No trademark infringement, but defendant's conduct held to amount to passing off

In A Eliyahu & Sons Ltd v Night Sleep Centre (2000) Plus Ltd (CC (Centre District) 9143-11-08, June 22 2011), the Centre District Court has held that use of DR RELAX for furniture did not infringe the marks RELAXON or DR GAV (Hebrew for 'Dr Back'), but found that the defendant's conduct amounted to passing off.

Two furniture retailers brought suit against another furniture retailer on the grounds of trademark infringement, passing off and unjust enrichment for making use of the mark DR RELAX. The first plaintiff, a local representative of El Ran Furniture, owns the device mark RELAXON and its Hebrew equivalent (registered in Class 20 of the Nice Classification for furniture):
The second plaintiff owns the registered marks DR GAV in Hebrew and English and its translation DR BACK (registered in Class 20 for "mattresses, chairs, television recliners, seats, etc", in Class 12 for "car seats" and in Class 35 (with design) for "sale services of mattresses, seats, etc"):

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The defendant made use of the mark DR RELAX in English and Hebrew for the sale of furniture (including recliners) and mattresses. The defendant also used the following device mark:
With regard to trademark infringement, the district court held that the defendant's "hybrid" mark was not confusingly similar to either of the plaintiffs' marks, due, among other things, to the nature of the shared elements, which were held to be customary in the trade (ie, the element 'Dr' and a reclining figure in one case, and the element 'relax' in the other). By way of example, the court noted that a reclining figure was used in the logo of a major competitor, the American Comfort chain.       
The fact that the defendant's management testified that the defendant intended to make further use only of the English logo further diminished the similarity, as the second plaintiff's device mark was in Hebrew. 
The defendant's mark and that of the first plaintiff were also held not to be confusingly similar, due to the existence of the extra syllable 'on' and the different appearance of the marks. The court pointed out that the visual appearance was more important for comparison purposes, as the marks were primarily used in print. The shared element 'relax' was held to be a foreign word that was common in the trade.  
The court also addressed the permissibility of using a hybrid mark drawing on the features of two other marks. Noting that the purpose of a trademark is to prevent consumer confusion, the court held that use in a hybrid mark of elements common in the trade (and, in this case, common in a particular industry) was permissible. Moreover, where at least one of the elements is not common in the trade (eg, MAC KING for fast food), such use should be permissible as long as consumers are not confused into attributing the goodwill of either trademark owner to the trader using the hybrid mark.     
Further, the plaintiffs were unsuccessful in proving the likelihood of consumer confusion for passing off purposes. The court noted that the use of a hybrid mark combining the names of two traders possessing a reputation in the trade might amount to passing off if it implies cooperation between the two, but such claim was neither raised nor proven.
Finding no trademark infringement and no likelihood of confusion, the court refused to extend the protection provided by the laws on unjust enrichment to the circumstances of the case.
However, the defendant was found to have engaged in passing off in that:

  • its sales assistants had made a specific misrepresentation indicating a connection between the defendant's goods and the second plaintiff; and
  • it had created a catalogue that was confusingly similar to that of the second plaintiff.
The court awarded to the aggrieved plaintiff statutory damages of IS200,000 (ie, the maximum statutory amount of IS100,000 for each act of passing off), noting the difficulty for a plaintiff to pinpoint specific acts of such nature.
However, the court refrained from imposing costs, taking into account:
  • on the one hand, the fact that the defendant's conduct was objectionable and that the first plaintiff's claim (although refused) had merit; and
  • on the other hand, the considerable delay in bringing the action on the plaintiffs' part.
David Gilat and Sonia Shnyder, Gilat Bareket & Co, Reinhold Cohn Group, Tel Aviv

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