Civil Case (Tel Aviv) 13315-08-20 LIFESTYLE EQUITIES C.V v. Don Gilley Ltd.

Judgment

I have before me a claim for the sum of ILS 7,000,000 which concerns a claim regarding breach of the trademark license agreement and trademark infringement.

Factual Background

1. The plaintiffs, Lifestyle Equities C.V. and Lifestyle Licensing B.V., are the owners of the rights in the Beverly Hills Polo Club brand (hereinafter: "BHPC" or the "Brand" or "Trademark", as applicable), with the galloping horse on which a polo player rides the racket upwards.  The brand is marketed by the plaintiffs in many countries, and the plaintiffs own a number of registered trademarks, as well as in Israel.  Under the trademark, many products are marketed, including clothing, apparel, footwear, glasses, bags, accessories, and more.  The sale of the products in the various countries is done through license agreements for the production and marketing of the products.
2. The financial claim before me concerns the plaintiffs' claim regarding the breach of the license agreement signed on March 24, 2010 between plaintiff 2 and Jinli in a tax appeal (hereinafter: the "License Agreement" or the "Agreement" and "Jinli Company"), which was under the control of defendant 2, Mr. Shalva Jinli (hereinafter: also " Jinli").
3. As part of the agreement, Jinli was granted a license to design, manufacture, advertise, promote, market and sell lingerie and socks that bear the trademark in the category of lingerie and socks in Israel. It should be noted that in accordance with the terms of the contract, it is prohibited to distribute the products in food stores (in the language of the agreement: "Food Stores"), and to market products that were not approved by the plaintiffs.  Third-party action was also prohibited without the plaintiffs' approval.
4. In 2013, the activity of Jinli ceased and it was liquidated and liquidated in 2014, and in its place was the 1st defendant, Don Gilly Company in a tax appeal (hereinafter: "Don Gilly Company" or "Don Gilly"), whose shareholders are Mr. Jinli and defendant 3, Mr. Ilan Rosen (hereinafter: "Mr. Rosen"). Don Geely began manufacturing, importing and trading BHPC products instead of Jinli.  According to the plaintiffs, this was done without their approval, as required by the contractual relationship between the parties according to the license agreement.  Against this background, it was claimed that Don Geely's activity with BHPC products is infringing, and that all of the products marketed and sold by it are infringing products.
5. According to the plaintiffs, they were exposed to these alleged infringements during the month of September 2014, when as part of a routine inspection of the markets, they discovered that products bearing the trademark were sold in food chains, in complete contravention of the terms of the license agreement, and that there were many infringing products on the market that were not reported to them.
6. On September 21, 2014, the plaintiffs contacted Don Gilley with a warning letter in light of the breach of the agreement. According to them, they found out that the infringing activity began as early as 2011, including when the products were sold to chains whose main activity is in the food sector.  Among these chains were Shufersal in a tax appeal and Rami Levy stores chain Hashikma Marketing 2006 in a tax appeal (hereinafter, respectively: "Shufersal Chain" and "Rami Levy Chain").
7. On April 5, 2015 , plaintiff No. 2 announced the termination of the license agreement and its expiration on June 15, 2015. Despite this, the defendants continued their activity and only on April 4, 2016, about a year after the cancellation notice, did Don Gilly announce that it had stopped importing products bearing the trademark to Israel.  It should be noted that in Don Geely's reply, through her counsel, there was no reference to the alleged indirect import system as defined below, or to the continuation of marketing in Israel, but only to the cessation of the import (p.  590 of the plaintiffs' exhibits).
8. On July 13, 2015, the plaintiffs filed an action against the defendants in this court, in which they petitioned for relief in the form of a permanent injunction prohibiting them from using the plaintiffs' trademark [Civil Case 24919-07-15 (hereinafter: "the previous lawsuit")]. Alongside the filing of the previous lawsuit, the plaintiffs filed a motion for a temporary injunction, which was rejected in the decision of the Honorable Judge Altuvia of November 4, 2015.  In the said decision, it was determined, prima facie, that the plaintiffs would not be harmed by the very importation of the products, and also that they themselves did not act in a hurry in light of the infringement that they claimed they discovered.  It was also ruled that the granting of the injunction could have harmed third parties who were in contact with Don Gilley.  In any event, it was ruled that the plaintiffs have at their disposal the monetary remedy, and therefore the request for temporary relief should be rejected.  At the same time, the court ordered the defendants to submit to the plaintiffs a detailed quarterly report, past, present and future, which would include all imports of products bearing the trademark, and all imports of products bearing the trademark imported by any of Don Gilley's customers.
9. The Ottoman Settlement [Old Version] 1916At a later stage, the parties reached a compromise that was given the force of a judgment on May 7, 2020 (hereinafter: the "Judgment in the Previous Lawsuit"), the main concern of which is the defendants' refraining from continuing to sell the products in dispute and providing data. In the framework of the judgment in the previous lawsuit, an order was issued against the defendants prohibiting them from making any use of the plaintiffs' trademark, as well as an order for the delivery of accounts, which obligates them, inter alia, to provide the plaintiffs with full and detailed disclosure of all documents related to or relating to their trade in products bearing the trademark (hereinafter: the "Order for the Provision of Accounts").

12-34-56-78 Chekhov v.  State of Israel, Pis.  D.  51 (2)It was also determined in the judgment in the previous suit that the plaintiffs would be entitled to file a new monetary claim against the defendants after receiving the accounts, and that in the framework of this claim they would also be entitled to sue the defendants for their real expenses in connection with the previous claim.  Indeed, such a monetary claim was filed, which is the claim before me.