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American Ort, Inc. v. Israel

July 17, 2007

AMERICAN ORT, INC., PLAINTIFF,
v.
ORT ISRAEL, DEFENDANT.



The opinion of the court was delivered by: Kenneth M. Karas, District Judge

OPINION & ORDER

With this action, two formerly affiliated charitable organizations continue, in federal court, a trademark dispute that was initiated in January before the United States Patent and Trademark Office. Plaintiff, American ORT, Inc., brings this case under the Trademark Act of 1946 (the "Lanham Act"), 15 U.S.C. § 1051 et seq., alleging that Defendant, ORT Israel, violated Plaintiff's registered trademark through Defendant's use of the word "ORT" in its American fundraising efforts. On May 8, 2007, Plaintiff filed this Motion, which seeks to preliminarily enjoin Defendant from using the ORT mark to solicit charitable donations in the United States. The Motion was fully briefed on June 13, 2007, and the Court heard oral argument on June 20, 2007. Because there is no material disagreement as to the facts, the Court did not conduct a factual hearing. For the following reasons, Plaintiff's Motion for a Preliminary Injunction is GRANTED.

I. Background

A. The Founding of ORT and the ORT Community

The original ORT society was founded in Russia in 1880. (Compl. ¶ 8; Answer ¶ 8.) Its mission was to provide educational assistance and vocational training to impoverished Jewish people. (Def.'s Mem. 2; Pl.'s Mem. 2.) The word "ORT" is an acronym derived from a Russian phrase meaning "Society for Trades and Agricultural Labor." (Def.'s Mem. 2; Pl.'s Mem. 2.) ORT is also known by the English acronym "Organization for Rehabilitation through Training." Today, organizations that use the term ORT exist around the world. (Def.'s Mem. 2 (stating that there are "approximately twenty autonomous non-profit organizations" that use the word ORT in their name).)

World ORT, an umbrella organization, was founded in 1921. (Pl.'s Mem. 3.) Plaintiff was founded in the United States in 1922 under the name American ORT Society. (Kessler Aff. ¶ 10; Compl. ¶ 9.) Plaintiff is not the only non-profit organization operating in the United States that uses the word ORT in its name. Both World ORT and Women's American ORT ("WAO"), an organization founded in 1927 as an affiliate of American ORT, conduct fundraising activities in the United States. According to Plaintiff, World ORT's fundraising efforts "are generally limited to Jewish federations" and "are conducted in coordination with and [with] the approval of American ORT." (Nadler Aff. ¶ 1.) Plaintiff also claims that, "[f]rom the beginning, American ORT and Women's American ORT were connected," noting, for example, that one of the founders of WAO was the wife of one Plaintiff's founders. (Id.) WAO's 1969 incorporation papers identify WAO as a "member" of American ORT, and in an agreement executed that same year, Plaintiff gave WAO express permission to use the ORT name on the condition that WAO cease using that name if WAO ever disassociated itself from Plaintiff. (Kessler Aff. II ¶¶ 2, 5.) Defendant disputes this connection between Plaintiff and WAO, arguing that the two organizations are distinct, autonomous entities, each independently using the word "ORT" in its domestic literature and fundraising.*fn1

Defendant was founded in Israel in 1949, where it is incorporated as a "public benefit organization." (Peleg Aff. ¶ 10.) Like the other ORT organizations in their respective countries, Defendant operates schools throughout Israel, specializing in "scientific and technological education." (Def.'s Mem. 3.) Defendant has the largest network of schools in the ORT community, with "more than 160 educational institutions" throughout Israel. (Id.) Plaintiff does not dispute that Defendant has a right to use the ORT mark in Israel.

B. The Dispute Between World ORT and ORT Israel

Until 2006, Plaintiff, Defendant, WAO, and numerous other "ORTs" located around the world were joint members of World ORT, which, according to its bylaws, is "a federation of autonomous National Organizations constituted in the form of an association." (Peleg Aff., Ex. 1.) However, in September 2006, a dispute arose between Defendant and World ORT, and, as a result, Defendant suspended its active participation in World ORT. (Id. ¶ 37.) According to Defendant, the dispute occurred when World ORT "dramatically reduced" the funds that it allocated to Defendant, "with only 10 percent . . . of all the World ORT funds . . . being allocated to ORT Israel despite the fact that ORT Israel is the largest organization participating in World ORT and represents more than 70% of the activities touted by World ORT." (Id. ¶ 38.) Plaintiff does not dispute that World ORT reduced the funds that it allocated to Defendant, but Plaintiff claims that World ORT did so only after Defendant failed repeatedly to submit certain financial reports to World ORT. (Pl.'s Mem. 5.)

In order to continue raising funds in the United States following its break with World ORT, Defendant "elected to work primarily with a new U.S. tax-exempt entity . . . , which w[ould] provide funds directly to ORT Israel from U.S. donors." (Def.'s Mem. 7.) At the time this Motion was filed, this entity "ha[d] been considering names such as Educate Israel, Inc. [or] TEC Israel" and planned to solicit donations from both individual and corporate donors, using the tag line "Global Support for ORT Israel." (Peleg Aff. ¶¶ 51-52.) Moreover, on at least one occasion, Defendant has already solicited funds in the United States using the ORT Israel name. (Nadler Aff., Exs. 1A-1G.)

C. Plaintiff's Registration of the ORT Trademark

On January 29, 2002, Plaintiff registered the "ORT" trademark with the United States Patent and Trademark Office ("USPTO"). (Kessler Aff. ¶ 8, Ex. 3.)Almost five years later, on January 26, 2007, Defendant petitioned the USPTO to cancel the registration "on the grounds that the mark was generic, merely descriptive without secondary meaning, and/or had been abandoned by American ORT." (Def.'s Mem. 8.)Plaintiff filed the Complaint in this action on March 21, 2007. Shortly thereafter, Plaintiff successfully moved the USPTO to stay the cancellation proceeding pending the resolution of this action. (Kasdan Aff., Exs. 33-34.)

II. Discussion

A. Standard of ...


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