Protection from counterfeits and passing off, handling misappropriation of business reputation and protection from unfair competition form an important part GKDM’s practice. The firm’s professional advice includes court litigation while integrating and applying comprehensive legal knowledge from various legal fields, such as Commercial Torts, Trademarks, Design Patents, Copyrights, Unjust Enrichment, etc.

Counterfeit goods – what can be done?

The main legal tool to cope with counterfeits is the Commercial Torts Law. The law views a counterfeiter as one who unlawfully tries to build on a reputation which another has built for himself. This misappropriation of reputation is referred to in the law as “Passing Off”.

The prohibition on Passing Off stipulates that a business may not use another business’ reputation in a manner which will cause a product which it sells or a service which it provides to mistakenly be considered to be an asset or service from another or an asset or skill which are connected to another business.

A person who is wronged by Passing Off is entitled to compensation without proof of damages (statutory damages) of up to NIS 100,000 for every such tort. Of course, if the actual damages are higher, a higher amount of compensation can be claimed.

In order to prevail at court in a case for Passing Off it is essential to first prove the existence of a reputation. That is to say, to demonstrate that the product or service at hand has a positive image in the eye of the general public thanks to which the product/service has a market of potential customers who are interested in purchasing it.

At the same time, one must demonstrate at court that the defendant misleads customers. This should be done by means of what has come to be called in case law the “Three Tests” or the “Triangle Test”: First, the original product (or service) is compared with the counterfeit product (or service). Their appearance and the phonetic characteristics of the name are examined. Secondly, the consumer audience is examined and whether it is likely to confuse the original product with the counterfeit. Finally, other circumstances which may be relevant are examined.

An additional prohibition in the law is the prohibition against providing a customer with a misleading description. That is to say, there is a prohibition against publishing information regarding a business, profession, assets or service when the business who publishes such information knows or should have known that the information is incorrect.

Similarly, the law prohibits Unfair Interference. This legal prohibition stipulates that a business will not unfairly prevent or burden customers, employees or agents’ access to a business, assets or services of another. Unfair Interference is generally relevant to misleading conduct done on the Internet with regard to Domain Names, i.e. luring web users to a competing website with a similar name.

If you have any questions regarding Imitations and Counterfeits, please contact us.

The above is an overview and does not constitute a legal advice. Professional legal advice requires individual examination of the specific circumstances.

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