Civil litigationi Forums
There are no specialised courts for trademark matters. Civil infringement actions for injunctive relief are tried in the district court. Actions for damages lower than 2.5 million new Israeli shekels are within the jurisdiction of the Magistrate’s Court, but if the lawsuit seeks for an injunction and damages, it would be tried before the district court, even though the monetary remedies are lower than the minimum sum within the jurisdiction of the district court.ii Pre-action conduct
In Israel, there are no pretrial formalities and the plaintiff is not required to take any steps before initiating legal proceedings. However, in practice, in interim proceedings courts sometimes do not appreciate the plaintiff not sending a warning letter to the infringer before filing the law suit petitioning for interim injunctions. This approach may be expressed by judges in awarding low amount of costs or no costs at all to a successful plaintiff just because he or she did not send a warning letter and, therefore, did not make an attempt to avoid legal proceedings.iii Causes of actionTrademark infringement
Trademark infringement is defined and established by the Trademarks Ordinance. Only the proprietor of a registered trademark is entitled to seek a remedy based on an infringement of its registration. The Israeli Supreme Court has ruled that a registered user (licensee) cannot sue for infringement of a registered mark for which it holds a recorded licence.
In order to establish the infringement contention, the plaintiff has to prove the defendant has used its registered mark or a mark resembling its mark in relation to goods in respect of which the mark is registered or goods of the same description, without being entitled to do so. The plaintiff has to prove the use of the mark by the defendant. The term ‘use’ is broadly interpreted by Israeli courts. Although the definition of an infringement in the Trademarks Ordinance requires only resemblance to the registered mark, the courts usually consider the question of the likelihood of confusion in deciding whether an infringement occurred.
‘Misleading similarity’ is a legal term to be determined and decided legally by the judge and not necessarily by evidence (see ‘Passing off’). In order to determine misleading similarity, the court applies a test known as ‘the triple test’, namely testing:
- visual and phonetic similarity;
- the description of the goods in question and the target consumers of the goods in dispute; and
- other relevant circumstances of the case, such as the specific conduct of the parties, which may affect the question of misleading similarity.
Passing off is defined and established in the Commercial Torts Act 1999, according to which a trader should not cause an asset he or she sells or a service he or she provides to be erroneously considered to be an asset or service of another trader or an asset or service connected to another trader. The plaintiff has to prove two essential grounds to establish the tort: it must meet the burden of proof to establish its goodwill in the mark and must convince the court that the use made by the defendant could cause the defendant’s goods or services to be considered the plaintiff’s, or at least that such goods or services might be connected to the plaintiff. The likelihood of confusion is decided by the judge applying the triple test described above.The doctrine of dilution
The doctrine of dilution has been recognised by the Israeli Supreme Court, but was recently limited to dilution of a trademark and only in matters of registered well-known marks; there is no possibility to sue for ‘goodwill dilution’ or for dilution of unregistered well-known marks. In an action based on dilution, the plaintiff must establish the goodwill it acquired in the mark (usually a strong internationally renowned mark) and convince the court that the use made by the defendant may dilute and tarnish this goodwill in the mark.Company names
The registrar of companies is responsible for the recordal of company names, implementing the provisions of the Companies Act 1999 and preventing the recordal of misleading names. Section 27 of the Companies Act provides that a company will not be recorded under a name that is a registered trademark in respect of goods and services that are similar to the objectives of the company in question or under a name that is misleadingly similar to the registered trademark. The triple test is used to test for misleading similarities. The registrar is also authorised to require a company to change its name if it is found to be a misleading name, and, if the company does not comply by changing its name, the registrar will choose a name for it. Disputes over company names are tried before the district court, usually within the framework of trademark infringement proceedings, and the district court may also judicially review the discretion of the registrar of companies regarding the recordal of misleading names within the framework of a petition to the district court.Domain names
Disputes regarding the registration of domain names registered by the ISOC-IL are decided by a special board established by the Association, which handles such disputes in accordance with its published rules and regulations. The general principles of misleading similarity in the field of domain names are adjusted by the board, meaning that more flexibility is allowed in this field in comparison with trademarks in other fields, and, sometimes, minor differences that would not normally suffice in distinguishing between trademarks may be deemed sufficient for the purposes of domain names. The infringement of a domain name may be brought to court within the framework of trademark infringement proceedings and other commercial torts, such as passing off or unfair interference, which has already been used by the court to prevent the use of a domain name by a trader. The district court has the power to prevent the use of a domain name or order a defendant to change an infringing domain name.iv Conduct of proceedings
The case is always decided by one judge. If the plaintiff seeks interim injunctions, an application should be filed together with the main lawsuit. Such an application should be supported by an affidavit to prove a prima facie case. The respondent may submit a response within 20 days of receiving the application, unless otherwise ordered by the court, and the applicant may reply to this response within 10 days. The court may render its decision based on the application and the response, without a hearing. Usually, the court will summon the parties for a short oral hearing and will allow short cross-examinations, if there are disputed facts that it deems relevant to deciding the case, and will render its decision regarding the interim remedies shortly thereafter. The same procedure applies when the application for interim injunctions is filed ex parte. Applicants must submit with the application for interim injunctions a self-guarantee without which a temporary remedy may not be awarded. The guarantee is aimed at securing any damage that might be caused to the respondent if it is eventually decided that temporary injunctions were granted even though the applicant was not entitled to it. Usually, an application for interim injunction is decided within four to six weeks.
The main lawsuit for permanent injunctions and damages is filed as a statement of claim detailing the relevant facts and specifying the requested remedies. The defendant files a statement of defence within 60 days. Within the preliminary proceedings, discovery of documents is available to both parties, and interrogatories may take place.
Discovery proceedings are only available to the parties in the course of the main lawsuit and not during the interim relief proceedings. Within the preliminary proceedings of the main lawsuit, each party is entitled to demand a general discovery of documents, as well as a discovery of specific documents, provided that these are documents that are relevant to the disputed matters. After disclosing a document, the other party is entitled to see the document and obtain a copy of it. A refusal to discover documents may be brought before the court, which may order a party to disclose the requested documents. Documents that were not discovered are not admissible as evidence, unless specifically permitted by the court. Documents concerning the extent of the alleged infringement may not be disclosed within the process of discovery since the plaintiff may be entitled to see such documents only after an infringement has been found by the court. Injunctions ordering discovery by third parties are very rare.
After completion of the preliminary proceedings, the court orders the submission of evidence, usually in the form of affidavits. Expert opinions are allowed. No evidence in reply is admissible in court, unless allowed by the court as rebuttable evidence. During the court hearing, each party is entitled to cross-examine the other party’s witnesses. Finally, the parties summarise their contentions, usually in writing. The court then renders its judgment. When the plaintiff seeks monetary remedies, the court will sometimes divide the proceedings into two stages: only if infringement and liability is found in the first stage is a second stage of deciding the damages tried.
In civil cases, the burden of proof is the regular civil burden, which is based on the balance of probabilities. A certified copy of the registration will be prima facie evidence of the validity of the registration.
It was decided that the question of the risk of confusion is a legal question and therefore the court may find such a risk, even without any actual evidence, although witnesses or any other evidence for actual confusion may help in convincing the court that injunctions should be granted for the benefit of both the registrant and the public.
If the action is based on common law rights (passing off), the plaintiff’s case is significantly harder to prove in terms of bringing evidence to establish the goodwill acquired by the plaintiff in the trade dress, which is circumstantial. The courts have not limited the means by which this can be proved (witnesses, experts, public opinion polls, etc.).
The winning party is awarded with the proceeding’s legal costs and attorneys’ fees. Unfortunately, the costs awarded by the courts in the proceedings described above are not actual costs incurred. The courts tend to award a fixed amount of legal costs and usually include attorneys’ fees in the fixed amount. When awarding costs, judges consider the extent of the proceeding, the amount of evidence, the number of witnesses, the number of hearings and also each party’s conduct (although costs should not be punitive). However, still, the costs and attorneys’ fees awarded are almost always significantly lower than the actual costs incurred by the winning party. The situation is different in proceedings before the Trademark Tribunal (opposition and revocation actions) where, in recent years, the hearing officers consider actual costs incurred by the party and attempt to award costs based on the actual legal costs and attorneys’ fees incurred, as long as they are reasonable. The result is that the registrar awards much higher costs than in the district courts.v Remedies
The civil remedies available to enforce trademark rights include injunctive relief and damages. In its final judgment, the court also has the power to order the destruction of assets resulting from the infringement or that were used to perform the infringement. The court may also order the transfer of ownership in the infringing assets to the plaintiff, in consideration of their real value, had an infringement not occurred.
The most effective remedy to stop an infringement is an interim injunction sought by the plaintiff. An application for an interim injunction may be submitted together with the main lawsuit for the permanent injunction. Such applications are decided on a prima facie basis within several weeks. An application for an interim injunction may be filed ex parte. The plaintiff may also apply ex parte for a search and seizure order, or what are known as Anton Piller orders, and this instrument is used in cases of counterfeited and pirated products that the plaintiff desires to seize as evidence and to prevent the infringer from flooding the market with the infringing goods.
The proprietor may also be entitled to monetary relief, such as damages or an account of profit. In an action that concerns an unregistered well-known mark, the plaintiff would be entitled to injunctive relief only.
The plaintiff may elect to receive damages based on the actual losses caused by the infringement or to receive all the profits made by defendant due to the infringement, based on an account of profit.
In an action based on common-law rights, such as passing off, statutory damages for up to 100,000 new Israeli shekels for all the events of a particular infringement are available to the plaintiff.
Other enforcement proceedingsi Customs anti-counterfeiting activities
In accordance with the provisions of Section 200A of the Customs Ordinance, customs authorities are authorised to hold goods that prima facie constitute an infringement of a registered trademark, and notify the proprietor of the registration that these goods are held by customs and that the proprietor must deposit a guarantee fixed by customs within three days of the notice. Within 10 days of the notice, the proprietor must file a lawsuit against the importer. Failure to deposit said guarantee or file said lawsuit will result in customs releasing the goods. Customs are authorised to extend the above terms and usually grant such extensions to overseas proprietors. In such a lawsuit, the proprietor may obtain injunctive relief, damages and an order of the destruction of the goods. Customs hold goods because of a notice received from a proprietor or found by its own inspection. In recent years, customs have implemented these provisions intensively, and infringing goods are held every day. If customs seize small quantities of infringing goods, they usually implement a ‘short procedure’, whereby the goods are destroyed without a court order if the proprietor supplies customs with a written opinion that the seized goods are counterfeit, together with an undertaking for indemnification of any damage caused to the importer of the destroyed goods, if it is proved that the goods had not infringed the proprietor’s trademark.
According to Section 69A of the Trademarks Ordinance, a trademark proprietor whose rights to a trademark are infringed or about to be infringed may send a written notice to the customs director asking him or her to detain the suspected goods and treat them as described above according to his or her powers under the Customs Ordinance (Section 200A).ii Criminal proceedings
Trademark infringement may also constitute a criminal offence under the Trademarks Ordinance. Criminal proceedings are generally prosecuted by the state. Only in cases where the procedure of a private criminal complaint is available to a registered trademark proprietor, may the proprietor file the complaint him or herself. Criminal offences under Section 60 of the Trademarks Ordinance or Section 3 of the Merchandise Marks Ordinance may be prosecuted by a private complainant who is the owner of the infringed trademark.
The Merchandise Marks Ordinance also provides for criminal offences committed by infringers who use deceptive descriptions for goods, and such infringing actions are also liable for penalties of a fine or imprisonment. The Ordinance also empowers the court to give a search and seizure order, which is carried out by the police.
In criminal proceedings, the prosecution has to prove the facts of the case beyond any reasonable doubt.
The defendant may be liable to a maximum of three years’ imprisonment or a fine that could amount to a maximum of 1.4 million new Israeli shekels.