A man founded a company with a name that includes his full name. Thereafter, members of his family founded a company with a name that also includes the shared surname and deals in the same areas of activity. However, after decades of activity and an agreement between the parties that the first company would be able to use the full name of its founder but not the family name disjointedly, the first company was sold to a third party who sought to continue using the company’s name despite not bearing the same surname.
The Court dismissed the second company’s contentions due to the absence of concern of deception resulting from change of ownership. The Israeli Companies Law allows the Court to order a company to cease using a name that is misleadingly similar to the name of another company. The examination of the chance of deception is done by means of the deceptive similarity test, which includes three main sub-tests: the test of appearance and sound, the test of the type of goods and the circle of customers, and the test of the other circumstances of the matter. All is in order to protect the consumer from making the mistake of thinking that it is contracting with another company. Here, the issue is not changes made to the company’s name, but rather the continuation of the use of the name agreed upon by the parties following a change in ownership of the company. This change has no effect on the name itself or on the concern of misleading the consumers, hence there is no justification for restricting the company's rights to continue using its own name.