A company presenting itself in its publications as "Toyota Rehovot - Parallel Importer," which engages in the marketing of original Toyota vehicles and spare parts imported to Israel via parallel import, was required by Toyota to cease the use of such term, which is using the Toyota's trademarks.
The Court accepted Toyota's contentions due to a failure to meet the "sponsorship test" and the potential for misleading customers. The Israeli Trademarks Ordinance stipulates that the owner of a registered trademark has an exclusive right to use the trademark, yet this does not prevent "honest use" by another party. The defense of "honest use" is contingent upon meeting three sub-tests, including the sponsorship test, which examines whether the use of the trademark suggests that the trademark owner has purportedly granted sponsorship to the user. In parallel import transactions where the buyer attributes importance to the identity of the importer, the user bears an increased obligation to meet this test and prevent deception. In assessing this test, the existence of a concern regarding potential deception will be examined, even if the customer understands the actual state of affairs prior to the purchase. Here, neither the use of the technical term "parallel importer," which is not known to all customers, nor the fact that the actual status becomes clear upon the customer's arrival at the company, is sufficient to remedy this concern. This is particularly true when dealing with the sale of vehicles, which constitute a significant transaction in cost for consumers, and as such, the importer's liability is of great significance to them. Hence, the aforementioned use does not fall under the protection of "honest use" and is prohibited.