It should also be noted with regard to the aforementioned professional opinion on behalf of Prof. Katz and the survey conducted by him, that it was submitted on behalf of the defendants after a number of lengths that were requested and given in this regard by the court, while the defendants referred in the requests for extension to the existence of opinions and surveys that were conducted for them by other professional bodies and the preparation of which was completed or almost completed. But these were not submitted to the court file. Raz's response in his affidavit and testimony in cross-examination to the explanations on this matter was characterized by inconsistency and left an uncomfortable feeling as to the circumstances of the non-submission of those surveys or opinions, and their results, for the court's review (Raz's affidavit of November 5, 2022, prov. p. 123, s. 2 - p. 128, s. 20).
- In view of the above series of reasons and determinations, with their cumulative weight, I determine that the defendants' use of the name "Toyota Rehovot" or "TOYOTA Rehovot" alongside the use of the plaintiff's logo as part of the business's logo, has the potential to mislead the consumer public in this case, and because of a deviation from the boundaries of "true use" is permissible. On the level of the causes of action, these determinations are sufficient to determine that the foundations of the causes of action of infringement of the plaintiff's trademarks and the tort of passing off have been proven. As detailed above, the cumulative conditions for establishing the cause of passing off, the existence of goodwill alongside a reasonable fear of misleading the public, were proven in this case.
At the same time, it should be emphasized once again that there is no dispute about the defendant's right to act as a parallel importer and to provide professional services to Toyota vehicles, as long as it does so without creating misleading representations to the public in connection with its relations with the plaintiff.
- 4. Domain Name
- The plaintiff uses the domain name Toyota-rr.co.il and her email address is info@toyota-rr.co.il. In this regard, it was held in the Tommy Hilfiger case that there is no dispute about the importance of the Internet space today in terms of marketing and advertising activity of businesses, and that it constitutes a significant sales arena in itself. In addition to the aforesaid, it was determined that the importance of domain names should not be exaggerated , since many surfers do not reach these sites directly by using the domain name, but rather through search engines or any links. The Supreme Court also ruled in the case of Tommy Hilfiger that the right of the trademark owner extends to the domain names as well, but this use, like the other uses, is subject to the "true use" exception, which, when it exists, permits the use, and therefore not any use of a trademark within the framework of any domain name is necessarily invalid. In other words, in this matter as well, it is necessary to examine whether the use of the domain name is likely to cause a reasonable consumer to mistakenly think that the website is operated under the auspices of the trademark owner or the official importer on his behalf. It was further determined that there is no impediment, per se, to incorporating the trademark into the domain name. In the same matter discussed there, it was held that the domain name www.tommy4less.co.il is not misleading, but rather indicates that it is possible to buy products of the Tommy Hilfiger brand on this site at low prices (the Tommy Hilfiger case, 74-84).
- The plaintiff argued that the plaintiff's domain name in this case is misleading and that the addition included in it - "-rr" that appears next to the trademark (and reflects the words - Rehovot vehicle) is minor, transparent and lacks a discriminating character, and that therefore the deception also exists in the use of this name and its trademark within its framework. It was further argued that authorized agencies on behalf of the plaintiff in Israel use such names within the scope of the domain name, which include the abbreviation of its name in their domain names and email addresses (for example, the domain name of A.S. Nazareth Ltd., an authorized agency on behalf of the plaintiff is www.toyota-as.co.il). It was also claimed that on the landing page on the defendant's website, the name TOYOTA appears prominently along with the plaintiff's silver logo and the words "Toyota Rehovot", so that the general appearance creates a misleading impression as if it were an authorized dealership of the plaintiff.
- The defendants, on the other hand, argued that their use of the domain name meets the test of "true use" within the meaning of the Tommy Hilfiger case. According to them, the name of this compound in its format indicates only that the defendant sells Toyota vehicles and spare parts of its manufacture, and there is no concern that the reasonable consumer will mistakenly think that it is the official importer or an authorized agency of the plaintiff. This is because on the homepage of the website it is stated in emphasis that the defendant is engaged in parallel imports and there is even an expansion in this regard under the label "About Us" on the website. It was also argued that the addition "RR" in the domain name expresses, as stated, the initials in the foreign acronym of the company's name - "Rehovot vehicle" and actually distinguishes between this domain name and the domain name of the official importer Union Motors - www.toyota.co.il. The defendants also referred regarding this dispute to the foreign judgment in the case of Toyota Motor Sales, U.S.A., Inc. Tabari, 610 F.3d 1171, 1180 (9th Cir., 2010 (the Tabari case). This judgment was given in the United States and was mentioned in the judgment in the case of Tommy Hilfiger (para. 45), in which it was held that car dealers who specialized in the sale of vehicles manufactured by LEXUS who use this trademark within the framework of their domain name, did not hereby infringe the trademark registered on the word LEXUS, since they do sell vehicles of this manufacture.
- In his affidavit, Raz testified that when a potential customer types in the search words "Toyota Rehovot", in the result of the company's website, the phrase "parallel imports" appears, in contrast to the search results for authorized dealerships on behalf of the plaintiff. According to him, even if any surfer made a mistake and entered the defendant's website, both at the top of the page on the website and in other prominent parts of it, it is clarified and highlighted that the defendant's business is in parallel imports (paragraphs 72-74 of Raz's affidavit). In Raz's cross-examination, he was directed to a place on the site where only the inscription "Toyota Rehovot" appears on the right side next to the Toyota logo and without the phrase "parallel imports", and also to the fact that even in the center of the site the inscription "Toyota Rehovot - all in one place" appears in the prominence. In response, Raz pointed to another small inscription on the upper right side of the web page, above and near the logo that reads, "Toyota Rehovot - Parallel Imports." Moreover, as a screenshot from the website of August 9, 2021, in the past the words "parallel imports" were part of the logo on the website, but this part of the caption was removed (P/7, P/8, Prov. 139, S. 20 - 141 S. 18).
- After examining all the evidence presented by the parties on this issue and the testimonies and arguments in this regard, I find that the domain name and the design of the landing page therein have the potential to initially mislead website surfers. The very fact that a customer is attracted under the false pretense of the possibility that the defendant is an official dealership on behalf of Toyota entails the potential for deception, even if the reality becomes clear to him at a later stage. Thus, a perusal of the landing page (P/7) shows that indeed the phrase "Toyota Rehovot" appears there only and the plaintiff's logo and even below the inscription this phrase appears, in large font and without the words "Parallel Import". I do not believe that there is a "parallel import" in the small caption, and even in the content below, in order to nullify this first glaring misconception. I find that even the removal of the words "parallel imports" from the title, as stated above, reinforces this concern.
- Moreover, the domain names that were examined in the case of Tommy Hilfiger and in the case of the foreign Tabari included distinct and clear signs. In the Tommy Hilfiger case, the name of the compound was included in the caption "4less", which, as the court clarified, there constitutes a discriminating caption that negates deception, and in the Toyota case, the name of the compound examined there was buy-a-lexus.com. In other words, these addresses/names included distinct combinations that are not common on websites on behalf of the official manufacturer and are not identified with it. In our case, the addendum "-RR" included in the domain name does not have a consumer significance in terms of what is known to the reasonable consumer, but rather a technical suffix similar to the domain names of authorized agencies in Israel, which, as stated, expresses only a geographical location that therefore does not contribute to differentiation from the plaintiff or to the prevention of misleading. Therefore, the reasonable expectation of a consumer or surfer who encounters the name of such a domain is that it is quite possible that this is the site of an authorized agency on behalf of the official importer. I will also note that even if the words "parallel importer" are included at the end of the search bar, as Raz claims, the phrase "Toyota Rehovot" is written twice when the phrase "parallel importer" is written at the end of the search line or in a particularly small logo, which is not always visible at the first glance of the search results, and is certainly not prominent when it is at the end of a long search line, and in any case this does not negate the fear of that initial deception.
- Therefore, I determine that the defendants' use of the domain name is misleading and exceeds the scope of "true use" permitted by a parallel importer, and that in doing so constitutes the commission of torts of trademark infringement and plagiarism, in view of the real concern of misleading consumers regarding the identity of the operator and his connection to the trademark owner.
D5. Business Design
- The plaintiff claimed in this regard that the defendants deliberately designed the service center in a manner that was deceptively similar to the design of Toyota authorized dealerships. This includes the use of the following misleading characteristics and the overall impression created by them - the combination of red, white, and gray colors identified with Toyota; The use of the plaintiff's huge silver logo on a gray background with the red inscription TOYOTA below it at the entrance to the service center and offices; the use of red designed chairs identical to those used at the plaintiff's authorized dealerships; characteristic gray vertical signage surrounded by a red line, and more. According to the plaintiff, these design characteristics, including the overall cumulative visual impression, indicate a clear attempt by the defendant to resemble a Toyota dealership in the eyes of its customers and thus build on the plaintiff's reputation. It was further argued in this regard that even if it is possible to point out slight design and appearance distinctions here and there, it is reasonable to assume that the customers will not notice them but will be impressed by the general visual similarity and thus will be misled.
- The defendants, on the other hand, argued that the use of the colors red, white, and silver and even the use of the car manufacturer's logo is an accepted use in the automotive industry, both in official importing agencies of vehicles made by other automakers and in general garages that are not. According to them, the rule is that intellectual property protection should not be granted to paint or the use of a combination of colors, especially in cases where it is an accepted and common combination in the field. They further argued that when other companies use a certain color, it should not be said that the general contract is liable to mislead the consumer. It was also argued that the plaintiff has strict standards regarding the appearance of agencies on its behalf as detailed in the standards booklet. Therefore, the reasonable consumer, and in particular those who purchased from one of the Toyota dealerships, was able to discern the striking difference between the visibility of the showroom of the official importer's agencies and the defendant's sales yard and garage. With regard to the entrance sign to the defendant's garage, it was argued that the Ministry of Transportation obligates the defendant's garage to establish visible signage from the moment of entry to the garage regarding the products in which the garage is an expert, in a visible place and in any publication of the defendant's name in accordance with section 5 and the first addendum to the Licensing Regulations. It was also emphasized that even in the said sign it is stated that it is a parallel import. As for the red chairs in the business, it was claimed that these are different from the chairs at the plaintiff's agencies, which were purchased two years earlier and are not at all in the defendant's garage, but only in the waiting office of Yaad Leasing Company, which is also owned by the defendant.
- Aslan's affidavit on behalf of the plaintiff was accompanied by a number of photographs comparing the large Toyota logo displayed on the entrance signs at its official importer's dealerships with the defendant's signage, which includes large internal signage of the plaintiff's logo on the walls of the defendant's dealerships and business, along with the use of a combination of red-gray-white colors (paragraphs 17-20 of Aslan's affidavit).
Raz testified that other car dealerships make design use of red-white-silver colors. Attached to his affidavit were photos from authorized dealerships of other manufacturers, including the automakers Mitsubishi and Kia, in which there is an alleged resemblance to authorized dealerships of Toyota. He further testified that at the time the claim was filed with the defendant there was no showroom at all, but rather a small sales office, unlike the service and sales centers of the official importer, Union Motors, which is obligated to have a showroom that meets the standards set out in the plaintiff's book of standards (paragraphs 94-97 of Raz's affidavit). In his cross-examination, Raz testified that the chairs were also different in design, with the chairs in the defendant's business having four legs, as opposed to chairs that rotate in the photograph of the authorized agency, and that these chairs are not part of the showroom, but are located in the waiting office of the Yaad Leasing Company, owned by Raz (Prov. p. 166, paras. 4-7). As for some of the signs that were attached to Aslan's affidavit, he further testified that there are other signs next to it with the inscription "Parallel Imports." Raz confirmed in the context that the inscription "Rehovot Vehicle Service Center specializes in TOYOTA" does appear in the vehicle handling plaza of the defendant's business, but pointed out that although the inscription "parallel imports" is not included in it, the defendants did not even use the trade name "Toyota Rehovot", but rather the name "Rehovot vehicle" (Prov. p. 167, para. 19 - p. 169, 24).
- In the Tommy Hilfiger case, it was held that the design of the store in colors identified with the "Tommy Hilfiger" brand does not constitute deception, unless it is done in a format and appearance reminiscent of the design of the original stores of the owner of the mark in a manner that may cause misleading. It was further held that the choice of colors in which the business was painted constitutes only one of many elements in appearance, and that the question of deception must be examined in this context in light of all the characteristics of the business (para. 70)
- In the present case, after examining the overall picture of the evidence and photographs on behalf of the parties, as well as their arguments in this regard, I find that the plaintiff's arguments on this issue should be rejected. In this regard, it is clarified that I have not found any unusual design similarity between the businesses that justifies the intervention of the court. In this regard, it has been proven that the combination of the colors red, gray, and white in one form or another is a common combination in the automotive industry and the plaintiff has no defense against it. The defendants have also sufficiently proved, in my opinion, that there is a similarity in this regard to the agencies of other car manufacturers as well, and that in any event, this is not a sufficiently clear deception of consumers in this design context. At the same time, it should be noted, with regard to the claims regarding the design and appearance of the business, that the infringement in this context also focuses on the infringing use of the trademarks that was discussed and decided above, with the operative changes required in this context also at the design level, as will be summarized below.
D6. Publications
- In this regard, the plaintiff claimed that the defendants make misleading use of advertisements that look almost identical to those of Toyota authorized dealerships, including through the use of similar color combinations and advertising ideas. In this context, the plaintiff claimed the use of the same font and the same colors, a prominent use of the Toyota silver logo, along with unfair and disproportionate use of Toyota's trademarks. The copying of all these visual elements, in the absence of any functional reason for doing so, is therefore intended, according to the plaintiff, to create a misleading general impression as to the existence of sponsorship or cooperation between the defendant and Toyota or the official importer, Union Motors.
- The defendants, on the other hand, argued that the plaintiff has no standing in this matter since the publications are ostensibly copied from the various Toyota dealerships and not from it. It was also argued that it was not a matter of copying the publications unless it was a similar idea shared by those publications, which was even visually implemented in a different way by the defendant. Thus, for example, promotions for Election Day and the end of the foreign year are those that are customary in all car dealerships, and this is not a unique advertising move for the plaintiff. Similar to the dispute regarding the design of the business, it was also argued in this matter that the use of red, white, and black advertisements in the signs is a common combination in the automotive industry and is not unique to the plaintiff or its authorized agencies.
- In this regard as well, photographs were submitted in support of the parties' claims. A study of them shows a certain visual similarity that in my opinion is not unique in itself and is not unique to any of the parties, such as the use of white color at the top with the silver Toyota logo while the bottom part of the advertisement is red and includes the details of the business. Similar publications in their contents that were submitted in the proceeding include publications relating to the end of the year, which included photos of vehicles and balloons, as well as a photograph intended for Election Day, which looks similar to an "election ballot" bearing the name of the business (paragraph 21, Appendix 13 to Aslan's affidavit). Raz even attached photos to his affidavit that show similarities to advertisements by other car manufacturers, which also used red, white, and black colors and the car manufacturer's logo on the top of the sign. Even with regard to the alleged similarity between the publications, the defendants pointed out a number of differences between the signs. Thus, the plaintiff's year-end advertisements included an English caption "TOYOTA TIME" alongside a picture of three vehicles of different colors and many balloons. On the other hand, the plaintiff's advertisement included only a few balloons and an inscription in Hebrew "Operation End of the Year" with a picture of one vehicle driving in silver. Raz also testified that this photograph was even lawfully purchased from some website dealing with the matter. With regard to the advertisements for Election Day, the defendants pointed out that in the advertisement on behalf of the plaintiff's agency, Chai Motors, an "election ballot" appearing with the inscription "Live" and the period of the sale, while in the defendant's advertisement - "Rehovot chooses Toyota Rehovot" with an "election ballot" with the inscription "Toyota Rehovot" (paragraphs 65-73 of Raz's affidavit).
- In view of this picture of evidence, I find it necessary to reject the plaintiff's argument regarding the publications in question. I accept the defendants' argument that the use of an election ballot for sales on election day is not misleading and is not protected by copyright or any other rights, as is the use of balloons in publications towards the end of the year. These are not protected original ideas, but at most accepted and typical applied ideas. For further illustration, see Civil Appeal 3425/17 Societe des Produits Nestle v. Espresso Club in a Tax Appeal (Nevo, August 7, 2019), in which it was held with respect to two advertisements centered on "a handsome man in a suit leaving a coffee shop" that there is no protection in relation to them, as long as there is no similarity in unique concrete aspects that correspond prominently with each other (para. 20).
D7. Pictures
- The plaintiff claimed in this regard that the defendants used images from the plaintiff's website and the websites of agencies on its behalf around the world in various publications, including the defendant's Facebook page and website. In some cases, to disguise the copy by using a different background. According to the plaintiff, the plaintiff's name appears on each of the photographs, and therefore there is a presumption by virtue of section 64(1) of the Copyright Law that she is the creator of the work and the owner of the copyright therein. The defendants' claims regarding the purchase of these photographs or that these are images that can be used for free were not backed up by license agreements, did not refer to the websites from which these images were taken, and did not even attach regulations indicating that the use of the images is free of charge. It was further claimed that the defendants refused specific disclosure requirements in the context on the grounds that it was a trade secret. In light of the great similarity, and in the absence of any reasonable explanation, the copying of the protected photos was proven.
- The defendants claim that Aslan's testimony indicates that Toyota's publications in Israel are made by Toyota's dealerships and that the photos were purchased from a photo database and Aslan does not know who took these photos. Therefore, the plaintiff did not prove her ownership of these photographs.
- Aslan testified that the defendant uses images from the plaintiff's official website as well as photographs taken from the websites of agencies on its behalf, even though the copyright of these photographs is owned by the plaintiff. The witness attached to his testimony photographs that appear on the website of the plaintiff and agencies on her behalf, as well as on the defendant's website and on her Facebook page (paragraph 35, Appendix 31 to Aslan's affidavit). It should be noted that some of the images were accompanied by information that the image was uploaded by DAM-Digital Asset Management ("DAM"), and that access to the site is only given to parties with special permission from Toyota. In his interrogation, Aslan testified that the materials came to the agencies from a database to which only authorized agencies have access (Prov. 29, 32 - pp. 30, 29). He also confirmed in his interrogation that he did not know who had the rights to the photographs that he attached to his affidavit and that these photographs were attached by him as "another example of how the defendant is trying to deceive the customers" (Prov. p. 31, paras. 3-31).
- As stated, Raz testified in his affidavit that the defendants made use in this context of images from various websites, some of which were purchased by the defendant or someone on its behalf with a license to use the relevant website, and some of them can be used free of charge. According to him, these sites are not related to the plaintiff and there is no uniqueness in these photographs, so that in any case the plaintiff does not own any copyright or other rights in respect of them (paragraphs 90-93). In Appendix 22 to his affidavit, a number of correspondences were submitted, which indicate that the person on behalf of the defendant even sought to verify with the advertising agency that the photographs were indeed permitted for commercial use (Appendix 22, pp. 164-165 of Raz's affidavit).
- An examination of the overall picture of the evidence in this matter leads, in my opinion, to the conclusion regarding the rejection of the plaintiff's claims in this component of the claim. As stated, the plaintiff's arguments are based mainly on the fact that her name appears on each of the photographs attached to Aslan's affidavit. However, I did not find that this was the case except for the vehicles themselves. It can even be said that in accordance with the requirement in the aforementioned provision of the CopyrightLaw - "the name of a person as the creator of the work appears on the work in the customary manner". Even the mention of the judgment in the matter of Civil Appeal 9678/05 Betimo Company in Tax Appeal v. ARRABON -HK- limited (Nevo, August 3, 2008) (hereinafter: the "Betimo Company") does not, in my opinion, help the plaintiff in her arguments on this issue, since there it was a matter of copyright in the games themselves on which the appellant's name appeared in that matter. After all, if the plaintiff's claim is accepted, then on every picture of a Toyota vehicle, possession will operate by virtue of section 64(1). Moreover, it was expected that this alleged defense would be a response in some legal document. Although information from the DAM system was presented, the meaning of this confirmation was not clarified in a concrete and clear manner, because in itself it does not necessarily indicate the existence of the claimed rights. Nor was there any affidavit submitted by the database manager, a person familiar with its nature, or any other document confirming Toyota's alleged ownership of this matter. Therefore, and given the burden of proving a copyright and its infringement that is imposed on the plaintiff copyright owner, and since the presumption of ownership did not arise under the circumstances by virtue of section 64(1) of the Law, the burden of proof required in civil law has not been lifted and the claims in this component are not dismissed.
D8. Unjust enrichment
- As stated, as was ruled in the Tommy Hilfiger case, when there is a specific and up-to-date arrangement in the legislation regulating the field of intellectual property, there is no room for judicial expansion of this field through the law of enrichment and not in law. In other words, even if deception is proven, it is embodied in the legislation regulating this area - trademarks and passing off in this case, and there is no room to expand the boundaries of protection beyond that. In addition, as Aslan confirmed in his cross-examination, the plaintiff received payment for all the vehicles she sold, including those that were imported in parallel (Prov. 17, 27 - p. 19, 1). In any event, the lion's share of the products were purchased from the plaintiff and the plaintiff exhausted the profit from that product. Therefore, any determination that the plaintiff is entitled to the defendant's profits in respect of these sales may lead to a situation of double compensation, since these profits were derived from products for which the plaintiff has exhausted its right. Hence, the claim should be dismissed by virtue of this ground.
D9. Personal Responsibility
- As stated, the plaintiff claimed that the defendant, being the plaintiff's manager and the active party therein, bears personal, separate responsibility, for those alleged wrongs committed by him or at his instruction, initiative or encouragement. This is not by virtue of the "curtain up" laws, but on the basis of the defendant's alleged direct involvement in the acts of infringement that are the subject of the proceeding. According to the plaintiff, the defendant is the one who chose the names used and approved the messages and the content of the publications for the defendant, while the advertising agency also acted in accordance with its instructions and the service center was designed and built according to its instructions. The defendants, on the other hand, argued that the defendant is, of course, a separate legal personality to whom all the activity that is the subject of the proceeding is related and was carried out for her, including all the publications and the design of the business, so that in any case no personal liability should be attributed to the defendant.
- The potential for imposing personal liability in cases of passing off exists (section 12 ofthe Torts Ordinance, section 11 of the Commercial Torts Law, Civil Appeal 407/89 Tzuk Or in a Tax Appeal v. Car Security Ltd., IsrSC 48(5) 661, 700 (1994), Betimo Company case , para. 14, Tommy Greenman Copyright 910-912 (2023)). In the present case, as determined above, the main infringement relates to the use of the company's trade name in the framework of the defendant's business name (Toyota Rehovot) and its domain name (www.toyota-rr.co.il). The defendant, who is the defendant's manager and sole owner, confirmed in this matter in his cross-examination that these names were chosen by him (Prov. 117, s. 20 - p. 118, s. 17, p. 148, s. 2-9). Therefore, in accordance with the framework of the aforementioned law and case law, even if the defendant was not involved in any detail related to this infringing activity, and even if advertising and construction personnel were involved in the advertising and design of the business whose services were hired for this purpose, I find that the defendant bears direct responsibility for these violations and is jointly and severally liable with it.
D10. Remedies
- In view of the aforementioned rule, the result of the proceeding is partial acceptance of the claim, with regard to the claims accepted as determined above. As explained below, even with regard to the remedies claimed, I find the plaintiff's arguments and demands partially accepted.
- A permanent injunction is hereby granted as follows -
The defendant will immediately cease, and will refrain in the future, from any use of the business name "Toyota Rehovot" or "Toyota Rehovot";