Priority of filing date decisive in BLACK PEARL Case

In Yarin Yam-Hamelach Ltd v Anna Lotan Ltd (August 18 2008), the Israel commissioner of patents and trademarks has held that, in rare cases, the priority of the filing date of the respective applications can be decisive in determining which applicant has superior rights in inter partes proceedings under Section 29 of the Trademark Ordinance.
In September 2005 Yarin Yam-Hamelach Ltd filed an application for the registration of the trademark BLACK PEARL for cosmetic products. Several months later, it came to Yarin's attention that Anna Lotan Ltd was using the mark BLACK PEARL for similar goods. As a result, Yarin sent a cease and desist letter to Anna Lotan demanding that it cease all use of the mark on the grounds that such use infringed Yarin's rights in its trademark. As the registration of the mark was still pending, Anna Lotan also filed an application for the registration of the mark BLACK PEARL (10 months after the date of Yarin's application).  
Under Section 29 of the ordinance, the commissioner may commence inter partes proceedings where there are rival applications for identical or similar marks with respect to identical or similar goods or services. If the parties do not reach agreement, the commissioner shall determine which mark has superior rights. In this regard, the courts have developed a test to determine the superiority of rights based on the following factors: 
  • the good faith of the respective applicants in the selection of their respective marks;
  • the extent of use of the mark by each party prior to the commencement of the proceedings (and, in some cases, up to the date of the hearing); and
  • the priority of the filing date.  
Usually, the most important factor in determining the priority of rights is good faith, followed by priority of use. The priority of the filing date is secondary and is often treated as a mere technicality.
In the present case, the commissioner ruled that it was impossible to determine whether either or both parties had acted in bad faith in choosing their respective marks. With regard to the extent of use, the commissioner held that although Anna Lotan had shown prior use of the mark, Yarin had provided more extensive sales figures for products sold under the mark.
In addition, the commissioner noted that although the second factor usually tips the scales in favour of the more extensive user, in this case the most important consideration was the priority of the filing date. The commissioner was convinced that Anna Lotan had filed its application solely in reaction to Yarin's cease and desist letter. In so ruling, the commissioner acknowledged that such a result within the context of Section 29 proceedings was rare, but appropriate under the circumstances.
The filing of a rival application following the receipt of a cease and desist letter is not unusual in Israel trademark practice. It seems that the commissioner has decided to put an end to such a practice.
The commissioner also considered whether it was appropriate to allow the concurrent use of the mark under Section 30 of the ordinance. The commissioner decided not to do so, holding that there would be an unacceptable risk that consumers might be misled as to the origin of the goods.
Neil Wilkof and Gilad Shay, Herzog Fox & Neeman, Tel Aviv

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