No automatic approval of settlement agreements

As a general matter, an agreement reached in settlement by the parties to an opposition or cancellation proceeding will not be rejected by the Israel Trademarks Office. However, such approval is not automatic, as the parties found out in Ganor v Musikart Ltd (Opposition to applications Nos 236701 and 236517, December 11 2011).
The applicant, Musikart Ltd, filed applications for the registration of the word mark ALMA in Hebrew in Classes 41, 43 and 44 of the Nice Classification and the applications were accepted for opposition. The opponent, Ofra Ganor, then filed a timely opposition based on her registration for the mark ALMA BEACH (in Hebrew) and design. Prior to the filing of the counterstatement of claims by the applicant, the parties reached a settlement agreement whereby the opponent would withdraw her opposition. At the request of the opponent, the agreement included a limitation on the geographic scope of use (the precise terms of which were not revealed in the decision), which was made subject to approval by the commissioner. Thereupon, the parties filed a motion with the Israel Patent, Design and Trademarks Office for approval of the settlement.
The adjudicator acknowledged that, under Section 4 of the Trademarks Ordinance (New Version) 5732-1972, a mark may be registered subject to waivers, conditions and limitations. However, the adjudicator was not willing to agree to a limitation based on the geographic scope of use of the respective marks. In her words, “under the circumstances, this is a subject that should be left to the field of contractual arrangements between the parties and it is inappropriate to give it expression on the Trademark Registry”. The adjudicator observed that, given the small territorial scope of the State of Israel, such a limitation should, in any event, be sparingly used, and only upon the submission of sufficient evidence to warrant a finding that unusual circumstances are present.
The adjudicator added in dictum that, even though no evidence had yet been submitted, there was a prima facie sense that there was a likelihood of confusion between the respective marks. In this connection,  the adjudicator referred to Section 26 of the ordinance, which provides that, even if an application is registered (either because no opposition is filed, or an opposition is filed but is resolved in favour of the applicant), the registrar is obligated to register a mark if it was accepted in error. She observed that, a fortiori, the registrar also has the same authority in the event that an opposition is filed but is ultimately withdrawn at the initiative of the parties.

The adjudicator thus declined to approve the settlement. She ordered the parties to give notice within 20 days of how they intended to continue with the opposition.

It is interesting that the decision did not make any reference to competition law considerations with respect to the limitation on the geographic scope of use. Moreover, the applicability of the extension of the adjudicator’s authority under Section 26 on an a fortiori basis is not free from doubt.
Neil Wilkof, The Bressler Group, Ramat-Gan

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