ISRAEL Trends and Developments Contributed by: Sanford T. Colb, David Colb, Barak Mashiah and Guy Oved, Sanford T Colb & Co
under the respective marks came from the same source. Commissioner’s initial decision In response to Kviscal’s application, the Israel Trade - mark Office refused registration on the grounds that the Applied-for Mark was identical or very similar to the existing registered mark, creating a likelihood of confusion, pursuant to the provisions under Section 11 (9) of the Israel Trademarks Ordinance (New Ver - sion), 1972 (the “Ordinance”). After the refusal, Kviscal entered into a co-existence agreement with Perfume Clean, in which Perfume Clean consented to the registration of the Applied-for Mark if Kviscal undertook not to challenge the existing trade mark registration of Perfume Clean, and both parties undertook to act in good faith in order to pre - vent consumer confusion. The co-existence agree - ment was submitted to the Commissioner along with a request to allow the application for the Applied-for Mark. Commissioner’s conditional approval and further proceedings The Commissioner did not view the co-existence agreement as binding on the administrative process and instead exercised his statutory discretion. The Commissioner determined that a likelihood of public confusion still existed, unless certain conditions were imposed, and accordingly granted Kviscal’s applica - tion but made registration conditional on two modifi - cations to the application: • Graphical modification – adding a phonetic marker in the Hebrew spelling, so that the Applied-for Mark will sound and appear more distinct than the registered mark of Perfume Clean. The modifica - tion renders the pronunciation of the Applied-for Mark to “Kviskal”, as opposed to the original repre - sentation of the mark, which could be pronounced as both “Kviskal” and “Kviskol”. • Limitation on goods/services, restricting coverage to goods in Class 3 for use in the industrial market. Kviscal rejected the second condition and appealed to the Jerusalem District Court. The district court accepted Kviscal’s appeal in its entirety, removing
the limitation on goods and services and holding that the co-existence agreement should be honoured, and that the Applied-for Mark be accepted for registration without revising the list of covered goods in Class 3. Supreme Court review The Israel Trademark Office then appealed to the Supreme Court. It is important to note that the Israel Trademark Office only rarely appeals decisions made by Israel’s district courts. The Israel Trademark Office argued that the district court erred in deciding that a co-existence agreement removes or restricts the Commissioner’s authority to refuse registration of a mark, or to allow registration subject to conditions and limitations. Such a ruling, according to the Israel Trademark Office, unjustifiably narrows the statutory discretion granted to the Israel Trademark Office and undermines public interest. The Israel Trademark Office maintained that co- existence agreements are not binding on the Israel Trademark Office. While such agreements may be a relevant consideration, they cannot replace the inde - pendent duty of the Israel Trademark Office to assess the likelihood of consumer confusion and to protect the integrity of the trade mark register. The Israel Trademark Office further contended that some co-existence agreements do not adequately address the risk of confusion and therefore cannot, in and of themselves, justify unrestricted registration of similar or identical marks. For this reason, the Israel Trademark Office must retain the power to impose substantive restrictions on registration. The Supreme Court accepted the appeal and ulti - mately reversed the district court’s ruling, reinstat - ing the principle that the Israel Trademark Office has independent discretion when assessing trade mark applications, even when a private co-existence agree - ment exists. Legal Issues Presented The core legal questions before the Supreme Court were:
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