A foreign brand owner may authorize an Israeli distributor, franchisee or affiliated company to use its registered trademark. If that authorization is recorded in the Israeli Trademarks Register, the subsequent breakdown of the commercial relationship raises two distinct issues: whether the contract permits termination and whether the registered authorization to use the mark can be varied or cancelled through the Registrar of Trademarks.
Sections 50–52 of the Israeli Trademarks Ordinance [New Version], 5732-1972, regulate registered authorizations. Section 52 addresses variation and cancellation of an authorized-user entry, not cancellation of the underlying trademark. For overseas brand owners and their counsel, the distinction can determine whether the immediate step is an application to the Registrar, a contractual claim in court or separate trademark enforcement proceedings.
What Is a Registered Trademark Authorization in Israel?
Section 50 permits the proprietor of a registered trademark to authorize another person to use it for all or some of the relevant goods. Under Section 50(b), the authorization has effect as an authorization under the Ordinance only after registration. The Registrar may impose conditions or limitations and must consider whether the arrangement is contrary to public policy or likely to mislead the public.
Section 51 requires an application identifying the proprietor and authorized user, their relationship, the extent of control exercised by the trademark owner, the relevant goods, limitations and the authorization’s term where it is fixed. These particulars matter when the parties later disagree about the scope or continuation of the arrangement.
Registration does not transfer ownership of the trademark. In Ampisel (Israel) Ltd. v. Na’imi, Israeli Supreme Court, Civil Appeal 650/80, PD 36(3) 780, the Court distinguished a registered user’s right to use a mark from a proprietary right in the mark and recognized the contractual character of the parties’ relationship.
The distinction between statutory registration and contractual permission should not be obscured by terminology. Parties sometimes refer generally to a “licence,” but the procedure under Section 52 concerns the entry for an authorized user recorded in the Israeli register.
Who May Request Variation or Cancellation Under Section 52?
Section 52 distinguishes several situations rather than providing one general procedure for unilateral termination.
Variation requested by the proprietor: under Section 52(a), the registered proprietor may apply to vary the authorization as to the covered goods and the conditions or limitations to which it is subject.
Cancellation requested by the authorized user: Section 52(b) permits cancellation on the authorized user’s application in the prescribed form.
Cancellation for misleading use or public-policy concerns: Section 52(c) permits the Registrar, on application and proof of the statutory circumstances, to cancel an authorization where the existence of the authorization or use of the mark by the authorized person may be contrary to public policy or likely to mislead the public.
These routes are not equivalent. The proprietor’s ownership does not itself make every contractual disagreement an automatic ground for unilateral removal of the registered authorization. The basis for a contested request must be identified in the statutory framework and the governing procedure.
Does Every Contractual Breach Justify Cancellation of the Registration?
No. A dispute about royalties, contractual exclusivity, sales targets or distribution rights does not automatically show that continued registered use is contrary to public policy or likely to mislead.
For example, a former authorized distributor may be marketing products under the mark while making misleading statements about the identity of the manufacturer or source of the goods. That conduct could raise a question under Section 52(c) beyond simple breach of contract. By contrast, disagreement over whether outstanding royalties were paid ordinarily requires examination of the contract and the appropriate civil remedy.
A contractual termination clause may be significant evidence of the commercial relationship and the authorization’s intended term. It does not eliminate the distinction between terminating a private agreement and changing the public register.
What If the Trademark Owner Wants Cancellation Without the User’s Consent?
The first step is to obtain the registered authorization and the underlying agreement. Counsel should identify the agreed duration, termination conditions, permitted goods and channels, quality-control arrangements and any notice or cure requirements. The request should explain why amendment or cancellation of the registered entry is warranted.
Registrar of Trademarks Circular 015/2012 addresses an application by the trademark proprietor to cancel or vary a registered authorization without a signed consent document from the authorized user. It directs the opening of an inter partes opposition-type proceeding under the relevant Regulations.
Thus the Registrar is not necessarily performing a purely clerical deletion when the parties disagree. The authorized user may contest the factual basis for the request, and a contested registration issue may require pleadings, evidence and an opportunity to be heard.
Where the real dispute is over contract interpretation, damages or specific performance, a separate civil court proceeding may be necessary. The Registrar’s power over the registration should not be conflated with the court’s power to determine all contractual remedies.
How Is an Application Handled Before the Registrar?
Regulation 63F of the Trademarks Regulations, 1940, addresses applications to vary or cancel a registered authorization, while Regulation 63G refers to a procedure corresponding to contested opposition proceedings in the circumstances specified.
Depending on the dispute, the applicant may need the register record, license or distribution agreement, termination notices, correspondence, evidence of the disputed use, advertising, packaging and records concerning control over the quality and nature of the licensed goods.
Section 52(d) requires that the parties concerned have an opportunity to be heard before the registration is varied or cancelled. This is especially important where the registered user contends that its contractual authority remains in force or challenges allegations of misleading use.
A proprietor preparing to instruct Israeli counsel should provide the full agreement and any amendments, not merely a letter saying that the relationship has ended. Likewise, the authorized user should preserve evidence of its continued contractual entitlement and the nature of its trademark use.
Does Cancellation of the Authorization Cancel the Trademark?
No. The trademark and the registered authorization are separate entries with different legal effects. Cancellation of one registered user’s authorization may leave the underlying Israeli trademark entirely intact and owned by the same proprietor.
The reverse is different. Under Section 52(e), cancellation or deletion of the trademark registration also terminates the authorization dependent on that registration.
Challenges to the trademark itself, including invalid registration, bad faith and non-use, are governed by Sections 38, 39 and 41 rather than the authorized-user procedure. See Trademark Cancellation and Revocation in Israel. Opposition before registration is a separate proceeding under Section 24, discussed in Trademark Opposition in Israel.
Can a Registered Authorized User Sue Third Parties for Infringement?
The right to use a mark under a registered authorization does not necessarily include a separate right to sue an alleged infringer. In the Israeli proceedings of B.Y.Y.B. v. Weitzenberg, the court explained that registered permission to use the mark does not, by itself, confer independent standing to sue for infringement of the registered trademark.
Foreign brand owners should therefore distinguish registration of a user from appointment of an enforcement agent or attorney and from the substantive right to bring a civil claim. The available claimant and the legal basis for enforcement must be verified under the Trademarks Ordinance.
Trademark Infringement After Termination of a Licence
A former distributor’s continued use of the mark may give rise to two different disputes. The first concerns whether the authorization should remain on the register under Section 52. The second concerns whether actual use after termination infringes the proprietor’s rights or breaches the parties’ contract.
An infringement action requires proof of the protected mark and the conduct complained of; the existence of an application to vary the authorized-user entry does not itself establish infringement or determine every contractual issue. The parties may need injunctive relief or damages in court in addition to proceedings before the Registrar.
See Trademark Infringement Litigation in Israel for court proceedings and Trademark Litigation in Israel for the firm’s representation of foreign counsel, international brand owners and Israeli distributors.
What Foreign Trademark Owners Should Prepare
Before requesting a change to the Israeli register, obtain the current trademark and registered-user records, the full licence or distribution contract, the notices affecting termination and evidence of the user’s actual conduct. Identify whether the requested remedy is a change in the register, an order ending use of the mark, contractual damages or a combination of these.
The statutory basis is the Trademarks Ordinance, Sections 50–52, and Regulations 63F–63G of the Trademarks Regulations, 1940. See also Yonatan Drori and Yotam Werzansky-Orland, Intellectual Property Law in Israel (2019), Chapter 2, Section 8.1.2, pp. 199–201.
