The HABITAT mark (and co-habitation): Part II

The dispute over registration of the HABITAT mark in Israel, reaching back to events in the 1970s, has now been decided by the Israel Supreme Court. Kat friend Adar Bengom summarizes for us the Supreme Court's decision.

As some Kat readers may recall, more than a year ago, IPKat reported that the District Court of Tel Aviv ruled that the mark HABITAT, registered in Israel more than 40 years ago by a local furniture and houseware retailer, should be cancelled on the ground that it had been registered in bad faith. At the same time, the District Court also ruled that both Habitat Israel and Habitat International can nevertheless use the mark HABITAT in Israel in parallel. As further reported, this ruling was appealed by Habitat Israel to the Israeli Supreme Court. On December 17, 2018, the Supreme Court dismissed the appeal, agreeing with the District Court's analysis of bad faith registration of the mark HABITAT in the 1970s.

Before we delve into the Supreme Court's ruling, here is a short recap of the facts: Appellant no. 2, Mr. Abraham Majerowicz, opened a furniture store in Israel in 1972 under the name "Habitat". In 1976, Mr. Majerowicz sought to register the mark HABITAT in Israel but he had to first overcome Habitat International's then-existing registered mark in Israel. He therefore filed and prevailed in a non-use cancellation proceeding. Since then and until 2016, Mr. Majerowicz and appellant no. 1, Habitat Israel (as its licensee), exclusively used the mark HABITAT in Israel.

On or about 2016, Habitat International decided to enter the Israeli market and Mr. Majerowicz in turn sought a preliminary injunction on the ground of anticipatory infringement. Habitat International counter-claimed that Habitat Israel and Mr. Majerowicz should be enjoined from using Habitat International's well-known mark and that the registration of the HABITAT mark should be cancelled on the ground of bad faith. The Israeli Supreme Court's ruling touches mostly on the issue of bad faith and only briefly notes (at the very end of the ruling) that the parties will nevertheless be permitted to make concurrent use of the mark, ruling that--

[I]n order to avoid confusion of the public…the Respondents will use the mark "Habitat International" [or its translation into Hebrew – A.B] in their advertising materials but may use the mark "habitat" on the actual marketed products. The Appellants may continue using the mark "habitat" [or its translation into Hebrew – A.B].

It seems to this blogger that the Supreme Court chose to quickly sidestep the issue of likelihood of confusion by means of a briefly stated form of concurrent use, and to conclude with a paragraph that is somewhat perplexing. How does the addition of the generic word “International” in the respondent’s advertising but not on their products avoid confusion?

Turning to the issue of bad faith registration, the Supreme Court ruled that although the ground of cancellation of a mark due to bad faith registration was explicitly added to the Trademarks Ordinance (New Version), 1972, only in 1999 as part of Israel's adoption of the TRIPS Agreement, this addition was separate and distinct from the concept of a well-known mark that had also been introduced into the legislation (similar to the treatment of both notions in the European Directive 2008/95/EC and the UK Trade Marks Act 1994). Therefore, in considering whether a mark was registered in bad faith in Israel, such mark need not be well-known in Israel.

Furthermore, the Supreme Court noted that even where there is no use of an “international mark” [whatever that means—AB] in Israel, the local registration may have been made in bad faith if the mark had already gained "international goodwill" [whatever that means—AB] . In this respect, the Supreme Court seems to rely on Habitat International's then-existing branches in several countries worldwide but, most notably, it gave weight to Mr. Majerowicz's personal knowledge of the mark HABITAT prior to seeking registration.

In doing so, the Supreme Court rejected the result of the US Court of Appeals for the Federal Circuit in Person's Co., Ltd. v. Christman, 900 F.2d 1565 (Fed. Cir. 1990), brought by the appellants, citing the criticism to this decision by the noted commentator Frederick Mostert, who argued that--:

...[T]he owner of the foreign mark is prevented from effectively expanding its business to the domestic jurisdiction under its own mark. The defendant's interest's on the other hand, cannot be given great weight if its objective is to prevent the foreign trademark's owner's into the domestic jurisdiction; to extract ransom from the foreign when it does enter the domestic market; or to trade on the international reputation of the foreign trademark" (F.M. Mostert, "Famous and Well-Known Marks: An International Analysis" (1997)).

But the Supreme Court neither further analyzes Mostert's assertion nor explains why it, and not the approach taken in Person's case, should apply to the case at hand. In this respect, in Person's, only seven months had passed between Mr. Christman’s (the respondent) initial operation in the US and Person's Co. preparations for entrance into the US market. On the other hand, in the Habitat case, almost 40 years have passed since Habitat Israel registered the mark HABITAT in Israel (and continuously used it since then) and until Habitat International sought to enter the Israeli market.

At least, it seems to this blogger that the Supreme Court owed a more substantial explanation for adopting the view of a commentator, as learned as Mr. Mostert is, over that of a judicial decision of a specialist appellant jurisdiction (albeit a foreign one).

Picture on the upper right is by Michelle Lai Lai and is licensed under Creative Commons Attribution-Share ALikwe 2.0 Generic license