Commercial torts in Israeli Law

This article will discuss actions that may be brought, and remedies available, on the basis of the  (the “Ordinance”), as well as on the basis of other laws.

Chapter Nine of the Ordinance deals with trademark infringements, and allows an aggrieved party to apply to the courts with an infringement action. However, the plaintiff must prove that an infringement actually occurred; according to Article 1 of the Ordinance, an “infringement” is defined as a situation in which a person uses a registered trademark in connection with goods for which the trademark is registered, when that person is not entitled to such use. Article 1 also extends to use of registered trademarks for advertisement purposes, applies to marks “resembling” registered trademarks, and includes goods that fit the same description as those for which the trademark is registered. In this way, the scope of what constitutes an “infringement” is broadened to include a wider range of circumstances.

commercial tortsWhen it can be proven that an “infringement” has indeed occurred, Article 57 of the Ordinance allows a ‘proprietor of a registered trademark’, as well as a proprietor of an unregistered ‘well-known trademark’, to bring an action with respect to the infringement. The practical implication of this provision is that an action may not be brought with respect to infringements of unregistered trademarks that are not “well-known”.

It should be noted, however, that Article 59(b) limits the relief that may be obtained by a proprietor of an unregistered ‘well-known trademark’ to an injunction only.  In this way, the proprietor of an unregistered well-known trademark does not enjoy the full scope of remedies available through the Ordinance, and is only entitled to protection of a trademark in the most basic sense.

Parties whose trademark rights have been infringed may also submit actions on the basis of various laws that provide remedies in such instances. Two common laws that may grant relief in cases of trademark infringement are the Commercial Torts Law, 5759-1999 and the Unjust Enrichment Law, 5739-1979.

The Commercial Torts Law

The Commercial Torts Law is designed to regulate competition, through encouraging fair business practices. This is primarily done through the imposition of liability on persons or entities that violate the rules of fair competition. The majority of these rules are laid out in Articles 1-4 of the Commercial Torts Law. For example, Article 1(a) of the law prohibits the act of ‘passing off’, which is when a business causes “…the goods it sells or the services it offers to be mistaken for the goods or services of another business or related to another business.” However, Article 2(a) stipulates that a business’ good faith use of its own name, for the purpose of selling goods or providing services, is not considered ‘passing off’ in itself. This means that, when imposing liability for the tort of ‘passing off’, the subjective element is of considerable importance.

The Unjust Enrichment Law

Unlike the Commercial Torts Law, the Unjust Enrichment Law applies to a broader range of legal situations, and is more general in nature. The main objective of the Unjust Enrichment Law can be seen in Article 1(a), which is restitution to a ‘benefactor’ by a ‘beneficiary’; the benefactor is entitled to restitution only when the beneficiary is proven to have obtained “any property, service, or other benefit” from the benefactor without legal cause. The remedy of restitution, as set forth in the law, is also applicable to the commercial tort of ‘passing off’ when the conditions for granting restitution are met.

It is important to remember that, while proving the tort of ‘passing off’ does not require the occurrence of financial harm, an action pursuant to the Unjust Enrichment Law for the remedy of restitution necessarily entails the existence of a benefit obtained by the defendant, at the plaintiff’s expense.


Skip to content