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Tuesday, 16 December 2003

NEW SOUND BUT SAME OLD STORY: ISRAELI, SAUDI COMPANIES FIGHT FOR THE RIGHT TO CONTROL THE ROTANA TRADE MARK

Our thanks to Gadi Oron for sending us a note on a recent Israeli case, New Sound v Master Cassette. New Sound, an Israeli manufacturer and distributor of audio tapes, registered ROTANA in for goods in Class 9. Master Cassette, another Israeli company, made and sold audio tapes in the name ROTANA under an exclusive distribution agreement with a Saudi company called Rotana (which had registered ROTANA in Saudi Arabia). The parties agreed that the ROTANA mark was used by the Saudi company extensively in some Middle East countries and was advertised in Arab TV broadcasts which were popular among Arab Israelis. The mark as used by New Sound was identical to the mark as registered in Saudi Arabia. New Sound sued for infringement and Master Cassette counterclaimed for invalidity (note: the Saudi company did not appear in these proceedings; it however gave Master Cassette power of attorney to act on its behalf). After considering the doctrines of well-known marks and dilution the court held that, although Master Cassette had only a contractual right to use the Saudi company's mark, it should not be restricted from using it at present in Israel. The judge however stated that the claimant's Israeli registration, although obtained in a lawful way, may be open to challenge in the light of the contractual relationship between the Saudi company and its local Israeli distributor. However, since Master Cassette filed a cancellation action with the Israeli Trade Marks Registrar, alleging the mark was filed in bad faith, the judge decided that both parties could continue to use the ROTANA mark until the Registrar gives a ruling in the striking out action.

The IPKat notes that both parties were using the same mark for the same goods. Accordingly he wonders why, in proceedings in which the court limited its ruling to the issue of relief pending a ruling on the validity of the Israeli ROTANA registration, it was necessary for the court to consider issues relating to well-known marks and dilution, rather than sticking to the narrow issue of the balance of convenience between the parties before the trade mark’s validity was affirmed or cancelled.

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