Prior to filing a trademark application, it is recommended that a clearance search be conducted to confirm the availability of the proposed mark for registration in Israel and assess the possible risks of trademark infringement by using the proposed mark.

Selection, clearance and registration

Prior to filing a trademark application, it is recommended that a clearance search be conducted to confirm the availability of the proposed mark for registration in Israel and assess the possible risks of trademark infringement by using the proposed mark.

If the applicant also wishes to search for common law marks, in order to avoid other possible risks based on unregistered marks which may exist on the market, this will involve an investigation of the actual products on the Israeli market and a search of relevant websites and databases in particular.

Israel is a member of the Madrid Protocol and it is possible to file international trademark applications designating Israel instead of an Israeli national application. The filing strategy should be decided on the merits of each case.

When protecting pharmaceutical trademarks in Israel, attention should be paid to the special labelling requirements. Under Israeli law, the label of any pharmaceutical must indicate the name of the pharmaceutical preparation in three languages: Hebrew, Russian and Arabic. This requirement was introduced to Israeli regulations in 2012 and should be considered with regard to both new trademarks and existing registrations. In some cases transliterations may be included in one application, but in other cases it may be necessary to file a separate application for each language. Each case should be examined in its own context.

Multi-class applications and specifications of goods

Since September 2010, when Israel joined the Madrid Protocol, multi-class applications have been allowed.

The broad specifications of goods in Class 5 are not acceptable to the Israeli Trademark Office. It is necessary to limit goods to the key ingredient of the intended pharmaceutical preparation or to restrict the list of goods according to the intended treatment.

The broad list of goods in Class 5 may be accepted in Israel only if:

the mark is intended to be used as the applicant’s house mark;

the mark is intended for a complete line of pharmaceuticals; or

the intended pharmaceuticals are still being developed and therefore cannot yet be specified (upon submission of an affidavit by the applicant stating that the pharmaceuticals are still in the process of development, the broad list of goods may be accepted, provided that the specification of goods is restricted within five years of the filing date).

Non-traditional marks: three-dimensional marks

The definition of a ‘mark’ according to the Trademark Ordinance [New Version] 1972 includes three-dimensional (3D) marks. A pharmaceutical company may wish to register the shape of a capsule, the package of a pharmaceutical or a pharmaceutical bottle as a 3D mark. The Israeli Trademark Office has a strict policy in this regard and tends to refuse registration of most 3D trademark applications that are filed.

The registrar believes that most 3D marks lack distinctive character and considers that 3D shapes are used not as a trademark, but rather as a means to bear the brand name which serves as a trademark.

The Supreme Court has dealt with at least two appeals on this matter and ruled that 3D marks may be eligible for registration if the applicant can establish that:

the 3D mark is used as a trademark to identify the origin of the goods; and

the mark has acquired a distinctive character in Israel.

It is clear from the registrar’s decisions that proving such acquired distinctiveness will require the submission of substantial evidence (mere sales figures and examples of advertisements may be insufficient).

The Supreme Court has extended these two cumulative conditions and ruled that the registration of 3D marks on the basis of acquired distinctiveness will be allowed only if the mark does not possess an aesthetic and functional value. Furthermore, each case will be examined on its merits.

The registration of trademarks protecting a specific sound or tune is also possible in Israel. However, other non-traditional trademarks – such as motion, taste, touch and smell marks – are not registrable. While colour marks are often allowed, marks which consist merely of a colour scheme may be registered only if the applicant can establish that they have acquired distinctive character.

Slogans

The Israeli Trademark Office applies a strict policy regarding the registration of slogans. An Israeli district court ruled in an appeal against the registrar’s decision in this regard that a slogan is no different from any other kind of trademark, and that the same tests used to determine whether a mark has distinctive character should be used when examining whether a slogan is eligible for registration.

However, it is difficult in practice to register a slogan. The registrar requires proof that the slogan is used as a trademark in respect of the goods applied for and that it has distinctive character (the applicant will usually be asked to present evidence to prove this distinctive character).

Parallel imports and repackaging

The Supreme Court has ruled that the parallel import of original goods may not constitute trademark infringement and therefore it is almost impossible to prevent such imports based on trademark registrations. The court ruled that as long as the goods imported originate from the trademark owner, they are genuine goods and therefore their sale may not be considered as trademark infringement simply because they are imported through different channels.

To prevent parallel imports, trademark owners must seek other causes of action, based on contract, tort and consumer protection laws. Under certain circumstances, parallel import may constitute a tort of inducement of breach of contract or misleading consumers, which could breach the Consumer Protection Act.

The Tel Aviv District Court ruled that a parallel importer of Tommy Hilfiger products had made unreasonable and unnecessary use of Tommy Hilfiger’s mark, and therefore his actions constituted trademark infringement and unjust enrichment. The court ordered him to pay a relatively large sum in compensation. On appeal, the amount of compensation was significantly reduced.

In this context, pharmaceutical companies are advised to mark their pharmaceuticals (eg, with hidden or visible codes or other attached devices on products or packaging) to enable their quick authentication, detection and location, and furthermore to implement strict manufacturing and distribution agreements which include jurisdictional restrictions. Such contractual measures may help to establish a cause of action against parallel imports.

Ten years ago Israel amended its law to permit the parallel import of pharmaceutical preparations. This type of import is allowed according to the Pharmacists Ordinance [New Version] 1981 under the strict supervision of the Israeli Ministry of Health. To obtain the appropriate permit, the parallel importer must meet the strict requirements stipulated by the Pharmacists Regulations [Preparations] 1986. The main stipulation is that the pharmaceuticals have been shipped to Israel by authorised companies from recognised countries and that the pharmaceuticals have been stored properly in those countries.

The Pharmacists Ordinance provides that pharmaceuticals should be sold in their original packaging. Repackaging is not allowed where the packaging is in direct contact with the pharmaceutical. Repackaging of pharmaceuticals may be allowed only in the case of the outer packaging (secondary packaging) which is not in direct contact with the pharmaceutical. This process may be done only under the strict supervision of the Ministry of Health.

Anti-counterfeiting and enforcement

Civil proceedings

The use of a trademark that is identical or misleadingly similar to a registered trademark may constitute trademark infringement under the Trademark Ordinance. Israeli law also recognises unregistered trademark rights, which may be secured in the case of a well-known mark or under the tort of passing off. Other causes of action against such use may be based on the Commercial Torts Act, the Law of Unjust Enrichment, the Consumer Protection Act and the Merchandise Marks Ordinance.

The civil remedies available to enforce trademark rights include injunctive relief and damages. The court is also authorised to order the destruction of assets resulting from the infringement or which were used to perform the infringement. The most effective remedy to stop an infringement is an interim injunction, which may be sought by the plaintiff. An application for an interim injunction may be submitted together with the main lawsuit for a permanent injunction. Such applications are decided on a prima facie basis and are subject to the balance of convenience, to be weighed by the court. The plaintiff may also apply ex parte for a search and seizure order, which is used in cases of counterfeit and pirated products and may enable the plaintiff to seize goods and documents as evidence and therefore prevent the infringer from flooding the market with these products.

Criminal proceedings

Trademark infringement and counterfeiting may also constitute criminal offences under the Trademark Ordinance and the Merchandise Marks Ordinance. Criminal proceedings are possible and may be initiated by the rights owner by way of a private criminal complaint. However, to succeed in such a procedure, the complainant must prove beyond any reasonable doubt that the accused party infringed the trademark knowingly. Sometimes the claimant encounters difficulties in establishing this high standard of proof. Another disadvantage in criminal proceedings initiated privately by the rights holder is the fact that the punishments prescribed by law are imprisonment or fines to be paid to the state of Israel; no damages are awarded to the claimant in criminal proceedings. Conversely, the findings and conclusions of a final verdict in a criminal case which convict the defendant are acceptable as prima facie evidence in a civil case if the convicted party is then a party to the civil proceedings.

Counterfeiting in the pharmaceutical field is viewed severely by the courts due to the potential harm to public health that such activities may cause.

Approximately five years ago, the Intellectual Property Unit in the Israeli police was integrated with other specialist units. It has increased resources as a result of this restructuring, but these are still insufficient to match levels of infringement. The Ministry of Internal Security plans to establish a special unit for criminal enforcement in the pharmaceutical field in 2015. In the battle against counterfeit pharmaceuticals, the Israeli police are confiscating counterfeit pharmaceuticals, arresting the suspects involved in such criminal activities and indicting them.

Customs proceedings

Whether due to a notice submitted to Customs by the rights holder or to random inspections of shipments performed on a regular basis, Section 200(a) of the Customs Ordinance authorises Customs to hold imported goods which prima facie infringe registered trademark rights (these provisions also apply to copyright infringement).

Customs notifies the rights holder that goods have been detained and that it must deposit a bank guarantee fixed by Customs within three working days of notification. The guarantee is required to secure possible future damage caused to the importer by this detention should the rights holder’s contentions be ruled as unfounded. Within 10 days of the above notice, the rights holder must file suit against the importer. These deadlines may be extended. Failure to deposit the guarantee or to file the lawsuit within the specified deadlines will result in Customs releasing the goods.

In the case of small-sized shipments, Customs may initiate a short procedure, according to which the goods may be destroyed upon the submission of a written opinion stating why the goods are counterfeit. The rights holder must also undertake to join Customs as a party in any lawsuit filed by the importer in this regard and submit an unlimited undertaking to compensate the importer for any damages should the owner’s allegations be ruled as unfounded. In recent years, Customs has implemented the above provisions intensively and goods are seized on a daily basis.

Advertising

The advertising of pharmaceutical is regulated and restricted in Israel. The Pharmacists Regulations (Preparations) 1986 prohibit the advertising of pharmaceuticals in the media or in non-scientific or non-professional periodicals, unless approved by the Ministry of Health. These regulations further prohibit the advertising of pharmaceuticals in a manner which contradicts what is recorded in the Drug Register regarding the particular pharmaceutical.

Special regulations govern the sale of over-the-counter (OTC) pharmaceuticals. These provide strict Ministry of Health supervision of advertising of OTC pharmaceuticals, the need for pre-approval and the exact warnings which must appear in such advertisements. An advertisement which includes a photo of an OTC pharmaceutical or its packaging may not need pre-approval, provided that it includes all of the data required by the regulations.

Comparative advertising of OTC pharmaceuticals may be approved by the Ministry of Health only after it has been proved that, according to scientific research, one pharmaceutical is better than the other.

Generic substitution

The Pharmacists Ordinance explicitly prohibits:

the alteration of a prescription;

the replacement of one prescribed ingredient with another;

the alteration of a prescribed dosage; and

the preparation of prescribed pharmaceuticals from different ingredients or in different quantities.

However, if the prescription does not specify an explicit brand, the pharmacist may replace the prescribed pharmaceutical with its generic equivalent which has an identical active ingredient in the same dosage, strength and form. Further, the Pharmacists Ordinance requires the pharmacist to inform the customer of the existence of additional identical registered preparations in the pharmacy.

Online issues

The use of marks that are identical or confusingly similar to a registered trademark, whether as a domain name or in any other form of online use, may constitute trademark infringement and the same civil remedies described above are available to the rights holder. In some circumstances, a well-known mark may be enforced even if it is not registered in Israel. An action may be based on the traditional tort of passing-off or another tort under the Commercial Torts Act – such as ‘unfair interference’, according to which a trader commits a tort if it prevents or unfairly restricts the access of clients, employees or agents to the business, assets or services of another trader.

Cybersquatting of pharmaceutical trade names, trademarks or registered company names may be dealt with by the Israeli courts under the above causes of action or by the Israeli internet association (ISOC-IL), which regulates the registration of domain names under the country-code top-level domain ‘.il’.

In cases of cybersquatting, pharmaceutical companies may turn to ISOC-IL’s dispute resolution platform. The dispute resolution platform is not designed to replace available legal proceedings, but is intended to resolve issues pertaining to the registration of domain names in a quicker, less expensive way.

Nahum Gabrieli and Ehud Gabrieli.

This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.