Minor 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.

steaksThe 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 entirety.

baladi minute steakBaladi 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 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 logoBaladi 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 mislead 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 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 steakIn 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 behaviour for which the case should be thrown out.

monopolyWith 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 LevyRami Levy claims that their product package is completely different to 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 mislead in any way that they are purchasing something other than the own label.\

boycottAs 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 expensive than their own label, which is against their policy.

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-InjunctionIt 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 no 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 he 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.

interestsThe 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 »


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 »


There would be one long staircase just going up…

June 25, 2016

stairway to heaven

I think Stairway to Heaven is far to long a song, and consider it over-rated. It lasts for over ten minutes, and Bohemian Rhapsody is only six minutes, and has rather more going for it. Besides, being ex-Imperial and having a PhD in physics, I feel a certain kinship with lead guitarist Dr Brian May, however I am not sure it is reciprocated.

That as may be, after an eight-day jury trial, it was ruled that the guitar riff did not infringe copyright of Spirit’s song Taurus.

I think that the media should differentiate more carefully between copyright infringement which is a crime, and plagiarism which is not.

Men at Work’s Greg Ham were accused of plagiarizing Kookaburra Sits In The Old Gum Tree in  Down Under. He committed suicide, leaving a note that said “I’m terribly disappointed that that’s the way I’m going to be remembered – for copying something…”. This was a tragedy.

Now it can happen that a song is based, possibly unintentionally on the work of another. George Harrison’s My Sweet Lord was found to have the same melody as Ronnie Mack’s He’s So Fine. The melody of Naomi Shemer’s Lu Hehi (literally let it be), bears more than a casual similarity to Paul McCartney’s Let it Be.

Of course, sometimes an unmistakable similarity does not imply that one piece is a copy of the other. A good example of this is HaTikveh (The Hope) – Israel’s national Anthem, the melody of which may be found here. there is a clear similarity to the melody of  Vltava by the Czech composer Bedřich Smetana. However, although Samuel Cohen, the composer, admitted that he was influended by a Moldovian song, it is far from clear where the melody originated and it may well have Jewish origins. That as may be, sometimes a composer will reference a line from the work of another, and this should be considered fair use. A good of example of this is the Swan-song from Tchaikovsky’s Swan Lake which has a four-stroke drum beat that echos Beethoven’s fifth symphonyfifth symphonyfifth symphony (Death at the Door).  I don’t see this as copyright infringement, but rather as a cultural reference. Copyright now lasts a ridiculously long 70 or 95 years. Do we really want to prevent any discernible similarities to the work of anyone in living memory in new works? The jury got it right, even if it took them over a week.

POST SCRIPT I showed this article to a client who is part of the Israeli music world. The Client studied at Netiv Meir and is not now Hallachically Observant. He told me that in the Nineties a noise-rock outfit called Plastic Venus played at the club where he worked. After the show, he asked the lead singer, Ronit Bergman, who wrote the music, and she pointed to the drummer Ilan Diamond. He went over to him and asked if he could ask him a personal question, and when Diamond agreed, asked him what Hassidic Court he grew up in. The answer was Vishnitz. If one listens to Plastic Venus’s music under the psychedelic overtones and all the distortion, one can discern Hassidic melodies. People listen to, absorb and rework the melodies of their childhood and other music they once heard. There are interesting historical reasons why Chabad Hassidim sing Napoleon’s March to this day. The reasons are linked to why the early Rebbes were incarcerated by the Tzar.

 


And the Oscar goes to Israel Ministry of Tourism

February 19, 2016

Oscar

Distinctive Assets has put together a goody bag to give out at the Academy of Motion Picture Arts and Sciences (AMPAS)’ award cermony known as the Oscars. The bag, worth an alleged $200,000 includes a VIP trip to Israel that is partly sponsored by the Israel Ministry of Tourism, amongst other expensive gifts including personal intimate massage devices, a vaporiser for a medical drug that is otherwise generally illegal and a device called a “vampire breast lift” whose usage esapes me.

However the Academy of Motion Picture Arts and Sciences (AMPAS), which manages the Oscar movie awards ceremony said it does not give out gift bags and AMPAS filed a lawsuit at the US District Court for the Central District of California on Tuesday, February 16 complaining that the marketing company’s actions have caused confusion and may lead people to assume that it is connected with the bags.

According to the complaint, the marketing company has used social media to promote the bag, including using the hashtag #OscarsSwagBag.

AMPAS also complained that Distinctive Assets sent press releases to news outlets and has misused its trademarks in the promotional material.


PETA

February 14, 2016

249607

On 4 Speptember 2012 Anna Lotan LTD filed Israel Trademark Application No. 249607 for PETA as shown above. The mark covers cosmetics- face and body creams, lotions, face and body cleaning preparations, soaps, gels, masks – all included in class 3.

The application was allowed and published for opposition purposes on 31 December 2013. On 30 March 2014, a Opposition proceedings was initiated by People for the Ethical Treatment of Animals, Inc. “PETA”.

The parties submitted their statements and evidence, forgo a hearing and croess-examination and submitted written summaries.

PETA is a non-profit organization founded in the United States that protects animal rights. PETA educates about lifestyles that do not take advantage of animals and monitor experiments on Animals. The Foundation to Support Animal Protection “FSAP” is a US Company that provides services to PETA and files PETA’s trademarks around the world, one of which is very similar to the Application in question, but PETA’s mark also includes the full name of PETA. This mark is shown below:

PETA trademark

PETA has had a tremendous amount of press coverage worldwide including a certain amount of press coverage in Israel [mostly due to the provocative use of naked women – MF]. Their marks are well known in the United States.

The Applicant, Anne Lotan, m nufactures and sells cosmetics. Apart from submitting some packaging showing the applied for mark, Anne Lotan did not supply details of their business.

PETA allows commercial companies to use its marks on products that are not tested on animals. Both sides concur that prior to filing their own application, Anne Lotan tried to obtain a license to use PETA’s marks and both sides concur that at the time of filing Anne Lotan did not have a license.

PETA claims that the mark is theirs and that Anne Lotan filed in bad faith to register a license that she was not authorized to use.

Anne Lotan claimed that they attempted to register the marks on failing to obtain authorization from PETA to use them, and after some of their products were inadvertently marked with the applied for logo.

The parties addressed the issue of registerability of the mark under Section 11(f) of the Trademark Ordinance 1972.  The Applicant does not deny that PETA have rights to the mark, but claim that their usage thereof was unintentional and not indicative of lack of faith on their part.

In the circumstances, the Deputy Commissioner considers that this Opposition can be dealt with briefly.

Section 17(a) of the Regulation states that an Application may be filed by an entity claiming ownership of the mark. In this instance, the Applicant does not claim rights to the mark and  does not have rights. The purpose of their attempted registration is to prevent the legitimate rights owner from registering the trademark and preventing Applicant’s usage thereof by selling packages with the mark thereon.

The Applicant filed the application after the Opposer requested that they stop selling such packages and after the Applicant agreed to take down the mark from their website. The Applicant claims that their attempted registration was legitimate in light of Section 7 which instructs that someone desiring sole rights to mark may file a trademark application for it.

The Deputy Commissioner failed to full follow the Applicant’s arguments but notes that the Applicant wasn’t even claiming sole rights. Anne Lotan is not the owner of the mark and cannot be registered as such in the Register. The exact relationship between PETA and  FSAP is not clear. However, as Anne Lotan does not challenge PETA’s rights to the mark, this relationship is not essential as far as this ruling is concerned.

The mark cannot be registered by Anne Lotan under Section 11(e) or 11(f), despite Opposer not specifically addressing this issue, since both parties agree that Anne Lotan does not have any rights in this. The logo is not theirs. One cannot register someone elses copyright protected artwork as a trademark without authority to do so.  In this instance, the stylized rabbit and the font are copyright protected property of PETA and thus cannot be registered under Section 11(e).

Section 11(f) prevents registration of a mark that could confuse the public and create unfair competition. Anne Lotan claims that there is no inequitable behaviour in that they do not compete with PETA and thus registration of the mark does not contravene Section 11(f).

The Deputy Commissioner does not consider that the two entities are competitors but rather that by Anne Lotan’s using the mark, the public would be mislead into wrongfully thinking that Anne Lotan’s goods had been inspected and approved by PETA as not having been tested on animals.

Allowing registration of the mark by Anne Lotan would create the false impression the PETA had authorized that the products were not tested on animals. There is also dilution in this instance.

PETA trades in the mark by allowing its usage on products authorized by PETA as not having been tested on animals. Anne Lotan does not deny this. Allowing Anne Lotan to register the  mark would dilute PETA’s mark. Regardless of how Anne Lotan sees their behaviour, objectively their behaviour is one of bad faith.

The mark may not be registered by Anne Lotan who must pay 5000 Shekels expenses and 30,000 Shekels + VAT legal costs to PETA, the costs being determined by the amount of evidence submitted.


The Diary of Anne Frank ®   – Trademark abuse

January 10, 2016

trademark abuse

In addition to adding Otto Frank as an author of Anne Frank’s diary in an attempt to keep the work out of the public domain, some bright lawyer working for the Foundation has successfully filed the book title as a trademark.

The purpose of this is the same. It is to prevent the book from entering the public domain. Trademarks may be renewed for ever. The ramification of this trademark registration is that only books originated or licenses by the Anne Frank Foundation can be titled The Diary of Anne Frank or anything confusingly similar.

No doubt the foundation would argue that this is to protect her integrity as an author and to prevent others from hacking about with the content. This is surprising as apparently they now believe that her father her father Otto did sufficient reworking to be considered as a co-author.

I accept that the title of a book can be an indication of origin and is inherently distinctive. The problem I have is that this development effectively makes copyright unlimited and prevents anyone else from publishing the book unless they give it a totally different name such as the Secret Diary of Adrian Mole aged 13 3/4, Anne of Green Gables, Frankenstein or something sufficiently different from the Diary of Anne Frank®, that no one could possibly be confused.

Since this is flagrant trademark abuse, it should be banned on policy grounds. There are different ways for doing this. I think that the trademark could have been considered as generic for books having the content of the diary since the diary is in the public domain, or it could have simply been refused on the grounds of ‘ordre public’ since public policy is for books to eventually enter the public domain a set period of time from the author’s death.

It would be churlish to point out that using actuarial tools to calculate the real time worth of possible sales in 70 years after’s one death is not actually an inventive for anyone to write anything. It would be insensitive to point out that regardless of Otto’s reasons for whatever authorship contribution he actually had, Anne Frank was not writing to publish at all.

For more on the difference between names and contents, what names are called and what works of literature may be called, it is worth considering that the white knight in Lewis Carroll’s chess novel Through the Looking Glass parodies a poem by Wordsworth and anticipates Wittgenstein in a song whose name is called Haddocks’ Eyes, but whose name is The Aged Aged Man. The song itself is called Ways and Means and is A-sitting on a Gate.


Competing Certification Marks

December 8, 2015

CERTIFIED INTERNAL AUDITOR

מבקר פנימי מוסמך מטעם לשכת המבקרים הפנימיים – ישראל

This ruling relates to certification marks. It has ramifications for marks for the word Kosher and the like. The background is a fairly common occurrence where a local organization has ties with an international body and there is a dispute between them as to whether the local organization merely cooperates with the international body or is a branch thereof.

Israel Trademark Number 238007 for “CERTIFIED INTERNAL AUDITOR” was filed on 12 January 2011 by the Institute of Internal Auditors Inc. in Class 41 and covers “Testing services, namely developing, constructing and administering tests and testing programs for candidates as internal auditors.”.

On  13 September 2012, the Organization of Internal Auditors – Israel (OIA) (R.A) filed a certification mark number 249443 in Class 41 for “מבקר פנימי מוסמך מטעם לשכת המבקרים הפנימיים – ישראל”. Literally the mark means “Internal Auditor, Licensed by the Board of Internal Auditors”. The mark covers a virtually identical set of services.

On 24 September 2012, the Israel Patent Office declared a competing mark proceedings. Since the parties failed to come to an understanding, on 19 February 2013 they were asked to present their evidence.

On 2 March 2014 a hearing was held by the Israel Patent & Trademarks Office.  The parties were asked to relate to the ramifications of 18306-07-10 The Non-Profit for Farm Animals vs. Man Hateva Beerotayim LTD et al. from 6 May 2013, which issued after the two trademark applications were filed. The parties chose to relate to this in their summations, which were filed in September 2014.

Background

238152

The Institute of Internal Auditors Inc. was founded in 1941 in the United States as a professional organization for internal auditors. Over the years, its activities widened and it s reputation in the US and elsewhere was strengthened. Currently it claims 175,000 members worldwide. It publishes the Internal Auditor journal both on line and in print form, and has a number of registered trademarks in Israel including. Israel Trademark No. 238471 for IIA in classes 35 and 42, Israel Trademark No. 238152  in classes 35, 41 and 42, Israel Trademark No. 235863 for CIA in  class 41, all from 2012, and earlier graphic marks 88935 and 88936 both in class 35 from 1996.

The Organization of Internal Auditors – Israel (OIA) (R.A) started its activities in Israel in 1960 and was a registered organization since 1984. Its main purpose is to provide a professional organizational framework to represent, advance and train those practicing internal auditing in Israel. The organization claims 1200 members and claims to be legally recognized in the Law of Internal Auditors 1992.

Both parties acknowledge business dealings from the 1960s. They signed business agreements in 1980, 2004 and 2007. In 2011 the  Institute of Internal Auditors Inc.  gave the Organization of Internal Auditors – Israel (OIA) notice terminating their business relationship. There is a disagreement between the parties as to the nature of the business relationship up until that time. The  Institute of Internal Auditors Inc.alleges that the Organization of Internal Auditors – Israel (OIA) was a local chapter of their international organization. Whereas the Organization of Internal Auditors – Israel (OIA) claims that it had a simple business relationship and it had full discretion regarding its activities in Israel.

Statement of Case of the Institute of Internal Auditors Inc.  

  1. The Institute of Internal Auditors Inc. claims that their marks take precedent over the Organization of Internal Auditors – Israel (OIA) as they filed first.
  2. They claim to have used their mark in the US since 1972 and via the Organization of Internal Auditors – Israel (OIA), since 1993,whereas the Organization of Internal Auditors – Israel (OIA) had not used their mark at all.
  3. The  Institute of Internal Auditors Inc. claims that the Organization of Internal Auditors – Israel (OIA)  are acting in bad faith. The Organization of Internal Auditors – Israel (OIA) was founded as a branch of the Institute of Internal Auditors Inc., and it represented itself as the only representative of the Institute of Internal Auditors Inc. in Israel, throughout the 1980s and beyond. The Organization of Internal Auditors – Israel (OIA)  used the standards, the Code of Ethics and the trademarks of the Institute of Internal Auditors Inc. for financial gain. Furthermore, in the signed agreements between the parties, the Organization of Internal Auditors – Israel (OIA) was obliged to help the Institute of Internal Auditors Inc. file their marks in Israel, but failed to do so. Only in 2011 following the  Institute of Internal Auditors Inc. canceled the agreement on the basis of alleged breach of contract did the Organization of Internal Auditors – Israel (OIA)  claim independent standing and file Israel Trademark Application No. 249443 which was inequitable behavior.
  4. The Institute of Internal Auditors Inc. claims that their mark is registerable under Sections 8a and 11(10 of the Trademark Ordinance. It has inherent distinctiveness. It also has acquired distinctiveness due to the long usage and is thus registerable under Section 8b of the Ordinance as well. The Institute of Internal Auditors Inc.denied that following the farm animals decision, its mark had become generic since the word certified had synonyms.
  5. Finally, the Institute of Internal Auditors Inc. claimed that their mark was registerable quelle telle on the basis of the US mark.

Statement of Case of the Organization of Internal Auditors – Israel (OIA)

  1. The Organization of Internal Auditors – Israel (OIA)  claims precedence since it has more activity in Israel as the Institute of Internal Auditors Inc. have failed to show usage.
  2. The Organization of Internal Auditors – Israel (OIA)  claims to be recognized as the official organization of Internal Auditors in Israel and that its activities are and always were independent. It claims that through its efforts it has developed a reputation for itself and its marks, and its relationship with the Institute of Internal Auditors Inc. are and always were merely cooperation.
  3. The Organization of Internal Auditors – Israel (OIA)  claims to have advanced the legislation in Israel and to have statutory rights regarding Internal Auditing in Israel and that its educational program is recognized as further education in the relevant laws.
  4. The Organization of Internal Auditors – Israel (OIA)  claims that following the Farm Animals decision, the application by the Institute of Internal Auditors Inc. is non-registerable as it lacks the distinctiveness required by Section 8a of the Ordinance. However, the Organization of Internal Auditors – Israel (OIA)’s mark is inherently distinct due to the identification sign noting that it is from the Organization of Internal Auditors – Israel (OIA), thereby making it easy for the public to differentiate between services they provide and competing services. They further allege that the Institute of Internal Auditors Inc.’s mark is descriptive and widely used in the field and therefore Non-registerable under Section 11(10) of the Ordinance. Additionally,since it is without acquired distinctiveness under Section 11(10), it also cannot be registered under  Section 8b if the ordinance as it is not registerable. In contradistinction, the service mark of the Organization of Internal Auditors – Israel (OIA)  does not attempt to monopolize the terms Registered Internal Auditor as it only claims these terms as part of a mark including the certifying body.
  5. Since the Institute of Internal Auditors Inc.’s mark is wholly generic, it cannot be registered under Section 16(2) on the basis of the US mark.
  6. The Organization of Internal Auditors – Israel (OIA)  claims that as they monitor and have a mechanism, their mark is a certification, whereas the Institute of Internal Auditors Inc. do not have a mechanism behind the certification and thus their certification is not a certification of quality.
  7. The Organization of Internal Auditors – Israel (OIA)  further claims that the proposed mark of the Institute of Internal Auditors Inc. is against the public order since it is confusing and prevents fair trade.
  8. Finally, the Organization of Internal Auditors – Israel (OIA) accuses the Institute of Internal Auditors Inc. of inequitable behavior since during the examination of Israel Trademark No. 154515 they had to file a disclaimer fo the term “Certified Internal Auditor” to get that mark registered.

Evidence

On 16 July 2013, the  Institute of Internal Auditors Inc. filed an affidavit from the legal representative and Vice Chairman of the organization in the US and one from Eliad Shlomovitz, a trainee of the Israeli legal counsel. The affidavit included copies of the 2004 and 2007 agreements and the letter terminating the relationship, publicity regarding the mark abroad and copies of the various trademark registrations including those in Israel.

On 2 July 2013, the Organization of Internal Auditors – Israel (OIA) filed an affidavit of Mr Mordechai Shnabel, the president of the Organization, copies of programs taught at various seminars and certificates issued to graduates of such courses, agreements between the organizations from 198 2004 and 2007, the constitution of the organization, the syllabuses for Internal Auditors  and various agreements between the Organization of Internal Auditors – Israel (OIA) and third parties.

Ruling

Section 29 states that:

 Where separate claims are made by different persons to be registered as proprietors respectively of identical or similar trade marks in respect of the same goods or description of goods, the Registrar may refrain from registering any such persons until their rights have been determined by agreement between them approved by the Registrar. In the absence of such agreement, the Registrar shall refer the dispute to the Supreme Court.

Where a competing marks proceeding is initiated, the Israel Trademark Office considers: (a) which mark was filed first, (b) the usage of the marks and (c) good faith or the lack of it. See Yotvata, Malchi vs. Old Fashioned Soap 2000 and the Star is born rulings.

The Registrar decides which mark takes precedence and the question of registerability is not addressed until the mark taking precedence is decided. See Bagatz Fromein and Sons LTD. vs. Pro-Pro Biscuits LTD., PD 19(3) 337, where Judge Zusman ruled that a proceeding initiated under Section 17 of the ordinance (now section 29) is NOT designed to determine if a trademark will be granted. The proceeding is based on the assumption that both marks are registerable. Only later , on a mark registering and being opposed is registerability considered.

Furthermore, Judge Zusman ruled that the Registrar could initiate a competing marks proceeding only if he were prepared to assume that both marks were registerable per se if the competing mark was not filed. Otherwise it is pointless deciding which mark should be examined first.

In Bagatz Al Din vs. the Registrar of Trademarks PD 35(2)  187, on 189 Judge Aharon Barak repeated this ruling and stated that the registrar could decide that neither mark may be registered, and endorsed Zusman’s view that only if both marks were per se registerable was the exhausting competing marks procedure appropriate.

The case-law clarifies where, instead of a competing marks procedure, the judicial body can decide that a mark is non-registerable. The conditions are:

  • the parties themselves raised non-registerability issues
  • the parties had an opportunity to relate to registerability issues
  • the parties knew that during the competing marks procedure the issue of registerability would be addressed.

Thus the Registrar may relate to registerability per se in a competing marks procedure. Deputy Registrar Israel Axelrod related to this in Yotvata vs. Tenuva regarding Eshel, and the Supreme Court endorsed his ruling. Similarly the issue was raised concerning Jerusalem Winery.

In this instance, the parties themselves each raised validity issues, specifically Sections 8 an 11(10) and the issue of registerability in the light of the Farm Animals decision was raised in the evidence stage. Furthermore, the adjudicator Ms Yaara Shoshani-Caspi noted in the hearing that she would relate to this issue. Thus, as a preliminary matter, before relating to which side prevails in a competing marks proceeding, Ms Shoshani-Caspi addressed the issue of registerability of each of the marks per se.

Section 1 of the Ordinance (definitions) states that:

A certification mark is defined as something intended to serve someone not providing a business regarding the sources of goods that he has some interest in, their components, method of manufacture, quality or some other property, or to provide assurance of their quality, nature or type.

There is no disagreement that the marks in question are intended to certify internal auditors. From the protocol, the marks are not intended to certify the services provided by either party, but rather to indicate the type and quality of service provided – specifically training and licensing of internal auditors. Therefore, it is clear that they are certification marks as per Section 1.

In Section 14 of the Ordinance the criteria for issuance of service marks states that:

The Registrar can authorize registration of a certification mark if (a) he is convinced that the applicant is able to provide the services covered, (b) a service mark can be registered even if it lacks inherent distinctiveness as per Section 8(a) and (c) such marks cannot be transferred without the Registrar’s authorization.

Thus certification marks are different from regular trademarks which require inherent or acquired distinctiveness.

The Farm Animals ruling (which issued after these applications were filed) relates to the distinctiveness requirement for certification marks.  Nevertheless, Ms Shoshani-Caspi considers its teachings should be applied here. In the Farm Animals decision, Judge Amiram Binyamini related to the application of Section 14b to the term Free (Range) Eggs, and ruled that despite the Section of the Ordinance, service marks nevertheless require a distinctive characteristic. They do not have to allow indication of the supplier. Nevertheless, they have to be able to distinguish between services certified by one mark owner and those by another. The ruling states:

If so, one asks how Section 14b of the ordinance allowing certification marks lacking distinctiveness as per Section 8(a) should be interpreted. Although there is a lack of clarity in the Section, one cannot but conclude that the intention of Section 14b is not to give a blanket allowance for Service marks to lack distinctiveness, but only to be lenient regarding the requirements of Section 8a which enables differentiating between one provider and another. This specific requirement is not relevant for certification marks, since the owner of the certification mark is not the owner or supplier of the goods or the manager of the business. This is clear from the definition in Section 1. 

From here, Section 14b is intended to provide a dispensation to certification marks from having a distinctive nature as per section 8a (indication of origin) but not from being distinctive.

 ….from the above, it is clear that certification marks are required to be distinctive, not of the supplier but of whether a good is certified or not.

Thus certification marks, though not requiring to indicate the origin of the good, are, nevertheless bound by Section 11(10).

A mark consisting of numbers, letters or  words, that are used to mark or describe goods, types of goods or their quality cannot be registered unless they have distinctiveness as per Section 8b or 9.

Thus Section 11(10), when interpreted as per the Farm Animals decision, prohibits a service mark that is generic or widely used from being registered, even if it has acquired distinctiveness due to many years of use.

The Farm Animals decision reiterates the 5792/99 ruling regarding Family magazine that classifies marks as generic, descriptive, indicative, random and imaginary, and explains that generic marks cannot generally be registered.

Citing 144/85 Klil vs. Commissioner of Patents, the decision goes on to note that as a mark is more descriptive, it will require more indication of acquired distinctiveness due to actual usage to be registered, and for a descriptive mark to be monopolized, a great deal of evidence of acquired distinctiveness is required.

As to Free (Range) Eggs, the mark was considered as lacking inherent distinctiveness and being more descriptive than indicative, and being generic in the industry since there is no other way of saying Free Range than be saying Free Range. Consequently the mark should be available to all. Furthermore, there was not enough evidence to prove acquired distinctiveness to overcome the inherent lack of distinctiveness.

In summary, a certification mark needs to be inherently distinctive as to the certifying organization and not descriptive or generic for the products unless it has acquired distinctiveness. If a certification mark fulfills these conditions, it may be registered. Otherwise, it should be examined in accordance with Section 14 of the Ordinance.

In this instance, the term Certified Internal Auditor cannot be considered a Service Mark as it does not indicate the service provider. It can be considered as a certification mark only if it can be used to indicate whether a service provider is certified or not.  Since it lacks inherent distinctiveness, it cannot be registered. It does not have the power to indicate the certifying body. It does not include a logo or something else linking it to the certifying body. The applicant does have other marks that indicate who the certifying body is, but the requested mark does not. It does not enable a third party to know who is certifying the service and to distinguish between different certifying bodies. Thus, when interpreting the Ordinance in the light of the Farm Animals decision, it cannot be considered registerable.

Furthermore, the term Certified Internal Auditor is descriptive of the services provided, i.e. training of internal auditors. Therefore under Section 11(10) of the law, such a mark cannot be registered. the wording of Section 11(10)of the Ordinance teaches that marks consisting of letters of numbers that are laudatory or descriptive are difficult for consumers to see as an indication of origin and should remain in the public domain and not become private property. The first mark is not stylized. The words are taken from a dictionary and cannot become private property – See the 2673/04 Copy To Go ruling.  The phrase “Certified Internal Auditor” consists of the descriptive “Internal Auditor” to which the term “Certified” is added. It does not indicate who is doing the certification.  The evidence submitted is insufficient to conclude that the certifying body is well known and established or that the mark is well known. Applicant’s arguments that there are synonyms for certified are not persuasive.

Thus allowing the first mark to be registered is not in the public interest.

The second mark indicates the certifying authority as the “Office of Internal Auditors of Israel” which is a real and actual organization that is a registered non-profit. It is not disputed that they have trained and certified internal auditors.  Nevertheless, the second mark does not satisfy Section 11(10) of the Ordinance since the term “Certified Internal Auditor” is included. Whilst it is true that marks should be considered as a whole and not analyzed into separate elements (see 5454/02 Tiv Tam vs. Ambrosa Pd 57(2) 438), and the Applicant is not trying to monopolize the term “Certified Internal Auditor” by itself, but only in the framework of the mark.  Nevertheless, the intention of the trademark applicant is immaterial. This is a word mark that by including the terms “Certified Internal Auditor” effectively monopolizes the terms and will prevent others from using it since it is a significant part of the mark. Consequently this should also be left in the public domain.

Here again, the words “Certified Internal Auditor” are descriptive and directly relate to the services provided.  From Farm Animals, the mark is descriptive and thus a priori non-registerable unless it has acquired distinctiveness under Section 11(10). However, the second Applicant has not yet used the mark and thus does not fulfill the conditions of Section 11(10). Were the mark stylized, it would aid their case.

Although the second applicant has demonstrated having a training program as required under Section 14a, since their mark is not distinctive, it cannot be registered.

The  Institute of Internal Auditors Inc. filed first but this only provides a small advantage and cannot be decisive where the parties had a long term relationship. Were the marks registerable it would be difficult to determine which side takes precedence.

Ms Shoshani Caspi concluded that neither mark was registerable and this rendered moot the necessity to rule on the relationship between the organizations from 1960 to 2011. Both files were closed and the parties were ordered to pay their own costs!

COMMENTS

Since Hebrew switches the order of noun and adjective, one could fairly relate to the 18306-07-10 The Non-Profit for Farm Animals vs. Man Hateva Beerotayim LTD et al. as ‘Animal Farm’ and it is tempting to do so.

This decision gives some substance to the recently reported suggestion in the Asos vs. Assos case, that the Registrar relate to one or other mark substantively and, if allowing it, that the mark then be opposable by the other party instead of having a competing marks proceeding. It certainly seems preferable to only debate who takes precedence if the marks in question are inherently registerable.