Commissioner clarifies meaning of good-faith intent to use

Israel

In Reporter Spolka z ograniczona odpowiedzialniscia v FIN.ING. SRL (August 9 2010), the Israel commissioner of patents, designs and trademarks has provided a gloss on the meaning of good-faith intent to use a mark within the context of a non-use cancellation action.

The registrant, FIN.ING. SRL, is a holding company incorporated in Italy that is involved in the clothing, footwear and leather products industries, among others. It registered the mark REPORTER in 1994 in Classes 9, 14, 18 and 25 of the Nice Classification. Reporter Spolka z ograniczona odpowiedzialniscia is a Polish company that manufactures, sells, distributes and advertises clothing and fashion products. Spolka claims that it began using the REPORTER marks in various countries since its foundation in 1994.

On March 17 2005 Spolka filed an action for the cancellation of the REPORTER registrations on the grounds of non-use. Under Section 41(a) of the Israel Trademarks Ordinance, one ground for seeking cancellation based on non-use is where:

there was no bona fide intention to use the trademark in connection with the goods regarding which there is a request to cancel the registration, and there in fact has been no bona fide use of the trademark in connection with the goods regarding which there is a request to cancel the registration.”

Spolka claimed that these requirements applied to the registrations at issue and that they should accordingly be cancelled for non-use. In 2009 the registrant agreed to the cancellation of the mark in Classes 9 and 14. As a result, the commissioner focused on the registration of the mark in the two remaining classes, namely 18 and 25.

The commissioner noted that the burden of proof to show non-use of a mark rests with the party seeking cancellation. Additionally, the commissioner stated that, in deciding the issue, three questions must be examined:

  • whether there was good-faith intent on the part of the owner to use the mark and whether there had been in fact good-faith use during the three years prior to the cancellation action;
  • whether there were any special circumstances in trade that prevented the mark from being used; and
  • whether the commissioner, in light of the foregoing, should order the cancellation of the mark.

It was noted that the three-year requirement for non-use under this head of Section 41(a) is not directly supported by the language of the ordinance.

The commissioner stated that there are two cumulative conditions under Section 41(a): good-faith intent to use and actual use. Intent to use alone does not suffice. The commissioner focused on the fact that, although the registrant had entered into a distribution agreement for the goods in 1999, the agreement was not carried out. The registrant was able to produce five invoices in the total amount of approximately €10,000, and the circumstances of the alleged distribution were not clear. In the view of the commissioner, such evidence fell short of the scope of use that was required. Accordingly, the registrant failed to establish that it had “a continuous” intent to use the mark.

Since the registrant was unable to show either good faith intent to use the mark or actual use under the provisions of the first head of Section 41(a), the registrant had to show that, nevertheless, there were special circumstances in connection with the non-use of the mark. However, no such special circumstances were shown. Therefore, the commissioner accepted Spolka's request and ordered the cancellation of the registrations.

Neil Wilkof and Jenia Melkhior, Herzog Fox & Neeman, Tel Aviv

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