critics. Both parties accepted that Alifaz’ wine could be considered as a boutique wine that was sold in small quantities. Nevertheless, Alifaz’ lawyers argument concerning the Balance of Righteousness and attempts to import law from a ruling concerning real estate were not considered convincing.
In summary, therefore, the issue is simply one of what takes precedence: (i) a small turnover of a quality wine over a longer period, or (ii) a larger turnover of a cheaper wine for a short period, where most of the sales were abroad?
Before ruling, Ms Bracha related to two additional questions:
- Is Eden descriptive?
- Can the marks coexist?
The Deputy Commissioner ruled that the mark Eden cannot be considered descriptive. Neither side have provided any evidence to the contrary.
As to coexistence, Ms Bracha ruled that the Alifaz is correct. The issue is similarity of the marks, not of the usage thereof. Once registered, the trademark owner can use the mark on in any graphic form, on any bottle and the usage may change over the years. Since the marks include the name Eden and this is dominant, the marks are confusingly similar. The usage is for wine in both instances and although the distribution channels is different, this is insufficient to make a difference. In the circumstances, Ms Bracha does not see coexistence as possible.
In conclusion, Mr Alifaz’ mark 267215 for Eden takes precedence and 260143 to Antifood Investments LTD is refused. Since the parties requested a costs ruling and no actual evidence was submitted, Ms Bracha estimates costs at 9000 Shekels.
This case is highly reminiscent of the Hallel and Yekev HaGalil cases.
In the case of Halel, Yoram Cohen (Tanya Wineries) used the trademark, named for his daughter, for boutique wines but didn’t register the brand until December 2009 when he learned that Arza Wineries, a large manufacture of bottom-of-the-range Kiddush wine decided to launch a slightly upmarket Kiddush wine made of table wine grapes called Halel (meaning praise). Tanya filed their mark 225418 for Halel but didn’t wait for it to issue and tried to obtain an injunction against Arza. Since Tanya’s wine was labeled in English and looked like and was a boutique wine, whereas Arza’s label was in Hebrew and was graphic, and the bottles were dissimilar, then Judge Yossef Shapira (now the State Comptroller) refused the injunction. Later on, Arza registered their logo as 238886. Both marks are in Class 33 for wines, but Tanya’s goods description is for table wine and port wine; included in class 33, whereas Arza’s is for Kiddush wine that is not dry and port wine; included in class 33. Thus there is room for coexistence if both parties consent. In the present instance, the boutique winery rejected coexistence.
In Yekev HaGalil (literally Galilean Winery) there was a long standing trademark for Yekev Hagalil since 2002, for a company making Arak, a spirit with an aniseed taste. The company had made wines in small quantities in the past. The mark Yekev Harei Hagil, meaning Galilean Hills Winery was allowed to register.
Contrary to Ms Bracha’s current ruling, in the past use of a mark on invoices was not considered proof of usage. This was ruled in the case of Off Teneh, where a mark was used in invoices of an abattoir. The difference between the two cases is that in Off Teneh the invoices were the only use of the mark, as the chickens from the abattoir were branded under a different name. In this ruling, the invoices carrying the name Eden is indicative that wine branded as Eden was sold.