Many multinational companies manage a huge portfolio of trademarks, patents, and designs in different territories around the world to protect their brands and IP in local markets.
Usually, there will be internal appointees for the operation and maintenance of the portfolio, on the one hand, to maintain the existing IP assets and on the other hand, to promote protection of the company's new IP assets. However, no company by itself can manage the maintenance of registered rights in foreign territories. An agent is needed, with the help of whom the maintenance of the local portfolio be performed, in accordance with the company's instructions, which empower him to handle the submission, registration and renewal of local registered IP assets.
In the past, it was customary for attorneys to think that the POA should be broad enough to allow them to act freely, and not only before a specific court tribunal or only with respect to a specific mark or design. The reasons for this were, for example, that if a certain decision needs to be appealed and the POA does not include it, and there are procedural requirements for validation of the POA, which will take time to complete (notarization, legalization, etc.), it is possible that the rights will be lost because appeals against erroneous decisions will not be filed on time, in the absence of an appropriate POA.
Recently, the approach has changed. POAs had been limited in scope and time, but are, still, sometimes, drafted extensively, beyond what is required to perform the work. The other side of the coin is that in a global market, when the activities of international companies span the world, they become more exposed to legal proceedings in different territories, whether a claim filed against them is well-founded or unfounded and whatever the issue may be.
Therefore, such a claimant may wish to present the statement of claim against the foreign corporation to its representative in Israel, instead of going to the trouble of requesting a serving outside the Israeli jurisdiction, translating, complying with the conditions of the service out of jurisdiction, and conducting an investigation to locate the company abroad, for serving the claim.
Therefore, a broad POA may become a trap for service of claims against the foreign company in foreign territories and create less favorable opening conditions for it. In Israel, for example, the deadline for filing defenses for civil claims is 60 days from the date of service of the claim. Service of a lawsuit to the agent empowered in IP issues when it deals with a different field, in which he cannot help, may put the financial costs of translating the pleadings on the shoulders of the foreign company and create a short time frame for responding to the claim, all due to an overly broad POA.
Recently, a request to recognize the service of a lawsuit for infringement of IP rights was discussed and decided in the Tel Aviv District Court C.L. 49089-01-21 Ricegrowers Limited v. Halaika et al. (hereinafter: "the decision"). This is a claim for infringement of copyrights and trademarks (hereinafter: "the claim") of an Australian company (hereinafter: the "plaintiff" or "Sunrise") that produces and markets rice worldwide, whose rights have been violated in Israel and in many countries in Europe and the Middle East. The defendant, a company from Bulgaria (hereinafter: "the defendant"), exported inferior rice, packed in infringing packages (hereinafter: "the infringing goods"), among other territories, to Israel, always by a third party, an exporter, and a fourth party, an importer in the destination country of import the infringing goods.
The defendant refused to accept the claim sent to it from Israel (after the court allowed service outside jurisdiction). However, the defendant decided to file an application for TM registration in Israel and contacted an Israeli attorney for that purpose. The defendant empowered him with an overly broad wording of the POA. The plaintiff found out about the TM application, and the broad POA (because documents submitted to the Israel Trademark Authority are public) and served the claim documents to the attorney who filed the TM application in Israel.
The plaintiff informed the Court of that service and requested to recognize the service as a lawful service to the defendant. The plaintiff argued that said attorney, who represented the defendant, among other things, in TMs, was authorized to perform any legal action for it before the Registrar of Patents, Designs and Trademarks, and to receive documents on its’ behalf in the aforementioned proceedings, and that the representation was not limited to this court tribunal and the POA lacked wording restricting the authorization in any other court. Plaintiff filed an opposition to the TM application submitted by the defendant and served it to that attorney (there was no dispute that the service of the opposition was in the scope of his POA). Therefore, it was argued that the service of the lawsuit was also lawful.
The court ruled:
“It is possible to recognize the service to the lawyer as a representative, even if he did not receive the representation in this specific case, when the court is convinced that he will inform the defendant about the proceedings opened against it, provided that there is no provision in the power of attorney that expressly denies the lawyer's authority to receive documents relating to another proceeding. In this case this lawyer is the representative of the 2nd defendant for the purpose of receiving the statement of claim and transferring it to it.”
The result was that the court recognized the service as lawful. It is true that the claim was about infringement of IP rights and the defendant had violated rights in many territories. But even though the defendant hid behind the curtain of the Hague Convention provisions and the court in Bulgaria made it very difficult for the service procedure according to the convention, producing the broad wording of the POA resulted in the recognition of a service to the local attorney. In the case in question, justice seems to have been done, because the evasion from the service of the statement of claims was one of a series of acts of violation of rights and evasion of the administration of justice, but this is a good example of the need to limit legal protection granted in a foreign territory.
CONCLUSION: It should be the internal appointee’s responsibility to see that POAs are not too broad. It must always be ensured that the POA is given only for the necessary purposes of carrying out the relevant action. It must be limited in time, and its issuance must be limited to exclude any court other than the court before which the matter subject to the action for which the POA was signed, is being tried.