Trademark Law in Israel – The BIG DEAL Decision

Trademark law in Israel is strongly influences by the US trademark law and Common Law in general. It is characterized by a very strict examination of trademark applications, both for substantive grounds, such as the descriptive character of a trademark (even stylized) and for relative grounds, such as the existence of an earlier similar trademark. The BIG DEAL decision is a good illustration of the practice of the Israeli Office, applying a great amount of flexibility and relatively wide freedom of action, with the view to protect the interests of the consumer.

Although trademark law in Israel is strongly influenced by the practice in the United States and more generally in the Common Law countries, it differs by a greater flexibility, an important consideration of the perception of the mark by the consumer and his protection.

The recent BIG DEAL decision by the Israeli Office is a good example of this practice. This decision is the conclusion of a nearly three years and half battle between the famous national newspaper Yediyot Aharonot (“the latest news” in Hebrew) and an Israeli chain of stores distributing various consumer goods.

The trademark BIG DEAL (No. 234855) was filed on November 3, 2011 in the form of a logo in colors, by the Israeli company Yediyot Internet controlled by the newspaper Yediyot Aharonot. This figurative mark is composed of the word BIG surmounted by the logo of the online news website of the newspaper  and the word DEAL in turquoise letters placed above the expression “the website of the sales of the State” in small letters and in Hebrew : .

This trademark application, filed in November 2011, in Class 35 for the services “Promoting the goods of others, namely, providing coupons, rebates and vouchers for the goods of others”, was accepted on May 19, 2013 by the Office and published for opposition in the trademark Journal at the end of May 2013.

A practice of strict examination

Since the Israeli Office has not yet fully recovered from the workload caused by Israel’s accession to the Madrid international trademark system, the period of examination of a trademark application is still relatively long (about 16 months).

As at the USPTO, the Israeli Office has strict examination practices (for substantive and relative grounds) and general product or service wording or class-heading definitions are generally accepted only in exceptional cases.

One of its particularities concerns the practice of citing earlier marks by systematically refusing to register a mark similar to an earlier mark already registered in Israel. This difference is based on the specificity of the Hebrew characters, which renders the average Israeli consumer less sensitive to the phonetic differences between marks written in Latin characters. Thus, the Israeli Office regularly cites earlier marks which, for a foreign ear, have little resemblance to the new mark. For example, the mark ONESTO was considered in the past by the Israeli Office as being similar to the mark ENSTO.

Where the cited mark has not yet been registered, the Office initiates contentious proceedings in accordance with Section 29 of the Trademark Ordinance between the competing trademark applications. In this type of procedure, applicants may either attempt to reach an agreement or choose the contentious way before the Office, each party attempting to establish that it has superior rights over its mark.

In the case a contentious proceeding is initiated according to Section 29, the three criteria that are used to determine the preference for one trademark application over the other, are the following: the filing dates of the applications, the use of marks preceding and following the filing dates (particularly in Israel) and the good faith of the parties. It should be noted that the filing date criteria is usually of secondary importance.

The opposition filed against the application

Once the mark is published in the Journal, there is a delay of three months in order to form an opposition.

An opposition was thus filed on August 14, 2013 against the trademark application by H.A.B. Trading Ltd, which is the owner of wordmark No. 131862 – BIG DEAL, registered on 2 September 2003 in Class 35 for the services “Shop services for toys, kitcheware, disposable articles, houseware, clothing for children, and drawing books”.

The opponent is an Israeli company that owns a chain of stores that has been existing since 1993 under the name BIG DEAL, having in the past counted 13 stores in Israel and nowadays, after the closure of several of them over the years, 8 stores only. These stores offer for sale a variety of products at attractive prices.

In support of its opposition, the opponent claims that its mark is used for the sale of a wider variety of goods than the one indicated in its registration, that the mark has become a well-known trademark and that the consumer might believe that the new mark applied for is related to his chain of stores, which would cause him unfair competition. The opponent adds that the mark applied for was filed in bad faith by the applicant in full knowledge of the earlier mark.

In response to these allegations, the applicant responded that the marks were sufficiently different. It added that he did not have any knowledge of the trademark of the opponent at the time of the conception of its own mark, that at the moment it became aware of it, he sent him a letter requesting a coexistence agreement, and that it was only when such request was denied that he decided to file his trademark application.

Section 30(a) of the Israeli Trademark Ordinance of 1972 allows the parallel registration of similar trademarks under the following conditions: “When the Registrar is satisfied that the marks are used in good faith at the same time or where there are other special circumstances which justify in its opinion the registration of identical or similar marks concerning the same products or types of products by more than one proprietor, the Registrar may allow such registration, subject to such conditions and limitations as it deems necessary.”

In practice, the Office is not obliged to accept the simultaneous registration of similar marks, if it considers that such registration is likely to cause confusion in the minds of the consumers. In this case, the protection of the public interest has priority over a private agreement binding the parties.

The practice of citations of earlier marks in Israel

In the BIG DEAL case, the applicant added that the opponent did not show until he received the notification by the Office concerning the publication of its trademark, although its website had already been active for about three years.

It should be noted here that when a trademark is being examined in Israel and when a prior trademark is cited against the registration of a new trademark, it is possible to submit arguments to the Office based on the differences between the marks and/or between the products (or services) concerned. When these arguments are sufficient to convince the examiner that the citation may be withdrawn, the Office uses to condition the withdrawal of the citation upon the acceptance by the new applicant that a notification concerning the publication of its mark for opposition, will be communicated in due time to the owner of the earlier mark.

This is a standard requirement intended to provide the opportunity for the owner of an earlier mark to oppose the trademark application if he so wishes. In this way, the rights of the owner of the earlier mark are preserved, without having this mark being officially cited against the registration of the new mark. This is Presumably what happened in this case and the company H.A.B. Trading Ltd became aware of the rival brand only at the time of receipt of this notification.

The opposition procedure

Subsequently, the parties filed their respective evidences, consisting mainly of affidavits from the presidents of the companies concerned – part of these affidavits being subject to a confidentiality order and not filed in the public record – various expert opinions, such as an opinion of a linguistic expert and the opinion of a statistical expert, as well as an opinion poll.

Various interim decisions concerning these evidences had to be rendered by the Office.

A subsequent hearing was held at the Jerusalem Office, where the parties and their witnesses were interviewed and cross-examined before each of the parties presented their conclusions.

The judge starts her decision by examining an application for the cancellation of one of the affidavits, on the ground that it includes facts that are not known personally to the affiant, as well as legal allegations.

It should be noted here that the proceedings held before the Israeli Office are regulated mainly by the Trademark Ordinance of 1972, as well as by the Trademark Regulations of 1940. Any issue that is not regulated by these texts must in principle be resolved according to the regular law governing civil proceedings, namely the Civil Procedure Regulations of 1984.

In practice, the Office’s interpretation of the laws is relatively flexible and allows a pragmatic approach to procedural issues.

Accordingly, the judge decided, in respect of the affidavit which the opponent sought cancellation, to take into account in the affidavit only the elements known personally by the affiant, while giving less weight to the rest of his statements. It relied for this purpose on a previous decision of the Office.

Is the mark BIG DEAL a well-known brand in Israel?

The judge then turns to examine the question concerning the reputation of the opponent’s mark, namely the wordmark BIG DEAL.

Article 1 of the Trademark Ordinance defines a well-known mark as follows:

“Well-known trademark – a well-known mark in Israel is a mark owned by a person who is a citizen of a Member State, is a permanent resident of the Member State or has an active trading or industrial enterprise there, even if the mark is not a registered trademark in Israel or is not used in Israel; in order to determine whether a mark is a well-known mark in Israel will be taken into account, inter alia, the degree of recognition of the mark to the relevant public, the degree of recognition caused by advertising means;“

Well-known marks enjoy in Israel, as in many countries, enhanced protection established by Article 11 (14) of the Ordinance:

“11. The following marks may not be registered: […]

(14) A mark identical or similar to a well-known mark which is a registered mark, even for goods which are not of the same field, if the mark applied for is likely to indicate a link between the goods for which the registration is requested and the registered mark, and that the owner of the registered mark is liable to suffer damage as a result of the use of the mark applied for. “

The criteria used to ascertain whether a mark has acquired over time a notorious character, as determined in previous decisions of the Office, are as follows:

• The degree of recognition of the brand;
• The importance and duration of its use;
• The importance of sales and the strength of market penetration;
• The extent of advertising for the brand and its duration;
• The degree of brand awareness, degree of use, registration and enforcement;
• The degree of originality of the mark and the degree of use of the mark or similar marks by third parties;
• The reputation of the brand in relation to the products and services concerned.

The opponent’s mark is not a well-known mark

In the light of the evidences filed by the opponent concerning the use of its mark and, in particular, the turnover generated by sales in its stores and relatively low and limited advertising resources for a period ending in 2012, the court held that there was no evidence that BIG DEAL had become a well-known mark or that the mark was clearly identified by consumers as referring to the services provided by the opponent.

Moreover, the opponent’s use of the BIG DEAL trademark under different forms, with texts or figurative elements that have varied over time, reduces the degree of recognition of the mark by the public in its verbal form as taken alone.

Regarding the turnover, the judge notes the absence of sufficiently precise global data concerning sales, because of the transmission of figures referring to limited durations, to a specific store only or global data not specifying the profits distributed between the different points of sale.

It should be noted in this regard that most of the failures in demonstrating the well-known character of a trademark at the Israeli Office are due to the lack of sufficient evidences or even to allegations that are not supported by appropriate evidences (usually in the form of affidavits). The Office generally requires accurate and proven documentation to support the allegations made, especially when it comes to demonstrating the intensive use of a trademark. It is therefore sometimes difficult to gather all the required elements and documents.

The risk of confusion between the marks

The judge then examines the question of the likelihood of confusion between the marks.

Article 11 (9) of the Trademark Ordinance provides:

“11. The following marks cannot be registered:

(9) marks which are identical to a mark belonging to another person and already registered for the same or similar goods, or similar marks likely to create confusion;”

The criteria of confusion

In Israel, the degree of resemblance between the marks is measured according to the “triple test” established by the case law:

• The appearance and sound test;
• Test of the type of products, the customers and the means of marketing;
• Other circumstances of the case.

The common sense test was later added to this triple test. It is clear that these criteria grant the Office a wide freedom of action in its decisions.

The burden of the proof of the capacity of a mark to be registered falls in principle on the applicant, here, the newspaper Yediyot Aharonot. Nevertheless, within the frame of an opposition, the opponent must first bring preliminary evidence justifying the opposition in order to reverse the burden of proof and put it on the applicant.

The comparison must be made by observing the marks in their full composition, while taking into account the imperfect recollection of the consumers.

The judge considers that there are significant differences in appearance and sound between the two marks, due to the stylization, the colors and the text additions appearing in the mark applied for. The judge’s argument to that effect, which details the additions to the mark which is the subject of the opposition, is rather weak, since the opponent’s registered mark is a pure wordmark.

Under Israeli law, a registered wordmark is supposed in most cases to grant a maximum protection to its owner, regardless of the forms, colors, variations or additions made to the mark. In this case, the text additions, the lowercase letters and the turquoise color do not seem to constitute visually significant elements justifying, in our opinion, an exception to the rule.

As a general rule, a figurative mark is considered to be sufficiently different from a wordmark, when it is characterized by a stylization, a logo or sufficiently original and creative colors so that the eye is eventually more attracted by these figurative elements than by the words included in the mark.

Regarding the type of clientele, the judge recognizes that the group of consumers concerned by the two brands is identical, i.e. all Israeli consumers.

As for the type of products/services offered, the judge considers that there is a clear difference between the coupons distributed by the plaintiff through its website, allowing to acquire products in various fields (tourism, optics, automotive, furniture, sports, etc.) and the stores of the opponent offering real products for directly sale. The fact that the opponent has occasionally offered his products through coupons does not change his opinion.

Once again, it is interesting to note that the judge attaches only minor importance to Class 35 services as detailed in the lists of the respective marks, although she notes with interest the opponent’s claims concerning a wider use of the brand, and prefers to focus on the real and actual means of marketing of the products/services under these brands. This system is typical of the very pragmatic approach of the Israeli Office by observing the actual use of trademarks.

The other circumstances of the present case enable to refer essentially to the behavior of the parties and to their good faith.

The registered trademark is a well-known mark
The judge notes to this effect that the mark  affixed to the mark applied for is undoubtedly a well-known mark of Yedihot Aharonot’s online journal (www.ynetnews.com), enabling to avoid any confusion between the parties. The applicant has shown that the trademark itself has acquired a distinctive character since the acquisition of the website “www.bigdeal.co.il” in 2010.

The addition of the housemark to the mark applied for, which is itself recognized as a well-known mark, is a decisive factor in the decision. This addition allows consumers to clearly identify the source of the services offered and thus to differentiate the proposed mark from the opponent’s mark.

In this regard, the judge refuses the request to reject the results of the opinion poll filed as an evidence by the applicant, for an alleged lack of objectivity (biased questions) and for a defective sample of population, and accepts its admissibility based on the oral testimonies at the hearing and the applicant’s conclusions.

According to this survey over 610 persons, 78% of respondents attributed the mark BIG DEAL to the website of the applicant, the newspaper Yediyot Aharonot, rather than the chain of stores of the opponent.

The Judge considers that all these elements render it possible to determine that the mark applied for has acquired a distinctive and well-known character within the meaning of the ordinance, with regard to the online sale of purchase coupons, which reduces the likelihood of confusion between marks.

The judge therefore determined that there is no likelihood of confusion between the two marks before the consumers.

She then rejects the opponent’s claims concerning the actual confusion caused between the marks, based on the opponent’s reception of numerous telephone complaints actually addressed to the applicant, and defines this confusion as being an administrative error (caused by an incorrect phone number communication by the telephone company) causing inconvenience to consumers. She bases her decision on the British book Kerly’s Law of Trade Marks and Trade Names.

It should be noted that, in the absence of Israeli jurisprudence, the Office regularly relies on books or even precedents essentially taken from the Common Law jurisidictions, but also sometimes from the European trademark law.

Accordingly, the judge dismisses the opposition and accepts the registration of the mark applied for.

The decision BIG DEAL is a reflect of the victory of the powerful over the humblest and the importance of the use and recognition in trademark law in Israel, which sometimes supersede the rights conferred by a prior trademark duly registered.