I wrote last year about the decision by Ben & Jerry’s not to renew its license agreement with Avi Zinger’s company, American Quality Products, when that license expires at the end of 2022. AQP manufactures Ben & Jerry’s ice cream in Israel, and sells it all over the country. B&J tried to impose as a condition of license renewal an agreement from AQP to no longer sell the ice cream in Judea, Samaria and the eastern part of Jerusalem. Such a condition is illegal under Israel law, and Zinger refused to agree.
B&J’s demand was part of the so-called “boycott, divestment and sanctions” movement, which ostensibly seeks to get Israel to “leave” what it illogically terms “occupied Palestinian territories” (the illogic being that there never was a state of Palestine and thus the land in question can’t be “occupied” by a foreign power), but which actually wants to see Israel wiped off the map.
The announcement about the non-renewal of the license came about because, although Ben & Jerry’s was bought by Unilever over 20 years ago, part of the deal was that B&J could still have its own governing board that determined its “social mission”, and that board seems to be composed of people who think as clearly as Bernie Sanders, Alexandra Occasional Cortex, and other luminaries of the American political scene.
Earlier this year, Zinger and AQP, represented by Alyza Lewin of the Brandeis Center and Marc Zell of Jerusalem (among others), filed suit against both Unilever and Ben & Jerry’s in Federal District Court in New Jersey, alleging that the conditioning of the license renewal on capitulation to BDS terms violated both US and Israel law, the Israel government’s consent decree for the Unilever-B&J merger, and the license agreement with AQP.
Yesterday, it was announced that Unilever, which retained responsibility for financial and operational decisions regarding Ben & Jerry’s, had decided to exercise its prerogative and act like the adult in the room – or at least look after its own financial interests, which had been hurt by reaction to the boycott announcement. The press releases state that Unilever settled the NJ litigation by agreeing to sell its interest in Ben & Jerry’s in Israel to Zinger, thus allowing AQP to continue to sell Ben & Jerry’s ice cream all over Israel – including Judea and Samaria – with Hebrew and Arabic labeling, in perpetuity. (Unilever press release; Brandeis Center press release).
As an IP practitioner, it was this last statement that intrigued me, because it seems to implicate trademark law, and it implies that the agreement precludes AQP from selling Ben & Jerry’s in Israel with English labeling. So I wondered how this aspect of the deal might be structured.
There are presently ten active registered Ben & Jerry’s trademarks in Israel (i.e. that contain the words "Ben & Jerry's"), in Hebrew and English, that cover Ben & Jerry’s products, ice cream sales services, and clothing bearing the Ben & Jerry’s logo. Ownership of all of these marks was transferred to Unilever in early 2021 – several months before B&J announced its refusal to renew AQP’s license agreement.
At their heart, trademark rights, like all IP rights, are negative rights – they don’t give the owner of the mark the ability to prevent others from using the mark, but rather give the mark owner the power to prevent others from using the mark without permission. But also central to trademark rights is the use of the mark: failure to use a registered mark over a prolonged period can be the basis for a cancellation action to get the mark off the register. (This is in contrast to patents, where, in most jurisdictions, the patentee need not make, use or sell the patented invention as a condition for keeping the patent in force.)
There are different ways that Zinger could have obtained the right to sell B&J in Israel in perpetuity, with Hebrew and Arabic labelling. One way is for Unilever to transfer ownership of all the marks in Israel to Zinger, with a stipulation in the settlement agreement that the agreement is contingent upon Zinger not selling B&J ice cream with English labeling. Or Unilever could transfer the ownership of the Hebrew marks only to Zinger, retaining ownership of the English marks. These two arrangements are consistent with the statement that Unilever is selling its Ben & Jerry’s business in Israel to Zinger. Another possibility is that Unilever could retain ownership of the marks, and license only the Hebrew marks to Zinger. In view of Ben & Jerry’s own statement on Twitter that “Unilever's arrangement means Ben and Jerry's in Israel will be owned and operated by AQP. Our company will no longer profit from Ben & Jerry's in Israel”, such a license would presumably be a royalty-free license.
The problem with any of these scenarios is that it would mean the English marks aren’t being used, and could eventually be subject to cancellation, regardless of who owns them. A way around this would be for AQP to occasionally produce batches with English labeling, or for AQP or a third party (if Zinger/AQP is not the owner of the English language marks) to import and sell Ben & Jerry’s ice cream produced outside Israel with English labelling. However, as noted above, such sales could not legally be subject to limitations on the place of sale, viz. the seller ice cream labelled in English could not deliberately sell only in pre-1967 Israel or agree to such a limitation on the geography of sales.
Another interesting observation is that although the press releases state that the labeling will be in Hebrew and Arabic, none of the marks presently registered in Israel are in Arabic. Presumably such marks will be registered in the near future.
But it’s not just Arabic language marks that aren’t registered in Israel. While some of the names of ice cream flavors are registered, like Chunky Monkey and Cherry Garcia, others, like Chubby Hubby, are not. And Phish Food is registered, in class 30 for ice cream, frozen yogurt and sorbet, but the registrant is Phish, Inc., not Unilever or Ben & Jerry’s.
There’s also the matter of the individual ice cream recipes themselves: without those, any agreement is worthless. Presumably the agreement also gives Zinger rights in those recipes in Israel, as well as the names of the flavors, but what about new flavors developed in the future?
Regardless of the legal mechanics of the arrangement, by reaching an agreement with Unilever, Avi Zinger and his legal team, and the government of Israel, which was also involved in the negotiations, have given the BDS BS a big “KMA”.
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