Most trademark conflicts occur between a registered trademark (the "earlier" mark) and a pending trademark application (the "later" mark). However, quite often a conflict arises between two (or more) pending trademark applications. Such a conflict occurs when different persons file applications for identical or similar trademarks for identical or similar goods or services.
In Israel, an application is examined by the trademarks department of the Israel Patent Authority (ILPTO) on the basis of inherent eligibility for registration (absolute grounds) and on the basis of existing prior registered marks or pending applications (relative grounds).
When two or more applications are filed for similar or identical marks that are intended for closely related goods or services, and where none of these applications have been accepted yet, then the ILPTO will initiate ex officio interference proceedings according to section 29 of the Trademarks Ordinance (New Version)-1972. The purpose of these contentious proceedings is to determine which of the applications will prevail and proceed to registration (unless there is a possibility of coexistence). This is rather unusual as in most jurisdictions such a conflict is resolved differently, not in ex officio proceedings.
At the beginning of the proceedings the parties (i.e. the owners of the conflicting applications) have to give due consideration to the possibility of reaching a coexistence agreement and, they must do their best to reach an agreement if possible. It should be noted that even when the parties agree on some form of coexistence, such an agreement has to be approved by the ILPTO, which will have to register the two (or more) conflicting marks.
In recent years, applicants in Israel encounter ever more frequently the refusal of ILPTO to approve a coexistence agreement. The ILPTO has adopted a somewhat rigid policy. Parties that agree on the coexistence of their respective trademarks and even undertake to employ measures to avoid confusion, encounter refusals to register both their marks. The most common case of a refusal to approve an agreement is where the parties agree that the same mark should be divided among different goods (or services). ILPTO would rarely approve such an agreement because according to its policy this will not prevent confusion by the public. The outcome may have serious results–for example, a party that uses his mark but cannot register it to protect such use. A refusal to approve an agreement would not prevent the parties from coexistence of use of the mark in the marketplace.
Where the owners of conflicting applications cannot reach agreement or when an agreement is reached but is not approved by ILPTO, then proceedings are conducted in which the parties involved have to convince the ILPTO whose rights should prevail, which of the marks proceeds to publication, and subsequently to registration, and which mark will be rejected. The proceedings are conducted in writing as well as orally. The parties submit their main evidence in writing (affidavits and documents), then a hearing is conducted in which the parties' witnesses are cross examined on their affidavits. Finally, after summations (written or oral) the ILPTO will render its decision on the matter. It should be noted that the party whose application is rejected in these proceedings may still file an opposition once the other trademark is published and may initiate revocation proceedings after the mark is registered.
Factors for Determining Which Application Should Prevail
The extent and period of use, filing dates, good (or bad) faith in the choice and adoption of the respective marks and other special circumstances are the factors which are weighed when deciding which of the marks will prevail in the interference proceedings. In judicial decisions (for example in the Supreme Court's judgment in CA 8987/05 SABON SHEL PA'AM (Malkhi)) it was held that the important factors are the extent and period of use and good faith in adoption of the marks, while the respective filing dates of the competing applications are less significant factors.
In this appeal on a decision of the ILPTO in interference proceedings both parties claimed rights in the trademark SABON SHEL PA'AM (meaning "Soap of Old days") for soaps. Mr. Malkhi, who lost in the interference proceedings, appealed the decision of the ILPTO, which said that that his opponent's rights in the trademark should prevail.
Malkhi had been using–but not continuously–the mark SABON SHEL PA'AM for his soaps for almost 40 years. However he had only sold small quantities of them. He filed his application three months before the other party. The company (Sabon Shel Pa'am Limited) had been using the same trademark for just under 10 years. However, their soaps were being sold in very high quantities in a successful chain of stores bearing the same trademark. The company filed its trademark application three months after Malkhi's application. The Supreme Court rejected Malkhi's appeal and upheld the ILPTO decision in the interference proceeding. The court held that the most important factors in considering conflicting applications are the extent of use of the respective trademarks and the parties' good faith in choice and adoption of the trademark. The respective filing dates have only secondary importance in these proceedings.
Malkhi's use had not been continuous (and he also concurrently used a different trademark for his soaps) and his volume of sales was small in relation to the very high volume of sales by Sabon Shel Pa'am Limited. There was no evidence of bad faith on the part of either party. Therefore, and despite the fact that Malkhi's application was filed earlier, the Supreme Court upheld the decision of the ILPTO.
Interestingly, the Supreme Court noted that the result would have been different in systems such as the EU, where the filing date of the respective applications would determine the outcome of such a conflict.
In other jurisdictions, a different approach is adopted to conflicts between overlapping applications:
In the USA (whose system is also based on absolute and relative grounds), the conflict is resolved either by opposition proceedings or revocation proceedings initiated by an interested party and very rarely interference proceedings are conducted.
In a market-based system (like the UK or EUIPO) where relative grounds are not applied during the examination phase, there is no intervention by the trademark office, and conflicting marks will be allowed to coexist and be registered. In such legal systems, a senior user may initiate proceedings (opposition or revocation) to determine superiority of rights.
In Israel Interference proceedings are not initiated very often. They are time consuming and involve high costs for the parties involved. These proceedings are imposed on the parties by the ILPTO. These are not voluntary proceedings like oppositions or revocation proceedings. Moreover, in the case of Israel, these proceedings are very lengthy (due to the lack of human resources at the ILPTO), resulting in prolonged uncertainty regarding the parties' respective rights. The question is whether opposition or cancellation proceedings provide sufficient tools to resolve a conflict between applications. This remains to be decided.
This article first appeared here http://www.inta.org/INTABulletin/Pages/Interference_Proceedings_7103.aspx in the INTA Bulletin February 15, 2016 Vol. 71 No. 3, and was reprinted with permission from the International Trademark Association (INTA).