"BAYwatch" - when eBay carefully watches over the car industry

 [Decision in opposition to register trademark no. 283359 for "CARBAY" rendered by the Israeli Registrar of Trademarks on January 29, 2020]

1. On January 29, 2020, the registrar of the Israeli Trademarks Office (the "Registrar") accepted an opposition (the "Opposition") filed by eBay Inc. ("eBay") to register Cal-Auto Finance Services (1998) Ltd.'s ("Cal-Auto") trademark no. 283359 for "CARBAY" in classes 35 with respect to, inter alia, online advertising and car selling services via the Internet and 39 with respect to, inter alia, towing of vehicles (the "Requested Trademark").

2. eBay, the giant multinational e-commerce corporation, is the owner and operator of an online trading platform, which facilitates online consumer-to-consumer and business-to-consumer sales. eBay is also the proprietor of Israeli registered trademarks no. 124841 for "EBAY", no. 251030 for "ebay" (stylized) and no. 2124842 for "ebay" (stylized) all in class 35 (collectively – "eBay's Trademarks").

3. In the context of the Opposition, eBay claimed that the Requested Trademark is ineligible for registration, inter alia, pursuant to Section 9(11) of the Trademark Ordinance [New Version], 1972 (the "Ordinance"; "Section 11(9)"), since it is likely to mislead consumers, and pursuant to Section 11(14) of the Ordinance ("Section 11(14)"), since it resembles the well-known eBay's Trademarks.

4. In addition, eBay claimed that Cal-Auto's choice of the Requested Trademark was made in bad faith, attempting to benefit from eBay's goodwill. In this regard, eBay referred to Cal-Auto's registered trademark no. 272948 (stylized) and argued that Cal-Auto intentionally refrained from using trademark for the uses covered by the Requested Trademark, and that instead, the actual use of Cal-Auto of the Requested Trademark resembles significantly to the stylization of eBay's Trademarks.

5. Cal-Auto rejected eBay's claims and argued that its actual use of the Requested Trademark is unlikely to mislead consumers as it differs from eBay's Trademarks in several aspects. Firstly, the word "BAY" is not exclusively associated with eBay, as such word is commonly used in commerce, and secondly, the component "Car" in the Requested Trademark cannot be confused with the component "e" in eBay's Trademarks.

6. Lastly, Cal-Auto noted that practically there is no competition between Cal-Auto and eBay as eBay's only product is the trading platform itself and not the goods that are showcased and sold through it. Therefore, it was further claimed that eBay's Trademarks are not well-known with respect to goods that are offered for sale on Cal-Auto's website. Furthermore, Cal-Auto stated that cars are not sold on eBay and even if they were, these cars were unavailable to Israeli consumers due to regulatory restrictions over the vehicle market.

7. The Registrar held that the Requested Trademark is ineligible for registration as it is likely to mislead consumers and also in view of the extended protection conferred upon well-known trademarks.

The Findings regarding the Opposition Pursuant to Section 11(9) 

8.Section 11(9) provides that a mark which is identical to, or is likely to cause confusion with, an earlier registered trademark, in respect of the same goods or goods of the same description, is not eligible for registration.

9.As for the likelihood of confusion, the Registrar implemented the "triple test" (the "Confusion Test") considering the visual and phonetic resemblance of the respective trademarks, the type of goods/services for which the respective trademarks are used,  the potential customers and additional circumstances, as follows:

10.It was held that the trademarks "eBay" and "CARBAY" (collectively –the "Trademarks"), are similar enough to cause confusion amongst consumers.

The Registrar held that "BAY", the common element of the Trademarks, is also the dominant element thereof and is more likely to be engraved in consumer's memory. The Registrar was of the opinion that the word BAY is neither related to, nor laudatory or descriptive with respect to the relevant goods or services and that it has gained a strong distinctive character due to eBay's use. In this respect the Registrar ruled that the stronger distinctive character is, the more likelihood of confusion exists. The Registrar further commented that the fact that there are other Israeli trademark registrations that include the "BAY" component does not directly lead to the conclusion that the word "BAY" is common in commerce and lost its distinctive character. The Registrar further stated that it cannot be overruled that a few of the owners of said registrations adopted the word "BAY" in an attempt to resemble eBay and accepted eBay's arguments that it is acting to enforce its rights against infringers.  

Importantly, Cal-Auto's actual use of the Requested Trademark resembles the design of eBay's Trademarks, as every letter has a different color, which further enhances the likelihood of confusion.

11.  Additional circumstance taken into account was the fact that Cal-Auto intentionally chose the word "BAY" and used similar colors as those used for eBay's Trademarks. These efforts to resemble eBay's Trademarks enhance the likelihood of confusion between the Trademarks.

12.  The Registrar was pursued that there is a likelihood that a consumer who places a purchase order on Auto-Cal's website will think he made the purchase on eBay or on a website related to eBay. Admittedly, the Registrar noted that the visual aspect played a key role in his decision. Bearing in mind that the relevant consumers view the goods and services only virtually (indirectly), they are more prone to confusion. Under these circumstances the significant resemblance of the actual use of the Requested Trademark to eBay's Trademarks enhances the likelihood of confusion.

13.Cal-Auto's claim that the high price of cars invokes consumers' extra attention and decreases likelihood of confusion was rejected. The Registrar was convinced that eBay does sell some cars in Israel (yet in a limited scope) and noted that regulatory barriers (that may be removed in the future) do not justify an unauthorized use of a registered trademark whatsoever.

14.On top of that, it was mentioned that the likelihood of confusion is not limited to confusion regarding the source of the services, namely, that the consumer will be misled to assume that he purchased from eBay, but also concerns the possibility that the consumer will be misled to assume that Cal-Auto is somehow related to eBay.

15.The Registrar held that the comparison between the goods and services as well as the customers should be made in accordance with the (existing and requested) registration and not with respect to the goods and services actually marketed under the relevant trademarks. Thus, with respect to class 35 he concluded that the services are completely overlapping. The class 35 services specified for the Requested Trademark are, inter alia, "Providing information via the Internet relating to the sale of automobiles; car selling services via the Internet". eBay's Trademarks are registered with respect to "online vendor". However, the Registrar was of the opinion that in this case the term "online vendor" covers all the requested services in class 35, as its usual meaning relates to providing services to third parties that trade online, including, but not limited to, providing trading platforms, advertising services, online promotion and clearing services.

The Registrar further stated that although Cal-Auto mainly sells cars while eBay is merely a trading platform, the said difference is not reflected in the respective specifications of class 35 and even if it was reflected in the specifications, the respective services are connected, complementary and directed at the same consumer. Moreover, the average consumer may identify the trading platform without being aware of its exact business models. Therefore, the Requested Trademark is likely to mislead consumers with regard to class 35.

16.  As to the services specified for the Requested Trademark in class 39 ("towing of vehicles") – it was held that they are not of the same description as "online vendor" (the services in class 35 with respect to which eBay's Trademarks were registered). The mere fact that both services could be obtained via the Internet is insufficient to hold that they are of the same description. 

17.In view of the above, the Registrar accepted the Opposition to the Requested Trademark pursuant to Section 11(9) only with respect to class 35 and not class 39.

The Findings regarding the Opposition Pursuant to Section 11(14) – a Well-known Trademark 

18.The Registrar stated that it is a judicial knowledge that eBay's Trademarks are well-known.

19.Pursuant to Section 11(14), a requested trademark which, is not intended for services of the same description as a registered well-known trademark, is not eligible for registration provided that: (1) the requested trademark may imply a possible connection to the well-known trademark or its proprietor (the "Connection Test" ; "Connection") and; (2) that the proprietor of the registered well-known trademark is liable to be adversely affected as a result of the use of the requested trademark (the "Injury Test"; "Injury").

20. In recent Israeli case law, CA 3425/17 Societe des Produits Nestle v. Espresso Club Ltd. ("Espresso Club") (click here for our report on the Espresso Club decision), the Supreme Court discussed the correlation between the Connection Test (being the test applicable to Section 11(14)) and the Confusion Test (being the test applicable to Section 11(9)). It was determined that the Connection Test's requirements, as set forth in Section 11(14), are more lenient than those applicable to the Confusion Test. In other words, a requested trademark which resembles a registered well-known trademark that is intended for different goods or services will not be eligible for registration even if a likelihood of confusion was not demonstrated (but a Connection was found), provided that the Injury Test is also met.

21. The Supreme Court further held, inter alia, in Espresso Club, that Section 11(14) does not apply to goods and services of the same description. The rationale for this ruling is to "exempt" the proprietor of a well-known registered trademark from the need to demonstrate the existence of an Injury, where the opposition is directed to goods of the same description, and to prevent an inevitable result whereby a proprietor of a registered well-known trademark will always be forced to meet the Injury Test (in addition to the Connection Test), by providing proper evidential basis. 

22. In accordance with the Supreme Court's position, Section 11(14) was applied by the Registrar only with respect to the Opposition to the Requested Trademark in class 39.

23. In this respect, the Registrar noted that in view of the visual resemblance between the Trademarks there is likelihood that consumers will associate the Requested Trademark with eBay's Trademarks, in accordance with the Connection Test. The Registrar was also convinced that dilution and abuse of eBay's goodwill may inflict Injury upon eBay in accordance with the Injury Test. Thus, the Requested Trademark in class 39 was found ineligible for registration pursuant to Section 11(14).

In conclusion, the Opposition was accepted and the Requested Trademark was found ineligible for registration: in class 35 pursuant to Section 11(9) and in class 39 pursuant to Section 11(14).