Registration and validity are not synonymous

In Alon Fuel Company for Israel Ltd v Energy International Ltd (Case 3395/01), the District Court of Jerusalem has held that the registration of a trademark constitutes merely prima facie evidence of the mark's validity. Therefore, the registration of a trademark may be challenged.

The issue arose when Energy International brought proceedings against Alon Fuel Company for trademark infringement. Energy International is the registered owner of the Israeli mark NRG (pronounced 'energy'). Alon markets two products - Texaco Havoline Formula 3 Energy and Green Energy. Energy International sought a permanent injunction prohibiting Alon from using the word 'energy'.

Alon countered with a motion to dismiss. Among other things, it argued that a third party, Texaco Inc, had registered the mark TEXACO HAVOLINE ENERGY in Israel after Energy International had registered its mark. If Texaco may legally use the word 'energy', contended Alon, then it too should be able to use the word to market its two products.

In response, Energy International argued that Texaco's mark was not lawfully registered since it infringed Energy International's prior NRG mark. (It also filed a motion to have Texaco's mark cancelled, but this motion has not yet been heard.)

Alon then argued that a registration is irrefutable evidence as to the validity of a mark. Therefore, not only is Texaco's mark valid, but its use of 'energy' is legal too.

The district court rejected Alon's arguments, stating that the registration of a mark is merely prima facie evidence of the validity of the mark. The court pointed to Section 64 of the Trademark Ordinance, which provides:

"In every legal proceeding on a registered trademark, the fact that a person is registered as the owner of the trademark is prima facie evidence that the original registration of the trademark and all its subsequent transfers are in effect."

Hence, the court held that the registration of Texaco's mark does not prevent Energy International from submitting evidence to show that the mark was unlawfully registered. This, the court stated, is a matter for the trial itself. Thus, Alon's motion to dismiss was denied.

Neil Wilkof and Shai Kagan, Herzog Fox & Neeman, Tel Aviv