Snapshot: trademark enforcement in Israel

Enforcement

What types of legal or administrative proceedings are available to enforce the rights of a trademark owner against an alleged infringer or dilutive use of a mark, apart from previously discussed opposition and cancellation actions? Are there specialised courts or other tribunals? Is there any provision in the criminal law regarding trademark infringement or an equivalent offence?

A trademark owner may enforce its rights against an alleged infringer or dilutive use of a mark with an action before the court. The action may be filed together with a motion requesting interim relief.

Owners of well-known registered and unregistered marks as well as owners of registered marks may base their action on trademark infringement. Owners of trademark rights acquired through use must base their action on other causes of action in order to obtain protection, such as the tort of passing off, as defined under the Commercial Civil Wrongs Law 1999.

The Israeli judicial system consists of magistrates courts, district courts and the Supreme Court. While there are no specialised courts, IP matters are usually heard before district courts (the second instance).

The owner of a registered mark whose right has been infringed or faces infringement may be able to resort to administrative measures of protection, such as filing a complaint with Customs to detain future shipments of goods likely to infringe its registered trademark.

In addition, several acts involving the unauthorised use of registered trademarks and their imitations incur criminal liability under different trademark laws. For instance, according to the provisions of the Trademark Ordinance, several acts incur criminal liability and corporate officers are also liable to penalties. These criminal offences include:

• the unauthorised commercial marking of goods bearing a registered trademark with respect to the same goods, which is likely to create confusion;
• the unauthorised commercial import of goods bearing a registered trademark with respect to the same goods or imitation of such mark, which is likely to create confusion;
• the commercial sale, distribution or rent of goods marked or imported to Israel bearing a registered trademark with respect to the same goods; and
• possession for trade purposes of goods so marked or imported. Other criminal offences are stipulated by the Merchandise Marks Ordinance, such as the prohibition to sell or possess, for commercial or industrial purposes, goods or items bearing a fake trademark.

To open a criminal proceeding, the mark owner may either file a complaint with the police with respect to the infringement of a registered trademark or file a private criminal complaint with the court.

What is the format of the infringement proceeding?

The Israeli judicial system consists of magistrates’ courts, district courts and the Supreme Court. IP matters are usually heard before the district courts. A trademark infringement or dilution action is initiated by filing a statement of claims detailing the facts that, if subsequently proven, will establish the cause of action.

The defendant must file a defence statement and the plaintiff, at its discretion, may respond to the defence statement with a statement of response. Once the exchange of pleadings is finished the case proceeds to pretrial, during which the parties conduct preliminary proceedings that may include:

• discovery;
• inspection;
• disclosure of specific documents; and
• interrogatories.

Following this, there are one or more pretrial hearings, which aim to resolve the pending preliminary issues being disputed by the parties and obtain decisions on miscellaneous motions. During the pretrials, a judge will decide on the next stages of the proceedings and the due dates for submission of evidence by the parties, usually comprised of written affidavits, surveys and expert opinions. Once the parties have submitted their evidence, a trial hearing is scheduled for the cross-examination of the affiants and experts. Subsequently, the parties will exchange their summations and the judge will hand down a decision.

To open a criminal proceeding, trademark owners may file a complaint with the IP unit of the Israeli police; the criminal proceedings are handled and controlled by the state. In cases where a trademark owner decides to control and handle the criminal proceedings, it is also entitled – depending on the circumstances – to file a private criminal complaint with a magistrate court.

The typical time frame for trademark infringement, dilution or criminal actions is two to three years from the filing of the claim until the issuance of a decision.

What is the burden of proof to establish infringement or dilution?

The burden of proof in trademark infringement proceedings will vary according to the relevant causes of action.

For infringement of a registered trademark, the trademark owner should demonstrate unauthorised use of its registered trademark or of a similar trademark with respect to the same goods or services or with respect to goods or services of the same description.

In cases of infringement of a registered and well-known trademark, the trademark owner may obtain protection against the unauthorised use of its trademark or of a similar trademark also with respect to goods and services of different descriptions. For this purpose, it should demonstrate that such use is likely to indicate a connection in consumers’ minds (likelihood of association) between such goods and services and itself and that it might be harmed as a result of such use.

No separate registration exists for well-known marks, so determining whether a registered mark is well known is a judicial matter that takes into account the extent to which the mark is known in public circles relating to it and the extent to which it is known as a result of marketing.

In cases of infringement of an unregistered well-known trademark, the trademark owner's mark may obtain protection against the unauthorised use of its trademark or of a similar trademark with respect to goods and services of the same description.

The owner of an unregistered trademark may not institute a cause of action on the basis of trademark infringement, but under the tort of passing off. To establish passing off, a plaintiff must prove two elements: the goodwill (reputation) in its goods and services, and the likelihood of confusion as to the origin of the goods and services.

To determine confusing similarity for the purposes of establishing trademark infringement and passing off, when assessing similarity between trademarks the Israeli courts examine the marks in their entirety, having regard to their overall impression. A threefold test applies that examines the visual and phonetic similarity between the marks, the similarity of the goods, the targeted customers and channels of distribution, and other case circumstances, including the general idea behind the marks. With respect to trademark infringement actions, the focus is on the confusing similarity between the marks themselves; for the purposes of passing off, the likelihood of confusion is examined, having regard to the entirety of the defendant’s conduct.

The dilution doctrine may apply in cases of registered and unregistered well-known trademarks and internationally famous businesses. Dilution will also exist in the absence of a likelihood of confusion, in cases when the trademark possesses strength exceeding specific goods and services and where the infringing use is intended to promote the business of another trader through free-riding on the goodwill of the trademark owner’s famous mark, through blurring its distinctiveness.

Who may seek a remedy for an alleged trademark violation and under what conditions? Who has standing to bring a criminal complaint?

Only trademark owners (including owners of well-known unregistered marks) may seek relief in cases of trademark infringement. A licensee cannot bring an action for trademark infringement. Registered trademark owners can also initiate criminal proceedings by filing a private criminal complaint with the court or filing a complaint with the IP unit of the police.

What border enforcement measures are available to halt the import and export of infringing goods? Can activities that take place outside the country of registration support a charge of infringement or dilution?

Registered trademark owners whose rights have been infringed or that face ‘reasonable suspicion’ that their rights will be infringed may file a complaint with Customs to detain allegedly infringing goods that are being imported to Israel or to the Palestinian authorities through Israel.

Customs may, either on receiving such notice or on its own initiative, detain imported goods that prima facie infringe registered trademark rights. Detention by Customs is subject to the deposit of an indemnification guarantee by the trademark owner and, depending on the size of the shipment detained, may be cancelled if the owner fails to deposit a guarantee and bring a legal action within 10 days of the notice of detention.

There are no available border enforcement measures with Customs for the export of infringing goods from Israel.

Due to the territoriality of trademark rights, the courts are likely to limit their considerations to acts carried out in Israel. Eventually, a blatant infringement of trademark rights or other bad conduct made outside Israel will increase the chances of successfully establishing bad faith, such as the personal knowledge of the defendant of an unregistered trademark that has acquired an international reputation outside Israel.

What discovery or disclosure devices are permitted for obtaining evidence from an adverse party, from third parties, or from parties outside the country?

The discovery, inspection, disclosure with respect to specific documents and written interrogatory proceedings are available in Israel. Discovery proceedings are not available against non-parties. Anton Piller search and seizure orders may be granted if the courts are convinced of the likelihood of the defendant destroying evidence or assets required for the trial.

What is the typical time frame for an infringement or dilution, or related action, at the preliminary injunction and trial levels, and on appeal?

The typical time frame for a trademark infringement or dilution action from the filing of a claim until the issuance of a decision is two to three years in the first instance and two years on appeal. Applications for interim relief may be resolved within weeks or sometimes several months.

What is the limitation period for filing an infringement action?

There is a seven-year limit for filing an infringement action, which is prescribed by law starting on the date the cause of action occurred. Where brand owners were unaware of an infringement, the limitation period starts on the date that the infringement was brought to their attention. Relevant case law holds that each act of infringement gives rise to a new claim, making it possible to file an infringement action seeking injunctions after the seven-year limit; however, damages can be recovered only for the seven-year limitation period.

What is the typical range of costs associated with an infringement or dilution action, including trial preparation, trial and appeal?

The official fee rate for filing an infringement or dilution action is 2.5 per cent of the claimed amount. Court fees are paid in two equal instalments: the first when filing an action and the second up to 20 days prior to the date scheduled for the first evidence hearing. It is common practice to indicate a nominal amount for court fees. The official fees relating to the appeal will depend on the specific appeal concerned, but it will not surpass a few thousand shekels.

According to case law, the prevailing party is generally entitled to reimbursement of its reasonable legal costs and attorney fees, but the reimbursement is typically only partial and depends on several case circumstances, such as the parties’ conduct during the proceedings.

What avenues of appeal are available?

The Israeli judicial system consists of magistrates’ courts, district courts and the Supreme Court. Trademark infringement cases are normally heard before district courts at first instance and the decisions may be appealed to the Supreme Court. Other miscellaneous decisions, such as decisions in interim relief proceedings, may be appealed to the Supreme Court, but only with leave.

What defences are available to a charge of infringement or dilution, or any related action?

The most common defences available to a charge of infringement or dilution include:

• phonetic, visual and conceptual differences between marks;
• the unlikelihood of confusion due to different goods and services, different consumers or different exclusive channels of distribution;
• the independent adoption of marks in good faith and prior or concurrent rights acquired by a defendant through use of a mark in good faith;
• the weakness and descriptiveness of an allegedly infringed trademark, allowing coexistence; and
• challenges to the validation of an infringed trademark due to lack of distinctiveness, genericness or rights acquired in bad faith.

Additional common law defences are available, including estoppel, laches, acquiescence and waivers.

What remedies are available to a successful party in an action for infringement or dilution, etc? What criminal remedies exist?

The remedies available to a successful party in an action for trademark infringement or dilution include permanent injunction, damage caused to the trademark owner such as loss of profit or, alternatively, accounting for profits and profits unjustly made by the defendant.

An award of damages may be based on proof of damage suffered by the owner or by way of judicial assessment. In trademark infringement and dilution cases involving the tort of passing off, the plaintiff may be entitled to statutory damages without proof up to 100,000 shekels for each tort. The amount of statutory damages awarded considers, among other things:

• the gravity of the matter;
• the number and duration of the infringing actions;
• the infringer’s conduct; and
• the size of its business. 

It is also possible to obtain an order for the destruction of infringing goods or their delivery to the trademark holder, as well as any other order that the court may deem prudent in the circumstances (eg, different declarative judgments, such as recognition of well-known trademarks).

In cases of infringement of unregistered well-known trademarks, the only remedy available in a cause of action based on trademark infringement is an injunction; however, other remedies are available under different causes of action, such as passing off and unjust enrichment.

In appropriate cases, it is possible to file a motion requesting different preliminary remedies such as orders for interlocutory injunctions, search and seizure orders, and orders restricting disposition with respect to an asset. A motion for interim relief must be requested simultaneously with or shortly after filing the statement of claims; in extraordinary circumstances of urgency, the interim relief may be granted ex parte, before the inter partes hearing.

Several technical and substantial conditions must be met to have the interim reliefs granted and avoid the motion being denied. The motion must be filed with an affidavit to support the factual claims and the applicant must file a personal undertaking not limited to an amount and a third-party guarantee at an amount set by the court to indemnify the defendant for its eventual damages if the claim terminates or is found to be unjustified and is revoked.

The motion for interim relief must persuade the judge that the interim relief is crucial to prevent irreparable damages and keep the status quo, demonstrating reasonable chances of success in the main case and that the balance of convenience is in the plaintiff’s favour. Moreover, the plaintiff must draft the motion in good faith, disclosing all of the important facts and documents to the court in a timely manner, since excessive delay in seeking the relief may amount to laches and dismissal of the motion.

Different penalties apply to offences relating to trademark infringements, including fines and up to three years’ imprisonment.

Are ADR techniques available, commonly used and enforceable? What are the benefits and risks?

The most widespread ADR practice is mediation, which is expressly encouraged by judges and the court system, and requires the parties’ mutual consent. The benefits of mediation include parties’ control over the dispute, potential cost savings and proceeding confidentiality; however, there is a risk of bad management.

Arbitration is also common; verdicts are legally binding on both sides and enforceable in courts. The parties can decide whether arbitration decisions are appealable. Benefits of arbitration include expeditiousness of the proceedings due to the substantial workload in the Israeli court system, the non-public character of the proceedings and the parties being able to choose an arbitrator with trademark law expertise.