Azbarga v. State of Israel

This is an appeal to a single Justice of a decision of the Tel-Aviv-Jaffa District Court, in which the appellant’s application to be allowed out of house arrest, on a daily basis at fixed times, in order to participate in daily prayers at the mosque of the town of Qalansuwa, was denied. Justice Rubenstein allowed the appeal in part, allowing the appellant to go to the nearest mosque to pray once a week and, after three months without incident, to go to the mosque once a day

Shemesh v. Focaccetta Ltd

Facts: The applicant, who was pregnant, and her children went to dine at the respondent’s restaurant. While dining, another customer of the respondent began to smoke. The applicant complained to the respondent but the customer continued smoking. The applicant filed a claim in the Small Claims Court on the grounds that the smoking in the restaurant was illegal and caused her damage. The trial court held that the respondent had breached the law, but it only awarded the applicant compensation for the cost of the meal (NIS 112) plus expenses. The applicant applied for leave to appeal to the District Court, but the District Court held that the amount awarded fell within the broad margin of reasonableness. The applicant then applied to the Supreme Court for leave to file a further appeal. Held: Justice Rubinstein, sitting as a single Justice, recognized the importance of enforcing the Restriction of Smoking in Public Places Law, 5744-1983, by means of civil actions, especially in view of the ineffectiveness of enforcement of the law by the authorities. A breach of the law constitutes a breach of the statutory duty in the Restriction of Smoking in Public Places Law, which was intended to protect the health of persons in public places. Jewish law has also increasingly recognized the dangers caused to the public by smoking in public places. The Restriction of Smoking in Public Places Law does not contain a provision for awarding compensation without proving damage. But it is very difficult, because of the nature of the case, to prove specific damage from an incident of smoking. In view of the fact that the breach of the statutory duty in this case involved a family with children and a pregnant woman, there are grounds for giving stronger emphasis to the damage, for the purpose of deterrence. The Supreme Court therefore awarded the applicant an additional NIS 1,000 in compensation

Storck KG v. Alpha

Facts: The appellants filed suit against the respondents for violation of a registered trademark and unjust enrichment. The appellants argued that the marketing by the respondents of a candy with a similar shape to the Tofifee candy that the appellants manufacture and market constitutes a violation of the appellants\u27 trademark. The District Court dismissed the appellants\u27 claim that their commercial trademark is a three-dimensional mark comprised of the shape of the Tofifee candy and determined instead that the appellants\u27 mark is a two-dimensional mark that does not protect the shape of the Tofifee candy, but rather only the graphic shape as presented in the Trademark Registry\u27s abstract. It was further held that even if the Trademark Ordinance [New Version] 5732-1972 enables the registration of three-dimensional trademarks, the shape of the product itself cannot be registered as a trademark. The District Court held that the marketing of a candy similar in shape to the shape of the candy that appears under the appellants\u27 trademark does not constitute a violation of the trademark. The District Court also compared the packaging of the respondents\u27 and appellants\u27 candy and concluded that the packaging of the respondents\u27 candy does not create a risk of misrepresentation and does not violate the appellants\u27 mark. The appellants appealed the District Court\u27s decision. Held: The Court held that the three-dimensional shape of a product is not eligible for registration based on its possession of an inherently distinctive character. However, it is eligible for registration on the basis of its possession of an acquired distinctive character. The Court further held that to the extent that the shape of the product fulfills a functional or aesthetic role (beyond a negligible role), the trademark will not be eligible for registration even if it acquired a distinctive character in fact. The judgment of the District Court was overturned, such that the proceeding was remanded to the lower Court for determination of the validity of the appellants\u27 mark according to the rules set out in the judgment. As to attorneys\u27 fees for the appeal, it was held that they be ordered based on the outcome in the District Court

Bremer v. Tel Aviv-Jaffa Municipality

[This abstract is not part of the Court\u27s opinion and is provided for the reader\u27s convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.] An appeal against the judgment of the Tel Aviv Administrative Court, in which the Court rejected a petition by the Appellants, owners of grocery stores in Tel Aviv, to order the Tel Aviv Municipality to close the businesses operated by Respondents 2-6 (the A.M.P.M and Tiv Taam supermarket chains, hereinafter: the “Respondents”), which are open on the Sabbath, in violation of Section 2 of the Tel Aviv-Jaffa (Opening and Closing of Stores) Ordinance, 5740-1980 (hereinafter: “the Ordinance”), which prohibits opening stores on the day of rest. It shall be noted that each Sabbath the Municipality issues fines in the amount of NIS 660 to businesses that operate on the day of rest, under Section 265 of the Municipalities Ordinance. Given that the Municipality has additional authorities to enforce the Ordinance beyond imposing fines, including filing a motion for an order to close a business that violated the provisions of an ordinance passed according to Section 249(21) of the Municipalities Ordinance (Section 264A of the Municipalities Ordinance) – the issue at hand is whether the Municipality was obligated to exercise them? The Supreme Court (opinion by Deputy President M. Naor, with President A. Grunis and Justice E. Rubinstein, concurring) upheld the Appeal on the following grounds: Regarding judicial review of an administrative agency’s enforcement policy, the Court ruled that: “indeed, in order for the Court to intervene in the scope of enforcement of one law or another, the competent agencies must completely absolve themselves of their duty to enforce the law […] or unreasonably refrain from fulfilling their duty”. However, when dealing with enforcement policy, the agency’s discretion exists within the law and the need to enforce it. The agency has a duty to uphold the law and insist upon others upholding it as well. To the extent that the administrative agency’s position is that it is no longer appropriate to enforce the law, it cannot absolve itself of the duty to enforce it, but rather may act to change the law – and a fortiori when an ordinance is at stake, as in the case before us. However, as long as the law has not been changed, the agency must act according to the existing state of the law. There are possible exceptions to the agency’s duty to enforce the law, such as when the law is anachronistic and conflicts with existing social positions. Such an exception does not exist here. The Municipality does not maintain it is inappropriate to enforce the Ordinance due to the nature and culture of Tel Aviv-Jaffa. It instead argues that it is in fact enforcing the Ordinance through imposing fines on anyone who opens their business in violation of the Ordinance. The Respondents are those arguing that due to the nature and culture of the city, the Municipality should not be forced to enforce. The agency’s duty to enforce the law means that the range of reasonable discretion at the enforcement stage – as broad as this range may be – is more limited than the range of discretion it had when passing the Ordinance. After passing the ordinance, the agency must exercise its discretion under the ordinance and its objectives. As a rule, the administrative authority must enforce the ordinance it passed and it no longer has broad discretion on whether to enforce it. The purpose of exercising an enforcement policy is, naturally, to bring about the actual enforcement of the law. Exercising ineffective means of enforcement does not realize this purpose. Lack of effective enforcement deals a severe blow to the rule of law. When the means employed by the administrative agency bear no fruit, refraining from employing additional means could, in certain circumstances, lead to conclude that in fact the agency is refraining from fulfilling its duty to exercise discretion or that its discretion is unreasonable. In any event, when the existing enforcement policy does not lead to the desired result, the administrative agency must, at the very least, consider exercising additional means of enforcement within its authority. Refraining from considering additional means of enforcement in such circumstances could constitute a flaw in the agency’s conduct – a flaw which merits the Court’s intervention. In this case, there is no doubt that the Respondents are violating the Ordinance. As such, in principle, the Municipality must act to close these businesses on the day of rest. This does not stem from a “religious” or “secular” perspective. It stems from the perspective that the law, including the Ordinance, must be followed. Enforcing only by imposing fines is not, to the proper extent, realizing the objective of the Ordinance. The objective of the Ordinance, in light of the social and religious values regarding the day of rest, means that businesses should indeed be closed on the day of rest – not that businesses who wish to open their doors on the Sabbath can do so provided they are willing to pay a fine. Enforcing only by imposing fines effectively enables continuous violation of the Ordinance by businesses that are part of large retails chains, who are economically resilient and who remain sufficiently profitable each Sabbath. It is therefore still in their benefit to continue to open their doors on the day of rest, despite the fine. The outcome of this enforcement is that the Respondents gain profits from an additional business day on the weekend. The Municipality’s treasury benefits from the significant fines it imposes upon the Respondents each week. But the rule of law – which requires obeying the orders of the law – is compromised. This difficulty grows when it becomes impossible to ignore the concern that it is convenient for the Municipality – in light of the economic benefits of imposing fines – not to insist upon following the Ordinance. If the nature and culture of Tel Aviv-Jaffa requires, in the opinion of its elected leaders, not to close businesses such as the Respondents’, on the Sabbath, the Ordinance may be changed in the manner prescribed by law. However, as long as the Ordinance has not been changed, the operating assumption is that it is to be followed. Indeed, the Municipality’s authority to request a Prohibition to Open Order, under Section 264A of the Municipalities Ordinance, is discretionary. The Municipality is not required to exercise this authority each and every time the Ordinance has been violated. However it must consider whether and how to exercise the various means of enforcement it has in its toolbox. The submissions demonstrate that the Municipality chose to impose fines on Respondents 2-6. They do not demonstrate that the Municipality so much as considered approaching the Local Affairs Court to move for a Prohibition to Open Order. Neither considering the possibility of filing a petition for such an Order, nor examining any other option for achieving – to a reasonable and proportional degree in light of all considerations – the Ordinance’s proper enforcement, constitutes a violation of the Municipality’s duty to act and to exercise discretion. In these circumstances, the Municipality violated its duty to exercise discretion from time to time, and in doing so, its conduct was flawed as to merit the Court’s intervention. The Appeal is upheld and the matter shall be remanded to the Municipality so that it exercises its discretion and adopt a meaningful decision on how to exercise its authorities under Section 264A of the Municipalities Ordinance or any other power in addition to its power to impose fines. The Municipality shall examine its position regarding the Ordinance’s enforcement within 60 days from the date of this decision. The Municipality’s decision in this matter shall be delivered to the Appellants’ attorney and, of course, is subject to additional judicial review. Justice Rubinstein joins and refers to two additional issues: the Municipality’s conduct as a public entity, and the insult to the Sabbath as a national and religious day of rest for the Jewish people. Justice Rubinstein ends his ruling with the hope that city leaders will succeed in identifying an enforcement mechanism, which would honor the law and the Sabbath, as well as be reasonably satisfactory to the fair residents of Tel Aviv who wish to rest

Carmi v. Sabag

Facts: The appellant suffered from a mental illness. On 1 October 1999, the appellant attacked the respondent, who was then an eight year old child, and seriously wounded him. The appellant then attacked his own daughter and killed her. The appellant was indicted for murder and attempted murder, but because of the mental illness from which he suffered, he was found not to be responsible for his actions, and he was hospitalized in a psychiatric hospital. The respondent, through his parents, sued the appellant for compensation. Held: Tort law does not recognize a defence of insanity according to the meaning of ‘insanity’ in criminal law, i.e., when the defendant did not understand what he was doing or the impropriety of his act, or could not refrain from committing the act because of a mental illness. Tort law recognizes only a defence of lack of control, when the tortfeasor had no control over his actions (such as in a case of automatism), either because of a physical or mental illness

Shtanger v. Speaker of the Knesset

[This abstract is not part of the Court\u27s opinion and is provided for the reader\u27s convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.] A petition which focuses on the question of the legality of two arrangements in the Criminal Procedure (Enforcement Powers – Detention) Law, 5756-1996 (hereinafter: the Detention Law ) which were added to the Detention Law, in the framework of Amendment no. 8 to the Law, which was legislated by the Knesset on March 14. 2011. The first arrangement amends Section 53 of the Detention Law. This arrangement provides that from now on, appeals to the Supreme Court on District Courts decisions in appeals on Magistrate Court decisions regarding matters of detention, release, violation of bail or motions for reconsideration, as well as appeals on District Court decisions regarding matters of bail, will be appeals by permission and not as of right (meaning, that from now on the option of a second appeal will be by permission only). The second arrangement amends Section 62 of the Detention Law and provides that a Supreme Court judge will be permitted to extend the period of detention of a defendant who is detained until the end of proceedings, beyond the nine months, for a period of up to 150 days (and to re-order this from time to time), in such cases in which it appears that it will not be possible to conclude the trial proceedings within a period of 90 days, due to the nature of the offense, the complexity of the case or multiple defendants, witnesses or charges. The High Court of Justice (by President A. Grunis, Justices E. Rubinstein and H. Melcer concurring) denied the petition on the following grounds: The arguments regarding the legislative process of the amendment to the Detention Law: The legislative process of the Amendment to the Detention Law indeed did not precisely correspond with the provisions of Sections 126 and 128 of the Knesset By-Laws (which focus on the specific voting procedures in the second and third readings of bills to which reservations have been submitted). However, these deviations from the provisions of the By-Laws do not constitute a flaw that goes to the root of the process , which severely and significantly infringes on the fundamental principles of the legislative process in Israel in a manner that would lead to the Courts intervention and the declaration of the Law void. (The fundamental principles of the legislative process, so it was held the Poultry Farmers Case, include, inter alia, the principle of the majority rule, the principle of formal equality – pursuant to which each of the Members of Knesset has one vote, the principle of publicity and the principle of participation – which guarantees the right of each Member of Knesset to participate in the legislative process). The arguments regarding the Law\u27s arrangements infringement of the right to freedom: The Petitioner\u27s arguments in this matter were general and unclear, however, in light of the importance of the right, the merits of the arguments were addressed. As is known, the constitutional review customary in our legal system is divided into three main stages. At the first stage (the Infringement Stage ), the Court examines whether the law infringes on a constitutional right. If it is found that the law does not infringe on a right, the constitutional examination ends. If it is found that the law infringes on a constitutional right, the examination proceeds to the second stage, in which the Court examines whether the law satisfies the conditions prescribed in the limitation clause. If the law satisfies the four conditions of the limitation clause, the infringement is constitutional, if it doesn\u27t - the constitutional examination reaches the third and final stage, the consequence stage. At this stage, the Court is required to rule as to the consequences of the constitutional infringement. Each of the constitutional examination stages has an important purpose in the entire constitutional analysis. The first stage of the constitutional examination (the Infringement Stage ) is meant to determine the conceptual scope of the constitutional right. The boundaries of the constitutional right are outlined at this stage, by interpreting the relevant right and balancing it with other rights. The second stage of the constitutional examination (the Limitation Clause ) is meant to determine the degree of protection of the right, and the boundaries of the legislator and the restrictions imposed on it when infringing on constitutional rights. Obviously, there is a reciprocal relation between the two stages, but each of the stages has its own balances and independent objectives. Therefore, it is better not to skip the first stage of the constitutional examination, even if ruling at this stage is not simple, unless circumstances justify skipping this stage. This is the case, even if the discussion at the second stage will lead to the conclusion that the law satisfies the proportionality criteria Do the arrangements of the Law infringe on the right of freedom? Indeed, there is no dispute that the detention itself infringes on the right of freedom in the most substantive manner. However, given the importance and centrality of the right – in and of itself and as a means to promote and realize other rights – it should not be interpreted in a narrow way, as applying only to the initial detention decision, but rather the right of freedom should be interpreted as a right that also applies to procedural protections that are directly and tightly related to the protection of the right and the its realization, with each case being examined on its own merits. As for the first arrangement, which provides that the option of a second appeal will be by permission only, the High Court of Justice is of the opinion that this arrangement does not infringe on the right of freedom, since, according to president Grunis\u27 position, the scope of the constitutional right of freedom does not extend to grant the option of a second appeal on detention decisions as of right. This conclusion can be inferred, inter alia, from a review of the scope of the right to appeal in our legal system. The central rule in our system, pursuant to Section 17 of the Basic Law: The Judiciary, grants a litigating party the right that its matter be heard in only two instances. A hearing in a third instance will, as a rule, only be held by permission. In light of the conclusion that the first arrangement does not infringe on the right of freedom, this ends the constitutional examination of the first arrangement. As for the second arrangement, which addressed the possibility of extending the period of detention of a defendant who is detained until the end of proceedings, beyond nine months, for a period of up to 150 days, there was no dispute between the parties that this arrangement does infringe on the right of freedom. Therefore, the High Court of Justice examined whether this arrangement satisfies the conditions of the limitation clause and reached the conclusion that it does (the main question that was ruled upon was the arrangement\u27s compliance with the proportionality condition). In this matter, it was clarified that this is an arrangement that was designated for special cases in which the Court is convinced that the judicial time required to conclude the criminal proceeding is expected to be especially lengthy in light of the complexity of the case, or the existence of many defendants or multiple witnesses , and it consists of means which balance between the infringement of the detainee\u27s freedom and the need to adjust the possibilities of extending detention in such complex cases, in which it is clear to the Court that a 90 days extension will not be sufficient). It follows that the infringement deriving from this arrangement to the right to freedom is constitutional. There is no doubt that the amending law discussed in the petition adversely affects, to some degree, the state of suspects and defendants compared to the previous legal situation. However, the mere adverse change does not necessary lead to the conclusion that there is an infringement of a constitutional right or that the amendment does not satisfy the conditions of the limitation clause. We must distinguish between the constitutional threshold and the legal status preceding the amendment to the Law. The legislator has leeway when amending the law, between the legal threshold prescribed before the amendment (which was higher than the constitutional threshold) and the constitutional threshold. As long as the amendment to the law did not prescribe a threshold lower than the constitutional threshold, the new arrangement cannot be deemed unconstitutional. The result is that both parts of the petitions are denied. Justice E. Rubinstein joined the above opinion, subject to certain remarks. Regarding the second arrangement relating to the extension of the detentions by 150 days, it is necessary to distinguish between the authority and the its exercise. As mentioned, the authority in and of itself is within the boundaries of constitutional proportionality. As for its exercise, Justice Rubinstein raises a small warning flag that when the case at hands relates to the denial of freedom from a person who is presumed innocent, relatively frequent judicial review should be allowed, and five months is a long time, and therefore one must be extremely diligent in complying with all of the conditions of the law, and the extension of 150 days should certainly be the exception in practice. As for the second appeal, that is a third instance hearing of a case (the amendment of Section 53) – in light of the workload imposed on the Supreme Court, there can be no dispute, and it is common sense, with all due sensitivity to the denial of freedom which results from the detention of a person who is presumed innocent, that it is not feasible in the long term to have the public resources to deliberate this as of right in three judicial levels. The situation in Israel until the amendment – deliberating detention in two instances as of right – does not exist in any nation. In this sense, the legislator reinstated reasonable normalcy , taking into consideration that one appeal as of right indeed already exists. Justice H. Melcer also joined the above opinion and emphasized two insights: (a) Alongside the right to appeal – the option to request permission to appeal is also a right, while it may be narrower than the former. However, this limited option can also be deemed as a means of review of the decision which is the subject of the application for permission to appeal and this is sufficient after the initial constitutional right to appeal has been exhausted. A similar approach and development can also be found in comparative law. (b) The arrangement amending Section 62 of the Detention Law, that allows a Supreme Court judge to extend a detention for up to 150 days, in certain given cases – is within the framework of the statutory leeway (which is also referred to as the boundaries of proportionality ), albeit, in the opinion of Justice Melcer, it is situated at the far end of such boundaries. It follows that it is not appropriate to grant a constitutional relief, since intervention of such nature in such circumstances is reserved only for the most extraordinary cases, and this is not the case here. The appropriate remedy in such cases is judicial restraint in exercising the authority, and this is indeed how we, Supreme Court Justices, act

Salomon v. Yaasin

The Appellant is a corporation operating in the field of sporting goods, clothing and shoes, and holds trademarks in many countries around the world. Three of its trademarks are registered in Israel and they include a logo of three parallel and diagonal stripes that appears on the side of sneakers, comfortable shoes, athletic shoes and shoes for daily wear. The Respondent imports shoes into the Palestinian Authority. In 2005, the Respondent imported sneakers from a factory located in China. As per his order, the shoes were marked with four diagonal stripes and labeled with the name “SYDNEY”, which appeared in three different spots on the shoes. The shipment of these shoes arrived at the Ashdod Port, and the Appellant was notified by the Department of Customs and VAT that the shipment would be held because, from the appearance of the shoes, the Respondent seemed to have violated the Appellant’s intellectual property rights. Officers of the Department of Customs and VAT gave the Appellant’s lawyer the Respondent’s information and a sample shoe, against the deposit of a bank guarantee. The Appellant believed the appearance of the shoes is indeed sufficiently similar to the shoes it manufactures as to be misleading and that the shoes infringe its trademark. The Respondent, for his part, argues that the shoes he imported did not infringe the Appellant’s registered trademark, but in order to reach an agreement with the Appellant, he proposed to make a certain change to the shoes’ design. The Appellant rejected the proposal, and therefore the Department of Customs continued to hold the shipment. The Appellant filed suit against the Respondent in the District Court for trademark infringement, passing off, harm to reputation, and unjust enrichment. The claims were rejected, and hence this appeal. The Supreme Court rejected the appeal (and in terms of the unjust enrichment cause of action – in a majority) ruling that: Justice Hayut – Infringement of a trademark: A trademark is intended to assist the consumer to distinguish between products made by competing manufacturers. Therefore, to be eligible for registration, the product must be of “distinctive character”. Such distinctive character may be inherent distinctiveness or acquired distinctiveness. There is no dispute that the Appellant’s trademark – three diagonal stripes identically wide and spread out on the side of the shoe – is currently absolutely associated with the Appellant corporation all around the world and constitutes a distinct sign for identifying its shoes. Therefore, it seems that there is no question regarding the existence of acquired distinctiveness for this mark. However, and as the lower court held, the inherent distinctiveness of the product is weak. The weakness of its inherent distinctiveness influences the scope of the protection the mark ought to be given. The fact that the mark has acquired a highly strong distinctive meaning warrants maximum protection. However, its weak acquired distinctiveness warrants protection that is generally limited only to the trademark itself and to extremely similar designs. In other words, allowing the Appellant to additionally monopolize two or four stripes (or any other number of stripes), is problematic as we thus exclude a stripes design from the public domain and prohibit other manufacturers from using this design for their shoes. This is not to say that the Appellant’s investment in advertizing and marketing has not led to the stripe design being popular and desirable, but this cannot lead to a conclusion that any use of stripes by a competitor is prohibited use. Section 1 of the Trademark Ordinance stipulates that an “infringement” is, among others, the use of a registered trademark or a similar mark, for the purpose of goods or related goods for whom the trademark had been registered, by someone who is not entitled to do so. The section does not detail the extent of similarity required between the marks for the use to constitute an infringement. However, the case law found that in this context the test in section 9(11) of the Ordinance – which sets the method of examining the mark for the purposes of registration, and that a mark is sufficiently similar to a registered trademark as to be misleading is ineligible for registration – should apply. Therefore, when concerning the use of a similar mark (as opposed to the use of an identical mark) the party claiming infringement must show that the other mark resembles its mark as to mislead the public. The acceptable test for examining the existence of a misleading similarity is a triple test that includes the sight and sound test, the type of product and consumers test, and the circumstances test. While applying these tests, one must remember that the marks as a whole must be compared, rather than specific parts of them, and that the examination must focus on the existence of a misleading similarity between the marks themselves. In our case, however, it is impossible to examine the marks completely separately from the goods upon which they appear. First, even if the consumer does not have the two products in their hands and compares the marks’ details, we cannot assume that the consumer disconnects the marks from the shoes themselves and examines them separately from the shoes. Second, the rule that the marks themselves should be compared was established in cases concerning verbal, rather than visual, marks. This distinction is important because complete separation between a visual trademark from the product upon which it appears, particularly when the mark may be interpreted as a decorative element, is an artificial and problematic separation. The application of the infringement tests must fit the unique circumstances of the case. Considering the circumstances here, it seems the shoe must be examined in its entirety. In the current case, the parties agree that the Respondent’s shoes are the same type of product for which the Appellant’s trademark was registered – sneakers – or sadly the same category of goods, that is the same commercial family. It is also agreed that the shoes do not carry the same design as the registered trademark, and thus this is not an attempt at counterfeiting goods. We should examine the similarity between the marks and decide whether indeed this similarity is misleading. Applying the sub tests, while accounting for normative findings regarding the scope of protection appropriate for the mark, lead to a conclusion that the Respondent’s shoes do not cause concern for misleading the public and therefore do not infringe the Appellant’s trademark. Passing off: This tort has two elements, which the party claiming the tort (plaintiff) must prove: reputation acquired through goods or services this party offers, and concern for misleading the public to believe that the goods offered by the defendant offers actually belongs to the plaintiff. There is no disputing the Appellant and its trademarks’ reputation in the field of sports shoes in Israel and around the world. Therefore, the first element is met and we must focus on the second – the concern for misleading. In order to explore the existence of this element we must examine the entirety of the defendant’s actions and conduct. This examination does not lead to a different conclusion than that which we have reached about the lack of concern for misleading in terms of the trademark. This is because the Respondent’s actions, such as attaching to the shoes a label spelling out the name “SYDNEY” in capital letters or packaging the product in a box also clearly marked with that same name, further reduce the concern from misleading. It seems in this case there is no concern for misleading the public. Reputation dilution: The doctrine of reputation dilution does not require proving a concern for misleading consumers. However, it seems that the cases where it is appropriate to find a reputation dilution exists even in the absence of misleading, are extraordinary cases where the lack of misleading was a result, for instance, of the product belonging to an entirely different category of products. In any event, even when proving misleading is unnecessary for claiming reputation dilution, this does not negate the requirement to show erosion and distorting the reputation acquired by the registered trademark because of the use made of the other mark. When we are concerned with marks on products in the same category, and in the absence of misleading similarity between the products or the marks that are largely differentiated, the claim that the reputation of the trademark’s owner would be diluted should seemingly be rejected. In this case, in light of our finding that it was not proven that the average consumer would be misled to think that the Respondent’s shoes were made by the Appellant, there is no concern that the consumer would indeed link the quality of the Respondent’s shoes to the Appellant, and in any event the cause of action of dilution does not exist. Unjust enrichment: It seems that the rule that possibly derives from the A.S.I.R case was fully reflected in Justice Strasberg-Cohen’s opinion that the individual’s interest that a creative work they produced and invested time, effort, thought, talent and resources into, is principally worthy of protection within the law of unjust enrichment, and this interest should not a-priori be excluded merely because it is not a cognizable right under intellectual property law. Still, it was decided that the scope and application of unjust enrichment law depends on the extent that the existing law is comprehensive in that it excludes the application of external law; that a requirement for finding in favor of the claim is that enrichment is not “by a lawful right”, that is that the copy or forfeiture consist of an “additional element” of negative value; that there must not be double remedies or compensation; and that when necessary a variety of remedies – which include restraining orders – may be granted under unjust enrichment law, though they are not detailed explicitly in statute. The Appellant holds a registered trademark and it essentially established its suit in terms of infringing this trademark. The issue is whether, where a court found that the intellectual property law elements that warrant protecting the holder of a trademark do not exist, and the court additionally found that under the circumstances there was no passing off, a plaintiff may be permitted to raise claims regarding unjust enrichment as an alternative cause of action. The majority justices in A.S.I.R. chose not to decide the issue of whether a plaintiff may simultaneously and alternatively file claims under intellectual property law and under unjust enrichment law. In other matters that came before this Court after that decision, the Court found that once the plaintiff failed to show the infringement of a registered trademark and the plaintiff is no longer entitled to protections of property under this “cognizable right”, there is no room to grant remedies under the alternative unjust enrichment claim. Even where we assume, for discussion’s sake, that rejecting the claim of infringing a registered trademark does not negate at all an alternative cause of action under unjust enrichment, it seems there is no dispute that this rejection carries significant weight in examining the existence of the four elements of the alternative claim, particularly in terms of finding against misleading. In this case, the Respondent used the mark of four stripes on the side of the shoe, as well as – and this is most important – the labeling of the word “SYDNEY”. Under these circumstances we must emphasize this case’s distinction from A.S.I.R., where there was a perfect replica of the product through reverse engineering. There, it was also a product that resulted from invention and development (as opposed to the use of the stripes design element, which has weak distinctiveness.) Justice Rubinstein joins the opinion by Justice Hayut. At the core of his opinion sits Justice Hayut’s premise that, insofar as the weak distinctiveness of the trademark is concerned, and her estimate that one would be hard pressed to argue that had the Appellant not chosen this mark, the shoes would not have been manufactured with stripes on the side. Thus even though Justice Rubinstein cannot say that the Respondent’s choice to use stripes was meaningless. In this context, recall Justice Netanyhu’s opinion in Kalil, that though Kalil’s registered trademarks (stripes on samples used for identification) are limited to three stripes, but a monopoly over any and every number of stripes would prevent many others from using stripes because of the restriction on the number of possible stripes as dictated by the width of the side. We must exercise caution when attaching absolute exclusive use in this context, the type of exclusivity that might, inadvertently, harm the delicate balance between protecting intellectual property and protecting freedom of occupation and freedom of competition. As for the issue of unjust enrichment (and having read the opinion by Deputy President, Justice Rivlin): the A.S.I.R precedent is relevant where the extent of intellectual property law is too limited, not substantively but for lack of registration, and thus some protection is provided under unjust enrichment law. However, is the Court granting “quasi-intellectual property” protection where intellectual property law was examined and found not to have been violated, as in this case? Normatively, at heart Justice Rubinstein would follow the President, but he remains uncertain as to whether the unjust enrichment claim could supplement intellectual property law where it does not apply for internal, substantive reasons, rather than merely external procedural ones. Deputy President Rivlin joins Justice Hayut’s position regarding the trademark infringement claim, but had his position prevailed, he would have found in favor of the petitioner in terms of the unjust enrichment claim. In A.S.I.R. the Court decided that generally there is no reason not to recognize an unjust enrichment cause of action where the law of intellectual property applies as well. Under the rules set in that case, it is appropriate to recognize the cause of action in this case, too, both because trademark law does not exclude doing so in the issue at hand, and because the right under “the internal law” of unjust enrichment exists here. One wishes to use a trademark that resembles a trademark registered to another, which undisputedly has acquired a significant and substantial reputation. The consumer prefers the product bearing the similar mark over the product bearing the registered trademark, due to the latter’s higher cost (among others, because of its reputation). In other words, the consumer is aware that the product purchased is a copy, and is interested in the product precisely because of this. The copying manufacturer and the consumer both benefit from this reality. This harms the manufacturer and the reputation it acquired. Currently, trademark law does not regulate this issue of copies that the consumer purchases with intent rather than by mistake. And note – the lack of application of trademark infringement claims to obvious copies (that is, products that are clearly a copy, and that even the consumer is aware of their being a copy) does not reflect a decision toward a policy that the “market of copies” is desirable in the eyes of the legislature. At most, this is a gap in trademark law. Bear in mind also that this gap is a result of court-made jurisprudence. It seems the time has come that Israeli law granted remedies against copies, insofar that they are copies of a registered trademark with the sole purpose of benefiting from a reputation of another – another who had taken lawful steps to register the reputable trademark. It seems there is no reason, in terms of intellectual property law, not to recognize an unjust enrichment cause of action as applied to copies of registered trademarks where there is no misleading similarity because the consumer is aware that the product is a copy. In the next step, we must examine whether the Appellant has a claim under unjust enrichment law per se. This claim has three elements: the first requirement is the existence of an enrichment, the second requirement is that the enriched party’s enrichment resulted from the enriching party, and the third condition is that the enrichment to the enriched party was not “through a lawful entitlement or right”. In A.S.I.R. we decided that an enrichment that is not “through a lawful entitlement or right”, in that context, is an enrichment that carries an “additional element” of improper conduct. The majority’s position was that conduct that is in bad faith or constitutes unfair competition is sufficient for the purposes of an “additional element”. It seems that where one wishes to copy a registered trademark associated with a reputation that holds economic value, with the purpose to benefit from this reputation in selling its products, and where the original manufacturer invested resources and effort in developing the reputation associated with that trademark while the copying manufacturer benefits from it without having to invest similarly, this would be a case of unfair competition and bad faith. The negative aspect of a perfect copy of a registered trademark continues also where the mark has been slightly, but insignificantly, modified. Such is the case at hand: the addition of a single stripe, while maintaining the registered trademark’s colors, the use of only one color for the stripes, using the stripes’ same direction and location on the shoe as well as the width of stripes and the width between them – amounts to a real similarity to the Appellant’s registered trademark and is in bad faith. The existence of the two first elements is primarily a factual question. In the case at hand, the Respondent’s profits from selling the shoes (those for which he had the opportunity to do so) would have caused an enrichment. This enrichment was at the expense of the Appellant. The Respondent wished to benefit from the market that the Appellant developed and the reputation it created for its trademark. Therefore, when the conclusion is that the Appellant indeed has an unjust enrichment claim, the question of remedy arises. Had the Court taken the opinion of Justice Rivlin, he would have proposed a permanent injunction against the Respondent prohibiting him from marketing or distributing the shoes with their current design. This injunction would stand until one of the changes proposed by the Respondent was executed

Israel Oil Refineries Ltd. v. New Hampshire Insurance

Facts: The Tel Aviv District Court granted a petition for the recognition of a judgment rendered by an English court, which had declared that an insurance policy issued by the respondent (New Hampshire Insurance) to an Israeli company, Oil Refineries Ltd. – the appellant – was void on the grounds that a substantial matter had not been disclosed to the issuer. The respondent brought the action in the English court after its sibling company (AIG Europe, which had underwritten the policy) had been served a third party notice in an Israeli proceeding brought against the appellant. The District Court ruled that the foreign judgment in favor of the respondent should be recognized pursuant to s. 11(a) of the Foreign Judgments Law, which provides for the direct recognition of foreign judgments under specified conditions. Oil Refineries Ltd. appealed, on the grounds that the foreign judgment was issued in a proceeding initiated at a time that a parallel proceeding between the same parties had been pending in Israel. Held: (Justice Arbel) The Foreign Judgments Law establishes a track for the recognition of foreign judgments (including sub-tracks for direct and indirect recognition) as well as a track for the enforcement of such judgments. The relevant track here is the direct recognition track (s. 11(a)), but the Foreign Judgments Law stipulates (in s. 11(a)(3)), with regard to such recognition, that the relevant treaty must allow only the recognition of judgments that are enforceable pursuant to Israeli law, thus requiring the court to determine which of the conditions for enforcement are to be applied to the direct recognition track. The best possible interpretation, based on a purposive reading of the statute’s language, is to adopt an intermediate view of the interaction between the enforcement requirements and the direct recognition track. According to this view, not all the enforcement track conditions are to be applied, and only those that constitute the threshold requirements for enforcement under Israeli law – i.e., those conditions that further the purpose that underlies the stipulation of requirements for enforcement – are to be applied with respect to the judgment for which recognition is sought. Pursuant to this interpretation, the provisions of s. 6(a)(5), denying enforcement to a judgment rendered in a foreign court in which an action was brought while a parallel proceeding between the same parties was pending in an Israeli court, will apply here to the recognition of the English court’s judgment. The sub-section should be applied to the direct recognition track – both because logic dictates that section 6(a) should be applied as a whole, and because its purpose – to prevent abuse of the ability to initiate a second proceeding in another country in order to avoid an Israeli court’s judgment – conforms to the overall purpose of that track. Once the District Court had found that the foreign judgment had been rendered in a proceeding initiated while a parallel proceeding was pending in Israel, it should have applied s. 6(a)(5) and refused to recognize the English court’s judgment. (Vice President Rivlin, concurring). Section 11(a)(3) of the Foreign Judgment Law allows for recognition of a foreign judgment when the relevant treaty does not obligate Israel to recognize judgments in a manner that deviates significantly from Israeli law; the statute requires that in order to be recognized, the foreign judgment must qualify under the provisions of the relevant treaty. Nevertheless, the Israeli court retains discretion in terms of its ability to determine whether the recognition of the judgment is in compliance with treaty provisions. With respect to the pending proceeding provision of s. 6(a)(5), the statutory language does not grant the court discretion with regard to the non-enforceability of judgments rendered in actions brought while there is a parallel pending proceeding in an Israeli court, but the relevant treaty leaves the matter of enforcing such judgments up to the deciding court’s discretion, Nevertheless, the treaty cannot be said to be one that deviates significantly from the relevant Israeli law. Pursuant to the statute, the Israeli court must take as its starting point the rejection of the judgment, while allowing the party seeking recognition to prove that circumstances justify a change from that initial position. Here the appellant has not met that burden, and the foreign judgment should not be recognized. (Justice Rubinstein, concurring). The impact of the pending proceeding will be determined in accordance with the language of the treaty, rather than the language of the local statute. Although the treaty here confers discretion upon the court in this matter, that discretion should have been exercised so as to deny the judgment’s recognition, based on considerations of the litigant’s lack of good faith. Furthermore, the stipulation in s. 11(a)(3) that the treaty require only the recognition of judgments that “are enforceable pursuant to Israeli law” is a reference to s. 3 of the Foreign Judgments Law, the specific section establishing the requirements for allowing foreign judgments to be enforced, and not to s. 6, dealing with defenses against enforcement

NRG Energy International, Inc. v. Texaco, Inc.

Facts: The decision involves an appeal from a ruling issued by the intellectual property arbiter at the Patents, Designs and Trademarks Office. The two parties had each registered trademarks with that Office: the appellant’s trademark, registered for its motor oil additive product, featured the letters NRG and a drawing of a fist combined with a piston, while the respondent’s trademark, registered at a later point in time for its motor oil, featured the words “Havoline Energy” and an image of a piston. The appellant, on the basis of its registered trademark, had requested the removal of the word “energy” from the respondent’s trademark. The arbiter denied the appellant’s request and this appeal followed. Held: The respondent’s registered trademark did not violate the appellant’s registered trademark. The test for determining whether a trademark has been violated relies on three aspects: auditory and visual similarity between the two trademarks, the merchandise type and customer group for the products covered by the two trademarks, and any other relevant circumstances of the case. The appellant’s main argument was based on an allegedly misleading auditory similarity between its registered NRG combination and the word “energy”. However, even though auditory similarity may be an important test for products that are purchased over the counter, the similarity between the sound of the letters NRG pronounced in combination and the word “energy” does not suffice to create the result sought by the appellant. Here, the appellant had written to the Patents Office at the time of registration that the letters in the trademark “have no meaning”, and it could not, at this later stage, claim that it had sought protection for the word “energy”. Furthermore, the word “energy” is an inherently descriptive word, and a standard term in the field, meaning that no party can be granted an exclusive right to its use through its inclusion in a registered trademark. The appellant also failed to show that the word “energy”, as derived from the letters NRG, had acquired any distinctive character associating it specifically with the appellant’s product, or that it qualified for protection as a “well-known trademark”. In any event, the fact that the respondent’s mark contained another word, in addition to “energy”, established that the auditory similarity was not misleading. The visual differences between the trademarks also weaken the appellant’s argument, as does the fact that the products are marketed in different sized containers. Finally, although both parties’ products fall within the general motor oil category, one product is a motor oil additive while the other is a motor oil itself, so that a claim of a violation cannot be based on a similarity regarding the type of product covered by the two registered trademarks. Appeal denied

Hydrola v. Income Tax Assessor

Appeals challenging a decision by the District Court, which partly granted the appeal by the Appellant, who conducted business in states formerly within the Soviet Union, for income tax return for the years 1992-1996. The appeals primarily centered round the Respondent’s reasoning for prohibiting writing off expenses for commissions paid to the Appellant’s agents in the Soviet Union based on two alternative justifications: failure to properly prove the expenses and the unlawfulness of the expenses, which were payments of bribes. The Appellant argues that the sums it paid its agents abroad were made for purposes of its income and that the Respondent must deduct them as expenses. The cross appeal concerned the partial recognition as expenses of payments the Appellant made to agents as salaries. The Supreme Court (in opinion written by Justice Rubinstein and with Justice Hayut and Elon concurring) rejected the appeal and the cross appeal and held that: The deduction of sums paid as bribes must not be permitted due to the unlawfulness of these expenses. Such payments were unlawful were they made in Israel and it is sadly presumed that they were also unlawful in the country where they were made, thus they are tantamount to expenses made as an offense. Recognition of these payments as expenses for the purposes of tax deductions is inconsistent with the public interest. This outcome is justified also in light of the protected interests that are infringed by bribery: proper public administration and the public trust in law and government authorities. The fact that the unlawful activity was committed abroad does not mitigate their severity which is in fact exacerbated due to the development of business activity abroad. This is joined by considerations regarding a concern for harm to Israel’s foreign affairs and to its reputation. This outcome is also a result of considerations such as fair competition, increasing economic efficiency, conserving public funds, and fairness. As for the evidentiary aspect, the Appellant should have demonstrated its claimed expenses. In an Income Tax Appeal the burden of proof is placed on the taxpayer, even when keeping admissible books, when there is a conflict about the bookkeeping. It is certainly the case when the tax payer seeks to demonstrate expense made in the course of creating an income. The Appellant challenges factual findings by the lower court, yet the matter of the believability of the evidence and the weight that ought to be attached to them are within the purview of the lower court, and it is not the course of the appellate level to intervene but fore rare cases that do not include the one at hand. Second, there is no place to intervene in the findings of the lower court, which balanced between the burden of proof placed on the Appellant and the evidentiary challenges it faced. The court did not reject all the expenses for lack of documentation and did in fact recognize some of the expenses. As for the cross appeal, the payments made by the Appellant to agents for salaries – as expenses, were proven. And though advancing the transactions through bribery was part of the agents’ roll, it was not exclusive and it cannot be said that their salary was touched by unlawfulness to the extent that their recognition as expenses may be rejected. Justice Hayut and Elon joined the above, but left for future consideration whether a general consideration is required for the issue of permitting allegedly unlawful expenses made by an Israeli tax payer abroad, as it does not necessitate a decision in these appeals