Filing Baseless Patent Infringement Complaints in the US Can be Expensive

August 30, 2017

Octane fitnessIcon Health and Fitness sued Octane Fitness for patent infringement in 2009, saying that Octane’s high-end elliptical machines infringed US Patent No. 6,019,710, which describes an elliptical machine that allows for adjustments to accommodate individual strides. After two years of litigation, a district court judge found that Octane’s machines didn’t infringe. Octane asked for an award of legal fees, but in 2011, a judge rejected the company’s bid. That decision was upheld on appeal.

It is very rare for US courts to rule costs. This has resulted in the so-called patent troll phenomenon, wherein companies sue for patent infringement on very shaky grounds assuming that they have little to lose.

In this instance, Octane Fitness appealed to the Supreme Court, which heard oral arguments on the case in 2014. In 9-0 vote, the court issued an opinion (PDF) making it much easier to get attorney’s fees. Justice Sonia Sotomayor wrote the opinion, holding that patent laws call for awarding fees in an “exceptional” case, which is “simply one that stands out from others with respect to the substantive strength of a party’s litigating position… or the unreasonable manner in which the case was litigated.”

With that, the case was kicked back down to the lower courts. Under the new standard, the district court judge awarded $1.6 million to Octane over the objections of Icon lawyers.

On Friday, the US Court of Appeals for the Federal Circuit upheld (PDF) that award in its entirety. The district court found that Icon’s claim construction arguments were “wholly at odds with the patent text, prosecution history, and inventor testimony,” The court also found that Icon included Nellie’s Fitness, an equipment distributor, as a defendant for the purpose increasing Octane’s legal costs.

The appeals judges found “no clear error in its analysis” and upheld the district court’s award. The panel dismissed a cross-appeal by Octane asking for a larger award, which would also cover litigation over the fees.

COMMENT

trollThe case is reminiscent of a frivolous law suit brought by Pearl Cohen on behalf of Vagabond Source, where the courts ruled that Source’s counsel (i.e. Pearl Cohen Zedek Latzer pay $187,308.65 in partial attorney’s fees, but that Source not be sanctioned. Pearl Cohen appealed that ruling, and lost again in the Federal Circuit Court of Appeals.

We think that such cost rulings are in order to prevent abuse of the system.

 


Polo

August 11, 2017

256843David Ibgy, who markets fashion goods, submitted Israel Trademark Number 256843 on 26 June 2013 for clothing under Section 25. The mark was allowed on 17 November 2014 and published for opposition purposes.

The mark is shown alongside.

 

82802On 27 February 2017, Lifestyle Equities CV opposed the mark. Lifestyle Equities CV is a Dutch company that has several Israeli distributors that sell clothing under their IL 82802 mark, which was registered in November 1995 in category 25 for clothing, shoes and head coverings. Their mark is shown alongside:

 

The Opposer’s Claims

The Opposer claims that their mark was developed in Los Angeles, USA, in 1982 as a mark that implies quality. Goods were sold under the mark in known chain stores in Israel, such as HaMashbir and Keds Kids, Errocca and in other fashion stores across the country.

The Opposer claims that the dominant element is the horse and rider and so the applied for mark is similar enough to their registered mark that it could be misleading and so is not registerable under Sections 11(6), 11(9) and 11(13) of the Trademark Ordinance.

To strengthen this contention, the Opposer notes that both they and the applicant use the mark for off-the-shelf clothing and consumers have inaccurate recall and so the marks are visually confusingly similar.

The Opposer notes that the two marks are directed to the same goods and that clothing with the marks are sold by the Applicant via similar distribution channels to those used by the Opposer, and the target clientele in both cases is the Israeli clothing and fashion-wearing public.

The Opposer alleges that the two marks share a similar conceptual idea that will confuse the public into thinking that the Applicant’s goods are supplied by the Opposer. Both marks have a side view of a rampant horse mounted by a polo player with a raised mallet within a ring of circles. The Opposer considers the relative proportions between the horse and the circular frame as being almost the same in the two cases.

Furthermore, Opposer alleges that due to their intensive use in Israel and the world, their mark has a reputation and may even be considered as being a well-known mark as defined in the ordinance. Due to the well-known nature of the mark, the likelihood for the public being mislead is increased.

The Opposer [Applicant in ruling, but this is a mistake – MF] therefore concludes that the situation may occur wherein the public will purchase the Applicant’s goods thinking them as being provided by the opposer or somehow connected with the Opposer, and so the pending mark is disqualified from registration by Sections 11(13) and 11(14) of the Ordinance. If the pending mark is registered, it could dilute the Opposer’s registered mark.

The Opposer claims that the Applicant acted in bad faith by choosing the horse and rider and was attempting to free-ride on the Opposer’s reputation which has been carefully established over many years. The Opposer considers the mark as representing unfair competition and is thus contrary to sections 11(6) and 12 of the Ordinance.

Furthermore, the Opposer considers the Applicant’s testimony as untrustworthy and that the Applicant has a long history of copying well-known marks and that the current mark was created by selecting elements from established marks, and so is allegedly non-registerable due to Section 11(5) of the Ordinance.

In the framework of their agreement, the Opposer claims that in addition to the applicant trying to copy the general circular appearance of the Opposer’s marks, he also chose to incorporate the olive branches that were allegedly copied from Israel Registered Trademark No. 227079 to Fred Perry (Holdings Ltd).

The Opposer also considered the applied for mark as lacking distinctive character, and thus contrary to Section 8(a) of the Ordinance, this due to the mark lacking anything unique.

Applicant’s Claims

On 22 April 2015, the Applicant responded with their counter-statement of case.  Applicant considers that there is no danger of confusion of unfair competition because the pending mark has to be considered in its entirety and in addition to the rampant horse and rider of the Opposer, the Opposer’s mark includes the words Beverly Hills and Polo Club, which are not elements of the pending mark. Applicant considers these words as central elements that are engraved in the consumer’s consciousness.

The Applicant adds that the common element of the rampant horse and rider were not created by the Opposer but have a long history in the fashion industry.

The Applicant accuses the Opposer of taking inspiration for their mark from Ralph Lauren, US Polo Association and others, and referred to such marks in use in Israel (see appendices to counter-statement of case and affidavit. The Applicant notes that the fact that the claimed motif is common and in widespread use is accepted by the international case-law.

As to the marks being confusingly similar, the pending mark has the letters PJ and not Polo Club, the marks are pronounced differently; the Opposer’s mark is jumping, whereas the applied for mark has three legs, the Opposer’s mark has a circular ring whereas the applied for mark has olive branches.

The Applicant claims to be targeting the popular market that purchases clothing in shops, bazaars and public markets whereas the Opposer is targeting an exclusive clientele by referring to the Beverly Hills Polo Club. This alone should be enough to differentiate between the Applicant’s and Opposer’s goods and distribution channels.

Finally, the Applicant considers that relating to the olive branches as being confusingly similar to those of the Fred Perry mark was only raised in the summations and is thus an illegitimate widening of the issues beyond the Statement of Case.

The Evidence

On 21 September 2015, an affidavit was submitted by Mr Eli Hadad, the director and owner of the Opposer. Similarly, the Opposer submitted an affidavit by David Bar, the director and owner of Beverly Hills Fashion Ltd which manufacturers, imports and distributes the Opposer’s products since 2008 under a franchise from Lifestyle Licensing.

On 22 November 2015, the Applicant submitted their evidence together with an affidavit. On 11 September 2016, a hearing was held, during which the parties cross-examined each other’s witnesses. The parties submitted their summaries and now the time is ripe to issue a ruling.

The Ruling

The ruling related to the following issues:

  1. Did the Opposer widen their front of attack such that references to Fred Perry and the olive branches should be struck from the record?
  2. Is the Opposer’s mark a well-known mark as defined by the Ordinance?
  3. Is there a danger of the similarity causing confusion?
  4. Did Applicant act in bad-faith in choosing the mark?

Since the argument regarding similarity to the Fred Perry mark was first mentioned in the summation, it is indeed an illegitimate widening and should be struck. However, to bring things to a final conclusion, the Adjudicator addressed this issue substantively.

Is the Opposer’s Mark Well-Known?

The Ordinance defines well-known marks and the Adjudicator went through the usual hoops, citing the Absolut and Pentax cases. The Opposer notes that Lifestyle Equities CV is one of the top 100 licensing companies. However, the Adjudicator noted that this says nothing regarding whether the specific brand and mark is well-known in Israel. The Opposer failed to establish that the brand was widely promoted in Israel. The distributor, Erroca, is widely known, but as a distributor of eye-glasses. Facebook followers and the like were not considered persuasive either. There also remained a problem that even if Beverly Hills Polo Club is a well-known brand, that does not mean that the horse and polo player are well-known.

Is there a danger of the similarity causing confusion?

Here the Adjudicator applied the triple test; the appearance of the marks being the issue rather than their sound since PJ and Polo Club sound rather different.

There is a similarity in that both marks include a horse and rider, but the horse and rider appear different, and there are other elements that are found in only one mark or the other.

Notably, unlike in similar oppositions abroad, the mark in Israel does not include the term Polo Club and the Opposer did not bring a market survey to show the similarity.

Citing the 212574 ,211841  Nautica Inc ruling from 15 February 2012:

Registration of a trademark does not provide a monopoly for a concept, such as someone holding a golf club or riding a horse, but only for the specific rendering of the idea in the mark.

The marks were not considered confusing.

 

Did Applicant act in bad-faith in choosing the mark?

The Opposer suggested that the PJ letters were taken from the trademark number 103307 for Polo Jeans Co. owned by the Polo/Lauren Company, and since the Applicant was a former worker of Polo US he could not claim ignorance of this mark. The Opposer also noted that the Applicant admitted to having a reputation for fake goods.

The Adjudicator did not find the allegations sufficiently compelling. This was also the case with the similarity between the olive branches of the trademark and of Fred Perry, which are both different.

CONCLUSION

The Adjudicator Ms Shoshani Caspi concluded that the alleged similarity between the marks did not pose a danger of misleading the consumers regarding the origin of the goods. This made the existence of absence of distinctive elements moot, since the claim was raised by the Opposer solely to base the claim of misleading similarity.

The Opposition was rejected and, using her powers under Section 69 of the Ordinance, the Adjudicator Ms Shoshani Caspi ordered Lifestyle to pay 7000 Shekels + VAT in costs.

COMMENT

I found the argument that the Applicant’s mark was for the fashion-conscious common polo-playing man, whereas the Opposer’s mark was for smart Beverly Hills playing polo set, rather amusing.

I suspect that Fred Perry’s olive branches and those of the Applicant are actually laurels.

The decision is reasonable. However, it seems contrary to the Tigris ruling. However, in general, there does not seem to be a great deal of consistency with trademark rulings.

There was an interim request by Ivgy that Lifestyle post a bond to cover costs should they lose. This was refused.

 


Chipsico – a Competing Marks Proceeding Where Both Marks were Refused

July 11, 2017

267474On 13 August 2014, the New Dubak Natsha ltd filed Israel trademark application no. 267474 in class 29 for chips (potato crisps). The stylized mark is shown alongside, and reads CHIPSICO Batates Modalaah – (Chipsico Crinkle-Cut Potato Chips).

The same day, the Halawani Industrial Company ltd filed two trademark applications for coffee, tea, cocoa, sugar, rice, tapioca, sago, coffee substitute, flour and grain products, bread, wafers, cakes and sweets, honey, treacle, yeast, baking powder, salt, mustard, pepper, vinegar, tomato paste, seasoning mixtures, spices, frozen foods, snacks and crackers. The first application was Israel Trademark No. 267770 CHIPSICO and the second, 267772 was for شيبسيكو, which is Chipsico written in Arabic.

crinkle cutThe trademark department considered the marks as being confusingly similar and the parties failed to reach an agreement, so on 8 May 2016, a competing marks proceeding under Section 29 of the Ordinance was initiated and the parties were invited to present their evidence.

New Dubak Natsha ltd submitted: Read the rest of this entry »


Freshly Squeezed

April 19, 2017

שחוטThis ruling concerns a cancellation request by the originator of a mark against a registered owner who bought the mark with other assets from a company that the originator had sold his business to that had subsequently gone bankrupt.

The grounds for cancellation request were alleged lack of use.

Israel Trademark No. 220623 is for a stylized logo including the phrase “סחוט טרי” transliterated as ‘Schut Tari’ which means freshly squeezed. The mark is owned by Schut Tari 2007 ltd and was registered for nonalcoholic drinks in Class 32.

 

Background

The manager of the Applicant for Cancellation, Mr Ohad Harsonsky set up a factory in the 1990s for producing fruit juices that were marketed under the Schut Tari brand.

orange jewsApproximately in the year 2000, Harsonsky set up the Shut Tari company that continued the activities of the factory. At the beginning of 2005, Harsonsky decided to sell the company and the factory to Pri-fer Natural Marketing and Distribution (2005) ltd. [MF – Pri is Hebrew for fruit. The name is a pun on prefer] which was established by MR Erez Rifkin to make the purchase. Mr Rifkin established Prifer Natural ltd, a company active in the fruit juice industry, in the early 21st Century.

phones-blackberry-orange-phone-fruit-demotivational-posters-1295112418Blackberry on Orange sketch.

After the purchase was concluded, Pri-fer changed their name to ‘Schut Tari Mitz’ Tivi ltd. (Natural Freshly Squeezed Juice ltd), and Schut Tari changed their name to Multi-Pri ltd. The Pri-fer Group started producing freshly squeezed juices and Multi-pri stopped all activities. The Pri-fer Group did not succeed in absorbing all of Schut Tari’s activities, and Pri-fer was late paying the sale price. A business disagreement developed and the Pri-fer Group and Multi-pri agreed to mediation in March 2006. A mediated agreement was given the status of a court ruling by the Ramallah Magistrate’s Court. The mediator was Haim Sodkovitz who represents Eco Alpha, the Applicant for Cancellation.

orange juice squeezerPri-fer and Mr Rifkin were unable to meet the negotiated payment terms that were agreed to in the mediation. Consequently, on 7 March 2007, Harsonsky and Multi-Pri used legal collection means. However, since Rifkin started bankruptcy proceedings and the Pri-fer Group is being disbanded, the bailiffs were unable to collect the debt. Read the rest of this entry »


More Coffee!

March 23, 2017

EdenFollowing on the heels of the Izhimis family feud, we now report on a competing marks proceeding between Abu Shukra Import Export and Marketing Ltd and Strauss Coffee B.V.

Again, this relates to Turkish coffee. On 2 May 2013, Abu Shukra filed Israel TM application number 255526 in class 30 shown alongside.

This ruling relates to all over packaging designs being used as trademarks and to branding concepts. To my mind, it also raises issues of monopolies and market abuse, but this is beyond the competence of the adjudicator and commissioner to relate to, although I think judges might see things differently.

22263EliteOn 16 July 2014, but before Abu Shukra’s mark was examined, Strauss filed Israel TM Application No. 266680 for Coffee, roasted coffee, roasted and ground coffee and coffee substitutes, all in class 30, and also Israel TM Application No. 266683 for Turkish coffee, roasted Turkish coffee, roasted and ground Turkish coffee and Turkish coffee substitutes, all in class 30. Strauss Coffee’s marks are shown alongside.

[At this stage we note that Strauss Coffee owns the Elite brand among many others. Strauss employees 14,000 people in 20 countries. The empire was built on their Turkish coffee brand, but they also now own Sabra, the leading hummus brand in the US, are partners with Yotvata dairies and Yad Mordechai Honey – MF]. Read the rest of this entry »


A Storm in a Coffee Cup

March 20, 2017

This ruling relates to competing rights of different relatives to register and use trademarks for a family business that eventually split up. The marks were registered by a cousin living in Ramallah, and cousins living in East Jerusalem applied to have the marks cancelled on various grounds including passing off, misleading marks, inequitable behavior and lack of use.

234876 LOGOChain Stores of Izhiman Coffee Company own two trademarks: Israel Trademark No. 234876 for the logo shown alongside, and 234877 for the Arabic and English word mark
بن ازحيمان IZHIMAN’S COFFEE.

Maazen and Shapik Izhimian applied to have the marks canceled under Section 39 of the Trademark Ordinance 1972, and further under Section 41 for lack of use.

The marks were first applied for by Muhammad Musa H’alad Izhiman in January 2011, and after examination, were registered on 2 May 2012 for “coffee and coffee spices in class 30.” On 27 February 2014, the marks was assigned to Chain Stores of Izhiman Coffee Company, a Palestinian Company based in Ramallah that was owned by Muhammad Musa H’alad Izhiman and his two sons Kassam and Nasser.

On 5 March 2014, the brothers Maazen and Shapik Izhimian who own a Jerusalem based business in Bet HaBad Street, for marketing and trading in coffee and spices under the name “Izhiman’s Coffee” and who are cousins of Muhammad, submitted a cancellation request. In July 2014, the owners Chain Stores of Izhiman Coffee Company submitted their response.

The Background

EnjoyMuhammad, his three brothers and the Applicants for cancellation are all members of the same clan, that were involved in the family business established by Musa, Muhammad’s father, together with Mahmud, the father of Maazen and Shapik in the 1980s. The company had three addresses, the Ramallah address, the Jerusalem address now run by Maazen and Shapik, and a third branch in Abu Dis.

In 1994, Muhammad fell out with his brothers and nephews and received sole ownership of the Ramallah store. His three brothers and the nephews shared the Abu Dis and the Bet HaBad Jerusalem shops and opened a further outlet themselves in Ramallah. In 2000 the applicants for cancellation and Muhammad’s three brothers opened a fourth branch in Salah Shabati Salahadin Street in East Jerusalem. In 2008, these partners ceased to cooperate, and Maazen and Shapik were left with the Jerusalem Store in Bet HaBad Street.

love.jpgMaazen and Shapik submitted an affidavit written by Maazen and a second one from Riyadh Ghazi Halaq, the owner of a coffee shop near the Bet HaBad address that buys his raw coffee from them. The mark owners responded with an Affidavit by Nasser Muhammad Musa Izhiman, Partner and authorized signatory. At the end of September 2016, the Adjudicator of IP, Ms Yaara Shoshani Caspi held a hearing and the witnesses were cross-examined.
Read the rest of this entry »


K -KOSHER – Looking for contributions to Oppose Indian Trademark Application

January 16, 2017

k-kosher

India has the world’s second largest population, its third largest economy and is the second largest producer of food after China.

India is a ‘global hotspot’ for food manufacturers, food producers, and food ingredient professionals. The country is now becoming an integral part of the global food ingredient network and supply chain. Given this trend, India has become one of the most important destinations for food investment, with the food industry growing at an annual rate of 17%. As food exports continue to increase in India, many Indian food manufacturers are required to certify that their products and ingredients are kosher.

In April 2016, Indian trademark Application Number 3243779 was filed by Mrs. Suchi Agarwal trading as AMRIT EXCLUSIF. The mark covers beverages including wine, spirits, liquors, whisky, brandy, rum, vodka, gin and Scotch all included in class 33. Ms Agarwal already has the word mark for leather goods.

Veteran Israel Trademark Attorney Neil Wilkof brought this application to my attention.

 

Wine is a key element in the rituals that mark the onset and end of the Jewish Sabbath and festivals, and features in life cycle events such as circumcision and wedding ceremonies. Perhaps due to its centrality, over the millenia, very stringent manufacturing and storage requirements have been developed that must be met for wine and brandy to be considered Kosher.

Neil’s problem is that the 3243779 mark is misleading in that if applied to the beverages listed, consumers would assume that the beverages are Kosher. On the other hand, no one organization should be able to prevent other manufacturers from using the work Kosher on wines that are manufactured in accordance with Jewish Law, and under bona fide Rabbinical supervision. There are a number of Indian trademarks for Halal marks including 1131733 (wordmark) and 1131732 and 1493214 which are each slightly stylized. A Moslem purchasing meat labeled as Halal would expect it to be from a clean animal that is slaughtered with a knife in accordance with Moslem practice and beverages labeled as Halal to be free from Alcohol. Similarly Jews should be able to expect wine or meat labeled as Kosher to be manufactured and stored in accordance with Jewish Law.

Neil and I have discussed the case with retired trademark expert Professor Jeremy Phillips as well as with the local Indian trademark counsel who brought the application to Neil’s attention. We all believe that there are grounds to oppose this registration under the Indian Trademark Law. The deadline for filing an Opposition is in mid-February 2017. We are happy to donate are time to this cause and I’ve reached out to the officer who handles fraud in matters of Kosher food for the Israel government.

None of us knows any Jewish licensed trademark Attorneys in India, and whilst we believe that Buddhists and Moslems will be sympathetic to the cause, we cannot expect a non-Jewish practitioner to work Pro Bono on this matter. Neil has consulted with the firm in India and it is estimated that the cost of fighting this opposition  could amount to $2000 – $3000. Neil and I are willing to assist the firm pro bono as needed.  If we can now find 20-30 practitioners who will each put $100 in the pot, we will have a budget for fighting this. Neil and I have agreed to put in the first couple of hundred. Please contact either of us if you’d be prepared to help.