A Balanced Temporary Injunction Against Rami Levy

April 19, 2018

This case concerns ‘minute steaks’ supplied by Rami Levy – a supermarket chain in own-brand packaging that has some similarity to that of Baladi, a brand that had introduced the product to the frozen meat freezers in Israel. Baladi sued Rami Levy for passing off, copyright infringement and unjust enrichment and tried to obtain a temporary injunction against Rami Levy at what is the start of the Israel barbecue season.

steaks

This case concerns ‘minute steaks’ supplied by Rami Levy – a supermarket chain in own-brand packaging that has some similarity to that of Baladi, a brand that had introduced the product to the frozen meat freezers in Israel. Baladi sued Rami Levy for passing off, copyright infringement and unjust enrichment and tried to obtain a temporary injunction against Rami Levy at what is the start of the Israel barbecue season.

baladi minute steak

The claims of passing off and copyright infringement were considered unlikely to prevail and thus not grounds for a temporary injunction. However, Judge Avrahami saw fit to grant a temporary injunction on the grounds of unjust enrichment. Rather than have Rami Levy’s product removed from the shelves and repackaged which could result in the meat being lost, she ruled that a sticker in a contrasting colour should be attached to the packages indicating that Maadaniya was Rami Levy’s own brand. Rami Levy was also advised to work towards introducing a more different package. The parties were invited to try to settle their differences without the court having to hear the case in its

Baladi makes meat products including minute steak which are thinly sliced steak that can be roasted in a frying pan in one minute. Baladi claims to have designed the packaging that they use for minute steaks.

Rami Levi is a public company that runs supermarkets across Israel. The company stocks known brands and also sells popular products packaged for them under their own label.

Rami Levi sells Baladi products. It also sells minute steaks under their only  own label “Rami Levi’s Sycamore Marketing Delicatessen”. Rami Levi’s own label minute steaks are packaged by TBone Veal.

In a preliminary ruling, Baladi claimed that minute steaks were not sold in supermarkets until they launched this product in November 2017 with a massive and expensive sales campaign. From the launch until 19 March 2018, the product sold well due to the marketing campaign. On 19 March 2018, suddenly, without notice, Rami Levi forbade Baladi to replenish supplies and blocked the product, and instead supplied minute steaks under their own label.

baladi logo

Baladi claims that the own-label brand is packaged in a copycat package of that of their product, and that this was a calculated, organized action of Rami Levi in bad faith, to ride on Baladi’s advertising campaign and product launch, benefiting from their investment. Baladi’s campaign has drawn customers to want to purchase their product. The customers go to the meat refrigerators and find the infringing product that is a copy of their package and are misled into believing that they are purchasing Baladi’s product.

Baladi considers that the case is particularly serious since Rami Levi is a retailer that can block their product whilst offering the competing own-label product. This is particularly problematic since Rami Levi’s product launch was just before Pesach and close to Independence Day which is the start of the Israel barbecue season when sales go up significantly.

In light of the above, on 22 March 2018, Baladi sued for passing off, unfair trade practices, copyright infringement in the product package and unjust enrichment. They filed their case in the Tel Aviv and Jaffa District Court. Baladi requested a permanent injunction, compensation and production of sales data. For the purpose of assessing the court fees, Baladi assess the damages at 2,750,000 Shekels.

Baladi also requested a temporary injunction on Rami Levi to prevent them using the product sold under their private label or at least to prevent them selling the product in the packaging used at the time of filing, and to cease from blocking Baladi’s products, and to enable their products to be sold on an equal basis with other frozen meat products. The Request was supported by an affidavit from Ms Irene Feldman, the VCFO of Baladi, and was filed as an ex-partes action for immediate attention since any delay will cause irreparable damage.

El gaucho minute steak

In response, Yossi Sabato, the VCEO of Rami Levy submitted an Affidavit claiming that Baladi was acting in extreme bad faith by not telling the court that they were conducting a parallel action against El Gaucho which is a label of TBone Veal in the Central District Court as 4347-01-18. In that instance, they made similar accusations which were rejected. This action, in a different court, against a different label, was a type of forum shopping that was indicative of bad faith and should be sufficient for the case to be thrown out. This was simply an attempt to corner the market and to prevent competition. The Ex-partes actions in both the El Gaucho case and in the present instance are cynical exploitations of the legal system designed to get free publicity, and the plaintiff was suing for extreme damages without having first contacted the supermarket chain, which is itself inequitable behavior for which the case should be thrown out.

monopoly

With regards to the complaint itself, Rami Levy claims that Baladi is trying to obtain a monopoly on minute steaks, which is a term known in Israel and abroad and which they did not coin. Baladi also tried to obtain a trademark for this generic term. Minute steaks have been advertised in Israel in the past and are available in restaurants and from butchers, and even from supermarkets. Baladi has not been in the market long enough for minute steaks to be identified with them to the extent that they deserve a monopoly on the term (acquired distinctiveness), and a reputation that is protectable, and even Baladi does not claim to have rights to minute steaks but only to the sound of the name.

Rami Levy

Rami Levy claims that their product package is completely different from Baladi’s, including writing and visual elements, and there is no likelihood of confusion. Baladi advertises their product with their trade-name Baladi clearly written thereon and, in the absence of this term, there is no likelihood of confusion. Rami Levy’s private label HaMaadaniya (literally the delicatessen) is well-known to Rami Levy’s customers as a low price brand, and there is no likelihood of confusion.

“Rami Levy” is written clearly on the front and back of the packaging, and is a super brand that does not need to ride on the reputation of Baladi or anyone else. The difference in price also prevents confusion, and all Rami Levy’s own branded products are clearly sold as such in their stores, and there are loads of examples of private labels being sold alongside branded goods and the public are not misled in any way that they are purchasing something other than the own label.

boycott

As to the issue of marketing Baladi’s products in Rami Levy’s stores, Rami Levy contends that they are under no obligation by general law (in rem) or by contract (in personam) with Baladi, to purchase any of Baladi’s products, including their meat products. Baladi’s goods are available in other chains. At present, Rami Levy stores DO stock Baladi’s minute steaks but, in view of the high price that Baladi dictates for their product, Rami Levy is under no obligation to replenish stocks of something much more

In answer to Rami Levy’s response, Baladi reiterated that their issue is NOT the name ‘minute steak’, but the packaging and the product blocking. On 26 March 2018. a long hearing was held. There were many attempts to bring the parties into an understanding, and the affidavits were reviewed and the parties summarized their arguments. After the hearing the parties still refused to come to an understanding, and so there is no alternative but to reach a verdict in this instance.

Relevant Considerations Regarding Temporary Injunctions

Principles-Governing-Issuance-of-Temporary-Injunction

It is known that the party requesting a temporary injunction has to convince the Court, on the basis of apparently convincing evidence, that there is grounds for the complaint and the Court then has to balance the ease of implementing the different actions, i.e. the damage to the complainant if a temporary restriction order is not issued, vs. the damage to defendant if a temporary restriction order is issued but if it later transpires should not have been. The Court has to ascertain whether the temporary injunction was requested in good faith, and if the injunction is just and fitting in the circumstances and does not unduly damage the defendant – See Regulation 363 of the Civil Procedures Regulation 1984.

interests

The main considerations for requesting a temporary injunction are the likelihood of prevailing and the balance of interests of the two parties, but where the Court considers that the likelihood of prevailing is greater, they will be less concerned about the balance of interests, and the opposite is also true.

When deciding on a temporary injunction, the court also has Read the rest of this entry »


 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 »


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.


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?


Pop Group Anthrax Sued for Ripping Off a Hannuka Sweater

February 8, 2016
Anthrax photo by Jonas Rogowski

Anthrax Photo by Jonas Rogowski

Anthrax is an American heavy metal band from New York City. It was formed in 1981 by guitarist Scott Ian and bassist Dan Lilker. The group was considered one of the leaders of the thrash metal scene during the 1980s. Of the “Big Four” thrash metal bands (the others being Metallica, Megadeth and Slayer). The name was chosen as being “sufficiently evil”.

Anthrax were the only thrash metal band from the East Coast. As of 2014, the band has released ten studio albums, a number of singles and an EP with American hip hop group Public Enemy. According to Nielsen SoundScan, Anthrax sold 2.5 million records in the United States from 1991 to 2004, with worldwide sales of 10 million.

Cummin's Hannukka sweatshirt

Aaron Cummins, claims he created the original design for the Ugly Hanukkah Sweater in 2012 and has exclusive copyrights to it, but that it’s being ripped off by others to promote the famous Anthrax rock band. According to his lawsuit, the sweater’s design was registered with the U.S. Copyright Office in 2013, and has since been marketed and sold through his Detroit company, Wet House.

Cummins claims that sometime around September, Cummins’ Hanukkah sweater design started showing up on the Internet as an Anthrax sweatshirt and continues to be sold online at Rockabilia.com as an Anthrax sweatshirt.

More details of this strange copyright infringement case may be found here.

Apparently the sweater design actually came from a joke post on Metal Sucks by writer Axl Rosenberg, who jokingly headlined that the band was selling Hanukkah sweaters and photoshopped an Anthrax logo onto an existing hanukkah sweater. The band actually ended up making and selling some of the sweaters…


Israel Supreme Court Refuses to Soften Stiff Sentences for Counterfeit Viagra Dealers

February 8, 2016

Fake Viagra

On appeal, the Central Region District Court in Lod ruled a ten month gaol sentence and fine for Roi Peer who had distributed counterfeit Viagra pills. Roi Peer appealed the ruling to the Supreme Court, where Justice Jubrahn ruled as follows:

The crimes that the appellant were convicted of are serious and the weight of evidence required to show a likelihood of rehabilitation is consequently significant. The fine and the gaol sentence are separate punishments that should be considered separately as is the ruling that the convict be detained in an appropriate secure installation.

The Appelant was convicted on the basis of his admission, of selling and marketing pills allegedly for treating impotence, without a Dr’s prescription, not in original packaging, infringing the trademarks and without meeting the patients or gaining medical information about them.

The Court of First Instance ruled six months community service and a 150,000 Shekel fine. The District Court rejected the appeal concerning the size of the fine but accepted the State’s Appeal regarding the rest of the sentence and changed it to 10 months actual prison time. This is the basis of the appeal to the Supreme Court.

Whereas a first Appeal is a matter of right, a second Appeal is granted only in cases having a significant public interest, an important legal question requiring clarification or where there are specific issues concerning the fairness of the punishment. In this instance, there is no such justification for further judicial review. The stiffness of a punishment is only grounds for review if it is significantly disproportionate to other sentences for similar crimes. In this instance, the punishment is reasonable and balances the various considerations.

In this instance, there is insufficient indication that the Appellant will be restored to being a productive member of society to justify not sentencing him to prison. The psychological evaluation was inconclusive. The crimes were serious and the financial greed could have adversely affected the public health. The evidence of likely rehabilitation required in this case is significant and not available.

The argument that the District Court acting as an Appeal Court exceeded its mandate thereby justifying a further appeal is rejected since the sentence was in the same category as that issued by the Court of First Instance and is reasonable in the circumstances. The fact that the District Court did not detail how the punishment was reached is insufficient to justify a further appeal. The Supreme Court does not consider that time equivalent to paying the fine can used to determine the appropriate additional gaol sentence since gaol time for not paying fines is different from a gaol sentence per se and these cannot be combined in ascertaining whether a  punishment exceeds that allowed for by law or whether such a punishment is reasonable.

9102/15 Dismissal of Further Appeal of Ruling 3933-09-15, the Dismissal by S Gubrahn, 16 January 2016

COMMENT

We note that there doesn’t seem to be any evidence justifying allegations that the pills were a health risk. Indeed, there doesn’t seem to be any evidence that they don’t work. Erectile dysfunction may be a medical condition that causes stress for the sufferer and his partner but it is not the sort of condition that is life threatening. That is not to say that wilful trademark infringement and passing off fake goods should not deserve serious fines and gaol time. I just don’t see this instance as more serious than other examples of willful trademark infringement and distribution of counterfeit articles.


Amad Arabiyah Wins Injunction and Damages from 13 Bootleg Distributors.

June 24, 2015

Arab Music

Amad Arabiyah Music Management and Distribution LTD sued 13 different shops in the Nazareth District Court. The shops had sold Music CDs and had stocks of pirate compact disks and were accused of contributory copyright infringement. Due to the similarity of the cases and the common plaintiff, the cases were combined into one case.

The original production of the albums was by Digital Sound LTD and Aalem en-Fan LTD, both Egyptian companies, who transferred the rights to the plaintiff. The logos and names of the Egyptian production companies appeared all over the compact disks and their packaging. In the original case as filed, the Egyptian production companies appeared as formal complainants, but the judge ruled that their names could be deleted from the statement of case since Amad Arabiyah Music Management and Distribution LTD had an exclusive license to distribute the compact disks and to sue for copyright infringement.

Amad Arabiyah Music Management and Distribution LTD sent a couple of investigators who purchased fraudulent disks in each shop and testified that the shops had stocks of such disks. They claimed 100,000 Shekels in statutory damages against each shop.

Amad Arabiyah Music Management and Distribution LTD considered that the full statutory damages should be awarded as the infringement was widespread knowing commercial infringement over a 35 year period that was profitable for the defendants. The shops considered the charges trivial and unsubstantiated and denied the standing of the plaintiff.

The court found the defendants guilty ruling that the recording company that produces music disks enjoys copyrights independently of the singers and composers. In this instance, the recording company transferred its rights to the plaintiff. The defendants sold copies of these compact disks from a company that was not authorized to distribute them, and so the disks are infringing copies. In the circumstances, the defendants knew or should have known that the disks infringed copyright, or at least should have made inquiries. Consequently an injunction was awarded against the defendants that requires them to destroy and forbids them from selling these compact disks. Each of the thirteen defendants has been fined 10,000 Shekels and has to pay 7500 Shekels in legal fees.

Civil Action 33968-05-11 Amad Arabiyah Music Management and Distribution LTD vs. Ahmed son of Mustafa Anbatawi et al., 13 Judge Atrash, 6 May 2015.             

COMMENT
I can see the sums awarded being appealed but the fact that there is infringement is clear. Although this particular proceeding relates to Egyptian music sold in Arab shops, I think that similar offenses occur in the Jewish sector, including Hassidic music traded in ultra-Orthodox areas. I am publishing this ruling in the hope that it will encourage others to enforce their rights and that those who do not see this as a kind of stealing because they are not sophisticated enough to understand the concept of rights in the abstract, should think again.