Overview
Israel does not have, like other countries, a unique legal system which deals with intellectual property matters, and trademark infringement matters are dealt by the regular courts system.
In addition, the Israeli commissioner of patents and trademarks has parallel authority to render decisions on the validity of patents.
In such a state of things, plaintiffs and defendants in trademark cases, as well as anyone who is interested to act to invalidate a registered trademark, have much flexibility in choosing the proper tribunal which will decide these
matters, flexibility that can be leveraged by sophisticated attorneys to promote the interests of their clients.
Plaintiff Strategy – Choice of Ground
A trademark owner that has his trademark right refused will often file a complaint to the relevant court arguing each relevant ground supported by the law.
However, a strong dilemma arises when the owner of a certain brand discovers an infringement of his right before he had properly secured a trademark right in Israel. Discovering such an infringement can be made after an Israeli trademark application was filed but not yet allowed for registration, or even when no trademark application has been filed at all.
When such an infringement is discovered, the owner of the right faces the dilemma of whether to first act to obtain a registered right and only then apply to the court, or whether he should apply to the court immediately and try to seek remedy by using the alternative ground of passing off.
Filing a Trademark Application and Waiting for Allowance
The main benefit in filing a trademark application and waiting for grant is that while in a passing off action the plaintiff must prove local (Israeli) reputation, there is no such requirement under the trademark law.
The Israeli trademark office’s regular examination time is around 14 months. However, the trademark office will accelerate trademark applications on the grounds that an infringement occurs. Requesting such acceleration is normally advisable.
Nevertheless, even in an accelerated process, it may take quite a few months until the examination process is concluded and a trademark is granted. One risk in doing so is that if the infringer is a sophisticated entity and tracks the trademark journal, it may file an opposition, which will hold the trademark process for a few years and will be quite costly for both sides (!)
However, most infringers do not follow up the trademark journal and it is usually safe to expect that a trademark will indeed be granted.
The problem comes up when such a trademark holder applies to court to obtain a preliminary injunction. Although a clever petition will argue that the application to court is being made on the basis of a ground that did not
previously exist, many courts will be reluctant to grant an injunction in such a case, the reason being that courts in Israel will normally grant injunctions only if they believe that the matter is extremely urgent, and may not think so
if the infringement has already occurred for a few months.
Filing an Action to the Court and Arguing Passing Off
The main benefit of applying to court immediately and arguing the alternative ground of passing off is the sense of urgency that such an application creates.
The downside is that proving local reputation is essential, and local reputation often does not exist.
The Preferred Strategy
If a trademark application is already in examination, the advisable strategy will often be to wait until examination is concluded in order not to trigger oppositions by a defendant that has been made aware.
There are precedents that in such a case, a petition to court after waiting for a formal grant is not filed too late.
However, in any other case, our view is that the advisable strategy is usually to file a complaint together with a petition for preliminary injunctions on the basis of passing off, and at the same time, apply for a trademark and request that it is accelerated. Many judges will be impressed by the urgency and grant an injunction even if the reputation is in question, and even if not, there will always be a second shot when the trademark is granted.
That may not be the strategy of choice for each counsel, but it is currently our view that it is the preferable way to go.
Plaintiffs Strategy – Choosing The Right Tribunal
A trademark owner that recognizes an infringement of his trademark rights and is interested to act against such a person or entity that infringes on the trademark can choose between different tribunals – each of the more suitable
for a different goal.
Choice of Court Level
According to the current civil procedure in Israel, the plaintiff must choose the tribunal which is authorized to grant him the requested remedy. The plaintiff therefore has, by deciding which remedy he seeks, much control over the chosen tribunal.
When the sought remedy is monetary compensation as well as a permanent injunction, the plaintiff must file his lawsuit in a district court.
When the sought remedy is only monetary compensation, it is possible to sue an amount which is within the boundaries of the magistrates court, and that way, file the lawsuit in a magistrates court.
Contrary to patent cases, where some patent owners may not wish to encourage an early decision (mainly when the patent is not practiced), most owners of trademarks will wish to submit their complaint together with a petition for preliminary injunctions to the district court, for a number of reasons:
(a) A trademark that is not practiced for 3 years is subject to cancellation. not so the case in patents.
(b) A trademark that is not used will normally not grant his owner a significant monetary compensation, so
injunction is the most efficient remedy.
However, this is not always the case. In some cases, such as when a trademark owner did not act immediately upon discovery of the infringement of his rights, the chances of obtaining a temporary injunction may be slim, and the trademark owner may prefer the magistrates court to reduce cost of counsel and to create a constant pressure on the opponent.
Choosing the Tribunal – A Question of Geography
When a trademark is infringed throughout the whole country, or in various other cases, the plaintiff will have a choice between different tribunals.
When the plaintiff chooses to file his claim in a district court, he can choose between the following courts:
The district court of Tel-Aviv
The district court of the Central District (Petah-Tikvah)
The district court of Jerusalem
The district court of Haifa
The district court of Beer-Sheva
The district court of Nazeret
Since most of the practicing attorneys are based in the central district, most of the claims are also filed in the Tel-Aviv or Petah-Tikvah court, but this is not a good reason to choose a court! Israeli judges move between courts all the time, and in any given point of time, some courts are better for plaintiffs and some courts are better for defendants.
By way of example, for many years we recommended our clients who were interested in preliminary injunctions in borderline cases, to avoid filing petitions for temporary injunctions to the district court of Tel-Aviv. This court had a
single judge who recently retired, who heard all those motions and denied most of them. Recently, this judge retired, and we are following up to see how the rulings will now change.
The district court of Petah-Tikvah, established to take the pressure of the Tel-Aviv court, has highly professional judges, but they also have a downside – they push very hard to compromise, even when compromise is not advisable for the plaintiff.
The importance of choice of the best venue is even more true when a plaintiff chooses to file his claim in a magistrates court, where the choice is between multiple courts, and in most of them there is a single judge dealing with intellectual property matters, so that choosing the court practically means choosing the judge, whose opinions are often known and ruling expected to some extent!
To conclude – one cannot overstress the importance of choosing the ideal venue to litigate a case!
Defendant Strategy – Choosing Venue
Defendants in patent infringement cases do not have much influence over choice of venue because it is normally chosen for them.
However, defendants to have the option of trying to divert the case from the court to the commissioner of patents and trademarks by filing a petition to invalidate the trademark and at the same time, file a motion to court to stay the proceedings until the commissioner of patents and trademarks has decided. This strategy usually serves as good leverage against a trademark owners, but the petitions to stay the proceedings in court usually fail. Unlike in patent
matters, which very few judges enjoy and understand, judges in Israel have more willingness to decide on trademark matters as they feel it is within their grasp.
Filing a motion to stay will therefore very rarely obtain its purpose and it is usually better to simply make the arguments to the judge. Unlike Juries in US matters who do not “like” to invalidate patents granted by the Patent
Office, most judges in Israel have little respect to trademark examiners, and there is no reason to believe that they will withhold a trademark valid where the commissioner would have cancelled it.
While the defendant has little ability to change the venue, it certainly can try to change the order of matters in court. A common petition to court would be that the question of validity will be decided before the question of infringement is, with the argument that if the court will render the trademark invalid, it can also not be infringed, and time will be saved. While Israeli civil procedure supports deciding all the questions at once, such an attempt to
change the order of things can be made.
All of the above relates to a case where an action has already been filed. An incredible opportunity to influence the choice of venue exists when a plaintiff begins a legal process by sending a cease and desist letter, which is what
nearly always happen.
In such a case, defendant can react by immediately filing a motion to the commissioner of patents and trademarks to try and invalidate the trademark. If such a motion is filed before a court action began, there is a realistic chance
that the court will indeed stay the proceedings. Another option which has even better chances is to file a motion for a declaratory judgment in a “slow” court. Such a motion, very rarely filed, can be a defendant’s way to many years of continues use of the trademark before the case is decided on its merits!
By way of example, a party receiving a cease and desist letter can file a lawsuit to the district court of Tel-Aviv asking for a declaratory judgment declaring that the trademark is invalid. If a claim will be filed against such a party in a different court it would be reasonable to assume that both proceedings will end up heard in Tel-Aviv court, and hence, the defendant may enjoy many years of lengthy proceedings.
Plaintiff Strategy – Temporary Injunctions
A. Temporary Injunctions
When trademark infringement results in immediate damage to a trademark owner, such a trademark owner will normally seek to secure a temporary injunction.
In such a case, the trademark owner will file a claim to the authorized district court, and will try to choose a court that tends to grant such injunctions in a given point of time.
When a regular claim is filed to court, the plaintiff must explain the outline of the case, but evidence is provided in a later stage. However, to secure a temporary injunction, the plaintiff must “come with clean hands” and present to the court everything he knows, including all evidence he may have that supports or that does not support his case. Therefore, petitions for preliminary injunctions are often very long and include many appendixes and affidavits (the Israeli court system works with affidavits and cross examinations. There are no depositions). In practice, therefore, the case and all its evidence are heard and concluded within a few weeks.
To win a petition for temporary relief, the plaintiff should show that:
- It has a valid claim.
- It has good chances of winning the case.
- The damage he will suffer if injunction is not granted is larger than the damage the other party will
suffer if injunction is granted (“the balance of hardships”). - That he filed his petition as soon or very shortly after he discovered the infringement.
In addition, the petitioner must deposit a guarantee in court if he receives the injunction to compensate the other party if the injunction ends up being cancelled. However, the amount of such guarantee is capped at around 13,000
USD.
Petitions for temporary injunctions that include all evidence are clearly expensive for both parties, but it has a great benefit – the judge’s decision in the temporary proceeding gives a clear indication where the case goes to, and often
leads to a compromise in an early stage. Recently, some courts began pushing the parties very hard to conclude the whole proceedings during the hearings regarding temporary injunctions.
A request for a temporary injunction is a sensible strategy when immediately stopping the infringement is required, but it can also serve as an excellent strategy in 2 completely different cases:
- When the trademark is weak/descriptive and may be invalidated in full evidential proceedings – while
the assumption of validity of trademarks is weaker than that of patents, it still exists. A smart use of the temporary process can overcome trademark weakness. - When the petitioner is interested in a compromise – Some courts will push parties to preliminary
processes to settle. Therefore, even when such a petition is completely without basis, courts will many times make offers that provide some remedy to the petitioners, merely to push defendants to agree.
B. Ex-Parte Injunctions
It is possible to apply to the court and request ex-parte injunctions. This is the case when a seizure order, for example, is requested, and informing the applicant may lead to the order being useless.
Winning such an injunction and securing a seizure order, for example, can completely shock a defendant who wakes up to an attorney accompanied by the police knocking on his door and confiscating products.
C. Downside of Injunctions
The significant downside of injunctions is that losing in a petition to obtain them leads to much frustration and lower chances of winning the procedure. The judge has already expressed his opinion and the defendant now has “energy” to fight the case.
The decision whether to seek an injunction must therefore be taken very carefully.
D. Injunctions and cease and desist letters
It is very common to send a cease and desist letter before filing a petition for injunction. Cease and desist letters are usually sent because plaintiffs believe that they may save the costly legal procedure.
However, such letters should be used with much caution because they may backfire, since a good attorney can use the letter to almost certainly block the option of winning an injunction (as will hereby be explained).
Defendant Strategy – How to Avoid a Temporary Injunction?
In cases where the defendant receives a cease and desist letter before filing a claim, he has received a great gift – a good shot at blocking the injunction! When there is no risk for an injunction, a response to a letter should avoid, as
much as possible, from reveling the defendant’s line of defense.
However, when there is a risk of the letter being followed by a petition for a preliminary injunction filed to court, the letter of response can be a very good basis for blocking the injunction (!)
Since the petitioner must “come in clean hands” and reveal all facts known to him to the court, he must also disclose the fact that a letter of claim was sent and the response to it, and a good letter of claim will include a reminder to that duty (“we will ask that in any proceedings you may choose to engage, you will enclose this letter…”). Then, it is enough that the defendant will create enough doubt in his letter to nearly certainly prevent the court from granting an ex parte injunction, and then, the letter should include implying that the defendant has a strong line of defense, but without revealing all the details (“the defendant has strong evidence that your claims have no basis”). In seeing such a letter, the court will want to see such evidence, and then, when presenting them, it
can also be argued that the plaintiff did not “come in clean hands” and convince the court to completely refrain from granting an injunction.
Another good way of “blocking” an injunction is inviting the defendant to mediation. Such an invitation, even if not done in a true attempt to end the conflict, will strongly influence the judge.
Conclusion
Trademark infringement cases in Israel allow parties much room for maneuver. Both plaintiff and defendant can choose between different courts and different strategies. It is a true chess game.
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Zeev Fisher is an Israeli Advocate and a Solicitor of England and Wales. He is one of the most senior intellectual property attorneys in Israel. He is the managing partner of Fisher Weiler Group, an IP boutique with
offices in Tel-Aviv and London.
Zeev Started his career as a criminal defense attorney for the Israeli army advocate general, and afterwards transformed to IP. He is a distinguished member of the INTA internet committee and is an authorized IP mediator. Mr. Fisher appears frequently before all the courts in Israel on IP matters, including the commissioner of patents, trademarks and designs, the district court, and the Supreme Court of Israel.
