Passing off in Israel protects business goodwill against misleading conduct even where the claimant does not rely on a registered trademark. The cause of action is established by Section 1 of the Israeli Commercial Torts Law, 5759-1999, and is particularly important for unregistered brand names, product get-up, trade dress and other commercial identifiers that have acquired recognition in the Israeli market.
Passing off is related to trademark infringement but is not the same claim. A registered trademark owner relies on the statutory rights created by the Trademarks Ordinance. A passing-off claimant must establish goodwill and a likelihood of deception or confusion arising from the defendant’s conduct.
For broader representation in Israeli trademark disputes, see our Trademark Litigation in Israel practice page. For registered-mark infringement claims, see Trademark Infringement Litigation in Israel.
The Statutory Basis for Passing Off in Israel
Section 1(a) of the Commercial Torts Law provides that a business must not cause the goods it sells or the services it provides to be mistaken for those of another business or for goods or services connected with another business.
The purpose of the tort is to protect commercial goodwill from misappropriation through misleading market conduct. The claimant therefore cannot succeed merely by showing that the defendant copied a name, appearance or other commercial feature. The claimant must establish that the feature relied upon has become associated with its business and that the defendant’s conduct creates the required risk of confusion or mistaken association.
The Two Core Elements: Goodwill and Likelihood of Confusion
Israeli passing-off claims are generally analyzed through two central elements: goodwill and likelihood of confusion.
Goodwill requires proof that the name, mark, get-up or other commercial identifier relied upon has acquired recognition among the relevant public as indicating the claimant’s business, goods or services. Evidence of copying or similarity alone is not enough.
The second element concerns whether the defendant’s conduct is likely to cause customers to believe that the defendant’s goods or services are those of the claimant or are commercially connected with the claimant.
How Is Goodwill Proven?
Goodwill is a factual issue and the required evidence depends on the nature of the market and the commercial identifier involved.
Relevant evidence may include the duration and extent of use, sales volumes, advertising expenditure, market share, distribution channels, media coverage, customer recognition, website traffic, social-media exposure, retailer evidence and the consistency with which the claimant has used the relevant branding.
Where the claim concerns product appearance or trade dress, the claimant should be able to show that the relevant visual features function in the market as a source identifier rather than merely as functional or commonplace product characteristics.
The Test for Likelihood of Confusion
The assessment of confusion is objective and depends on the overall circumstances in which consumers encounter the competing businesses, products or services.
Israeli courts commonly consider factors similar to those used in trademark-confusion analysis, including the appearance and sound of the signs, the nature of the goods or services, the relevant customer population, the channels of trade and the remaining circumstances of the case.
There is nevertheless an important distinction. In a registered trademark infringement claim, the comparison focuses principally on the registered mark and the allegedly infringing sign. In passing off, the court may examine the broader presentation of the defendant’s activity, including packaging, product appearance, advertising and the overall commercial context. See Trademark Triple Test in Israel for the distinction in detail.
Passing Off and Unregistered Trademarks
Passing off is one of the principal legal mechanisms for protecting an unregistered trademark in Israel.
An unregistered sign does not receive the same statutory monopoly that arises from registration in the Trademark Register. The owner must therefore prove the goodwill that the sign has acquired and the likelihood that the defendant’s conduct will mislead customers or create a false commercial association.
This makes evidentiary preparation especially important. A claimant relying on an unregistered brand should preserve materials showing when the branding was adopted, how extensively it was used in Israel and how the relevant public came to associate it with the claimant.
Passing Off and Trade Dress
A passing-off claim may concern more than a word mark or logo. Product packaging, the visual appearance of a product, store presentation and other elements of commercial get-up may become relevant where those features have acquired goodwill and the defendant’s use creates a likelihood of confusion.
The claimant must still identify the features said to function as source indicators and establish that consumers associate them with the claimant. Functional or ordinary features that competitors need to use are less likely to support a strong exclusivity claim.
Passing Off vs. Registered Trademark Infringement
The two claims frequently appear in the same lawsuit, but their legal foundations differ.
A registered trademark claim begins with the rights recorded in the Trademark Register. The claimant generally does not need to prove goodwill merely in order to rely on the registered right.
A passing-off claim, by contrast, depends on acquired goodwill. Even where the parties use confusingly similar signs, the passing-off claim may fail if the claimant cannot establish that the relevant identifier had become associated with its business.
The broader factual focus of passing off can nevertheless make it useful where the disputed conduct concerns packaging, presentation, an unregistered name or an overall commercial impression not fully captured by the registered trademark alone.
Good-Faith Use of a Business’s Own Name
Section 1(b) of the Commercial Torts Law provides that good-faith use by a business of its own name, for the purpose of selling its goods or providing its services, does not by itself constitute passing off.
This is not a blanket permission to create confusion. The way the name is presented and the surrounding commercial circumstances remain relevant to whether the defendant has engaged in misleading conduct beyond bona fide use of its own name.
Evidence in a Passing-Off Action
A well-prepared passing-off case generally addresses both goodwill and confusion separately.
Evidence of goodwill may include historical sales and advertising records, market surveys where appropriate, retailer or distributor evidence, media references and evidence of recognition by the relevant public.
Evidence of confusion may include side-by-side examples of the competing presentation, marketplace screenshots, packaging, advertising, communications from customers, misdirected inquiries and evidence showing how the goods or services are actually selected and purchased.
Foreign counsel should preserve dated online materials as early as possible because websites, social-media pages, advertisements and marketplace listings can change quickly after a dispute begins.
Preliminary Injunctions in Passing-Off Cases
A claimant may seek interim relief where continued misleading conduct threatens immediate harm to goodwill or customer relationships.
The court applies the general Israeli rules governing provisional remedies, including consideration of the prima facie strength of the claim, the balance of convenience, delay, good faith and the practical effect of granting or refusing relief.
Because goodwill is an essential element of passing off, a preliminary-injunction application should contain evidence supporting the existence of that goodwill rather than relying only on similarity between the parties’ branding.
Damages Without Proof of Actual Damage
Section 13 of the Commercial Torts Law allows the court, at the claimant’s request, to award damages without proof of actual damage for a qualifying wrong in an amount of up to NIS 100,000.
For this purpose, acts forming part of a single course of conduct are treated as one wrong. The statutory amount is therefore not automatically multiplied by every sale, advertisement or individual act within the same course of conduct.
A claimant may also pursue other remedies and forms of monetary relief where the legal and evidentiary requirements are satisfied.
Injunctions and Other Remedies
In addition to damages, passing-off litigation may involve permanent or preliminary injunctions, orders concerning infringing or misleading goods, accounts and other remedies available under the Commercial Torts Law and general civil procedure.
The appropriate remedies depend on the conduct proved, the urgency of the matter, the continuing risk to goodwill and the evidence concerning commercial harm.
Passing Off and Well-Known Trademarks
Passing off can also be relevant where a foreign brand relies on reputation in Israel but does not have a conventional registered trademark covering every aspect of the disputed conduct.
Israeli trademark law separately recognizes well-known marks under the Trademarks Ordinance. Depending on the registration status and the facts, a dispute involving a well-known mark may therefore include both statutory trademark claims and a passing-off claim.
Working with Foreign Counsel in Passing-Off Disputes
Foreign trademark attorneys and litigation firms may instruct Drori Stav IP to act as Israeli counsel in passing-off and unregistered-brand disputes.
At the outset, useful materials include evidence of use and reputation in Israel, examples of the claimant’s branding and get-up, examples of the challenged use, Israeli sales and advertising information, relevant correspondence and information regarding parallel disputes in other jurisdictions.
We assess the available claims, the evidence of goodwill and confusion, interim-relief strategy and the relationship between passing off and any registered trademark rights or Registrar proceedings.
Israeli Counsel for Passing-Off Claims
Drori Stav IP represents claimants and defendants in passing-off, trademark infringement and related unfair-competition disputes in Israel.
For broader representation in trademark disputes, see our Trademark Litigation in Israel practice page.
Legal Source
The statutory framework is the Commercial Torts Law, 5759-1999, including Section 1 concerning passing off and Section 13 concerning damages without proof of actual damage.
