Legitimate Use of Trademark by Parallel Importer
In Elad Menachem Swissa v Tommy Hilfiger Licensing LLC the Supreme Court discussed the boundaries of parallel importing (PI), and held that while the Israeli Trademark Law does not specifically address the issue of PI, the Israeli case law has been consistently held that there are only very limited restrictions.
In general, PI is permitted, and in marketing original PI products one may make use of the marks of the original manufacturer. However, in making such use of the trademark, the PI most show that the use of the trademark does not create a reasonable probability that the consumer develops the impression that the PI is enjoying the support of the owner of the mark (OFM). That is, the trademark may be used to advertise an authentic product, but without causing the consumer to believe that the specific dealer is sanctioned by the OFM.
The impression mentioned above can be created either by acts of the PI himself misleading the consumer to believe that he is an “official” importer, or by his failure to correct misleading beliefs among consumers about the sponsorship of the OFM.
In a case where the PI products are of lower quality, then the PI is further committed to stress the difference in the quality of his products and that he is not supported by the OFM .
The obligatory requirements to the PI is to ensure that the purchaser is not under the belief that the PI is operating on behalf of the OMF differ from case to case, and are set according to the relationship between the purchaser and the OFM. So when the relationship between the purchaser and the OFM is important (for example for ongoing support issues), then the PI would have to emphasize that he is not the official importer (e.g. parallel car imports, where ongoing maintenance is a crucial selling factor).
However in cases where the purchaser is not necessarily looking to buy from the official importer and the relationship between the purchaser and the OFM is not of importance, the PI does not have to constantly stress that he is not acting on behalf of the OFM.
In accepting most of the appeal, the Supreme Court ruled that the appellant is precluded from naming his store “Tommy Hilfiger Importer Warehouse” as the name implies sponsorship of the OFM. However, the court allowed other practices that were earlier prohibited by the district court, such as using the domain name www.tommy4less.co.il which does not imply that the site in sponsored by the OFM (and might even be understood the opposite way). The plaintiff was also allowed other rights to use Tommy Hilfiger brand, including in posts, brochures, colors of the store, and on its website (with the exception of one notice on the site stating that the good are from PI).
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