Companies are often faced with the dilemma of using trademarks within their advertisements and promotion material. For example: Is a company entitled to advertise the fact that it is marketing Ralph Lauren products, under Ralph Lauren trademarks, without permission from Ralph Lauren?
This question has often been dealt with by the Israeli Courts when examining parallel importation. It has long been established that companies are entitled to sell branded goods without the brand owner’s blessing. For example, a “parallel” importer may sell Dyson vacuum cleaners in Israel while competing with the Dyson’s “official” Israeli importer/distributor. Provided, of course that the parallel importer is marketing bona fide Dyson products, in contrast to counterfeit goods. In other words, once Dyson sells a vacuum cleaner, it parts with control over that product, and any vendor may sell it under the Dyson trademark.
Though several court rulings dealt with parallel importation, there were no clear cut rulings which specifically addressed unlicensed trademark use within advertisements and promotions. The matter has finally been dealt with extensively by an Israel District Court in TOMMY HILFIGER LICENSING LLC et al vs. Swissa et al (C.F. 11296-09-10), (hereinafter, the “Tommy Hilfiger Case.”)
The Tommy Hilfiger Case - Factual Background
The facts of this case are quite complex and will not be specified in their entirety within this article. It is worth noting the following facts:
The questions at hand, identified and addressed by Justice Yitzhak Inbar, were: (1) are the Defendants entitled to use the Plaintiffs’ trademarks? (2) and if the Defendants are entitled to use the Plaintiffs’ trademarks, what type of use is allowed?
According to the Israel Trademarks Ordinance, the primary Act relating to Trademarks and Trademark Registration, one may use a trademark if the use is “true/genuine use”. Specifically, Section 47 of the Ordinance, provides that:
“Registrations under this Ordinance shall not prevent any genuine use by a person of his own name or of the name of his business or the geographical name of his place of business, or of any or his predecessors business, or use by any person of any genuine description of the character or the quality of his goods.”
In order to determine if the use is genuine/true, the court examined the following three questions:
After carefully examining the facts at hand, the Judge concluded that:
In short, the Judge determined that the Defendants did not use the Plaintiffs’ trademarks in a reasonable and fair manner. The Plaintiffs were awarded approximately US$150,000.
Use of trademarks without permission or license provided by trademark owners is common everyday practice. A typical vendor literally sells goods under thousands of trademarks without license or permission.
Businesses advertise and promote the fact that they sell branded goods. Moreover, occasionally one will use his competitor’s trademarks within competitive advertising.
All the above acts are legitimate, provided that use of trademarks is required for identifying the goods and is executed in a reasonable and fair manner. Additionally, use may not mislead consumers to contemplate sponsorship by the trademark owner.