Respondent's Response
- The respondent argued in its response that the motion should be dismissed, if only on the grounds that Tressen was not added to the proceeding. It was argued that the issuance of orders as requested is liable to harm Tersen, as well as that the failure to join them constitutes an abuse of the legal process, since the purpose of this is to prevent the court from hearing Tersen's position. The Respondent also claimed that the Applicant never mentioned to her the exclusivity vis-à-vis Tarsen and that this condition was not mentioned in the price quote that was sent to her, in which the Respondent considers a document embodying the agreements with the Applicant. She also claims that after the beginning of the engagement with the Applicant, she invested considerable sums in design and advertising and never undertook to continue manufacturing the product through the Applicant.
- With regard to the reason for the termination of the relationship, the Respondent claimed that the Applicant had breached an undertaking to assume and that this had caused a crisis of confidence. The Respondent considers the Applicant's conduct to be a breach of the agreement between them and attributes fraud to her in this action. She also claims that in fact it was the Applicant who stopped working with her by stopping the process of ordering two shipments to Super Pharm. It was argued that the concealment of this fact constitutes a lack of good faith that justifies the rejection of the application.
- With regard to the nature of the matter - causing a breach of the exclusivity contract with Tarsen - the Respondent claims that after losing confidence in the Applicant, she contacted Tarsen, who clarified to her "that there is no exclusivity agreement with the Applicant regarding the sale of Complex products in Israel" and that there is nothing to prevent her from engaging with her directly. Tarsen also forwarded to the Respondent a letter clarifying this issue, in which it was noted that there was no exclusivity agreement with the Applicant with respect to PURE products and that the formulas related to this product belonged to it.
- In light of all this, the Respondent argues that the chances of the claim are slim, since the Applicant must show that there is an agreement with her that contains a condition for exclusivity or ownership of the formulas, and this was not presented. It must also show that there is an exclusivity agreement with Tarsen regarding PURE products and this was not presented either, and Tarsen has also made any other written claim. With regard to the claim of the existence of an agreement of conduct between the parties, it was argued that the burden of proving such an agreement was increased and that the Applicant did not comply with it, as well as that agreements that violate the freedom of competition should be interpreted in a restrictive manner. It was also argued that the Applicant's claim is a restrictive arrangement that cannot be enforced by means of an injunction. In addition, it was argued that there is no place for orders preventing the sale of the product outside of Israel, since there is no agreement prohibiting it.
- Quoted from NevoWith regard to the balance of convenience, it was argued that this was at most compensable financial damage, and that the case law determined that this state of affairs did not justify an injunction. With regard to the argument that the failure to grant a temporary injunction would lead to the liquidation of its activity, the Respondent argues that in any case it was entitled to cease its activity with the Applicant, and that the fact that there have been no additional clients recently is not of interest to her. With regard to the claim of advance notice, it argues that the requirement for 18 months of advance notice has nothing to rely on, and a period of one month is reasonable and sufficient. The Respondent also claims that it was the Applicant who in fact terminated the engagement between the parties.
- The Respondent further argues that if an order is issued and it is prevented from executing the orders through Tarsen, it will be forced, with no other choice, to do so through the Applicant in which she has lost confidence, and the rule is that the court will not force parties whose relations have run aground to continue business cooperation. She also claims that she will be severely harmed by the granting of the order, since she spent money for orders from Teresan and the issuance of the order will damage her reputation vis-à-vis the customers. In addition, the Respondent argues that the issuance of an order is liable to prevent the products from reaching the public, and that the purpose of this order is not to preserve the existing situation but to change it, since at the time the application was filed, there was no existing agreement between the parties. She also argues that the temporary relief is identical to the main relief, and this is also a reason for rejecting the application.
Examination of the declarants and summaries of the parties
- I held a hearing in which the declarants were interrogated - the Applicant's CEO and the Respondent's CEO. I did not see to detail the content of the investigations at this stage, and this will be done, to the extent necessary, when discussing the arguments of the parties. The parties summarized their arguments in writing, and I will detail the main points.
- The Applicant claimed that it was proven that the chances of the claim being accepted were high since it was proven that the Respondent committed torts against her of stealing a trade secret and causing a breach of contract. It also claims that the Respondent breached the agreement with her. With regard to the tort of theft of a trade secret, it was argued that the formulas according to which Tresen manufactures the products developed by the Applicant for the Respondent are a trade secret belonging to her, as appears from the first agreement, as well as from an email sent by Tersen in which she claimed that she had never interfered in the selection of the fragrances. Another argument is that some of the products are based on BONO products, for which the Respondent does not dispute that it is the owner of the formulas, so that their disclosure will lead to the exposure of the formulas of the BONO products. The Applicant also referred to the response of the Respondent's manager, who confirmed that the Applicant was the one who developed the product for her and at his expense, as well as to the fact that he had contacted Tarsen with the question of who was the owner of the formulas and wished to learn from the fact that the Respondent did not believe that Tarsen was the owner of the rights in the formulas. She also argued that there is a presumption in law that the creator is the owner of the formula, and in the absence of a dispute that she created the formula, she is the owner of it.
- With respect to the tort caused by a breach of contract, the claim is based on the fact that according to the Applicant it is the owner of the exclusive right to distribute Tersen products in Israel; the Respondent was aware of this; and that it caused the breach of the agreement by Tersen. It was argued that the first agreement does relate, according to its wording, to BONO products only, but in practice it relates to all of the Applicant's products distributed in Israel, due to the fact that it was determined that it would be the sole distributor of Tarsen in Israel, with the exception of a company called SHINY. It was argued that the exclusion of SHINY indicates that the agreement was not limited to BONO products only, and therefore it should be seen as determining exclusivity for all products marketed in Israel. It was also argued that this arises from Tarsen's approach to the Applicant three years after the signing of the agreement, when it was approached by an Israeli company that wished to manufacture products in the factory, as well as from the second agreement, where exclusivity was determined with respect to products to be marketed in a number of European countries. The Applicant further argues that there is no logic in an engagement without an exclusivity clause, otherwise nothing prevents the brand owner (such as the Respondent in this case) from engaging directly with the manufacturer and bypassing it.
- The Applicant further claims that the Respondent was aware of her relationship with Tarsen and for this reason she never made direct contact with Tarsen but ordered the products through her. With regard to the fact that the first agreement does not set a termination date, it was argued that it should not be inferred from the fact that the parties did not intend it to be permanent, and that the circumstances of the matter indicate that the parties expected a long-term agreement, as evidenced by the fact that the second agreement granted the Applicant exclusivity for a period of 10 years. Alternatively, it was argued that in any event, the agreement is valid until the end of the reasonable notice period, to the extent that it is given by Tersen. In light of this, the Applicant claimed that the Respondent caused Tersen to breach the contract between them by causing her to sell her products that would be distributed in Israel using formulas belonging to her.
- The Applicant claims that an agreement was entered into between the parties in terms of conduct, according to which the Respondent orders products from her while defining the desired comfort and design of the product, and she works to develop the product at her own expense and produce it at the Tarsen factory, after which she imports the products and supplies them to the Respondent. In this regard, she disagreed with the Respondent's claim that the price quote between the two embodies the agreements between them, and argued that the latter relates only to the first order and that it does not address a number of material issues, including the identity of the key to the products; the owner of the formulas; and the issue of exclusivity. She also argues that at most it can be said that this is a partial agreement to which conditions were added in the conduct of the parties.
- With regard to the breach of the agreement, the Applicant claims that it was the Respondent who breached the agreement between them by stopping the activity with her, as appears from the letter she sent to Tersen and the fact that she ordered the products directly from Tersen. It was emphasized that the cessation of activity was without prior notice when the Applicant invested large sums of money in the purchase of raw materials that remained in the hands of Tarsen. It was also claimed that the Respondent unlawfully deducted the sum of ILS 328,344 due to an argument that it was entitled to a discount of 3% (in the years 2023-2025), a discount that the Applicant denies since it was contingent on its claim of meeting a sales target, which the Respondent did not meet. The Applicant further argues that there is no substance to the Respondent's claim of a severe crisis of confidence that was caused, since not only did she not breach the agreement, but the Respondent also afterwards made a significant order through her.
- With regard to the balance of convenience, it was argued that it was clearly tilted in favor of the Applicant. It was argued that in a case of infringement of a proprietary right, including intellectual property, the initial remedy is an order to stop the infringement and a compensation award is not a substitute for this. It was argued that the Respondent is the Applicant's sole customer and there is a concern that without the issuance of orders it will advance the purchase of the products from Teresan and thus cause it to breach the agreement with it, as well as that this could endanger the second agreement. It was also argued that this would cause it real damage to the point of liquidating its business, while for the respondent the volume of orders from it constitutes 4% of its total business. In this regard, the Applicant notes that the Respondent confirmed that if orders are issued as requested, it will order the goods through it without any other choice until another supplier is found, and that this will happen quickly, according to the Respondent's. It was argued that there is no substance to the claim of loss of trust, so there is no impediment to granting an order that may be in essence an obligation to engage the parties.
- The Applicant further argues that the orders do not change the existing situation, since the application was submitted before the products were supplied to the Respondent and it is doubtful whether they were manufactured at all. It was also argued that the orders would not impose any restriction on Tarsen, since the agreements with it stipulate exclusivity for the applicant and the formulas are her property. Therefore, she argues that there was no need to add Tarsen to the proceeding, since she would not be harmed by the granting of the orders. She further argues that the issuance of the orders will preserve the status quo and allow her to continue her cooperation with Tersen.
- The Respondent argued in its summaries that the application should be rejected due to a number of threshold grounds, including the non-inclusion of Tersen; the identity of the interim relief; and the fact that the temporary relief is in the sense of changing the existing situation and not preserving it. She also argued that if temporary relief was granted, it would force her to enter into an agreement with someone in whom she had lost confidence and was not interested in purchasing more goods from him, even for the period of time until she found a new supplier. In addition, it was claimed that the Applicant submitted the application in bad faith by saying that her manager lied about the 3% discount; that it did not disclose that it had canceled the Super Pharm order; and that it did not specify in the application the condition regarding the scope of the opportunity in the first agreement.
- On the merits of the matter, the Respondent argues that no good chances of a claim have been proven, but even the opposite. It was argued that Tarsen denies the existence of an exclusivity agreement, and as stated, it was not added to the proceeding, and this should act in accordance with the Applicant's obligation. It was also argued that the first agreement deals only with BONO products , so that it does not apply to our case, and the Applicant admitted that no other contract was signed with Tarsen in relation to the distribution of products in Israel. She further argues that in any event, the agreement with Tarsen is conditional on ordering a minimum quantity of products and does not have a specific time application, so that it can be canceled at any moment.
- The Respondent further argues that insofar as it is determined that this is an exclusivity agreement, it is a restrictive arrangement that is contrary to the law, and the Applicant did not deal with this argument. It was also argued that this agreement does not prevent it from marketing the PURE brand, which does not dispute that it belongs, through a broker other than the Applicant. With regard to the relationship between the parties, it was argued that the price quote sent by the Applicant anchors all the parties' agreements, and the conduct of the parties should not be regarded as anything that expands it, as the Applicant claims.
- With regard to the claim of ownership of the formulas, the Respondent argued that the Applicant did not develop the products, but that she was only an intermediary vis-à-vis Tersen. She also claims that in the application the Applicant used misleading language when she stated that she was engaged in production when this was not true. Regarding the development of the products, the Respondent referred to the words of the Applicant's manager, from which it emerged that the last time he used any laboratory for the purpose of developing a product was "very long ago" (at p. 21, para. 31) and argued that this indicates that she did not develop the PURE products so that the formulas do not belong to her. It was argued that there is no agreement or other document that indicates the Applicant's ownership of the PURE product formulas , and on the other hand, Tarsen also claims ownership of them. With regard to the Applicant's manager's claim that adding the smell of vanilla is an idea of him, it was argued that this is not a development that confers ownership in the formulas, and in any event, it is common knowledge to the public that cannot be a trade secret. She also argues that the Applicant did not prove even roughly that she developed the product or assisted in doing so, and that the idea of adding a vanilla scent is not sufficient for this purpose. The Respondent further argues that if the order is granted, it will not obligate Tarsen, who is familiar with the formula and claims ownership of it, so that she may find herself violating the order without knowledge, since she is not aware of the formula.
- With regard to the balance of convenience, the Respondent argues that it is clearly biased in its favor, inter alia, because to the extent that damage is caused to the Applicant, it is financially compensated, whereas for it it is a high damage, which includes damage to reputation due to the inability to supply the products to its customers, which may cause them to enter into an agreement with another company. She further argues that the Applicant is petitioning to prohibit her from importing products under her brand, which illustrates the damage that will be caused to her. In addition, it claims that the order, if granted, will cause damage to Tersen that it will not be able to market the products in Israel, without it being attached to the proceeding. With regard to the possibility of continuing the business relationship between the parties, it was argued that the case law determined that such a relationship should not be imposed on conflicting business parties.
Discussion and Decision
- As is well known, the purpose of a temporary relief is "to ensure a prima facie right during the legal proceedings and the proper and efficient conduct of the proceeding or the proper execution of the judgment" (Regulation 94 of the Civil Procedure Regulations, 5779 - hereinafter - 2018; hereinafter - the Regulations). The conditions for granting interim relief are the existence of prima facie sufficient evidence as to the existence of a cause of action; reaching the conclusion that the balance of convenience is tilted in favor of the relief seeker; and that there is no other remedy that has the power to achieve the purpose of the temporary relief, and that its harm to the respondent is lighter. The good faith of the parties and the question of whether the applicant did not delay in filing the application was also examined.
- With regard to the cause of action, the examination is prima facie only (Civil Appeal Authority 5602/24 Yossi Ziv v. Gonen Kestenbaum - in his capacity as receiver for the rights of the debtor in the property [Nevo] (July 28, 2024), para. 18) and between the two basic considerations - the chances of the claim and the balance of convenience - there is a parallelism of powers, i.e., "the higher the chances of the claim, the leniency should be given to the requirement of a balance of convenience, and vice versa" (Civil Appeal Authority 54088-09-24 Haya Shimon v. Bracha Feldman [Nevo] (November 27, 2024), but as a rule, most of the weight is placed on the balance of convenience (see Mini-Many: Civil Appeal Authority 1227/24 Sarfati Zvi & Co. Building Contracting Company in a Tax Appeal v. Gamul Yehud in a Tax Appeal [Nevo] (February 19, 2024); Civil Appeal Authority 4927/24 Security Pattern in Tax Appeal v. Endowment Ezra Fund Misna Appeal Yaakov Heitner [Nevo] (October 28, 2024). When examining the balance of convenience, the court must consider the irreparable damages that will be caused to the applicant if the relief is not granted against the damage that may be caused to the respondent as a result of the temporary relief. It is also worth noting that in the new regulations it was noted that when examining the balance of convenience, the court must also take into account "damage that may be caused to another person or to a public interest" (Regulation 95(d)(1) of the Regulations).
And from the general to the individual.
- Prior to discussing the question of the existence of a prima facie cause of action, I thought it should be noted that the Applicant chose not to join Tarsen in the proceeding, even though she is a "central player" in the dispute and in any case a necessary litigant. Even after I commented on the matter (see my decision of September 10, 2025 rejecting the application for a temporary injunction), the Applicant did not seek to amend the procedure and to add Tersen, but argued that this was not necessary (see paragraphs 49-50 of the Applicant's summaries). As is well known, any person who is liable to be harmed by the order, let alone a direct victim, must be attached to the application for temporary relief (Civil Appeal Authority 1767/04 Yaakov Tawil et al. Solel Boneh et al. [Nevo] (March 7, 2004)), as well as the court is obligated to bring "damage that may be caused to another person..." (Regulation 95(d)(1)); See also Civil Appeals Authority 5292/24 Shirour Direct Trade in Tax Appeal v. NINGBO et al. [Nevo] (August 8, 2024), whose facts are similar to ours; hereinafter - the Shiraor case).
- 00In my opinion, Tarsen is a necessary litigant in the application and this is expressed in two different ways. First, Tarsen is liable to be harmed by the existence of an order prohibiting the Respondent or anyone on its behalf from "manufacturing and/or ordering and/or importing and/or distributing in Israel or abroad" the products it (Tarsen) manufactures. I will return to this issue during the discussion of the balance of convenience, and at this stage I will focus on the additional point of view of the non-inclusion of Tarsen, namely, that the discussion of the substantive questions that must be decided was lacking, since it was not possible to hear Tarsen's position and her explanations for the Applicant's arguments. As we will see below, in many ways this starting point is also the end point. The absence of Tarsen prevented a substantive (and apparently even basic) discussion of the main points of contention, and this acts to the Applicant's obligation, all the more so in light of the possible harm to Tarsen.
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- The practical difficulty of joining a foreign litigant is clear and does not require explanations. This is certainly true of the tight time frame in the application for temporary relief. However, this does not justify not adding a party who is liable to be harmed by the order, and from the Applicant's arguments in her summaries it emerged that this was an informed decision that was not related to the practical difficulty, but rather to the unwillingness to "exacerbate the situation" by filing a lawsuit against Tarsen (section 50). This reasoning is not convincing, of course, when the conclusion is that the orders are liable to harm Tersen, and I will return to this later.
And now to the substance of things.