The tort of passing off

The tort of passing off

May 9, 2012

The purpose of the laws governing the registration, use and infringement of trademarks is twofold: to protect the consumer who knows that the product bearing the trademark comes from a particular source and will not be misled into thinking, due to the use of the trademark, that it is a different product. ; And protecting the reputation of the trademark owner and thereby preventing competitors from being built from the trademark of another and the reputation that the trademark has accumulated in order to promote their own products and illegitimate economic interests.

Such an attempt to attract consumers while trying to mislead them constitutes unfair competition. At the heart of the unfair competition are two key ideas: one that a competitor will not reap the fruits of his friend, and the other, to prevent harm to consumers. The question arises as to what is the law in a case where, for example, a trade name is not registered as a trademark, but it has gained a great reputation as a result of a large investment by the trade name holder. The tort of passing off, which is enshrined in section 1 of the Commercial Torts Act, prohibits a dealer from causing a property he sells or a service he provides to be mistaken for property or service of another dealer or related to another dealer. The purpose of the tort of passing off is to protect the reputation acquired by a person in a business - a business that concerned assets or a business that concerned services.

Section 13 of the law allows for compensation without proof of damage, in the amount of up to ILS 100,000. The tort of passing off is intended to protect the proprietary right of the reputable person in the business, which may be prejudiced by the defendant's deception. This protection is essentially in recognition of the right of a business owner to maintain the positive image of the product or service he provides, both in the eyes of the general public and in the eyes of the customer public seeking to purchase the product or service, in particular.

The ruling states that the tort of passing off consists of two main elements: The first is that the plaintiff must prove that he acquired a reputation himself in the goods or service in which he trades, ie that the public identifies the goods or service with his business and no other. The second is that the plaintiff must prove a reasonable fear of misleading the public. The deceptive tests include identity in sound, significant visual similarity, identity in the type of goods sold and the circle of customers and even similarity in the marketing channels of the goods.

A recent ruling in the Supreme Court held that a distinction must be made between a business reputation that has a business significance that expresses a clear proprietary interest protected by the tort of passing off, and a reputation in the context of "reputation", which has no proprietary meaning in the business field. Where a company's activity is philanthropic in nature, based on donations, the interest that the respondent seeks to protect is not a business-material interest and therefore the tort of passing off does not apply in this matter.

As to the second element, the Court held that in examining the appearance and sound, no compensation will be given when it comes to a material difference between the signs that does not raise a concern of misleading the public. The court also separated the separation between a daily product in which the level of inspection performed by customers before purchasing it is low (and therefore there is a higher risk of misleading the public), as opposed to a product whose purchase requires a more in-depth examination and which has a lower risk of deception.

It is important to remember that ignorance of the law does not constitute protection. Thus, especially in light of the high compensation without the need for proof of damage by the plaintiff, it is very important to consult regularly with a lawyer who specializes in the field to make sure no injustices are committed by the business and certainly a lawyer should be consulted immediately.