In unprecedented ruling, court holds that time-limit to appeal runs from award of costs

In Millenium Marketing Intertrade (1999) Ltd v Farm Chalk Investment Ltd (MCA 27992-08-14, February 18 2015), the Tel Aviv District Court has dismissed an appeal against a decision of the trademark registrar to allow the registration of the device mark CLIP FRESH, notwithstanding an opposition by the holder of the registered stylised mark CLICK & FRESH, holding that the marks were not confusingly similar. The court entertained the appeal despite the fact that the period to appeal from the date of the judgment-in-chief had lapsed, holding that the period should be calculated from the date of the decision on costs. The court also upheld the registrar’s relatively high award of IS80,000 in legal costs.

The appellant, Millenium Marketing Intertrade (1999) Ltd, has held since 2007 a registration for the stylised mark CLICK & FRESH for kitchen containers and utensils in Class 21 of the Nice Classification:

In 2014 the appellant opposed the registration of the stylised mark CLIP FRESH BY FARM CHALK, applied for in 2010 by respondent Farm Chalk Investment Ltd for the same goods:

The registrar dismissed the opposition on all grounds, specifically holding that the propounded mark was not confusingly similar to the opponent’s mark in contravention of the provisions of Section 11(9) of the Trademarks Ordinance (New Version) 5732-1972, and was not liable to create unfair competition and public competition in contravention of the provisions of Section 11(6) of the ordinance. In a separate motion, the registrar awarded the applicant IS80,000 in legal costs (over IS90,000 had been requested). Following the decision on costs (four months after the decision in the opposition), the opponent appealed.   

In an unprecedented decision, relying on earlier Supreme Court rulings which did not directly address this specific issue, the district court decided to entertain the appeal despite the lapse of the statutory timeframe prescribed for appeals, holding that the decision on costs (treated in case law as “another decision” distinct from the judgment-in-chief and separately appealable by leave) was not separate from the decision in the opposition and was liable to affect the appellant’s decision to appeal. Therefore, the statutory time period started running from the decision on costs.

On the merits, the court dismissed the appeal.

The court held that the marks were not confusingly similar under the three-pronged test of confusing similarity, due to the pronounced graphic differences between them. As to the phonetic similarity, the court emphasised the fact that the appellant had disclaimed both word elements in its mark upon registration, which did not preclude a finding of similarity but affected any comparison with marks containing the disclaimed elements. The court agreed with the registrar’s analysis that marks in a crowded competitive market enjoy weaker protection, in the context of the other circumstances of the case and of the 'common sense' test.

As to the appellant’s claim that the respondent had imitated the conceptual message of its mark, the court noted that trademark protection of a concept was intended for marks with a novel artistic concept, whereas 'click' and 'fresh' were descriptive terms and, as such, were entitled to narrow protection (if at all). The court held that the appellant had failed to show that it had created a connection in the consumers’ mind between the descriptive words making up its mark and its unique product, which would be one of the rare cases in which a descriptive mark would be entitled to protection.

The court also stressed the need for caution in granting IP owners an overbroad monopoly at the expense of free competition.

As to the other grounds of appeal, the court held that the appellant had failed to show that the respondent had chosen its mark in bad faith, and had failed to prove that its mark had a reputation, thus entitling it to prevent registration of the respondent’s mark on the grounds of unfair competition.   

Finally, the court upheld the registrar’s relatively high award of IS80,000 in legal costs, agreeing with the respondent that the “real costs” envisaged by Israeli case law refer to actual proven costs and not to reasonable costs.

Orit Gonen and Sonia Shnyder, Gilat Bareket & Co, Reinhold Cohn Group, Tel Aviv