Damages in an Israeli industrial design infringement lawsuit are not calculated automatically by multiplying the price of the accused product by the number of units sold. The central questions are which sales or profits the design proprietor lost, what the defendant gained from the protected appearance and how reliably the financial effects can be linked to the infringement.
The Israeli Designs Law, 5777-2017, permits both compensation based on proven loss and, in appropriate cases, statutory damages without proof of loss. The applicable regime must be identified before any calculation. Sections 73–78 govern remedies for infringement of rights under the 2017 Law, including registered and qualifying unregistered designs. A legacy registered design under the former Patents and Designs Ordinance may be subject to materially different principles, especially concerning statutory damages.
Calculating Lost Sales and Lost Profits
Section 73 makes design infringement a civil wrong to which the Torts Ordinance applies, subject to the Designs Law. A proprietor claiming lost profits should show what sales would probably have occurred without infringement and what profits those transactions would have produced.
A competing sale is not automatically a sale that the design owner would otherwise have made. The economic evidence may include the parties’ prices, manufacturing and marketing costs, profit per unit, demand, the proprietor’s production capacity, substitute products, market competition and orders actually lost.
It would ordinarily be unsound to calculate lost profit merely by multiplying the defendant’s unit sales by the claimant’s retail price. Revenue differs from profit, and the existence of the infringing product does not necessarily mean every buyer would have purchased the proprietor’s product instead.
Can Damages Reflect an Entire Product When Only a Component Is Protected?
In Ronit Diglei Umot Ltd. v. Roni Shatan, Israeli Supreme Court, Civil Appeal 3853/11 (13 May 2013), the dispute concerned registered designs for car-mounted flag holders. The Supreme Court considered whether lost-profit damages had to be limited to the protected holders or could take account of sales of combined products consisting of a holder and a flag, even though the design did not protect the flag itself.
The Court examined demand for the combined product, available alternatives, the ability of the design proprietors to meet demand and the causal relationship between the protected holder and sales of the complete product. In the circumstances, profit on the combined product was relevant, but the Court did not assume that every infringing holder sold would automatically have yielded a sale of the proprietor’s holder and flag.
The case illustrates that the protected component can drive demand for a larger product, but the claimant must prove the relevant economic relationship. This is not a universal rule that recovery always extends to total sales of every product containing an infringing part.
For further analysis of actual and potential profits, see Yonatan Drori, Monetary Remedies in Intellectual Property Proceedings (Hebrew, 2015), Chapter 7, pp. 129–134.
The Defendant’s Profits Versus the Claimant’s Lost Profits
The claimant’s lost profit and the defendant’s gain are different figures. One addresses the claimant’s economic injury; the other concerns enrichment through infringing exploitation. In Ronit Diglei Umot, the Court considered potential remedies involving the infringer’s gains as well as lost profit under the law governing the legacy registered designs.
A disgorgement or restitution claim requires a legal basis and evidence of revenue, relevant expenses and the portion of the gain attributable to the design infringement. The entire turnover of a business, or even of a product combining many features, is not necessarily profit caused by the protected appearance.
Care must also be taken to avoid double recovery for the same injury. Lost profits and infringer profits should not be added mechanically simply because both figures can be calculated.
Statutory Damages Without Proof of Loss Under Section 75
Section 75(a) empowers an Israeli court, at the claimant’s request, to award compensation without proof of actual damage of up to NIS 100,000 for each infringement. This applies to design rights governed by the Designs Law, including registered and unregistered rights. The claimant must still establish a protected right and infringement; only proof of the precise amount of financial loss is dispensed with.
Section 75(b) identifies considerations including scope and seriousness of infringement, estimated actual damage, estimated profit to the defendant, the nature of the defendant’s activity, the relationship between the parties and good faith. For the latter, the law also refers to the range of design alternatives in the relevant product category.
The statutory maximum is not a fixed amount payable for each infringing product, does not create a minimum recovery and is not automatically awarded when liability is established. A claimant should explain how the evidence supports the sum requested.
How Many Infringements Are There When Thousands of Products Are Sold?
Section 75(c) provides that infringements forming one series of acts are treated as one infringement for statutory-damages purposes. The number of invoices, individual units, shipments or purchase orders does not by itself establish the number of compensable statutory infringements.
A court may need to distinguish one continuous commercial operation from separate acts that are factually and legally independent. The number of products, parties, designs, timing and conduct can matter, but there is no automatic multiplication of NIS 100,000 by the number of units sold.
In Ronit Diglei Umot, the Supreme Court also discussed whether different sales might be considered separately as an alternative approach. The award in that case, however, did not rest on statutory damages, because the court could assess economic loss. Its observations should not be converted into a simple numerical formula under Section 75 of the later statute.
Can Statutory Damages Be Awarded for a Legacy Registered Design?
The former Patents and Designs Ordinance did not contain an express equivalent to Section 75. In Ronit Diglei Umot, the Supreme Court discussed the possibility of looking to statutory remedies under other intellectual property legislation but did not grant such an award and left a material question unresolved.
Subsequent decisions demonstrate why the distinction matters. In Dialit Ltd. v. Harar, Central District Court, Civil Case 2081-08-07 (24 March 2021), the court held that statutory damages without proof of loss were not available for infringement of a legacy design governed by the Ordinance in the absence of express legislative authority. That is a District Court ruling, not an amendment establishing a new statutory damages regime.
Other outcomes in cases under the former regime require attention to the particular claims and evidence. In Herzl B. v. Shopping Channel, Herzliya Magistrates’ Court, Civil Case 3103-01-19 (16 September 2020), a monetary claim was dismissed where the claimant had not attempted to prove damage. In Radius v. All Trade, Petah Tikva Magistrates’ Court, Civil Case 16155-06-19 (3 January 2021), the court awarded a total of NIS 20,000 following infringement of two legacy registered designs despite the absence of proof of a defined pecuniary loss.
In Galil Profiles v. Belco LED, Krayot Magistrates’ Court, Civil Case 45211-01-24 (18 October 2026), the court found infringement of a registered design and passing off and awarded NIS 50,000 in total despite the inability to establish the alleged monetary damage. The result must be understood in the context of the claims and applicable legal regime, rather than as a general award for every design infringement.
The contrast among these decisions underscores the need to determine the governing statute, legal basis for recovery and proof of damage before filing the monetary claim.
Estimated Compensation and Mixed Intellectual Property Claims
Not every award made without complete sales records is statutory compensation. A court can sometimes estimate damage based on a sufficient factual foundation, depending on the applicable law and procedural posture. The exercise differs from a statutory award that does not require proof of damage.
In Monkey Business v. Aslan, Haifa District Court, Civil Case 59718-10-17 (29 August 2019), proceedings concerned a registered design for a vegetable cutter alongside copyright in packaging photographs and passing off involving a carrot sharpener. The parties agreed to an estimated financial decision in the absence of complete sales information. NIS 40,000 was awarded, with partial indemnification involving a supplier.
That negotiated evidentiary framework should not be treated as a fixed tariff for legacy design infringement or as proof that a standalone registered-design claim automatically carries a statutory minimum.
Orders for Accounts and Evidence of Commercial Exploitation
Foreign design owners may have no direct access to a defendant’s Israeli production, importation and sales records. Section 76 authorizes the court to order an account of the details of infringement. That remedy does not establish infringement by itself; the claimant must first meet the relevant requirements.
In appropriate cases, the proceedings may involve a determination of entitlement to accounts followed by disclosure and analysis of the financial records. Useful documents can include purchase orders, customs records, invoices, inventory reports, unit costs, returns and records differentiating accused goods from lawful products.
Where the figures remain incomplete, an estimate may be considered on a proper evidentiary basis. It should not be a figure chosen arbitrarily in place of establishing the extent and commercial consequences of the acts.
Innocent Infringement Under Section 78
Section 78 provides a defense against damages for an infringer who did not know and had no reason to know, at the relevant time, that rights existed in the design. Registration creates a statutory presumption of awareness. For an unregistered design, proper marking under Section 62 or publication of a registration application can create a corresponding presumption.
A general assertion that the defendant did not know the proprietor’s identity is not necessarily the same as establishing ignorance of the existence of design rights. The evidence may include when marketing began, whether the article carried the requisite notice, communications received by the seller and whether exploitation continued after a warning.
The defense can affect monetary liability but does not automatically authorize further infringement. Section 74 injunctive relief is examined separately. See Defending a Design Infringement Claim in Israel.
Injunctions and Orders Concerning Infringing Products
Section 74 addresses injunctions, and Section 77 provides for orders concerning infringing products and certain assets primarily used to manufacture them, subject to the statutory conditions and interests of third parties. The court may order destruction, transfer of ownership or other appropriate measures, but these consequences are not automatic for every product found in the supply chain.
Where manufacturing or sales continue during litigation, the proprietor may assess a request for an interim injunction. The tests for preliminary relief, including urgency and balance of convenience, differ from those governing final damages following determination of liability.
Preparing a Financial Claim for Design Infringement in Israel
The claimant should collect historical sales data, unit margins, evidence of cancelled orders, information about substitutes and competitors, and records showing whether the protected appearance materially influenced demand. If the relevant design protects a component of a larger product, the economic relationship between the component and total product sales must be established rather than assumed.
Where the defendant controls essential figures, counsel should consider whether to seek accounts or an economic expert’s analysis. Where loss cannot be quantified and the right is governed by the 2017 Designs Law, Section 75 may provide an appropriate alternative. For a legacy design, the availability of a no-proof damages route must be assessed separately.
Different remedies may be pleaded in the alternative when procedurally appropriate, but the claim should explain which figures correspond to distinct injuries and how double compensation will be avoided. The litigation strategy should fit the exact Israeli design right and evidence, not a general global damages estimate.
For the broader law governing infringement, see Unregistered Design Infringement in Israel and Design Litigation in Israel. The Israel Patent Office’s official English translation of the Designs Law provides the principal statutory reference, with the Hebrew text prevailing where interpretations diverge.
