Legal Updates

A right to use the name of a company may be restricted if it creates consumer deception

February 11, 2022

A company under liquidation assigned the rights in its trade mark, which included the company name, to another company, both in the field of distribution and marketing of food products.

The Court held that the assignee company may not use the trademark in conjunction with the "Ltd." suffix. Israeli law stipulates that even when there is a registered trademark, every person is entitled to a “rightful use” protection in his own name or name of his business. This, in order to balance the two conflicting interests of trademark protection and the protection of one’s right to use his own name or name of business. However, this protection is subject to a number of limitations, including the obligation to use the name in good faith and in a manner that does not create deception. Here, the use of the full name of the company in liquidation, in conjunction with the suffix "Ltd." may deceive the public, especially when the two companies operate in the same field, and as the company has not yet finished its liquidation process, in a manner that could lead to consumer deception. Thus, the assignee company may not use the company name for its business using the “Ltd.” Suffix.