A scratch line on a profile as a trademark indicating origin

If a design feature on a profile serves to indicate the origin of that profile, it may be registered as a trademark.

Israel trademark application 240319 filed by AL-SHURKAH ALWATANEYA LISENAET AL-ALAMENYOM WALPROFILAT (National Aluminum & Profile Co.) or NAPCO is such a mark.

240139

The mark, as shown above, was applied for aluminium profiles in class 6.

To some extent, the mark is reminiscent of the three-stripe Adidas mark, but it seems that the intention here is to monopolize a nonfunctional scratch like indentation anywhere on any profile as an indication of origin. Furthermore, if the scratch were to have a function, such as engaging a seal or the like, it could still infringe.

To avoid such problematic protection, the applicant clarified that the mark was a lengthwise 120 degree scratch on non-significant parts of the profile.

We assume that non-significant parts is to exclude such scratches that serve an aesthetic or functional purpose.

The applicant requested immediate fast-tracked examination as new requirements of the Israel Standards Office required manufacturers of products for sale in Israel to have registered trademarks identifying the goods.

After a hearing at the Israel Patent Office, the mark was allowed with the above clarification and disclaimer on 28 November 2012.

On 27 February 2013, Extal LTD filed an opposition, claiming that the mark lacked distinguishing characteristics as required by Section 8a of the Trademark Ordinance 1972 and was confusingly similar to their mark and thus was non-registerable under Section 11(13) and was thus against the public ordre, was not registerable under Section 11(5), would create unfair competition, false identification of the origins of the goods, dilution of Extal’s reputation and was thus not registerable under Section 11(6).

This scratch seems to have caused an awful lot of trouble.

The opposer, Extal, was established in 1988 and claims to specialize in developing, manufacturing, designing and marketing quality aluminium profiles. The firm is active internationally and in Israel, and has invested in advanced manufacturing equipment, automated storage and powder painting. In 2005 Extal bought up the reputation and IP rights of Mipromal. This and sales in 2011 and 2012 of hundreds of millions of Shekels are the basis of their claims to a wide reputation in Israel.

In 1988 the Opposer filed Israel Trademark Number 121163 in class 6. The mark appears as follows:

121163

The mark lapsed in 2006 due to failure to pay the renewal fees and was resubmitted in August 2011 and, following office actions, was split into two marks, Israel TM Application Numbers 253416 and 240117, each consisting of one of the elements above. Those applications were suspended pending this hearing. The Deputy Commissioner noted that scratches on the side of profile are standardized symbols for marking sections of extrusions, and the intention of the mark is a protrusion along a profile or an indention on a profile.

Extal claimed that the single scratch/protrusion has become well known in Israel and is marked on and identified with their products. The pending application is confusingly similar to their well known mark and is used to mark aluminium profiles with a triangular scratch along the profile. The distribution channels and target consumers are identical. Since the requested mark is recognized by the Israel Standards Institute as indicating that the goods come from Extal, allowing NAPCO to register the mark contravenes public order.

Extal alleged that NAPCO’s marks were filed in bad faith, since they were filed soon after their marks lapsed, and further alleged that NAPCO had filed false information.

NAPCO filed their statement of case on 14 April 2013 and denied most of Extal’s allegations but admitted that the two companies’ products were aimed at the same target audience in Israel. NAPCO claimed to have independently invented the scratch sign and to have used it since 1996, and for many years in Israel thereby developing a reputation for their products. NAPCO argued that Extal’s 121163 mark was neither a protrusion or a scratch and could not protect a scratch on an aluminium profile. To the extent that it could have provided some protection for whatever it protected, Extal had abandoned the mark. Furthermore, the publications supplied by Extal indicated that they were marking their goods, de facto, with a protrusion not an indentation.

Both sides filed numerous affidavits from employees and from people in the industry. The witnesses were cross examined in March and June 2014.

One of Extal’s arguments was that a lengthwise scratch along a profile is to minimal to serve as an indication of origin and was unacceptable under Section 8a of the Ordinance. We find this argument odd for Extal to submit since they were concurrently prosecuting a similar mark themselves. We think that the statement could fairly be used to estoppel their application.

That as may be, Ms Bracha noted that the Israel Standards Organization requires that profiles are marked. Since they are extruded in long lengths and then cut to size, a mark at one end or another is insufficient and manufacturers mark their profiles with (combinations of) protrusions and / or scratches. The Israel Standards Organization keeps a register of the various manufacturers marks but also requires the manufacturers to register trademarks. See Accumulated Regulations 7012, 30 June 2011 Section 2.2. The regulation came into effect for imported profiles on 30 November 2012.

Clearly the Israel Standards Organization regulations are not binding on the Israel Trademark Office which may refuse a mark considered as generic, as too similar to a competing mark, or for some other reason. However, the guidelines for examiners considering trademark profile markings as trademarks require them to take into account the Israel Standards Organization’s regulations when considering whether marks are inherently distinctive or have acquired distinctiveness. Thus the profile itself is functional or aesthetic and longitudinal scratches or protrusions (certainly on non-visible faces) serve as an indication of source.

There are a number of such marks with two or three indentations or protrusions such as 96177 (Extal), 96178 (Extal) 67008 Klil and 124975 (Extel). None of these have accompanying explanations.

NAPCO’s mark is a single scratch but it includes a clarification that “the mark is a lengthwise 120 degree scratch on non-significant parts of the profile.”  Thus NAPCO’s mark has inherent distinctiveness and is designed to distinguish its products from those of competitors.

The question remains whether it is indeed distinctive and whether it could create unfair competition.

Section 11(6) states that a mark that could confuse the public, falsely indicate the origin of goods or promote unfair competition may not be registered.

In this instance, the question is different from that discussed in the caselaw, such as 10959/05 Delta Lingerie vs. Tea Board China, 2006, and  the Safari Surf and Enrico Coveri cases, in that the pending mark is arguably confusable with a non-registered mark. As Seligsohn wrote in his Biblical Epic monumental Trademark and Related Laws, Shocken 1973:

A mark will be considered as a misleading mark if the public would be mislead to believe that it was the mark of another. The English Courts have dealt with this issue and ruled that a mark that is confusingly similar to one that have been registered may not be registered. However, the Israel Law does not differentiate between a registered mark and one not registered but well known. In both instances the Commissioner will refuse the mark if he believes that it will confuse the public into thinking that the mark is that of the third party. Before the Commissioner takes this step, he must be persuaded that the established unregistered mark is so well known in Israel that the public will assume that the younger application is the product of the owner of the established mark.

Extal is the largest distributor of profiles in Israel will 20% of the market. Their mark is well known. The argument centered on whether Extal had a reputation for a single line mark as they claimed, or only for a single protrusion as NAPCO argued.

The Deputy Commissioner was persuaded that Extal has a reputation for a single line mark among the relevant market and fulfills the requirements set down in 18/86 Phoenician Glass vs. Les Verreries de Saint Gobain, PD 45 (3) 225, 245-146.

There is no doubt that the original 121163 application was for scratches or protrusions as both were shown and the description was for a single line on a profile wall. Furthermore, a letter from the Israel Standards Organization appended to the file wrapper also related to a single line. Furthermore, the registration at the Israel Standards Organization was for a single protrusion or a single indentation.

The Opposer, Extal, attempted to register the two marks in one application in 2011, but the Patent and Trademark Office ordered the application split into two applications, one for an indentation and the other for a protrusion.

The opposer had a registration, lost it unintentionally, but has marked their products with a single line since the 1990s. They also had registered a design for a profile with a single line.

About half of the opposer’s product are sold to warehouses, traders or wholesalers. A significant proportion of the products are sold to window and door manufacturers and to industry. The relevant public are thus wholesalers and tradesmen.

Extal claims that 99% of their profiles are marked and that the calendars they distribute to their customers in 1994 stated “One line – the indication mark of Extal Profiles”. Their 1996 catalogue has the letters ID standing for indentification along various images, and pointing to a line that is generally a protrusion, sometimes an indentation and sometimes not clear. The catalogue even states: NOTE – Extal’s identification mark – a single line.

A further catalogue from 2006 states Micropramel and Extel’s marks are one or 2 lines stamped on the profile. [The Hebrew word used indicates stamped into, but doesn’t rule out embossed, since the word is that used for coin manufacture- MF].

Mr Yatom, testifying for Extal, argued that the choice of protrusion or scratch was left to the technicians and both were considered as indicative marks.

The Deputy Commissioner Ms Bracha notes that most images show a protruding line but some show an indentation and she concluded that the relevant audience would consider both as being Extal’s marks.

She was also impressed that despite testifying that he and others in the field could differentiate between the two suppliers’ products, A Mr Altif failed to identify the source of a sample as did other witnesses. Rather damningly, a Mr Masaroy who testified for NAPCO had trouble identifying his client’s goods.

From Mr Altif’s testimony it transpired that after painting, other marks were eradicated. It was difficult to identify the source of goods and one had to cross-check profiles with those shown on invoices. Sometimes functional or aesthetic lines were confused with those allegedly serving as indication of origin. In practice, additional indications such as delivery papers were used to identify batches. He also indicated that there was a problem with fake imports on the market.

Although the registration had lapsed, the mark was still in use and was refiled a day before this case that is being opposed. Extal expressed doubts that NAPCO was using their mark.

Extel sent private investigators to eight distributors and, without relating to scratches or protrusions, these asked workers about Extal and NAPCO’s products and marks. The conversations were submitted as evidence. Whilst noting that the investigators knew what was expected of them, the Deputy Commissioner did not feel that they had concealed information as alleged by NAPCO . As transcripts and tapes were submitted, there was no need to submit a report. That said, the Opposer chose the distributors to send the private investigators to and could select companies that they had a good relationship with. Despite certain reservations about the private investigation, the Deputy Commissioner felt that the Opposers’ mark was well known and that they were considered as being a single stripe, without differentiating between protrusions and indentations.

As to Applicant’s good faith, it is noted that although they claimed usage of the 120 degree indentation from 1996, they do have other marks in use. The opposed mark was only registered with the Israel Standards Organization from 2013, which is AFTER the Applicant was aware of the Opposer’s claims to the mark. The marks were filed almost simultaneously but NAPCO requested accelerated examination. This and the large difference in market share indicate that NAPCO may have been acting inequitably.

NAPCO ‘s choice of mark remains unclear, but regardless of whether the mark was requested in bad faith, in practice it is confusingly similar to the Opposer’s mark and thus cannot be registered.

Since the mark is refused under Section 11(6) as potentially confusing the public, whether or not the Opposer’s mark is a well known mark under Section 11(13) is moot.

Nevertheless, although perhaps not a well known mark in the sense of Section 11(13) Extal does have a reputation in the industry.

The Opposition was allowed and the mark canceled. Nevertheless, as the Opposer had not filed clear marks and had not maintained their marks they were not entitled to full damages. Had the opposer’s mark been properly registered the applicant’s mark would not have been allowed and thus the opposition proceeding would have been superfluous. Showing a reputation in a non-registered mark made this opposition particularly difficult as it made it necessary to bring evidence of reputation and of Applicant’s bad faith in registering the design.

A firm claiming to be a market leader should be more professional in registering its marks to prevent a third party registering them. Similar considerations are true for the registration with the Israel Standards Office as well.

The parties’ behaviour in the proceedings and the intermediate rulings and cross-examinations and interference are also taken into account. Thus costs of 5000 Shekels including VAT are deemed appropriate.

COMMENT

At a Patent Conference at Bar Ilan University recently, the Commissioner of Patents and Trademarks discussed the pending design law and noted that designs were being used to protect extrusion profiles.

That as may be, although scratches seem to be odd types of trademarks, it is not easy to permanently mark extrusions to indicate origin. Furthermore, apparently the first makers’ marks were scratches and the like on pieces of armour.

The issue of non-functional elements in an extrusion serving as a trademark has been discussed by the Israel Patent Office before see here.

The prime example of case-law in Israel concerning a well known but non-registered mark is the Chanel ruling of 1950, where some Israeli market his products Chanel and the well known brand Coco Chanel had not registered their marks in Israel. Another case of interest is the Versace saga here, here and here. I don’t think that the single scratch/protrusion is that well known. Extel has at least two other registered marks for two triangular scratches, two triangular and two domed protrusions, implying that the single triangular scratch can at best be one of several lines. Nevertheless, it may well be a recognized marking in the industry.

It seems that this whole case hinged around the issue of whether Extal had a reputation for a single line or for a single protrusion, and whether, if only for a single protrusion, whether the two are confusingly similar. There is no doubt that ten or twenty years ago Extal was claiming a reputation for a single line or stripe, but that is not the issue. Nor is the registration at the Standards Institute. The issue is what people in the industry see as being Extal’s mark. The Israel Patent Office, by requiring Extal’s application to be split, has already determined that a scratch and a protrusion are not the same. The private investigator’s testimony was less than satisfactory. Indeed, NAPCO attempted to get it struck from the record – see here. I note that the sorely missed UK IP Judge from Golders Green, Hugh Laddie, apparently did his own market research when considering likelihood of confusion, such as with the Burton fashion brand. I wonder if Ms Bracha could have usefully visited one of the many wholesalers in Talpiot or Givat Mordechai, or sent an Examiner, and thus determined first hand, whether Extal had a reputation for a single scratch line or not. Certainly one doubts that calendars from 2006 are being referred to, even if some may still be hanging on walls somewhere.

 

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