Itay Sachish registered Bar 9 and Beach 9 for restaurants and cafes in Class 43. Roi Leon filed a request to have these marks cancelled from the register under Sections 38 and 39 of the Trademark Ordinance. Leon claimed ownership of the marks which are used in a change of restaurants by Sachish. This was reported back in November 2015.
The parties are involved in several different types of litigation before different courts and decided not to inform the Patent and Trademark Office regarding these proceedings, where the cases are standing and whether rulings have issued. This creates a situation where contradictory rulings might issue. To avoid this, Ms Shoshani Caspi, Adjudicator at the IPO gave the sides until 3 November 2015 to provide full details regarding the various litigation proceedings.
Now, the Patent Office is finally ruling on this cancellation request.
What the sides agree on
On 2 April 2001, the two parties established a company called E.R. Productions 2001 LTD, of which Sachish owned 65% and Leon owned 35%. Subsequently, E.R. Productions 2001 LTD collaborated with Night Line on the Sea LTD, using the 9beach mark for managing coffee shops and restaurants. The parties do not agree regarding the legal status of this collaboration, however there is a written agreement from December 2004 to the effect that Nightline received $5000 from ER and relinquished all rights to the mark 9beach.
In 2006, a deal was made with other investors and the original partners shares were reallocated.
Roi Leon’s claim
Leon claims that the marks were registered by Sachish in bad faith. From 2001 through 2008 both parties used the marks directly or via E.R. Productions 2001 LTD. Based on the ownership of the mark by the company as per the 2004 agreement, the mark should be transferred to him, or should be owned equally or owned by the company. Clearly the marks did not belong to Sachish.
Sachish meanwhile accuses Leon of inequitable behaviour and misuse of the courts to deprive him of his rightful possessions. Sachish considers that Leon is estopelled from making claims not made in the competing marks proceeding or the opposition proceeding. Since Leon does not challenge the validity of the marks but only the ownership thereof, the only cause for action is Section 39(a1) and the marks are and remain the property of Sachish.
Claims of estoppel and inequitable behaviour are dismissed. The actions of the parties in the various fora could have been better but costs were awarded. Based on the evidence of the designer and the name on the business receipt, both 9Beach and 9Bar are both properties of ER Production LTD and should be transferred to that company. The words beach and bar as less significant. The mark is the stylized 9 whose graphics were paid for by ER production LTD and Sachish’ claim to have negotiated the design with the graphic artist does not alter this.
In conclusion, based on the written agreement from 2004, the ownership of 219665 (9Beach) and the derived mark 243636 (9Bar) are transferred from Sachish to ER (Production 2001) LTD.
Sachish is ordered to pay 15000 NIS + VAT to Leon within 14 days.