Scope of protection for well-known marks clarified

In V&S Vin Sprit Aktiebolag v Absolute Shoes Ltd (Civil Appeal 9191/03), the Israeli Supreme Court has examined the scope of protection for well-known trademarks that have been registered in Israel.

The appellant, Swedish company V&S Vin Sprit Aktiebolag, is the owner of the registered trademark ABSOLUT in Israel for vodka, and for bar and restaurant services. V&S sought an injunction to stop the respondent, Absolute Shoes Ltd, from using the mark ABSOLUT (or as later adopted for use, ABSOLUTE SHOES) for its shoe store business. V&S based its claim on, among other things, the fact that its trademark is a well-known mark pursuant to Section 46A(b) of the Trademarks Ordinance [New Version], 5732 - 1972. This section gives exclusive rights to the owner of a registered well-known mark, even if an alleged infringing mark is being used for goods that are not of the same description as the goods specified in the registration, provided that (i) the use would likely indicate a connection between the respective goods, and (ii) the mark owner is likely to be injured.

The Tel-Aviv District Court rejected V&S's claim under Section 46A(b). It held that the interpretation of "goods that are not of the same description" should be restricted to goods in related fields to the field(s) in which the mark is well known. It therefore rejected the request for an injunction. On appeal, the Supreme Court held that the lower court had erred in its restrictive interpretation of the law but it too rejected the request for an injunction.

The Supreme Court was of the view that each case should be decided on its facts. Accordingly, a well-known mark can be protected, even when the field of use is not related to the field for which the mark is known. Conversely, protection can be denied even when the fields of use are related. The Supreme Court noted the possibility that large international corporations, which own successful trademarks, could expand their range of goods into fields that are unrelated to the original field of use of their trademark, and that such use might merit protection.

The Supreme Court then examined the two cumulative conditions set out in Section 46A(b), namely that a registered well-known mark can only be protected if (i) the use by a person other than the trademark owner is likely to suggest a connection between the two parties' goods, and (ii) the mark owner is likely to suffer injury as a result of such use. The court held that the threshold for 'connection' under the first condition is lower than that for confusion but that there remains a requirement for association in the mind of the public. As to the likelihood of injury condition, the court held that a concrete foundation must be established.

Nevertheless, on the facts of the case, the court held that V&S had not satisfied the threshold under the first condition. In its view, although the threshold for connection between the goods is lower than that for confusion, no such connection could be established in the instant matter because the field of shoe selling is too distant from that of alcoholic drinks. For this reason, the court reached the same result as the lower court and rejected V&S's claim under Section 46A(b).

Having so ruled, the court did not address the issue of whether injury was likely to result from the use of the registered mark by Absolute Shoes.

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