Appeal Regarding Infanti Baby Seats Virtually identical to those of Fisher Price (Mattel)

September 19, 2017

fisher price swing seatBaby swing-seats that were made in China and are identical to Fisher Price swing seats, down to the image of a lion on the upholstery, were imported and sold in Israel under the brand Infanti. Fisher Price obtained an Anton Pillar injunction and seized 1830 seats from the Importers’ warehouse. However, the Nazareth District Court rejected all attempts to obtain compensation under copyright infringement of the lion design printed on the seat upholstery and in the instruction manual, trademark infringement for the Fisher Price logo shown in the illustrations of the instruction manual, the trade tort of Passing Off, and the catch-all Law Of Unjust Enrichment following A.Sh.I.R. The case was then referred to the High Court.

This ruling by a panel of Israel High Court judges considers whether copyright subsists for a product design or artwork printed on a product where no design was registered for the product and whether there are grounds for sanctions under the trade-law of Passing Off or under the Law of Unjust Enrichment. The legal advisor to the government filed an amicus brief clarifying the position of the government in such issues.

judge elyakim rubinstenThe main ruling was given by Vice President of the High Court, Judge Elyakim Rubinstein who first considered the basic relationship between design law and copyright. Then, he ruled whether part of something that could have been registered as a design is entitled to copyright protection, and if so, whether the lion character is copyright protected even if the swing chair could have been registered as a design. Are the respondents direct or indirect infringers of the Appellant’s copyright? Do they have the defense of being unaware? Does trademark infringement require intent? And finally is there Passing Off or Unjust Enrichment?

Essentially Judge Rubinstein and Fogelman found copyright infringement due to the lion character on the upholstery, and Judge Meltzer also found that there was passing off, due to the products being virtually identical. Judges Rubinstein and Fogelman rejected the claims of passing off since although Fisher Price clearly had a reputation, they did not necessarily have a reputation for the baby swing seat. Infanti’s copies, though virtually identical to those of Fisher Price, were packaged in different boxes and the boxes were clearly labelled Infanti. The product itself was also labeled with the Infanti brand.

The main ruling is given below, followed by additional comments by Judges Fogelman and Meltzer. Since this is an important ruling, I have translated it in full. At the end are some comments and criticisms.

Background

This is an appeal against ruling 39534-02-15 by Nazareth district Court judge, Ben Chamo which was given on 8 January 2015 and in which Fisher Price lost their claim regarding copyright infringement in a child’s swing seat.

The ruling addresses the relationship between copyright and registered design rights. Judge Rubinstein notes that in the modern consumer society, the design of consumer goods has an increasing importance, and that manufacturers invest heavily  Consequently, many goods are some combination of functionality and artistic expression which makes it difficult to classify such goods in a single IP category and raises difficult legal questions. This appeal relates to a list of such questions of which the relationship between design law and copyright is central.

The Appellant, Mattel Inc. is a US Company that owns Fisher Price which makes baby goods, etc. The Respondent, Dvaron Import-Export Co. Ltd, is a company that imports various baby products into Israel. They and their directors and share holders were sued.

infantiMattel / Fisher-Price learned through Sakal which imports their products into Israel, that the respondents have been distributing a baby swing seat manufactured in China and branded as Infanti, which is a copy of the Fisher-Price swing seat.  Read the rest of this entry »


Israel Supreme Court Rejects Appeal from Shukha Trademark Infringers

June 9, 2017

shukhaThere are two branches of the Shukha family that market oil and other food stuffs: Sons of George Shukha ltd. and Antoine Shukha and Sons ltd.

Sons of George Shukha ltd, which also imports and distributes rice, have 27 registered trademarks including the name Shukra in English, Hebrew and Arabic.  The earliest registered mark is from 1984 but one mark is for Sons of George Shukra from 1930.

Over a six-year period, the Sons of George Shukha ltd attempted to enforce their marks through the courts with the parties reaching an agreement that allowed Antoine Shukra and Sons to use labels that include the name Shukra in a font size no larger than that for Antoine and Sons and together with a logo. The settlement, though ratified by the court, was not fulfilled and so Sons of George Shukha ltd. appealed to the Supreme Court. Antoine Shukra and Sons submitted various creative arguments arguing that since the size of their oil containers was larger, the agreed size of the label was no longer reasonable. They also claimed that the ruling only related to the name Shukra in Arabic. They submitted that two weeks to recall and remove all infringing products from the shelves was too short a period, and the penalty of 2500 Shekels for every day delay would cripple them.

Supreme Court Judge Amit pointed out that unless the penalty for failing to enforce was crippling, infringing parties would simply continue to prevaricate. He noted that in two of the three counts of continued infringement, Antoine Shukra and Sons acknowledged that they were infringing, and in the third case, where the issues that received court endorsement related to the size used for the name Shukra and to it being used together with a logo, even if there was some grounds to consider the Appeal based on font size, the infringers were not displaying the logo prominently. He refused to reconsider issues ruled on by District Judge but noted that the District Court judge had stated that the Appellants had made various claims in affidavits but withdrew them during the hearing, and had generally acted in bad faith.

Judge Amit noted that with financial penalties for failing to enforce, staying a ruling during Appeal was generally not appropriate since a monetary ruling could rectify any issues. Judge Amit refused to stay the enforcement, but granted a 30 days instead of 14 days for it to be enforced.  By the end of this period, the Appellants have to provide a full record od what was done to recall or relabel the infringing goods. Costs of 5000 Shekels were awarded to Sons of George Shukha ltd.

Appeal 4113/17 Sone of George Shukra ltd. vs. Antoine Shukra and Sons ltd. and various members of the Shukra clan and related companies. 8 June 2017


All for a $ Store Fined 30,000 Shekels for IP Infringement

June 22, 2016

dollar_redThe ‘All for a Dollar’ store in Tel Aviv’s Dizengoff’s Center was sued by Times Warner for selling goods that were decorated with images to which Time Warner owned the rights. The images included Tom & Jerry, Power tom and jerryRangers, Superman and Looney Tunes. Although statutory damages in lieu of evidence of 100,000 Shekels were sought, the damages awarded were only 30,000 Shekels (about $800 US), based on an attempt to strike a balance between the number of goods, the type of goods and the need to punish the offender and to warn others.


A scratch line on a profile as a trademark indicating origin

February 11, 2016

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.

 


Large Consignment of Fake Plumbing Components Destroyed at Importer’s Cost

February 10, 2016

huliot

When one thinks of fake goods, luxury items such as Rolex watches and perfumes spring to mind. Software and music is also copied and distributed easily, but one doesn’t think that anyone would fake plumbing materials.

Actually, fake light switches, plasterboard, aluminium profiles and plumbing materials are made.  Huliot Have now managed to have a large consignment of 88,000 fake plastic plumbing components destined for Gaza destroyed in Ashdod Port at the importer’s cost.

Huliot a long established manufacturer of pipes and plumbing components based at Kibbutz Sde-Nehemiya.

A few months ago, the Customs Office at Ashdod port compounded a large consignment of counterfeit plastic plumbing components imported from China and destined for Gaza.  The plastic components had the registered trademarks of Huliot A.C.S. Ltd embossed on each component and were also packaged in packaging bearing Huliot’s name and distinctive green diamond logo.

The Customs Office were suspicious of the large consignment because the goods appeared to be of low quality so IP Factor who is the registered Agent of Huliot trademarks was contacted by the Customs Office. We take this opportunity to complement the Ashdod Customs for their vigilance in this matter.

Adv. Aharon Factor of our firm, IP Factor, filed a petition at the Tel Aviv District Court for a restraining order and for an order for the destruction of the goods.  The parties subsequently negotiated an out-of-court settlement further to which the goods were destroyed at the importer’s expense and some legal costs were paid by the importer to Huliot.

Huliot’s CEO Mr. Paul Steiner believes that the large consignment has a retail value of about 400,000 Shekels and would have tarnished Huliot’s reputation for high quality products.  Although destined for Gaza, Mr Steiner believes that some of the goods would have found their way back to Israel which would have caused even more damage to Huliot’s reputation.

Mr Steiner is a great believer in IP development and enforcement and engages veteran Israel Patent Attorney Simon Kay as part-time in-house IP Manager. Simon has developed a vigorous strategy to protect the company’s intellectual property and reputation, including patenting developments, registering the designs of new components, marking components and their packaging with Huliot’s logos and trademarks.  IP Factor handles the trademark portfolio for Huliot and for some of Simon’s other clients.

COMMENT

In a recent post we noted that suppliers of fake Viagra pills had received prison sentences since the product posed a danger to the public. We noted that most fake Viagra pills are merely ineffective rather than dangerous. Fake building materials can cause tremendous damage. Sewage and grey water piping that cracks can contaminate drinking water supplies. Whilst untreated individual erectile dysfunction can adversely affect reproduction, cholera can kill millions. One of my clients has developed and is launching a child safety device for adjusting car seatbelts to children. The device has undergone very extensive safety testing. Fake devices are now being advertised on Chinese wholesale websites. Quite possibly, these are inferior and unreliable products. Perhaps the courts and police should reconsider what types of fake goods are dangerous and what importers and distributors should be sent incarcerated?