Unregistered mark may serve as basis for refusal of application

Israel

In The Opposition of Guri Import and Export Ltd v Alias Waxman Ltd (November 20 2011), the patents, trademarks and designs adjudicator has ruled, among other things, that an unregistered mark, which is not a well-known mark, may nevertheless serve as the basis to refuse the registration of a trademark on the grounds of a likelihood of confusion.

Alias Waxman Ltd has engaged in the marketing and sale of sweets for more than 30 years. One of the products marketed by Waxman is a sour-sweet candy called Hamzuzim. The opponent, Guri Import and Export Ltd, is also engaged in the sale and marketing of sweets. According to Guri, it started selling sweets under the mark HAMZUZIM in 2005 and has invested more than $4 million in the marketing of this product since then. Guri alleged that its market share in the relevant field reached 30% in 2009.

In 2007 Waxman filed a trademark application for HAMZUZIM for various sweets. After acceptance and publication, Guri filed an opposition, relying on two main grounds:

  • Its mark is a "well-known" mark due to substantial investment in advertising. Therefore, Waxman's mark is confusingly similar to Guri's.
  • The registration of Waxman's mark would confuse consumers and constitute unfair competition.

Based on the evidence, the adjudicator ruled that she was not convinced that Guri's mark was a "well-known" trademark. This finding was mainly based on the fact that the adjudicator believed that the consumer survey provided by Guri was unreliable, since it was not supported by an expert opinion; thus, Guri had failed to prove that its mark had acquired sufficient "recognition" among consumers. In addition, the adjudicator noted that, since the mark HAMZUZIM is not used on the packaging of Guri's products, but merely on stands placed at the entrance of outlets selling the products, she was unable to conclude that this mark had become "well-known" as a result of Guri's marketing activities. Therefore, the adjudicator concluded that Guri's mark was not well known.

As for the claim of consumer confusion and unfair competition, the adjudicator ruled that, while the Israeli Trademarks Ordinance recognises rights in an unregistered mark (which is not well-known) with respect to challenging the registrability of a third-party mark, such unregistered mark must be distinctive. From the evidence presented, the adjudicator concluded that, while at least part of the relevant consumers identified the mark HAMZUZIM with Guri's products, such recognition did not reach the level required to prove that the mark was "well known".

However, the adjudicator ruled that Guri's mark had acquired a level of distinctiveness among Israeli consumers that was sufficient to prevent the registration of Waxman's mark on the grounds that it was likely to mislead consumers. The adjudicator further noted, albeit without elaborating on the importance of this finding, that she did not find any evidence that Waxman had made use of the mark HAMZUZIM prior to the filing of its trademark application.

It is noteworthy to mention that, under the decision, the practical difference between a "well-known" mark and rights in an unregistered mark based on use in connection with a challenge to a third-party application is not fully clear.

Neil Wilkof, The Bressler Group, Ramat Gan, with the assistance of Gilad Shay, Herzog Fox & Neeman, Tel Aviv

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