Why didn’t the court prohibit Shufersal from selling products bearing a mark identical to the mark of the brand Ronit Yam?

In July 2018 Hon. Justice Grossman of the Tel Aviv District Court denied a motion for temporary injunction filed by Amman Fin Ltd. (the Ronit Yam brand), despite her holding that the plaintiff’s Fin Mark has immense goodwill and that the respondent copied it. The court’s conclusion was based on the determination that no fear of confusion exists since the original product is expensive and high-quality as opposed to the copied product which is less expensive and of lower quality. Although the judge’s determinations were limited in scope to temporary relief only, the decision raises the question of whether highly-reputable luxurious brands are unprotected from cheap, low-quality imitations.

As part of the motion for temporary injunction the court was asked to prevent the Shufersal chain from marketing textile products bearing the Fin Mark since this mark is identical to that of the plaintiff, which it has had and used for many years.

The Fin Mark looks as follows:

The plaintiff marketed products on which the Fin Mark was embedded by itself or within a circle to the side of which the words ocean spirit appear. On the other end, Shufersal started marketing bedding, pillows and blankets bearing the Fin Mark also appearing inside a circle with the words ocean story alongside it.

The plaintiff filed an application to register the Fin Mark as a trademark, but on the day of the hearing the mark had not yet been registered.

Shufersal argued that the Fin Mark is a generic mark, that the plaintiff’s goodwill is in jewelry and bijouterie rather than textile accessories and that the plaintiff’s design was not at all known to Shufersal. The claim with respect to having no knowledge about the Plaintiff’s mark was held back when it turned out that the plaintiff’s products were well known to Shufersal’s witnesses, some of whom had even purchased them personally.

The court rejected the generic argument at this stage and held that it was in need of a thorough factual inquiry within the examination of the main case. At the same time, the court held that the plaintiff’s Fin Mark, especially in the bedding collection, was uniquely designed.

The court then moved to examine whether the plaintiff has goodwill in the Fin Mark and whether Shufersal’s use of it might lead to confusion among the consumer public. The court recognized the plaintiff’s goodwill in the Fin Mark and found that the plaintiff’s products appeal to an affluent segment of the population – the products are sold at boutiques in Ramat Hasharon and their prices are high in light of, among other things, the nature of the products and their quality.

It was also held that there was clear resemblance between the Fin Mark design, including the circle it is displayed within, and the design of the respondent’s products; it was further held that the design of the respondent’s products was done against the backdrop of the respondent’s familiarity with the applicant’s mark and that “the reasonable consumer looking at the two printouts may believe that this is the same product.” Despite all this, the court held that there is no likelihood of confusion among consumers since these are products of a different quality (different quality of fabric texture) and given the big difference between the prices (high prices of the plaintiff versus low prices Shufersal sold them at). Lastly, it was held that the set of customers is different – the plaintiff’s customers are of the high socio-economic scale versus Shufersal’s customers, who are of average income.

With this difference serving as background, the court ruled that, at the temporary relief stage, no concern for misleading existed and therefore temporary remedies would not be issued. The court’s determination was made within the context of Shufersal’s notice that it is concluding sale of the collection bearing the Fin Mark at the end of July 2018.

The court did not discuss in its decision the claim of dilution of goodwill or infringement of copyright in the Fin design or the claim of unjust enrichment and left the discussion on the grounds of copyrights for the main case.

The court’s decision raises the question of whether quality, highly-reputable brands will no longer be able to prevent low-quality copies from being sold at low prices by imitators. This decision also underscores the importance of registering an appropriate trademark in order to protect brands at the early stages of the brand’s development and before imitators who covet the goodwill amassed emerge.