Case Number

CA 6316/03

Date Decided

8-1-2007

Decision Type

Appellate

Document Type

Full Opinion

Abstract

Facts: Appellant, Ilan Car Glazing Ltd. purchased R.G. Car Glass Glazing Services Ltd from Respondents. After the sale, Respondents continued to make commercial use of the term “Car Glass.” Appellant filed suit seeking a permanent injunction prohibiting respondents from using the name “Car Glass” or any variation thereof in connection with any business providing glass windows for cars.

The District Court determined that the name “Car Glass” is a generic description of a service provided, and thus, is not subject to an action for passing off. Furthermore, the District Court ruled that the name did not hold a special distinction identifying it with a particular company, which would set it apart from all others providing the same service. In its appeal, Appellant argues that the name does have distinctive characteristics sufficient to distinguish it from its competitors, and that it has acquired sufficient goodwill through its use of the name which entitles it to legal protection.

Held: In writing for the majority, Deputy President E. Rivlin held that in a successful action for passing off the plaintiff must prove that the defendant provided goods or services under the name in question, thereby causing consumers to believe they were receiving the goods or services from the plaintiff. No liability will be imposed for passing off unless the plaintiff has acquired sufficient goodwill under the name in question such that the public identifies the goods or the services provided with the business of the injured plaintiff.

The Court found that the public identifies “Car Glass” with the services provided by Appellant, and, therefore, the use of the name by any other party for commercial purposes amounts to passing off. However, this ruling does not entitle Appellant to exclusive usage of the term “Car Glass.” The Court determined that Respondents are entitled to use a foreign company’s trademarked logo consisting of the English form of the term “Car Glass” together with an image of a car window, demonstrating the service it provides. The English form of the term and the accompanying logo are different from the name in question in both language and appearance. The Court concluded that this decision reflects an appropriate balance between the rights of Appellant, who rightfully purchased the right to use the name from Respondents, and the rights of Respondents, who purchased the right to use the English form of the term with the accompanying logo from a foreign trademark holder. The decision of the district court is therefore reversed as to Respondents’ usage of the Hebrew form of the name “Car Glass,” but upheld as to Respondent’s usage of the English form of the term and the accompanying logo.

Justice Naor ruled in the minority opinion that the appeal should be allowed in full. The appellant has “goodwill” in Israel and the use of the name “Carglass” by the respondent is liable to mislead its customers. The respondent does not have “goodwill” in Israel. The fact that the respondent has a contractual right to use the Israeli registered trade mark of a foreign company does not detract from the degree of protection provided by the tort of passing off, as respondent’s right to use the trade mark was not registered, and as such it has no validity under Trade Marks Ordinance. Although there is comparative caselaw regarding parallel goodwill, and regarding the question if it is sufficient for a foreign corporation’s product to be well known in the country under discussion, even without having customers there, for that corporation to have “goodwill” in said country, in this case it was not proven or even claimed that respondent has customers in Israel or even that it is well known in Israel. Neither does the issue of the local bad-faith copier of an internationally known product name arise in this case, as respondent did not even argue that appellant had acted in such a way. Where an injunction is given it must suit its purpose, which with respect to the tort of “passing off”, is to prevent conduct that may cause the fear of misleading, and as such, limiting the injunction in the current case in a manner that allows the respondents to use the trade mark of the foreign company would not prevent the fear of misrepresentation. First, unless the Court’s intention is to bar oral use of the word in the trademark, such a limited injunction would allow oral use of the name “carglass” which would be indistinguishable from appellant’s trade name. Regarding the written use of the trademark as allowed by the limited injunction, appellant’s customers are liable to see respondents’ English “Carglass” logo and be misled to believe that appellant, as many Israeli businesses do, has taken on an English-lettered logo. The appellant’s use of the name “Carglass” should get full protection. Its use does not prevent the public in Israel, whose languages are Hebrew, Arabic, Russian and Amharic, of a word needed for free use. Its protection will not prevent competition, as it has not been proven that “carglass” is even a common description for the relevant service in English. There are no circumstances that detract from the conclusion that the elements of “passing off” have been proven. The law has already balanced the rights of the parties, and the result is that the appellant has a right to prevent the respondent, who has no “goodwill” in Israel, from causing concern of misleading appellant’s customers in Israel with a name that is identical to appellant’s trade name orally and in Hebrew writing, and similar in English writing to the extent of misleading, whereas no damage to the public is expected from granting appellant that right in the field of auto glass in Israel.

Keywords

Trademarks

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