A distributor selling counterfeit goods risks paying liquidated damages without proof of damage

A distributor sold fake products of a well-known personal care company in Israel and contented not to have known that they were counterfeit.
The Court accepted the claim and held that the distributor is to pay compensation due to the sale of the counterfeit products without the need to prove actual damage. When a business causes that goods it sells, or services it offers, be mistaken for the goods or services of another business, or related to another business, it commits a tort of passing off. Here, the seller did not deny that it sold counterfeit goods but contended that this was a one-time event and that it made little profit from the actions. However, the distributor knew, or should have known, that these were counterfeit products because the goods were bought under shady circumstances from two people whom he knew only by their first name and he payed them in cash and at a price that was substantially low than the market price. Additionally, there was a high risk of misleading consumers because the products were designed in the same manner, marketed to similar customers and in bad faith and thus the distributor was ordered to pay liquidated damages without requirement for proof of damage in the amount of ILS 50,000.