Civil Case (Haifa) 80960-12-24 Benny George Shukha (Haifa) Ltd. v. Antoine Shukha & Sons Ltd. - part 4

Companies Law

36. In a lawsuit filed by the plaintiff, she is a petitioner for the granting of remedies according to Section 30 The Companies Law provides as follows:

The court may, at the request of a company, instruct a person who has taken its name or a name that is similar to it to the point of misleading, or, at the request of a person who has been injured by the registration of a company in a name in contravention of the provisions of section 27, to instruct the company to refrain from using the name, unless it is convinced that the defendant's right to use the name precedes the applicant's right.

This section replaces the Section 36(f) to the Companies Ordinance [a new version], which established a similar provision.

37. Other Municipality Requests 2626/95 Princess Hotel Netanya in Tax Appeal v. Lexan Israel Ltd., IsrSC 51(3) 802 (1997), the Court noted that: "Section 36(f) is intended to strike a balance between a company's right to choose a name for itself and the interest to protect the public from deception".  The purpose of the instruction is therefore Prevent deception, to protect the public so that it does not mistakenly think that a company with a certain name is another company with a similar name (see more about the purpose of the provision in the explanatory notes to the proposal).  Companies Law, 5756-1996, Booklet 2432 of October 23, 1995); Civil Case (Tel Aviv District) 1686/05 Daniel Fox Holdings in Tax Appeal v.  Elves Components Ltd., paragraph 3 (4/7/2005); Civil Appeal 197/59 The Israeli Ship Repair Company' Eretz Yisrael Ship Repair Company Ltd., IsrSC 13 1222 (1959); Y.  Gross, Companies Law, 99 (5th Edition) - 2016); Civil Appeal 2626/95 Ibid., p.  805).
38. In other words, the purpose of the provision Section 30 The Companies Law and the imposition of the restriction on the use of a misleading name are intended to protect the public from mistakenly thinking that it is contracting with one recognized company, when in practice the company with which it is contracting is different. In order to implement the deception test, the courts adopted the "triple test."" which was also used as a test in the tort of "passing off" (prior to its repealing in the Commercial Torts Law, 5759-1999 and its replacement In the section 1 to the new law).  According to this test, the similarity between the appearance and sound of the two names, the type of merchandise, the circle of customers, and other circumstances of the matter are examined (See also Y.  Gross, supra, p.  100; Civil Appeal 210/65 Union Bank of Israel in a Tax Appeal v.  Agudat Israel Bank Ltd., P.D.  19:673 (1965); Civil Appeal 261/64 Pro-Pro Biscuit Kfar Saba in Tax Appeal and Provisk in Tax Appeal v.  L.  Frumin & Sons Ltd., P.D.  Samp(3) 275 (1964); Civil Appeal 382/70 Lamed, Investment and Trading Company in Tax Appeal v.  "Lammet" Foreign Trading Ltd., Piskei Din 25(1) (1971)).

Other Municipality Requests 2626/95 The aforementioned clarifies the court that "The question the court must ask itself is: What would happen if each of the two rivals competing with each other was allowed to use its own mark? The public, because of the similarity between the names, is liable to confuse them?" (ibid., at p.  805, and see also Civil Case (Tel Aviv-Yafo) 1830-03 Lafayette Asset Management and Brokerage Agency in a Tax Appeal vs.  Lafayette Modiin in a Tax Appeal (11/11/2003)).

39. And dove. The courts emphasized that there is no need to prove an intention to mislead, but rather that it is sufficient that the name is liable to mislead the public (Civil Appeal 652/70 Israel Loan and Savings Bank (formerly Jaffa-Tel Aviv) in Tax Appeal v.  Jerusalem Loan and Savings Mutual Association Ltd., IsrSC 25(2) 508 (1971); Civil Appeal 30/77 Royce (Ashdod) in Tax Appeal v.  Royce Ltd., IsrSC 31(3) 183 (1977)).
40. For our purposes. The plaintiff claims that the defendant's use of her name "Antoine Schocke & Sons Ltd." is liable to mislead the public into thinking that he is entering into a transaction with the plaintiff and purchasing the plaintiff's products.  Apparently there is a certain similarity between the names - The use of the name is spoken, and there is a similarity in the circle of customers and in the products sold.  However, this is not enough, for the issue should not be viewed only from the plaintiff's point of view.
41. As we have seen, the defendant has been registered as a company under the name of Antoine Schocha & Sons in a tax appeal as early as 1983, even before the plaintiff company was registered (in 1984). The defendant uses its name and markets products under its name throughout those years, and even before that during the period when the activity was carried out by the partnership.  We have seen that over the years various proceedings have been conducted between the parties and agreements have been reached whereby the defendant is entitled to continue to make use of its name and to register a trademark on the terms as agreed upon in the first settlement agreement and in the second settlement agreement.
42. There is no dispute that the defendant has a circle of customers, that it is engaged in the trading and marketing of food products and that for decades it has used its full name when marketing the products, and since the signing of the agreements this has been done without any objection on the part of the plaintiff (except for opposition to the use of additional trademarks).
43. The change of ownership rights in the company, due to which the plaintiff petitions for the remedies claimed and for the cessation of the use of the defendant's name, is not at all relevant to the claim of deception. It is not clear to me how the change of ownership in the defendant is liable to cause the public to make the mistake of thinking that the defendant's products belong to the plaintiff, or to think that it is contracting with the plaintiff.  The change in ownership in the name has no effect on the question that the court must present to itself, i.e., whether the public is liable to make a mistake due to the similarity in the names and "mix" the companies (as detailed above).  Other Municipality Requests 2626/95).
44. Instruction Section 47 The Trademarks Ordinance, which grants protection for "true use" in a person's name or in the name of his business, is not relevant to the question before us, i.e., the question of the use of the company's name. Section 47 The Trademarks Ordinance deals with the protection that every person, including a corporation, has to make real use of his name or the name of his business (see Civil Appeal 3559/02 Toto Gold Subscribers Club in Tax Appeal v.  Sports Gambling Regulation Council , IsrSC 59(1) 873 (2004); Civil Appeal 8483/02 Aloniel in Tax Appeal v.  McDonald, IsrSC 58(4) 314 (2004)).  Therefore, the parties agreed in the framework of the proceedings between them that the company would use its full name "Antoine Schokha & Sons Ltd".  As a matter of fact, the plaintiff objected to any use of the name Shukha outside of the company's full name.  It is therefore clear that the question of ownership of the defendant's shares was not relevant to the question of the true use of the defendant's name.

I will note that my decision of February 11, 2022 in insolvency case 555052-08-20, dealt with the assignment of the rights to use the name to the Benny Fawzi Group, and I determined that the use of the full name of the company by the Benny Fawzi Group "may mislead the public" (ibid., paragraph 65).  This is not the case when the company itself uses its own name.

45. It is also worth mentioning that the case law that dealt with commercial tort law, and in particular passing off, determined that the defendant in a claim for a prohibition on the use of the name may have a defense if he has already accumulated goodwill in his name. It was also held that "A late dealer does not have the power to prevent the early dealer from practicing under the name that is the subject of the dispute(See the words of Justice M.  Naor Other Municipality Requests 6316/03 Ilan Automotive Glazing in Tax Appeal v.  Baruch & Sons Automotive Glazing Ltd., IsrSC 62(2) 749 (2007), para.  13) (Judge Naor was there in the minority, but not on this matter) (see also HC (Haifa District) 30170/97 Rubin Tours in a Tax Appeal vs.  Shmulik Rubin Tourism in a Tax Appeal (14/7/1998)).
46. And in our case. Antoine was registered even before the plaintiff was registered, and operated under its name for many years.  Clearly, there is no reason to demand that it refrain from using its name.
47. It is worth further noting that the use of the name of a person who owns rights in the corporation as part of the corporation's name is common Most. You can find many corporations, Israeli and international, that bear the name of their founder (see, for example, the The cars"Ford" and more).  In many of the companies, the rights of the shareholders have been changed, some have even become public companies, and they still bear the name of their founders.  The change of ownership does not change the accumulated goodwill and the company's right to continue to use its name.
48. The above is sufficient to clarify that the plaintiff has no proper cause of action to receive the remedies claimed by her. The same result can also be reached by virtue of the laws of estoppel.  and we begin with the claim of judicial estoppel.

The Judicial Estoppel

49. As is well known, the rule is that a party who has made a certain legal or factual claim is prevented from making a claim in that proceeding or in another proceeding that contradicts his original claim. This rule, in which a party is silenced from raising contradictory arguments according to the various interests he has in each proceeding, is known as "judicial estoppel".  The purpose of the rule is to maintain the integrity of the legal process and the public's confidence in the judicial system (see, for example, Civil Appeal Authority 4224/04 Beit Sasson in a Tax Appeal v.  Shikun Ovdim and Investments Ltd.IsrSC 59(6) 625, 633 (2005); Civil Appeal 513/89 Interlego A/S N.  Exia-Lines Bros S.AIsrSC 48(4) 133, 194 (1994); Civil Appeal 2252/17 Sharabi v.  Levy, paragraph 13 (24/6/2019)).
50. Maintaining the integrity of the proceeding and the confidence in the certainty of the legal proceedings requires that parties be prevented from changing their arguments and adapting them to the needs of the moment in each proceeding. This is true both with respect to legal claims, and all the more so when a litigant presents facts that contradict the facts he presented in the previous proceeding.
51. As we saw above, the plaintiff sought to purchase the defendant's shares, first through direct negotiations, and then, in accordance with the court's decision in the framework of bidding in the insolvency proceeding. In all the aforementioned proceedings, the plaintiff did not raise any claim regarding the continued use of the company's name.  On the contrary, we have seen that the plaintiff, through her counsel, insisted that between the terms of the sale it should be explicitly stated that the purchase is subject to the determination that the company is the owner under the name of "Antoine Schocke & Sons Ltd.", and that the company has rights in the registered mark.  It also stipulated that it be clarified that the company has exclusive rights to use its name in any variation, in any language, etc.  (see Adv. Dolev's letters of December 30, 2020).  The plaintiff's demand was accepted by the trustee and the condition she set was included exactly as requested, between the terms of the sale (see Appendix 6 to the statement of defense).  The terms of the sale were approved by the court, and when approving the sale of the shares to Benny Fawzi, it was determined that the sale was under the same terms as those set by the trustee.
52. Since it was the plaintiff who insisted that he determine that the sale of the company's shares is contingent on the company having rights in its name, she is now silenced from denying this. The plaintiff agreed that the rights in the name belong to the company and that it is entitled to continue to use that name.  The plaintiff did not raise any claim of deception and did not raise any claim that the change of ownership would prevent the use of the name.  And do, the plaintiff knew that the bidder in the bidding was the Benny Fawzi Group.
53. Maintaining the purity of the judicial process, the good faith of the parties and the protection of certainty requires that the plaintiff's claim for a prohibition on the use of the name be dismissed. The Fawzi people competed in the bidding according to the same conditions, and they had a clear expectation that none of the bidders would deny the rights of the Antoine company, which was about to be sold in the proceeding.  This expectation must be protected by the court and the plaintiff must not be allowed to deny the defendant's rights when this is contrary to her current interest.
54. I will add that it was appropriate to reject the plaintiff's claim also because of bad faith conduct and abuse of the legal process (see Regulations 4 and 42 To the Civil Procedure Regulations, 5779 - 2018, and compare Civil Appeal Authority 1954/24 Vaknin v. Kibbutz Nir David - Cooperative Society, paragraphs 24-25 of the judgment of Justice N.  Sohlberg and the references there (January 7, 2025)).  Since the defendant did not elaborate on this matter, I will suffice with this general remark.

The Act of the Beit Din

55. The rule regarding "act of the court" is intended to serve the principle of finality of the hearing, i.e., the principle that litigation in disputes decided between parties should be put to an end. It is customary to note that two considerations underlie the principle of finality; Efficiency and justice (Civil Appeal 5610/93 Zalesky v.  The Local Planning and Building Committee, Rishon Lezion, IsrSC 51(1) 68, 97 (07/04/1997); N.  Salzman Act of the Beit Din in the Proceeding Civil 12-24 (1991).  The resources of the judicial system are limited and therefore should not be devoted to the same issue over and over again; There is a public interest in maintaining legal certainty and stability; A final judgment has an impact not only on the parties to the proceeding, but also on third parties; Public trust is based, among other things, on stability and belief in the correctness of the court's ruling, and a renewed discussion of the same matter that has already been discussed and which is liable to lead to contradictory results harms this trust; The rule of finality directs the parties in their arguments, and the knowledge that the decision in the proceeding is final encourages the parties to present all their evidence and arguments at the first stage; The rules of justice require the protection of the party who won the proceeding, since the multitude of litigation in the same matter causes the parties many expenses, not all of which the winner will be able to collect (see also A.  Clement and R.  Shapira: "Efficiency and Justice in the Judicial Process The Civil: A New Interpretive Approach" Law & Business G, 75, 101-105 (2007)).
56. The rule of the act of the beit din has two branches; Silencing a cause and estoppel a company (see Civil Appeal 2035/03 Lev Jasmine in Tax Appeal v. T.G.I.  Ltd., IsrSC 58 (6) 447 (June 14, 2004); Civil Appeal Authority 5138/18 Jazi Awad v.  Adv. Nesher Paragraph 12 (16/10/2018); Civil Appeal 127/06 Bank Hapoalim in a Tax Appeal - Mishkan v.  Nagar, paragraph 14 (19/02/2009); v.  Salzman, supra, at p.  3).
57. Claim Silencing the cause of action This means that "Where a claim has been heard on its merits and decided by a competent court, there is no need for an additional claim between the same parties or their substitutes, if it is based on the same cause of action" (Civil Appeal 246/66 Klujner v. Shimoni (IsrSC 22(2) 561 (1968)).  When a plaintiff wins his lawsuit, it is said that his cause of action Swallowed In the judgment and the place where the defendant won the first proceeding, it is said that the plaintiff's claim Blocked And he (the plaintiff) is silenced from re-bringing it up again (v.  Salzman, supra, p.  6).
58. The second branch, Silencing a company, is concerned with a judicial decision in a defined factual dispute. The rule of estoppel means that a party will be prevented from denying a decision on a certain factual question that has been clarified and decided by a competent judicial instance (Civil Appeal 246/66 The above, Civil Appeal Authority 2237/06 Bank Hapoalim in Tax Appeal v.  Weinstein (08/03/2009)).
59. For the existence of a company estoppel, four conditions are required; factual and legal identity between the company that was discussed and decided in the first judgment and the company in the second proceeding; Identity between the parties or their successors or between those who have Legal proximity to the litigants in both litigations; In the first litigation, a positive factual finding was determined with respect to the companies; The decision in the company was essential to the final outcome of the litigation (v. Salzman, supra, at p.  141; Civil Appeal 1041/97 Serero v.  Tomares Shoes Ltd., IsrSC 55(1) 642 (February 24, 2000); Civil Appeal 9647/05 Poliva in Tax Appeal v.  State of Israel Customs and Tax Appeals Division and the Ministry of Commerce (22/07/2007)).
60. When dealing with a barrier of the type of "estoppel of cause", the court examines the identity of the grounds in both proceedings. However, it has been said more than once that the test of the identity of the cause is not formal but substantive (Civil Appeal 8444/19 Gibor v.  Azorim Building (1965) in a tax appeal (26/04/2022)).  Thus, it is said that the court will give its opinion "[...] Whether the right or the protected interest in the two claims are identical, as well as the degree of similarity between the factual basis underlying the two proceedings" (see Civil Appeal 2035/03 Ibid., paragraph 6; Civil Appeal 8/83 Gordon v.  Kfar Monash - Moshav Ovdim IsrSC 38(4) 797, 801 (February 13, 1985); Civil Appeal 1650/00 Zisser v.  Ministry of Construction and Housing IsrSC 57(5) 166, 181 (July 21, 2003); Civil Appeal 823/08 Hazan v.  Tax Authority - Netanya Tax Assessor, paragraph 7 (04/01/2009)).
61. It should also be noted that the rules of the court may apply and block a lawsuit even by a person who was not a party to the first legal proceeding, provided that there is a "legal relationship between the parties" (Civil Appeal 718/75 Amram v. SkornikIsrSC 31(1) 29, 32 (1976); Civil Appeal 344/83 Roitman v.  PeresIsrSC 39(4) 29, 36-40 (1985); Civil Appeal 686/02 Association of Owners and Residents of Kiryat Wolfson in Jerusalem v.  Kiryat Wolfson in Jerusalem Management and Services Company Ltd.IsrSC 59(1) 943, 958 (2004); Civil Appeal Authority 4936/20 Estate of the late Muhammad Mahmoud Somron z"l v.  Himanuta Ltd., paragraph 53 (3/4/2023)).
62. In the present case, the plaintiff claims that the defendant's use of her name is liable to mislead the public into mistake between the companies, and therefore justifies the issuance of an order preventing her from making use of the name. As we have seen, in the first settlement agreement and in the second settlement agreement that were approved in court rulings, it was expressly determined that the defendant was entitled to use its full name as part of its trademark and under the conditions determined.  These agreements were approved by the court in judgments dated 13/7/2011 and 1/11/2016, and therefore they constitute an estoppel of cause with respect to the grounds discussed in these cases (see regarding the approval of a compromise in cases of estoppel of grounds: Civil Appeal 1545/08 Moscone et al.  v.  Solel Boneh Ltd., paragraph 7 (4/3/2010); Civil Appeal 8444/19 Gibor v.  Azorim Building (1965) Ltd., paragraph 21 (26/4/2022)).
63. However, the previous rulings cannot silence grounds that were not discussed. The present cause of action is not identical to the causes of action discussed in the past, since the plaintiff relies on the claim that following the change in ownership rights in the shares, the defendant lost its right to use its name.
64. 64. The examination of whether we are dealing with "the same cause" is done in an "expansive" manner. Since, the principle of the act of the court will apply where the basic basis of the causes of action in the two proceedings is similar, even in the later claim details and elements that were not included in the previous claim (Civil Appeal 735/07 Tzamarot Building Company v.  Mizrahi-Tefahot Bank, paragraph 24 (5/1/2011)).  Even an extensive examination of the grounds that were the basis of the 2011 and 2016 claims, as opposed to the present cause of action, does not lead to the conclusion that this is the same ground, and I will explain.  These lawsuits dealt with infringement of the trademark of the Bnei George Company, in its formal form.  Thus, in the 2016 lawsuit, it was claimed that "On the infringing products, it appears as a logo and as a trade symbol, for all intents and purposes, in bold and enlarged, usually at the center of the product addressed to the consumer's eye, the name "Antoine Schokha & Sons"...  The name "Shukha" appears sequentially when it is enlarged and accentuated from the rest of the words" (paragraph 25 of the statement of claim).  The 2011 lawsuit also dealt with alleged infringement of the trademark, in its formal form, i.e., the emphasis and prominence of the name was taken in the center of the caption (paragraph 33 of the statement of claim).

The matter of the present lawsuit is different; It does not deal with the question of whether the new mark is similar and infringing, or not, but rather with the very right to make use of the name in light of the change of ownership in the company.

65. The conclusion from the aforesaid is that in the settlement agreements approved in the judgments, the company was decided as to the defendant's right to use its name and the trademark that includes its name. The argument that the change in ownership of the shares negates her right to use the name was not decided or discussed.

Therefore, the judgments from 2011 and 2016 do not silence the plaintiff from arguing her claims regarding the effect of the change of ownership on the right to use the defendant's name.

66. Of course, this conclusion does not make the decision redundant, according to which the plaintiff is silenced from raising claims regarding the rights regarding the use of the name, in the name of the principle of judicial estoppel, and this does not change the conclusion that the change of ownership does not establish a proper cause of action.

Conclusion

67. In light of all of the above, I accept the motion and order the dismissal of the plaintiff's claim to prohibit the defendant from making use of her name and to prohibit her from making use of the trademark that includes her name.

However, this decision does not legitimize the defendant's use of various trademarks, or to make use of the name "Shukha" in other ways that were not included in the company's rights as determined in the judgments from 2011 and 2016 and as determined in the terms of the bidding.