Commissioner considers third party's right to intervene in pending cancellation action

Decisions by the Israel commissioner of patents, designs and trademarks on the issue of a third-party intervenor are rare. For that reason, the November 1 2012 decision given by the commissioner in the cancellation action regarding Registration No 216,916 (motion to intervene and, in the alternative, an extension for the trademark proprietor to respond) merits attention.

In this matter, petitioner Avner Strauss, pursuant to Section 72 of the Trademark Regulations 1940, moved to intervene in the aforementioned cancellation action. Pursuant to Section 72,  any person, other than the registrant, who alleges that he/she has a benefit in a registered trademark, may file a motion to intervene.  Decision on the motion is then rendered after a hearing. Here, the proprietor of the challenged registration, Strauss Cultural Industries Ltd, stated that the petitioner was entitled to intervene on the basis of an agreement entered into in 2002 between the proprietor and the petitioner.

Under the agreement, the proprietor had been liquidated, and ownership in the registration thus reverted to the petitioner. As such, it was argued by the proprietor that the petitioner was the proper party to carry on with the cancellation action. It was noted, however, that the proprietor and the petitioner had not yet taken steps to file a request with the registry to transfer ownership of the mark to the petitioner.

In response, Dani Argon, the party seeking cancellation (the challenger), argued that the proprietor had no asset that it could have transferred retroactively pursuant to the 2002 agreement. Further, the challenger asserted that any such rights could accrue to the benefit of the challenger only upon registration of the mark,  which occurred after the proprietor had been liquidated. The commissioner rejected the latter claim, pointing to Section 31 of the Trademarks Ordinance, which provides that the registration is valid from the date of the filing of the application.

The commissioner noted that the rights that flowed from the date of the filing of the application for registration preceded the commencement of the winding-down procedure, even if registration was consummated after liquidation. Here, the application was filed before the proprietor had been liquidated. As such, the commissioner could not rule out the possibility that the rights in the registered trademark were a form of asset belonging to the proprietor prior to liquidation. It follows that the petitioner had claims of right in the asset as described by virtue of the 2002 agreement.

While the commissioner granted the petitioner the right to intervene, the commissioner noted that the motion to intervene had caused a delay in the proceedings to the potential detriment of the challenger. Accordingly, pursuant to the authority conferred under Section 72 of the regulations, the commissioner conditioned the right to intervene on an undertaking given by the petitioner to pay the expenses of the challenger. In that connection, the commissioner ordered that the petitioner post a bond guarantee in favour of the challenger in the amount of IS30,000 (approximately $7,200).

Neil Wilkof, Dr Eyal Bressler and Company, Ramat-Gan