Distributor prevented from using mark - even though it owns it

Israel
In a decision regarding a motion filed by Mobileye Technologies Limited against LD Israel Auto Equipment Investments Ltd (IAEI), the Jerusalem District Court has granted an interim injunction preventing IAEI from using the mark AWACS in connection with the marketing of a new car accident prevention system.
 
Mobileye manufactures a car accident prevention system that alerts a driver that his or her car is straying from its lane, causing a risk of collision with an oncoming car. In 2006 Mobileye entered into a distribution agreement with IAEI, and the latter became the exclusive distributor of Mobileye's system in Israel. Thereafter, IAEI started to market Mobileye's systems under the brand name AWACS. IAEI also registered AWACS as a trademark. At the beginning of 2011, the relationship between Mobileye and IAEL soured and the parties decided to terminate their exclusive distribution agreement.
 
Following the termination, IAEI contracted with a competitor of Mobileye, Safe Drive Systems Ltd, to market Safe Drive's car accident prevention systems in Israel. As part of its marketing efforts, IAEI contemplated the launch of a new Safe Drive product called RD140 during a large exhibition in Tel Aviv, due to take place at the end of March 2011. However, on the invitations for the launch of Safe Drive's system, a logo featuring the AWACS mark was placed next to the RD140 product.
 
As a result, Mobileye filed a motion for an interim injunction, asking the court to prevent IAEI from using the mark AWACS for any product that is not produced by Mobileye. Mobileye claimed that, since IAEI had breached its contractual obligation towards Mobileye, the reputation in the AWACS mark belonged to Mobileye. Accordingly, it claimed that IAEI was not allowed to use the mark for any products other than those of Mobileye. Mobileye further argued that any use of the AWACS mark to market Safe Drive products misled consumers into believing that the RD140 products were in fact those of Mobileye.
 
In response, IAEI argued that it was the owner of the registered trademark AWACS and, therefore, was allowed to use it for any product that it was marketing. Moreover, IAEI argued that there was no risk that consumers would be misled by its use of the AWACS mark, since the Safe Drive system is substantially different from that of Mobileye.
 
The court agreed with Mobileye and ruled that the AWACS mark is associated only with Mobileye's products in the consumers' minds. As a result, any continued use of the mark by IAEI for products other than those produced by Mobileye had the potential to mislead consumers. The court thus granted an interim injunction prohibiting IAEI from using the trademark AWACS for any products other than those manufactured by Mobileye. Furthermore, in order to avoid any possibility of confusion, the court ordered IAEI to specify the name Safe Drive Systems in full next to the product name in any marketing material that it may distribute regarding Safe Drive products.                                    
 
Neil Wilkof and Gilad Shay, Herzog Fox & Neeman, Tel Aviv

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