Maltech vs Israeli Importer – Trademark Infringement Case In Review
Trademark infringement in a serious concern in copyright law, and though it is easier to enforce in our modern globalized world, international litigation is always more complicated than legal concerns limited to the borders of a single country. In this article, we will review a recent case concerning international intellectual property law, and address the concerns of international companies who wish to enforce their trademark in Israel.
Our law office specializes in international copyright law and intellectual property. Contact us if you need help registering a trademark in Israel or if your copyright \ intellectual property had been infringed.
Legal Overview of the Case
As in most countries, Israeli law allows the owners of registered trademarks to take action if said trademark is infringed. The plaintiff must demonstrate that the defendant used its trademark, or a mark resembling its trademark, in relation to the same or similar goods, without being entitled to do so.
Although the statutory framework for trademark infringement only requires that the defendant’s mark resemble the registered mark, Israeli courts typically also consider the likelihood of consumer confusion. Central to this analysis is the concept of “misleading similarity.” Courts employ a three-part standard known as the “triple test” in determining misleading similarity. The triple test considers:
- the visual and phonetic similarity between the two marks,
- the similarity of goods in question and the overlap of target consumers, and
- other relevant circumstances, including the conduct of the parties.
A plaintiff that prevails in its claim of trademark infringement may be entitled to injunctive relief preventing the defendant from continuing to use the mark, and\or to monetary relief in the form of compensatory damages.
Maltech was founded in Italy in 1979 and is now considered the world’s leading manufacturer of machinery in the international construction market. Since 1992, Maltech has been manufacturing machines for mixing and spraying plaster.
In 2005, Maltech created its well-known trademark: a letter “M” composed of four red and gray parallelograms separated by thin white lines. Below the M is the word MALTECH in red. From that time on, Maltech used this trademark for its mixing and spraying machines, as well as for various other construction machinery. Maltech also used the trademark in publications, stationery, business cards, clothing, stationery, stationery, lighters, keychains, etc. Maltech is now a multinational company that sells its products in nearly 50 countries around the world. Maltech markets its products through importers and distributors worldwide.
Maltech began marketing its products in Israel in 2005. During this period, Maltech acquired an excellent reputation among Israeli consumers both in the field of construction and among the general public. Maltech’s excellent quality has led to a steady increase in the sales of its plaster spraying and mixing machines. In 2019, Maltech registered its trademark in Israel.
In 2020, Maltech received information from its Israeli distributor that a small Israeli-based company that imports and sells construction equipment, had created a mark similar to Maltech’s registered trademark, and was using it in its sale of construction machines. The defendant’s Facebook page displayed photographs of non-Maltech machines bearing the infringing mark, alongside photographs of Maltech machines bearing the registered trademark and the infringing mark. Maltech subsequently requested that the defendant stop all use of the infringing mark. The defendant refused. Maltech, represented by our firm, filed a complaint alleging trademark infringement.
As Maltech’s counsel, our firm needed to demonstrate that (a) the defendant did indeed use the infringing mark, (b) the defendant’s mark was misleadingly similar to Maltech’s trademark, and (c) Maltech suffered damages as a result of the defendant’s infringement.
In order to show that the defendant used the infringing mark, our firm provided photographs and listings from the defendant’s Facebook page displaying the infringing mark on the defendant’s merchandise, thus demonstrating that the defendant did indeed market merchandise bearing the mark. Further, our firm asserted that because the defendant’s Facebook page also displayed photographs of Maltech products bearing the Maltech trademark, the defendant’s use of the infringing mark would certainly lead to customers being misled regarding the origin of the merchandise.
In order to show that the defendant’s mark was misleadingly similar, our firm addressed the three factors of the “triple test.” Firstly, our firm asserted that there was a visual similarity between the two marks, noting the striking resemblance in form between the two logos. Both consist of red and grey parallelograms separated by thin white lines, arranged in the shape of a letter M
Secondly, our firm asserted that the goods bearing the infringing mark are of a similar nature to those of Maltech, given that both parties used their respective marks for plaster mixing and spraying machines. Regarding the similarity between customer pools, we asserted that both products were likely to be purchased by the same class of consumer. Because the customer base is likely to associate the infringement mark with Maltech products, any deficiency in quality in the defendant’s products would certainly negatively impact Maltech’s commercial reputation.
Thirdly, we contended that the circumstances surrounding the defendant’s use of the infringing mark strongly indicate that the defendant intended to make its mark misleadingly similar to Maltech’s trademark. Maltech’s is globally recognized for its high quality, and the similarity between the marks is too striking to be coincidental. Rather, the defendant clearly intended to capitalize on Maltech’s international good will by passing its own products off as Maltech’s.
Finally, our law office sought to demonstrate the following damages. Firstly, Maltech experienced a decrease in sales. Given that consumers bought machines from another company under the impression that they were from Maltech, naturally the number of actual Maltech products sold in Israel diminished. Secondly, the defendant also sold incompatible spare parts under the infringing mark, resulting in both (a) lost income from Maltech’s own sale of spare parts and (b) damage to Maltech customers’ machines due to the incompatibility, which in turn resulted in a loss of consumer good will due to the mis-association with the Maltech brand. Finally, our firm asserted the injury to Maltech’s reputation, which it had built for over a decade, and which has now been tarnished due to its association with an inferior product.
The defendant attempted to downplay the visual similarity between the two marks. The defendant claimed that its mark was not an M, like Maltech’s, but was rather composed of both an M and H, the initials of the company’s owner. To this our firm responded that the H is not prominently displayed, and the mark is in effect just an M. The defendant further claimed that its M is a different symbol, given that it is stretched horizontally. Our firm contended that this minor alteration was not enough to render the letter an entirely different symbol.
The defendant also attempted to minimize Maltech’s ability to use the letter M as a unique mark. The defendant argued that as a generic letter, Maltech’s M was not sufficiently unique to merit trademark protection. Our firm rebutted that under accepted trademark doctrine, a generic letter may function as a mark by itself when it creates a “separate commercial impression.” Given Maltech’s widespread reputation, it is clear that its M symbol invokes a commercial impression in its own right. This is especially true when it is used in the context of construction equipment. Therefore, Maltech’s symbol has the full protections of a registered trademark, and the defendant’s mark is in violation of these protections.
After an informal hearing, at the recommendation of the judge, the parties agreed to a court order compelling the defendant and/or anyone on its behalf to refrain from using the infringing mark. The court further ordered the defendant to immediately delete the photos posted on its Facebook page that displayed the infringing mark. Further, the parties were then encouraged to negotiate a settlement for damages between one another, keeping in mind the damages to Maltech’s reputation and income noted above, and submit their agreement to the court for enforcement. Based on our appraisal of said damage and the compensation required, the sum would be in the tens of thousands of ILS.
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