Panthenol – Costs ruling

panthanolIsrael Trademark Application No. 278427 for the word PANTHENOL was submitted by by Tetra Pharm ltd and covers Soaps; perfumery; cosmetics; essential oils; cosmetic preparations containing herbal, vitamin, mineral; cosmetic preparations for the treatment of seborrhea; hair and body lotions; bath foams; shampoos; hair conditioners; hair treatment preparations; creams, gels, moisturizers; salts; powders; toiletries; aftershaves; make-up preparations; deodorants for personal use; cosmetic preparations for the treatment and care of the face and the body; after shave lotions; antiperspirants; sunscreen preparations; dentifrices; non-medical dental preparations, namely, non medicated dental rinse and non-medicated whitening and cleaning dental preparations; cosmetic preparations for the treatment of burns; cosmetic preparations for the treatment of skin redness; cosmetic preparations for the treatment of skin irritation; all included in class 3.

exorbitantThe Proctor & Gamble Company opposed the registration. Tetra Pharm ltd abandoned the mark and Proctor & Gamble requested real and actual costs of 29,659,07 Shekels which is about $8,500.

Proctor & Gamble argued that Tetra Pharm ltd’s application was in bad faith since at the time of filing they were well aware that their mark was confusingly similar to Proctor & Gamble’s marks and was also the dictionary name of a chemical.

proctor and gambleProctor & Gamble argued that this was clear since the Applicant abandoned the mark without even attempting to defend it. The actions that Proctor & Gamble request costs for include learning the process, preparing an opposition, time spent in negotiating a settlement that was initiated by the Applicant, legal research, preparing an application for costs, filing fees, couriers, etc.

Proctor & Gamble added that not providing real and actual costs would incentivize the applicant to infringe Proctor & Gamble’s rights in the future.

tetrapharm-logo.jpgTetra Pharm ltd accuses Proctor & Gamble of acting in bad faith, and argues that one should not award costs for attempts to negotiate a compromise or for work performed prior to filing the opposition or for work performed in preparing the request for costs. They allege that the requested costs are exorbitant since a single statement of case was submitted, and the issue was resolved at an early stage in the proceedings.

RULING

One has to balance the entitlement of the winning side to expenses paid out in practice, with the opposing interests, as explained by Adjudicator of IP, Ms Yaara Shashani Caspi in her cost ruling regarding Israel trademark application no. 274115 from 19 September 2017:

It is a general rule that the party winning in court is entitled to real costs as incurred in practice. Nevertheless, the one judging is not obliged to award real costs, since (s)he has to consider the facts of the case and legal policy (see 6793/08 Luar ltd vs. Meshulam Levinstein Engineering and Subcontracting ltd, 28 June 2009.

The case law establishes that the applicant requesting real costs has to prove that they are reasonable, proportional and essential to managing the case in the specific case. (See Bagatz 891/05 Tnuva Cooperative for Marketing Agricultural Produce in Israel ltd vs the Authority for Granting Import Export licenses of the Ministry for Infrastructure, p.d. 50(1) 600, 615 30 June 2005. This limitation to costs, that they should be reasonable and essential is:

To prevent a situation where the costs that are awarded are so high that they will be too much a disincentive on a party, and create an inequality, making legal action unnecessarily expensive, and thus limit access to the courts. See 2617/00 Kinneret Quarries (limited partnership) vs. the Municipal Committee for Planning and Building Nazareth Ilit. p.d. (1) 600 (2005).

In this instance, the Applicant did win the proceedings, and are thus entitled to a refund of costs. However, in the circumstances, Commissioner Ofir Alon does not consider it appropriate to award the actual costs, since they are exorbitant for the preliminary stage that was reached before resolving the issue, and since this is not exactly a complicated issue. After weighing the various considerations, Commissioner Alon considers that 8000 Shekels is reasonable.

The Request to Reconsider the Extension

On 25 September 2017, the Applicant requested an extension to reply to the costs ruling without sending a copy to the Opposer and without appending the Opposer’s response as required by Commissioner’s Circular 006/201. On 28 September 2017, a decision was given that required the Applicant to act in accordance with the procedures and to obtain the Opposer’s position regarding the extension. As per the ruling, on 2 October 2017, the Applicant approached the Opposer to receive their position, and on 3 October 2017, the Applicant’s counsel (Wolff Goller Bregman) requested a further extension in which he noted that the Opposer’s counsel (Shlomo Cohen) had not yet received instructions from their client, but failed to note that they had only informed Opposer’s counsel the day before.

On 4 October 2017, Opposer’s counsel (Shlomo Cohen) informed Applicant’s counsel (Wolff Goller Bregman) that they oppose the extension. However, Applicant’s counsel (Wolff Goller Bregman) did not mention that they had already filed for an extension, and did not inform the Patent Office that the Opposer was opposed to the extension.

Following this, an extension was granted until 15 October 2017 whilst the Opposer’s position was not before the Commissioner. On 17 October 2017 the Opposer requested reconsideration of the Extension and explained the sequence of events, and requested that the extension granted to the Applicant be reconsidered in light of the Applicant’s behaviour.

The Opposer is correct that the Applicant’s behavior is inappropriate. Parties to a legal proceeding before the Patent Office should send each other copies of communications submitted to the patent office. The purpose of the Circular is to enable the adjudicator to rule when the position of all parties is before him or her. In this instance, the Applicant’s behaviour did not allow this.

Although not seeing it fit to change the decision regarding the extension, thereby enabling the cost ruling to be given without consideration of the Applicant’s position, but the Applicant will bear further costs of 3000 Shekels for requiring reconsideration.

In light of the above, the Applicant will bear Opposer’s costs of 11,000 Shekels and out-of-pocket expenses of 1434 Shekels. These sums will be paid within 21 days, or interest will be incurred.

Re Israel Trademark No. 178427 Panthenol; ruling on Costs, Ofir Alon, 6 December 2017. 

COMMENT

Pantene.jpgThe term panthenol is arguably similar to Proctor & Gamble’s leading brand Pantene.

There are, however, differences. More problematic, Panthenol (also called pantothenol) is the alcohol analog of pantothenic acid (vitamin B5), and is thus a provitamin of B5. In organisms it is quickly oxidized to pantothenic acid. It is a viscous transparent liquid at room temperature. Panthenol is used as a moisturizer and to improve wound healing in pharmaceutical and cosmetic products. Indeed Pantene Pro-V is based on Panthanol.

It is true that the mark should not have been registered, and the Examiner should have picked this up. Then again, opposing such a mark is not complicated and 29,659,07 Shekels does seem exorbitant. The basic ruling of 8000 Shekels for filing an opposition, though considerably lower, is also rather high for a trademark opposition.

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