In Ilan Car Glaziery Ltd v Carglass Luxemburg Sarl (December 3 2008), the registrar of trademarks has granted the applicant's request for the cancellation of six trademark registrations on the grounds of non-use under Section 41 of the Israeli Trademarks Ordinance 1972 (New Version).
Ilan Car Glaziery Ltd is an Israeli company specializing in car glaziery. Its main customers are car garages, insurance companies and car leasing companies. Ilan has used the mark CAR GLASS (written in Hebrew letters, but phonetically identical) on an unregistered basis since at least 2002. Carglass Luxemburg Sarl is a company with worldwide activities in the car glaziery field. In 2002 Carglass obtained six registrations for the trademark CARGLASS (and design) in Israel. The words 'car' and 'glass' were disclaimed.
In 2002 Ilan purchased the business (including the rights of use in the name) of an Israeli company called RG Car Glass. RG had been well known in Israel in the car glaziery field long before Carglass entered the Israeli market. Ilan claimed that the CARGLASS marks should not have been registered under the ordinance on the grounds that they:
- were confusingly similar to RG's well-known mark; and
- created unfair competition.
Alternatively, Ilan claimed that the CARGLASS marks should be cancelled on the grounds of non-use.
The registrar rejected the claim that the marks were confusingly similar despite their phonetic identity. The registrar relied, among other things, on an earlier ruling of the Israeli Supreme Court regarding Ilan's request for injunctive relief against Carglass's licensee. In that ruling, the court had held that the licensee could use the mark (and design) in its entirety.
Similarly, the registrar held that the marks at issue in the present case were not confusingly similar. The registrar emphasized that:
- the CARGLASS marks are written in English letters and in a stylized form, while Ilan's marks are generally written in Hebrew letters;
- Carglass disclaimed the words 'car' and 'glass';
- Ilan did not register its mark; and
- Ilan’s customers are sophisticated and would not be confused by the two marks.
As to the unfair competition claim, the registrar focused on the fact that Carglass is a large, worldwide company, while Ilan is a local Israeli company. Therefore, it was reasonable to assume that the CARGLASS marks were registered in good faith and were not intended to build upon Ilan's reputation. In that respect, the registrar had no evidence before it indicating that Carglass was a worldwide company. However, he relied on judicial notice after having conducted an independent search on the Internet.
However, the registrar granted Ilan’s request for cancellation on the grounds of non-use. The registrar held that Ilan had met its burden of proof with respect to showing non-use by Carglass. As a result, the burden shifted to Carglass to prove use. However, Carglass did not submit any evidence to prove its use of the mark in Israel.
Nevertheless, Carglass argued that its licensee in Israel had made use of the CARGLASS marks. Carglass claimed that its licensee’s use should be imputed to it and that the claim of non-use should be rejected. The registrar disagreed, holding that use by the licensee had no legal effect since the licence had not been registered under the provisions of the ordinance. According to the registrar, for use of the licensee to be imputed to the licensor/registrant, the licence must be properly registered under Section 50 of the ordinance.
Neil Wilkof and Adar Ortal, Herzog Fox & Neeman, Tel Aviv