Israel Sports Betting Board backs the winner in TOTO GOLD claim

In Toto Gold Subscribers Club Ltd v Israel Sports Betting Board (Civil Appeal 3559/02, September 26 2004), the Israeli Supreme Court has upheld the Jerusalem District Court's ruling that, among other things, the use of TOTO GOLD in respect of games of chance infringed the trademark TOTO.

Toto Gold Subscribers Club Ltd purports to have developed a method for increasing the probability of winning games of chance in Israel and other countries, including the Toto game organized by the Israel Sports Betting Board (ISBB). ISBB is a statutory body that was granted a monopoly in the field of sports betting games in Israel. It owns the registered trademark TOTO in Israel for, among other things, betting.

ISBB filed suit in the District Court of Jerusalem against Toto Gold, arguing that its use of TOTO GOLD for its betting services infringed the TOTO trademark. The court upheld the claim and Toto Gold appealed to the Supreme Court.

One of the grounds for appeal was that the TOTO mark had been invalidly registered. Toto Gold claimed that TOTO has become generic as it describes a type of football betting system used in Israel and the rest of the world. Therefore, in Toto Gold's opinion, the trademark registrar had erred in allowing the mark to be registered.

The Supreme Court acknowledged that trademark protection is not uniform and depends on the nature of the mark. It noted that descriptive marks would not be granted protection unless they had acquired distinctive character through use. Similarly, it stated that generic marks would be granted protection only in rare cases where it is proved that the mark has acquired a special meaning that creates a direct connection between the mark and the relevant goods. It thus recognized that even generic marks may be granted trademark protection in special circumstances.

The lower court had rejected the claim that TOTO was a generic mark. Nevertheless, it had ruled that TOTO is identified in Israel and the rest of the world with the field of sports betting, suggesting that TOTO should be considered to be generic. Without specifically ruling on whether this was the case, the Supreme Court treated the mark as generic, such that proof of acquired distinctiveness would be required for registration. It held that, in determining whether a generic mark has acquired distinctiveness, it must be proved that the mark has achieved secondary meaning through use, whereby an exclusive connection is created between the mark and its owner. It is unclear whether such a test for generic marks requires a higher standard of proof than that for descriptive marks. Whatever the answer is, the Supreme Court concluded on the facts of this case that there was a direct connection between ISBB and the mark TOTO, which had thus acquired the requisite secondary meaning.

Toto Gold also argued that the fact that ISBB enjoyed a statutory monopoly in the field of sports betting reinforced the connection between TOTO and ISBB. This, said Toto Gold, gave ISBB wider protection than is allowed under trademark law principles. The Supreme Court rejected this contention and upheld the lower court's decision on this point.

The Supreme Court went on to hold that TOTO GOLD was confusingly similar to TOTO and that ISBB's case for trademark infringement had accordingly been made out.

Neil Wilkof and Anat Paz, Herzog Fox & Neeman, Tel Aviv