Employee Inventions – the first of three decisions

August 7, 2017

worker's compensationThere is a procedure by which an inventor can request that a tribunal consisting of a judge, the Commissioner and an academic can consider the appropriate compensation to the inventor for an invention made in the course of his employment.

The most recent and important ruling of this nature concerned the contribution of an inventor working for Isscar. That committee ruling was appealed through the courts. For details of that ruling, see here.

There have been two more rulings that have just published. Presumably they were decided now, as Commissioner Kling came to the end of his term of office. As the identities of the inventors and the companies have been withheld, the rulings lack the juicy details. Nevertheless, I have summarized the two rulings below as they give guidelines regarding how the committee considers the issue following the Supreme Court discussion and the various conferences, etc. that related to the issue, including one that I organized.

In the first ruling Ploni (this is the Biblical term for an unidentified character taken from Ruth 4:1) – i.e. Anon vs. Company.

Ploni requested that the committee rule on appropriate compensation for a service invention under Section 134 of the Israel Law. On 20 November 2014 the company requested that the submission be thrown out, and, following a request from the committee that he do so, Ploni responded on 20 September 2015.

A hearing was held on 11 July 2016, which was attended by the Company, their CEO Mr XXXX, and their attorney Daniel Bostonai. Ploni was not represented.

The Main Facts (censored)

The company was founded in 1999 as a start up company that never got beyond the development stage. The field of activity is withheld.

contractPloni is a mechanical engineer that was employed as an external consultant in July 2002, and became an in-house general manager of the company in December of that year. On 16 December 2012, an employment contract was signed between the company and Ploni. This was intended to formalize the Company’s rights in developments and inventions and Ploni’s compensation for his work. The contract stated that Ploni would have no claims for additional compensation or remuneration. Ploni was also signed onto an options deal under which we would be entitled to some shares immediately, to additional shares after a period of time, and to a third batch of shares that depended on company income from sales. The original options agreement was renegotiated on 31 December 2003, to one that allowed Ploni to purchase 7.5% of the company.

From 2005 onwards, the company made several rounds of investment. In 2006, the company and Ploni exchanged various draft contracts to better define Ploni’s terms of engagement. After four drafts were exchanged and the parties failed to reach agreement, Ploni decided that he was NOT interested in continuing with the company and tendered his resignation on 4 February 2007. This came into effect on 4 March 2007.

Ploni’s Section 134 submission was related to Patent Application Numbers XXXXX and YYY from Date 1 and Date 2. These were both abandoned by the company; one was actively abandoned by applicant deciding not to pay the renewal fee allegedly due to lack of application of the patent, and the other was abandoned prior to it ever issuing.

Prior to requesting that the committee calculate a value for the service inventions, Ploni started a proceeding against the Company in the Labour Court. Essentially Ploni requested that the court order the company to allocate 7.5% of all the shares issued by the company to Ploni. The Labour Court ruled the agreements and draft agreements as relating to 7.5% of the company prior to dilution as a result of fund raising. This was appealed to the Supreme Labour Court, and returned to the Labour Court. More details follow below.

The Company’s Claims

  1. The company claims that since the parties had signed a work agreement that ruled out any additional compensation, the committee has no authority to rule compensation and the case should be dismissed. This claim was strengthened by the practice of the company and Ploni over the years.
  2. Since Ploni had signed agreements with investors that stated that the company had no other obligations, he was estopelled from claiming that the company owed him anything.
  3. The allegations that Ploni was owed something for a service invention should be considered moot in light of the statute of limitations, since the latest date by which any right could be considered was the filing date of the respective patent application.
  4. Thus the request for compensation was filed after a significant delay which indicates that Ploni had given up on any and all claims for compensation. \

Ploni’s Claims

  1. Ploni counter claimed that the signed work contract did not relate to compensation for patentable inventions and the parties did not reach agreement on compensation for these.
  2. The statute of limitations had not passed since the relevant date is Ploni’s final date of employment by the company.
  3. The Company were tardy in requesting that the case be thrown out.

RULING

The legal basis of the committee is defined in Section 134 of the Law as follows:

In the absence of an agreement that determines whether the inventor is entitled to compensation and what the compensation should be, appropriate compensation will be determined by the Committee for Compensation established under Section VI.

In the Committee ruling concerning Barzani vs. Isscar Ltd from 4 May 2014, which withstood an Appeal to the Supreme Court 4353/14 Barzani vs. Isscar Ltd, from 8 July 2015, it was determined that Section 134 is non-cogent in that the parties can come to some other arrangement.

“The committee came to the conclusion that Section 134 is not a cogent right and is not employment law that, as socialist rights has special protection. On the face of things, and in line with the wording of the Law, it appears that the committee was correct (the Article states ‘where there is no agreement that sets employee compensation’). That as may be, with the limited right to meddle with committee decisions, the court does not see fit to interfere in this instance.

In this instance, the respondent (Ploni) had the opportunity to purchase company shares. As states in the share option agreement of 16 December 2002, the respondent received his share options as a general manager of the company. As agreed in agreement of 31 December 2002, this was dependent on performance as manager:

“… In the event that vesting of all or any of the Awards is contingent upon fulfillment of certain conditions (“Vesting Conditions”), such as the achievement of certain targets by the Company or Grantee, the details thereof will be set forth in a separate Appendix that will be attached to this Award Agreement as Appendix B.

Appendix B was not submitted. Nevertheless, the respondent agrees that the share allocation was to closely follow the development of the invention by the company. In a hearing on 11 July 2016 the respondent stated that the options were for the profit of the patent.

As stated in the Isscar ruling, the purpose of the arrangement between the parties is understood from the parties’ actions. It is clear that the respondent saw the options as compensation for the service inventions in question. The directives regarding the distribution of options that were signed on 31 December 2003 are understood as being a giving up of any and all other compensation. The court deliberations of the Labour Court may be understood as being the day in court that Ploni was entitled to with respect to options that were not actualized. These ended in a settlement under which Ploni was awarded 40,000 Shekels for options that were not actualized and Ploni himself saw these as the basis for this complaint.

This conclusion renders moot further discussion regarding statute of limitation and estoppels.

The committee accepts that the case should be thrown out. However, as Ploni was unrepresented, they did not award costs against him.


Big Deal!

January 19, 2016

in a side skirmish, H.A.B. Trading LTD filed a request to throw out  Yidiot Internet’s cancellation action against their trademark no. 131862 for Big Deal. Yidiot Internet filed a response to this and added evidence from the main case.

The request to cancel the case was based on Sections 8(a) and 11(10) of the Ordinance and the argument that Big Deal is a generic term which should not be monopolized, preventing the public from using the term. Yidiot Internet further argued that the filing of the generic term without even a graphical rendering thereof was inequitable behaviour on the part of the applicants, designed to prevent fair use of the term ‘big deal’ by others. They proposed a disclaimer from rights in the combination of words.

The mark owner, H.A.B. Trading LTD noted that they had registered the mark in September 2003 and the cancellation request was only filed in July 2014 which is more than five years after it was filed as provided for in Section 39a of the Ordinance, and that the challenger was therefore prevented from raising such arguments that the mark should not have been registered and was invalid, justifying that the request be thrown out and a basis for allegations that the request to cancel the mark was filed in bad faith.

Discussion

The burden of proof for cancelling a mark lies with the challenger who files the cancellation request. See Bagatz 144/85 Klil Non-Ferrous Metals vs. Commissioner of Patents 44(1) 30, page 318. Section 64 of the Ordinance determines that the registration of a mark is a prima facie indication of its validity. The burden of proof will, however, oscillate from side to side throughout the proceeding as each party brings evidence to support its case.

Section 39 relates to grounds for cancellation under Sections 38 and disallows arguments of registerability found in Sections 7 to 11 if more than five years has passed since the mark was registered. However, Section 39(a) states categorically that arguments of inequitable behaviour when filing the mark may be raised as grounds for cancellation of the mark at any time.  Thus the issue is the alleged inequitable behaviour and whether this is persuasive.

The Opposer sees the registration of a generic term and failure to pay the renewal in a timely manner as evidence of inequitable behaviour.  The  Adjudicator of Intellectual Property Ms Yaara Shoshani Caspi rejected the late payment argument as sufficient to cancel the mark on equitable behaviour grounds. However, she felt it reasonable to consider if even at the time of filing the term Big Deal was a generic distinctive mark among traders such that its filing was inequitable behaviour. The authority and obligation of the Registrar of Trademarks is to protect the public interest inherent in a clean trademark registry over and beyond the business interests of the parties in a contentious proceedings.

Inequitable behaviour is something objective that has to be proven with solid evidence and not merely alleged.See for example, section 7 of the ruling from March 2009 concerning Tobishi Trading vs. Herman International Industries which related to Israel Trademark No. 175594 which stated that the Challenger to a mark on basis of inequitable behaviour at the time of filing has to provide evidence of alleged inequitable behaviour.

Since Section 21a discusses disclaiming monopolistic rights to words and phrases, and since Section 39a relates to Sections 7 to 11 but not to Section 21 as having a five year limit for raising such issues, this issue of generic nature of the mark can fairly be raised as grounds for cancelling a mark even after 5 years has passed.

Following the above analysis, it is better to allow the cancellation proceedings to proceed and to deal with the validity of the mark on its merits rather than to throw out the cancellation proceedings. Costs of 1000 Shekels excluding VAT were awarded against the mark holder.

Interim Decision by Adjudicator Ms Yaara Shoshani Caspi re validity of Israel trademark no. 131862 for Big Deal, 14 December 2015.

COMMENT

Quite apart from whether the mark should have registered, a mark can become generic at any time – think elevator, escalator, aspirin, thermos, so the mere fact of registration cannot be used to prevent a discussion of the invalidity of a mark on generic grounds.

 


GHI – Can a mark be cancelled for non-use if the non-use was the result of opposition proceedings?

March 11, 2015
Gemstones...

Gemstones…

Sections 39 of the Israel Trademark Ordinance allows trademarks to be opposed for various grounds. Section 41 of the Israel Trademark Ordinance legislates that trademarks may be cancelled due to lack of use. This decision relates to the issue of whether a mark that is not in use allegedly due to an ongoing opposition to its registration can be cancelled as a result of the lack of use

Gemology Headquarters International LLC registered Israel trademarks 187385 and 187386 for the letters GHI in December 2007. The marks cover gemological services such as identification, authentication and ranking of diamonds, precious stones and for providing certification of precious metals, diamonds, gemstones and pearls in classes 42 and 16.

Under Section 41 of the Trademark Regulations, in December 2011 the Gemology Institute of America Inc. filed cancellation proceedings alleging that the marks weren’t in use.

The cancellation proceeding was filed whilst the same parties were fighting an ongoing opposition proceeding against the marks under Section 39 that claimed unfair competition and that that marks were not-registerable. That proceeding was combined with another opposition relating to stylized trademark numbers 200701 and 200702 for GHI. Those oppositions were eventually rejected and the marks were considered registerable. However, before the ruling, the Opposer filed to cancel the marks on grounds of lack of use, arguing that they could not initiate cancellation proceedings earlier as the minimum period of three years of lack of use hadn’t occurred when the mark was opposition proceedings was filed.

Evidence for and against the alleged lack of use included statements by the management of the two companies and also an affidavit by a private detective.

Section 41 states:

[a] Without prejudice to the generality of the provision of sections 38 to 40, application for the cancellation of the Registration of a trade markregarding some or all of the goods or classes of goods in respect of which a trade mark is registered (hereinafter – goods regarding which the cancellation is requested) may be made by any person interested on the ground that there was no bona fide intention to use the trade mark in connection with the goods for which it is registered in connection with the goods regarding which there is a request to cancel the registration and that there has in fact been no bona fide use of the trade mark in connection with those goods in connection with the goods regarding which there is a request to cancel the registration, or that there had not been any such use during the three years preceding the application for cancellation. 

[b] The provisions of subsection (a) shall not apply where it is proved that the non-use is due to special circumstances in the trade and not to any intention not to use, or to abandon, the mark in respect of the said goods. 

[c] For the purpose of this section, there shall be deemed not to have been bona fide use of the trade mark in the event of any of the following: (1) use of the trade mark in Israel in advertising only whether in the local press or in foreign newspapers reaching Israel unless there are special circumstances which in the opinion of the Court or the Register justify the non-use of the mark on goods manufactured or sold in Israel. (2) cancellation of an authorisation to use the mark given to a manufacturer in Israel under section 50 unless the authorisation is cancelled following an infringement of conditions or because the person who gave the authorisation intends himself to manufacture the goods for which the mark is to be used or to grant the authorisation to another manufacturer in Israel. 

[d] Application for cancellation may be made in the prescribed manner either to the Supreme Court or, at the option of the applicant, may be made in the first instance to the Registrar. 

[e] The Registrar may at any stage of the proceedings refer the application to the Supreme Court, or he may, after hearing the parties, determine the question between them subject to appeal to the Supreme Court.

[f] in this section, “use” of a trade mark shall include [1] use of a registered trade mark by its proprietor or by an authorized person under section 50 in a manner that differs from that noted on the register in such a way as not to change the distinct character of the mark as it is registered; [2] use by an authorized person under section 50 on condition that such use is subject to the control of the proprietor of the mark.

 The Mark holder first tried to get the proceedings dismissed on grounds that cancellation due to lack of use can only be initiated by an “interested party” and that the Opposer does not fall into this category. The Commissioner of Patents and Trademarks ruled against throwing the request out and decided that the issue would be judged on its merits. Then, based on a close reading of Section 41a and 41b and the case law, the Commissioner ruled that a mark not in use should be cancelled unless extraordinary justification for lack of use is given, and that such extraordinary justification should be more than simply the business considerations of the parties concerned. Accepting such an extraordinary justification was the prerogative of the commissioner who did not feel that it was warranted in this case.

Legal Arguments for not throwing the case out due to lack of standing

In an Appeal to the Supreme Court from 1971, (67/71 “Pharmo LTD vs. the Commissioner of Patents and Trademarks P.D. 28(1) 802, 8/6/71, Judge Vitcon addressed the issue of interested parties by contrasting with the term “injured party” as it appears in Section 38. The Israel Law does not relate to injured parties, but to ‘interested parties” and even the more limited term “injured parties” has been interpreted broadly in the English rulings, such that one can generally assume that parties requesting cancellation of a mark have standing. Even if one disputes the general applicability of Pharmo, in 144/85 Klil vs. Commissioner of Patents and Trademarks PD 42 (1) 309 a similar conclusion was reached, i.e. that interested parties are not just aggrieved parties.

In the present case, the requester for cancellation is anyway an aggrieved party, in that he opposed registration on grounds of unfair competition. Consequently, even if one holds that the term interested party should be considered narrowly, the requester for cancellation fulfils the requirements and has standing. Even though the Requester for cancellation is at a disadvantage having lost the opposition, he nevertheless has standing which is considered in Klil to be a basic constitutional right and has the right to request cancellation. Thus, even if not considered an injured party, he may be considered an interested party, and the change of terminology indicates that the two groups are different and the interested party is wider than an injured party.

Anyway, in Appeal 2209/08 Gigiesse Confezioni S.P.A. vs. Amphom, it was stated that Section 41 is to prevent defensive registrations and to keep the maintain the integrity of the register. Where the claim is lack of use, this is precisely what Section 41 is for. Furthermore, the Commissioner should take into account public interest and clearly the Requester for cancellation has at least the standing of disinterested parties. In this regard, even were the request to be filed and then dropped, the Commissioner would have a duty to examine the evidence and to consider canceling the mark due to lack of use.

 

Legal arguments on the merits for not considering this instance as an exception justifying lack of use.

From Bagatz 302/84 Nicholas it is clear that 41a states that lack of actual use is a basis for cancellation and under certain circumstances 41b allows intent to use to be considered as a defense against cancellation. In other words, the first thing to be considered is whether there is use, and if not, the mark should be considered voidable unless a good reason for lack of actual use is brought, in which case the mark may be maintained at the Commissioner’s discretion.

In this instance there is consensus that the mark was not in use, and the question is simply whether the Commissioner is persuaded that the lack of use is justified in the circumstances.

Citing 95/54 Chanel vs. Commissioner, the term extenuating circumstances is understood to be something general and not company specific.

Nicholas and Mig both give guidelines for extenuating circumstances.

GHI claim an intent to use the mark as their world wide branding apart from in US where EGL is used. GHI further claim actual use in India and the fact that they are fighting for the TM in China, Canada, Israel and Hong Kong is, itself proof of intent to use. That as may be, apart from in India, GHI have postponed launching the mark.

Without wishing to nail the lid down, the Commissioner was not convinced that legal battles constitutes proof of intent to use. The investment in a laboratory is not considered evidence of proof to use the mark, only of investment to provide services, which could be provided under a different mark. In addition to not using the GHI mark, there is a further mark GIH, also not in use. When this was opposed, the mark owner did not show actual use.

Whatever the reason, the mark owner has not actually used the mark and the Supreme Court has already ruled that not using the mark for defensive reasons is not sufficient to maintain the registration.

The mark owner is entitled to weigh up the pros and cons of using a challenged mark, but if he decides not to use it, he cannot then object to cancellation due to lack of use. There are insufficient grounds to justify an exception under 41b and the Commissioner therefore declined to use his prerogative to maintain the mark under 41b.

The commissioner considered the case to be analogous to Amphom and, like Judge Danziger, held that the mark was void through lack of use.

Cancellation Ruling re GHI, Asa Kling 2 February 2015


IL 157,035 – If one accused of infringing a patent does not challenge its validity, is the accused estoppeled?

March 8, 2015

Fig. 3Fig. 6

Israel Patent Number 157,035 is owned by Moshe Lavi. It relates to a shelf for the compressor of an air conditioning unit.

The main claim is as follows:

 A modular bracket for an air conditioner compressor, said bracket comprising a substantially rectangular frame composed of at least two portions, being “U” or “L” shaped provided with surplus holes allowing adjustments to suit the thickness of an air-conditioning compressor to be seated thereon, at least one further structure being attachable to said rectangular frame to provide support thereto.

The patent application was filed in July 2003 and issued in May 2007. In April 2014, Zach Raz, represented by Pearl Adv. filed a cancellation proceedings and, on 27 July 2014 Moshe Lavi, represented by Pearl Cohen Tzedek Latzer Barats filed a request to have the case thrown out.

Note, the Pearls concerned are different lawyers with the same name. To differentiate between them, we will call one firm Pearl and the other Pearl Cohen – Brats.

In an earlier dispute, 47000-02-12 Moshe Lavi vs. Zach Oz Air Conditioning LTD., the parties agreed to an out-of-court settlement in which the applicants for cancellation undertook not to infringe the patent, and, consequently, Pearl Cohen Brats argued that they were estopelled from challenging the validity of the patent.

At this stage Pearl Cohen Brats claims that Zach Oz never raised validity issues which are generally the first line of defense that infringers take, and at this stage, they are estoppled and it is too late for the them to challenge the validity of the patent whether or not the grounds for so doing were known at the time of the previous ruling.

Moshe Lavi represented by Pearl Cohen Brats further alleged that Zach OZ was behaving inequitably and was misusing the legal procedures. This argument was based on the compensation damages awarded in the out-of-court settlement were minimum as the parties were keen to put the legal battles behind them, and, were Moshe Lavi to know that the validity would subsequently be challenged, they would never have agreed to reducing the compensation.

Zach Oz argued that there was no positive declaration of validity or admission of validity in the court case or in the out of court settlement. They further argued that the grounds for invalidating the patent were only discovered after the out-of-court settlement. They further opined that throwing a case out without discussing its merits should only be considered in extreme cases where it is clear that the case is frivolous. Since the issue of infringement and that of validity are not the same, one cannot consider that the previous court ruling prevents the patent office from hearing the case.

Ruling

The Commissioner, Asa Kling noted that throwing out a case on a technicality without hearing it on its merits was an extreme step, and that the Israel Patent Office had an obligation to ensure the integrity of the patent register (see section 73b of the Israel Patent Law 1967) so that the validity of any patent that arguably should never have issued should be challengeable.

Citing Judge Zamir in Appeal 3833/93 Levine vs. Levine:

Access to the Courts is a constitutional right despite there not being a constitution and this right is not yet written into the basic laws, and the courts will uphold this right.

Judge Heishin in 733/95 Orpal Aluminium vs. Klil Industries LTD PD 51(3) 755, 628:

Access to the courts is a basic right as basic rights are commonly understood.
Furthermore, access to the courts is considered a basic right, even if not literally stated in the Basic Laws. It is the air that allows the courts to breathe and is the basis of the judiciary and of the rule of law.

In other words, Heishin was noting that the courts need to be able to hear cases to function and so were loath to throw cases out on a technicality.

Commissioner Kling accepted the need for finality, but ruled that the need for access to courts  and for cleaning the patent register by voiding  a priori non-valid patents was a greater need. He didn’t consider that civil procedures were merely for the benefit of the warring parties and there was an overriding national interest in allowing cancellation proceedings to be judged on their merits. Section 73b rules that such cancellation proceedings could be submitted by anyone.

Based on the statements of case, this instance was not one of those rare cases where access to the courts should be denied.

In paragraph 2 of the statement of case, Lavi (represented by Pearl Cohen Brats) stated that “the patent was granted on 12 May 2007 and is in force for all purposes”. In paragraph 14 of the counter claims Zach Oz represented by Pearl stated that the patent is in force until 21 July 2013, i.e. a further year. It seems that this was simply a misreading of the register. One cannot deduce from this that they accepted that the patent was inviolate and could not be challenged.

Since anyway, anyone can challenge the validity of a patent, and in so doing, serves the public interest, the whole concept of judicial estoppels is irrelevant and this skirmish is simply a waste of precious judicial time.

Essentially the infringer, can, of right, challenge the validity of the patent in the patent office whilst defending himself from allegations of infringement. The legislators intentionally allowed this and the estoppel simply does not exist.

It appears that Lavi (represented by Pearl Cohen Brats) are attempting to learn ex silencio assent to the validity of a patent whose validity was never formally asserted. Although Section 182 allows the alleged infringer to raise invalidity issues in his defense, he is not obliged to do so.

The mere fact that in the previous court case, there were vague references to validity issues, the court never addressed those issues and it cannot be construed that the previous court had affirmed that the patent is valid.

Citing Zaltzman in Court Actions 1991, , the Commissioner ruled that an out-of-court settlement undertaking not to infringe that was subsequently endorsed by the court cannot be considered as if the parties had accepted validity of the patent or that there was indeed infringement. They had merely decided not to bother to have an adversarial dispute that could create estoppels.

Arguably, the claim that the token compensation would not have been accepted had the patentee known that the validity of the patent would subsequently be challenged might be grounds for ruling that the agreement was broken or for claiming inequitable behavior in an appropriate forum but this could not be used to argue that the case should be thrown out without relating to the issues raised, thereby preventing the validity of the patent from being challenged in the patent office.

The Commissioner ruled that each side should bear their own costs for this request to throw out the case.

The patentee was given three months to relate to the validity issue.

COMMENT

Disclosure – Way back in 2007 when Lavi sued Zach Oz, I was approached by Soroker-Agmon on behalf of the defendant to give an expert opinion concerning whether the patent was infringed. I came to the conclusion that there was no infringement unless the claims would be interpreted so broadly that they would be voidable as lacking novelty (the Gillette Defence). I requested a minimal budget to search the prior art as it seemed clear to me that the patent was for a shelf bracket with a triangular brace and it should never have issued anyway. The budget was not forthcoming, and I never got to present my arguments of non-infringement in court as the defendant got cold feet and agreed to the out-of-court settlement so my arguments were never heard. It was and is my belief that the patent in question was not infringed, could easily be voided as lacking inventive step and, with a little searching, should be easy to show was anticipated. No substantive judgment was given.

The issue before the Commissioner was a legal one and was simply whether the arguments for cancellation should be considered on their merits, or whether the party requesting cancellation should be legally prevented from presenting their arguments.

The commissioner is, of course correct to throw out the request to throw out the case on a technicality. Furthermore, as the request was frivolous, and as noted by the commissioner, the request was a waste of Judicial resources, I think he was more than generous in ruling that the parties should bear their own costs.

I understand that back when the infringement case was filed, Zach Oz had minimal resources to fight the patentee and was effectively bullied into submission. As with the Source Vagabond case, a more vigorous defense would have been that the whole lawsuit was frivolous, that the patent was not infringed. Maybe now they’ll do what they should have back then and show that the patent never should have issued.


“The Duchess! The Duchess! Oh my dear paws! Oh my fur and whiskers!”

February 15, 2015

The Hunter Group Ltd. Pty which is a Thai company filed Israel Trademark Application No. 190,755 for a design including the word ‘Sleeky’ together with a couple of paw prints. The application is in class 31 and covers pet food including dog food and cat food; all included in class 31. The mark is shown here:

sleeky

The Iams Company (a US manufacturer) have a registered mark 91789 for a footprint as follows:

Iams poor-print

Their mark also covers foodstuff for animals in the same class.

In practice, the Iams company markets pet foods as the brands Eukanuba and IAMS together with the footprint as below:

Eukanuba nad Iams

When the Israel Patent Office allowed the 190,755 mark, the Iams Company filed an Opposition which was presided over by then Deputy Commissioner Noah Shalev Shmulevezh, and eventually rejected in a ruling in June 2012 by the Israel Commissioner of Patents and Trademarks, Asa Kling, based on the material in the file (without a hearing).

The Commissioner applied the ‘triple test’, and noted that although the goods and channels of marketing are similar, there is no likelihood of confusion since the marks sound different and look different, although the Hunter Group’s mark includes a couple of footprints that are somewhat similar to the Iams trademark protected footprint.

Under Section 25 of the Trademark Ordinance, Iams, represented by Dr Shlomo Cohen, filed an Appeal to the Tel Aviv District Court.

The Hunter Group Ltd. Part was represented by Adv. Yossi Bregman (Wolf Goller Bregman) and by my brother Adv. Aharon Factor acting Of Counsel.

Judge Ginat of the Tel Aviv District Court ruled that the issue is likelihood of confusion and the triple test serves as an indication of whether or not there is likelihood of confusion.

Iams considered that their mark was well-known, both in Israel and abroad, and Hunter’s mark was an infringing copy.

Iams tried to show that Hunter’s ‘expert witness’ was merely a local sales representative and no ‘expert’. Judge Ginat retaliated by noting that Iams expert has argued that Eukanuba was used for dog food and IAMS was used for ipkat cat food, whereas in practice it is the other way around.

Although Iams’ well-known mark has been in use since 1980, the paw prints are different. Also, Nestle Purina Petcare Company has a paw print mark 87,529 that was originally owned by Spillers and is also used for pet food in the same class. Their paw print is shown below:

nestle's paw print

When pushed, Iams’ expert acknowledged that Nestle’s mark bore some similarity to theirs, but argued that they weren’t filing suit against Nestle at present. Judge Ginat found it astounding that their expert claimed to be unaware of Nestle’s mark. Particularly as in their statement in the Opposition they claimed that Nestle’s mark was only registered with the Opposer’s consent.

Dr Shlomo Cohen claimed that since the Applicant in that case was the well-known company Nestle, Iams was prepared to allow them to register their mark but this does not confer any rights whatsoever to third parties.

Judge Gilat rejected this. He considered that the very argument countered the requirement of equitable behaviour and Iams are estopped from claiming confusion of the public, since no license was granted by Iams to Nestle, and one can’t selectively apply one’s rights against an insignificant player claiming a likelihood of confusion, whilst ignoring a serious competitor with a large market share.

To support this contention, Judge Ginat quoted Sir Nicolas Browne-Wilkinson V-C in Express Newspapers plc vs. News (UK) LTD, concerning claims and counter claims regarding copyright in articles that

“There is a principle of law of general application that it is not possible to approbate and reprobate. That means that you are not allowed to blow hot and cold in the attitude that you adopt. A man cannot adopt two inconsistent attitudes towards another: he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to do back and adopt an inconsistent stance”.

In the hearing before the Commissioner, Iams expert witness expressed a certainty that when the products are displayed side by side the consumer (i.e. the purchaser, not the pet) would be misled by the similarity. The Commissioner noted that this was speculative and no evidence was given for this beyond hearsay from store owners. No confused customers came forward to complain. Being unsubstantiated, Judge Ginat felt that the Appellant had failed to show that customers were confused and that their profits had suffered. Although the Opposer to the mark is not required to substantiate these allegations, Judge Ginat noted that it would have been wise to do so.  Furthermore, the marks seems to coexist quite happily in main jurisdictions including IAM’s home country, the USA, and there have been no TM oppositions in any other jurisdiction apart from Israel.

As to the triple test, Judge Ginat noted that in addition to the sight and sound of a mark, and to the goods and channels, the third strand of the five part trilogy was the “common sense test”, and noted that there were significant differences that ruled out customer confusion including the fact that the paw prints were appended by the Thai applicant to the brand name Sleeky. Sleeky sounds COMPLETELY different to both Iams and Eukanuba. The Appellant tried bringing the Supreme Court Decision 3976/10 Akisionerno Droujesto vs. Phillip Morrison to support the contention that there was a likelihood of confusion, but Judge Ginat considered that even accepting the fact the English is a second language and words could be mispronounced, the differences between Sleeky and Iams and Eukanuba were rather more striking than the similarity between Eve and Eva as cigarette brands, and didn’t see that this argument really advanced the appellant’s case.

In conclusion, Judge Ginat upheld the Commissioner’s ruling that the marks could coexistent and that both product lines could be sold side by side as they were worldwide Furthermore, the public interest was served by competition in the pet-food industry. Costs of 10,000 Shekels for legal fees was awarded to The Hunter Group Ltd.

Civil Appeal 3066.09.12 the Iams Company vs. Hunter Group Ltd. Part, re IL TM 190,755 before Judge Ginat of the Tel Aviv District Court, 11 February 2015.

COMMENT

Granted, I don’t purchase cat or dog food and have better English than most Israelis – some of whom have English as only a third language. Nevertheless, it seems clear to me that a paw-print, at best, indicates that the product contains pet food, and is for animal consumption, not human consumption. A paw print is at least strongly indicative that the product is intended for cats and dogs and so interpretation should be narrow and only a very similar footprint should be considered infringing. Two footprints of one form are not confusingly similar to one simplified footprint. With the brand-names clearly shown and so completely different, there is no likelihood of confusion so Judge Ginat is correct. However, no doubt IPKATS and ipdogs ip litigators everywhere will wait with bated breath to see if Iams and their representative appeals this decision to the Israel Supreme Court.

More Paws for thought:

“Pooh looked at his two paws. He knew that one of them was the right, and he knew that when you had decided which one of them was the right, then the other was the left, but he never could remember how to begin”

David said moreover, The LORD that delivered me out of the paw of the lion, and out of the paw of the bear, he will deliver me out of the hand of this Philistine. And Saul said unto David, Go, and the LORD be with thee.”

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.” ― Mark Twain (R.L. Clements)

 

 


Naomi Ragen Found Guilty of Plagiarism Again

November 17, 2014

Sacrifice   marriage made in heaven

On 11 November 2014, Judge Oded Shacham found Ms Naomi Ragen not guilty of Copyright infringement on a technicality, but nevertheless guilty of infringing the moral rights of another author in a book that she wrote that was ruled as plagiarizing a short story by the other author, a Ms Cynthia Rosengarten (now aged 82). The request for an injunction was denied. The damages awarded were 60,000 Shekels, which was rather less than the 2.5 million shekels requested in the statement of case.

Background

The plaintiff, Ms Cynthia Rosengarten published a short story entitled “A Marriage Made in Heaven” in an anthology of short stories written by various Hareidi (Ultra-Orthodox) women, that is titled: “Our Lives, An Anthology of Jewish Women’s Writing” which was published in 1991. The anthology was edited by Sara Shapiro.

Ms Rosengarten claims that the story is autobiographical and relates to the marriage match of her eldest son. The story is a 15 page personal account of her dealing with match-makers, and how, as a mother, she felt when a girl from Boro Park was suggested as a suitable match for her 18 year old son. On one hand she is aware of the need for her son to get married, but on the other hand, she considers all the potential brides inadequate. The story reflects reality in the Hassidic world.

Ms Rosengarten sued Ms Naomi Ragen and Keter Publishing LTD, claiming that Ragen’s best-seller “the Sacrifice of Tamar” which was published in 1997 includes elements from “A Marriage Made in Heaven” and infringes both commercial and moral rights therein. Ms Shapiro was mentioned as a formal plaintiff.

The Sacrifice of Tamar tells the story of Tamar Feingold, who grew up in an Ultra-Orthodox neighborhood of New York, and relates her internal conflicts with the community in which she lives.  Two years after getting married, Tamar Feingold is raped by a black (that is, African American – not Hareidi) rapist whilst staying with her sister. Later that night, Ms Feingold sleeps with her husband and hides the trauma she went through. She becomes pregnant and is unsure which is the father of the child. Chapters 1 to 22 of the book relate to the feelings of Tamar through the pregnancy, where eventually a white skinned child is born.

In Chapter 23, the son asks his mother to help him find a life match.  The son gets married and a year later his wife has a black skinned baby. The son accuses her of unfaithfulness and Tamar has to come clean about the rape. The son’s marriage dissolves and Tamar, the grandmother, adopts the grandson and leaves the Hareidi fold.

According to the Statement of case, Ms Ragen used parts of “A Marriage Made in Heaven” in Chapter 24 of her novel, thus violating the Copyright and Moral rights of the plaintiffs. They claimed damages and also requested an injunction.

Ruling

Because of the time-line, the ruling was given under the old Copyright Regulation of 1911 and not under the new Copyright Act 2008, but, considering the infringement as on-going, eventual damages took into account the statutory damage regimes under both law.

In the ruling there is a lot of discussion as to whether the copyright was actually transferred by Ms Rosengarten to Ms Shapiro and that it wasn’t transferred to the printing house. No assignment document was forthcoming. It was alluded to and was probably filed somewhere but was not produced.

Judge Shacham ruled that the copyright in “A Marriage Made in Heaven” belongs to Ms Shapiro and consequently the plaintiff Ms Rosengarten does not have grounds for financial Read the rest of this entry »


Is Leapfrog trying to jump ahead at Sony’s expense?

September 18, 2014

Sonicgear

Leapfrog Distribution PTE LTD filed Israel trademark application No. 240389 for SONICGEAR.

The application covers “Audio devices, including but not limited to: speakers, multimedia sound systems, docking stations, radios, radio clocks, portable multimedia devices, headphones, headsets, microphones, earphones, audio cables and accessories; all in class 9.

On the mark being published for opposition purposes on 31 October 2012, the Sony Corporation filed an opposition.

Sony frog

Sony’s claims

Sony claimed to be a world leading brand of electronic goods including video game consoles and telecommunication equipment with worldwide reputation, including Israel, with a range of branded products that are identified with Sony. Since the company name Sony is well established, it may considered a Well Known Brand and is entitled to wide protection.

According to the Opposer, there is a similarity between the Applicant’s mark and their name, both phonetically and visually, and so the mark lacks distinctiveness in contradistinction to Section 8a of the Trademark Ordinance.

The Opposer (Sony) claims that a connection between the Applicant’s mark and their own will damage the reputation of years and cause a dilution of Sony’s name. Sony accused Leapfrog of trying to free ride on Sony’s long established reputation which is the result of years of cultivation, and so claims that the registration of the mark is inequitable behaviour and contrary to the public good.

Leapfrog’s claims

Leapfrog was established in 1999 and has sold electronics under the name SONICGEAR for more than a decade. SONICGEAR’s goods have been sold in Israel since 2006. The requested mark has been in use in Israel since 2008 and has developed its own reputation.

Leapfrog denies a likelihood of confusion since both Sony and Sonicgear have developed their reputations over years. Leapfrog claims that Sony has lived with their use of the SONICGEAR branding for years and are thus estoppeled from opposing it, and their opposing it now is itself inequitable behaviour.

Evidence

Leapfrog further claims that the marks look and sound different and that there are very many marks that start with the prefix SON in Class 9 of the Trademark Ordinance.

SONY submitted an affidavit of the Head of Trademarks at SONY that shows the rating of the SONY mark in Japan, examples of branding publicity for Sony in Israel and lists of SONY’s trademark registrations around the world.

Leapfrog filed an affidavit of their CEO showing sales of the SONICGEAR brand over the previous five years and examples of their trademark registrations.

Both sides gave up on the right to cross-examine.

Ruling

Citing Supreme Court precedents, Deputy Commissioner Jacqueline Bracha ruled that where the parties agree to accept testimony without cross-examination this adversely affects their rights to challenge the facts presented in the testimony but this does not bind the court to accept the affidavits at face value.

In this instance, the two affidavits may be used to build a picture of the relative usages but the court has to bear in mind that the affidavits were not challenged.

As to the Opposer’s challenge to the distinctive nature of the mark, Section 8a states that a mark cannot be registered unless it may be used to distinguish between the goods of the registrant and those of competitors. Ms Bracha ruled that the purpose of the Section is to prevent parties from monopolizing generic words. She considers that the distinguishing features of a mark have to be considered by looking at the mark in isolation, without considering competing marks. The issue is whether the mark is descriptive or laudatory, not whether it is confusingly similar to other marks.

Consequently, Ms Bracha ruled that better grounds of opposition might be 11(9) or 11(13) as Sony’s marks are registered and they are claiming a likelihood of confusion.

She went on to apply the triple test and ruled that the as far as the appearance and sound of the mark were concerned, the marks should be considered in their entirety and not broken down into syllables or parts. SONICGEAR does not look or sound like SONY. The mark is also stylized with distinctive graphic elements.

The prefix sonic implies audio and is thus generic descriptive, and not fairly monopolizable by Sony. She noted that it was true that many other firms were actively using marks starting with or including ‘son’, but did not consider this as being grounds for registration per se. Nevertheless, since other players were using the syllable / sound, it weakened Sony’s argument that there was a likelihood of confusion.

The hard G in the middle of Gear is audibly dominant. Furthermore, as a stylized ON-OFF button, it is graphically distinct. She then went on to cite the Appeal of the Killy – Killa decision (considered by former Commissioner Dr Noam as confusingly similar, but overturned by Judge Ginat of the Tel Aviv District Court).

As far as the clientele is concerned, there is certainly overlap but Ms Bracha did not consider that there was a likelihood of confusion, and certainly no evidence of their being a likelihood of confusion was submitted.

Under other considerations and common sense, MS Bracha accepted that the prefix Son was not distinctive and noted that Leapfrog also had a second stylized mark Powerlogic where the Os were jack-plugs similar to the C of Sonicgear, and this strengthened the identity of the mark with Leapfrog’s.

As to Sony being a well-known mark, Ms Bracha accepted this, but explained that the significance of this is covered by Section 11(14) of the Trademark Ordinance, i.e. that an identical or confusingly similar mark could not be registered in a different class if this could create a likelihood of confusion. In this case, since she had concluded that the marks were not confusingly similar, the issue was moot.

In terms of unfair competition, Ms Bracha ruled that merely establishing that a competing mark is wel known is insufficient. A likelihood of confusion is also required and no evidence of this was submitted.

The grounds of Public Interest were considered not relevant, since these were limited to marks that were widely considered offensive, and that wasn’t the case here. As to inequitable behaviour, Ms Bracha referred to the Pioneer decision instead of repeating it again, and also noted that although alleged, no evidence was submitted.

The Opposition was refused and Ms Bracha awarded the Applicant 2000 Shekels costs and 13,000 Shekels + VAT in legal fees.

Ruling: Opposition to Israel Trademark 240489 “Sonicgear”, Sony vs. Leapfrog Ms Jaqueline Bracha, 10 August 2014.

Comments

This was a well-reasoned response. That cannot be said of the Opposition as filed.

If the Opposer chooses to oppose a mark based on one legal argument and is unable to prove his case since the legal basis chosen was wrong, why should the Patent Office raise legal issues such as Section 11 which were not raised? After all, an Examiner had already decided that the existence of Sony’s marks were insufficient to prevent registration and Sony (via their Counsel, Dr Shlomo Cohen, Law Offices) did not challenge this under Section 11.

The Chinese do seem to often choose marks that are at least reminiscent of and perhaps inspired by brand-leaders. Sonicgear is somewhat reminiscent of Sony and of Panasonic, and this case reminds me of the Lovol – Volvo decision.