Adjudicator provides guidance on application of Sections 11(5) and 11(6)

The adjudicator, in ruling on the opposition filed by Saar-Jo Investments Ltd against registration of the mark COVERI by Enrico Coveri srl for "clothing, footwear and headgear, all in Class 25", has provided useful guidance about the application of Sections 11(5) and 11(6) of the Israel Trademark Ordinance when the opponent does not rely on rights in a prior registration in Israel (Opposition to application No 237567 for COVERI in Class 25, May 27 2015).

In particular, the opponent alleged that, under Section 11(5), the mark "is or may be injurious to public policy", while under Section 11(6), the mark "is likely to deceive the public and it encourages unfair trade competition". The opponent also submitted an expert opinion, which was merely attached as an exhibit to the opponent's evidentiary affidavit, which concluded on the basis of a survey that the applied-for mark had little goodwill in Israel.

With regard to Section 11(5), the opponent argued that the applicant had acted in bad faith because the opponent had used the mark COVERI in Israel for 15 years. In addition, allowing registration of the mark after an infringement action was rejected by the district court, due to the failure of the applicant (the plaintiff in the infringement action) to file a bond as requested by the court, was injurious to public policy.

The adjudicator rejected the argument, ruling that, unlike a claim for cancellation based on bad faith under Section 39A(1) of the ordinance, there is no similar provision with respect to an opposition proceeding. Only an act that constituted an injury to a basic value of society (such as using the copyright work of another in one's trademark application) will amount to an action injurious to public policy.

With respect to the claim that the applied-for mark constituted deception of the public under Section 11(6), the adjudicator reiterated her position that this ground requires that the mark on which the opposition is based "enjoy significant goodwill, even if it is not a well-known mark". The adjudicator noted that the applicant sought registration for various clothing goods, while the opponent relied on its use of the mark with respect to the retail sale of children's clothing and furniture. The adjudicator ruled that there was significant visual and aural similarity between the respective marks and that there was the possibility of overlap between the respective customers. She further ruled that the opponent had developed material goodwill in the work over a 15-year period, far surpassing the goodwill accumulated by the applicant in the applied-for mark.

The adjudicator then addressed the claim by the opponent that the applicant had selected the mark in bad faith.  Agreeing with the opponent, she reasoned as follows:

"Nevertheless, the law does not look favourably upon registration of a trademark, the entire purpose of which is to block competitors or potential competitors. Such marks are called defensive trademarks and conduct in this regard may amount to bad faith."

Based on the foregoing, the adjudicator accepted the opposition and refused registration of the mark.

Neil Wilkof, Dr Eyal Bressler & Co, Tel-Aviv