Israel Judge Allows Import of Copycat Scooters

Hsin Lung Accessories Co. Ltd., a Taiwanese company has developed and patented or registered designs for collapsible aluminum scooters that are distinguished by having two back micro-wheels and one front wheel.

Their design incorporates a split base with a propulsion mechanism that drives the scooter forwards by alternatively shifting weight from one foot to another and twisting the body. The scooter is sold in Israel as “Streeter” and worldwide as “Fliker.” It is patented in the US, Germany and China.

The US Patent Number US 7,073,805 titled “User-propelled riding toys and methods” has the following abstract:

This invention is a user-propelled riding toy. A platform on which a user stands is supported by a steering mechanism that transfers a directional force from the platform; and a geartrain mounts to the wheels. The geartrain is adapted to receive a downward force from the platform, and translate a portion of the downward force into a rotational force on the wheels. The geartrain also provides an upward return force acting on the platform, and translates a directional force into a lateral force acting on the wheels. The platform is propelled forward direction by the rotational force on the wheels. Lateral forces cause two sets of wheels to pivot in opposite directions, and thereby directionally steer the platform.

The importer also claims copyright on the packaging, having a unique design on the box.

When other companies began selling similar scooters in Israel, Hsin Lung and their local distributor, both represented by Saar Plinner, sued the importers, distributors and the Customs Authority.

The problem is that the design was never registered as a patent or an industrial design in Israel.

Unperturbed, Hsin Lung Accessories Co. Ltd. and the importer sued for passing off, unjust enrichment and copyright infringement. It was noted that in Israel copyright does not require registration.

The defendants claimed that the generic scooter manufacturers in China that manufactured the goods suggested the brand name “Mover,” and gave various packaging options, including a picture of the goods within, in attractive colors. However, what is clear is that apart from the name being different, printed in different colors and appended to a different position, the two scooters are identical.

The complainants asserted that the issue is not parallel importing of similar goods, but rather importing of fake goods, and that they developed a market by heavy investment in marketing. They alleged that the choice of identical colors was intentional, and that the suffix “er” on the names “Streeter” and “Mover” was designed to confuse.

The defendants claimed to be acting properly, in that the complainants had not registered their design or patent in Israel, the names were different and copyright on designs does not extend to goods that could have been registered.

Judge Rafi Carmel of the Tel Aviv District Court noted that copyright was not infringed and that the scooters were sold under a different name that appeared clearly, in different colors three times on the article in question. The free-riding charges, that the defendants were fulfilling a demand created by the advertising of the plaintiffs was also dismissed since free-riding is not a tort in Israel.

Ruling that the plaintiffs had not proved that unjust enrichment rights in the scooter accrued to the plaintiffs, he rejected the Unjust Enrichment charges. All charges were dismissed and the plaintiffs were required to pay legal fees of NIS 20,000 (about $5,300).

For comments on this decision see The IP Factor blog.