Trademarks Office refuses to strike out cancellation application

Israel
In Francis Shukha Sons Ltd v George Shukha Sons Ltd (March 1 2009), an IP adjudicator at the Trademarks Office has refused to strike out an application for the cancellation of various SHUKHA marks on the grounds that the five-year time limit prescribed by law is not absolute.
 
George Shukha Sons Ltd, a family retail business, owns various trademarks containing the term 'Shukha' in Hebrew, Arabic and Latin characters in several classes of the Nice Classification. George Shukha sought an injunction to prevent Francis Shukha Sons Ltd (which was owned by a former partner's heir) from using the mark SHUKHA.

In 2008 Francis Shukha sought the cancellation of seven SHUKHA marks. In response, George Shukha requested that the cancellation application be struck out on the grounds that it included four marks that had been registered more than five years before the date of the application for cancellation. Therefore, the application was barred by the statute of limitation under Section 39(a) of the Trademarks Ordinance 1972 (New Version), which provides that an application for the removal of a trademark must be made within five years of the issuance of the certificate of registration. In the alternative, George Shukha requested that the application for cancellation be split into seven separate applications, or into two applications for each group of marks.
 
The IP adjudicator noted that:

  • the procedural remedy sought by George Shukha was not provided for in the ordinance; and
  • in such a case, the court must apply the provisions of the Civil Procedure Rules 1984, which state that causes of action that are not properly asserted do not warrant striking a claim.
Relying on the Banana Beach decision, the IP adjudicator highlighted the need to exercise caution in deciding whether to strike out the application - especially in light of the fact that an application for cancellation has implications not only for trademark owners, but also for the public in general. The IP adjudicator concluded that a cause of action existed for at least some of the marks and thus refused to strike out the application.
 
The IP adjudicator also refused to split the application into seven separate applications, holding that applications for the cancellation of multiple marks are common practice in Israel. The IP adjudicator agreed with Francis Shukha that a single application is appropriate where identical or similar factual claims are made in respect of multiple marks. Relying on the LifeStyle decision, the IP adjudicator concluded that a single application was appropriate in this case as it would save judicial time and prevent the issuance of conflicting decisions.
 
The IP adjudicator further held that there was no need to split the application in two (one application for the marks registered less than five years before the filing date of the application, and another for the marks registered more than five years before that date), as the application sufficiently distinguished between the two groups of marks.
 
The IP adjudicator also refused to strike the claim relating to the marks registered before the expiry of the five-year limitation period, reiterating that the statute of limitations under Section 39(a) is procedural and may be overridden by allegations of bad faith under Section 39(a1).    
 
Citing the Versace decision (for further details please see "VERSACE marks cancelled after 20 years"), the IP Adjudicator held that if the exceptional protection provided by Section 39(a) was removed on the grounds of bad faith, the public interest should be taken into account in determining whether to cancel the marks.
 
Finally, the IP adjudicator emphasized that bad faith is a serious allegation which imposes a heavy burden of proof. If an applicant alleges bad faith only to circumvent the five-year limitation period, it will be at risk of an award of costs against it.  
 
David Gilat and Sonia Shnyder, Gilat Bareket & Co, Reinhold Cohn Group, Tel Aviv

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