Trademark infringement in Israel is often carried out through a limited liability company. The company orders branded products, imports them, approves packaging and operates the online store, but individuals make the commercial decisions. When the trademark proprietor considers suing a director, shareholder or senior manager as well as the company, a separate legal question arises: did the individual personally participate in conduct that satisfies the requirements of a cause of action?
Israeli law does not make every director personally liable for a company’s trademark infringement. Nor does it grant immunity to a manager merely because the relevant act was performed on behalf of a company. The outcome turns on the person’s conduct, the legal basis for personal responsibility and the evidence supporting the claim against that specific defendant. For international brand owners pursuing an Israeli distributor or former licensee, this distinction can be crucial.
Direct Personal Liability Is Different from Piercing the Corporate Veil
The starting point is the Israeli Supreme Court’s decision in Tzuk Or Ltd. v. Car Security Ltd., Civil Appeal 407/89, PD 48(5) 661 (1994). The case dealt, among other issues, with personal liability for passing off; it should not be presented solely as a trademark infringement decision. The Court explained that a company officer who personally commits a tort does not acquire immunity merely because the act was performed as an organ of the corporation.
The corporation may be responsible for an officer’s conduct, while the officer may be independently liable for his or her own wrongful acts. This is direct personal liability, not automatic attribution of all corporate debts to management.
Piercing the corporate veil is a different doctrine. Section 6 of Israel’s Companies Law, 5759-1999, permits attribution of certain company debts to a shareholder only in exceptional circumstances, including specified misuse of separate corporate personality. Difficulty recovering against an insolvent company, by itself, does not establish the statutory requirements.
Section 54(a) of the Companies Law preserves the personal responsibility of individuals serving as corporate organs even where their acts or intentions are attributed to the company. That provision does not create a new trademark tort. The claimant must still establish the elements of the relevant direct claim against the individual.
What Involvement Can Support a Claim Against a Director or Manager?
Consider a manager who instructs a factory to place a competitor’s registered mark on packaging, approves an order for unauthorized branded goods and directs the company to continue selling after the license has unambiguously ended. This differs substantially from a non-executive director who receives periodic board reports or a passive investor who holds shares but does not direct commercial operations.
Evidence may concern who chose the brand, approved designs and packaging, contracted with suppliers, authorized imports, controlled a website or marketing account, and decided how to respond to a trademark owner’s complaint.
Physical handling of the goods is not necessarily required if a person’s instructions and participation in the commercial act can be proved. Conversely, holding a senior title, owning most of the shares or signing an ordinary corporate document is not necessarily proof of personally committing infringement.
Each director or shareholder named as a defendant requires a separate factual assessment. A pleading that treats all company officers as one undifferentiated group may not establish liability against any particular person.
Trademark Infringement After a Licence Has Ended
Some disputes begin with an authorized commercial relationship. A company legitimately manufactures or distributes goods under an international brand for years, but a licensing agreement expires or is terminated and the company continues its activities.
In Lifestyle Equities C.V. and Lifestyle Licensing B.V. v. Don Gilli Ltd., Tel Aviv District Court, Civil Case 13315-08-20 (2 June 2026), the dispute concerned the Beverly Hills Polo Club trademarks and a former Israeli licensee. The District Court distinguished conduct during the license term from commercial use after the authorization had conclusively ended at the close of 2015.
The court rejected personal liability of the individuals for the company’s contractual breaches while the licence was in force, finding insufficient grounds for the exceptional form of subjective personal fault required in the circumstances. But it imposed direct personal liability, jointly and severally, for trademark infringement arising from continued unauthorized use from 2016 onward, in light of the individuals’ demonstrated involvement and the commercial conduct after warnings.
The decision applied the principles of Tzuk Or; it did not establish a presumption that every shareholder or director of a licensee becomes personally liable whenever the company breaches a trademark agreement. The findings concerning the dates of authorization, personal decisions and continued use were essential to the result. The judgment’s discussion of the officers’ personal liability is available in Hebrew.
Distinguishing Contractual Liability from Trademark Infringement
While a valid licence remains in force, a disagreement about royalties, reports, sales targets or exclusivity may primarily raise contractual obligations. Whether an individual who did not personally undertake those obligations can be held liable requires its own basis in contract or tort law.
After an effective termination, continued use of the protected mark may create a separate infringement claim. But it is necessary to examine whether the licence actually ended, whether transitional or sell-off rights remained, what the parties agreed, and what the alleged officer personally directed or carried out.
In Don Gilli, distinguishing these time periods was critical. Foreign brand owners seeking enforcement against a former Israeli distributor should preserve the original agreement, amendments, termination correspondence and records of post-termination production and sales.
Where the user is recorded in the Israeli Trademarks Register, a separate proceeding may also be required to vary or cancel that entry. See Cancellation of a Registered Trademark Licence in Israel.
What Must a Claimant Prove Against an Individual Shareholder?
First, the claimant must establish the trademark right and an unauthorized act amounting to infringement or another relevant civil wrong. Next, it must identify the individual’s conduct: for example, commissioning infringing packaging, ordering suspect goods or instructing employees to continue a prohibited sales campaign.
Proof of majority ownership does not answer these questions. Nor does an individual’s signature on documents necessarily establish that he or she committed the infringing act rather than acting in a routine representative capacity.
Relevant evidence may include contracts with factories, purchase orders, artwork approvals, emails, company messaging records, import documents, marketing instructions and decisions made after a complaint. Evidence should tie the particular person to the product, mark, time period and act in issue.
The civil burden of proving the direct claim rests with the claimant. Where necessary materials are in corporate possession, focused disclosure concerning the particular alleged activities may be appropriate. A broad request for every company document is no substitute for a reasoned case connecting the officer to the wrongdoing.
Direct Infringement Versus Assisting Another Person’s Wrong
It is important to identify the legal route. The person alleged to have committed the wrongful act may face a direct claim. A claim against someone who assisted another person’s tort may engage the separate requirements of Section 12 of the Israeli Torts Ordinance.
In Tzuk Or, the Court did not impose liability on a person whose role was limited to technical development without sufficient findings concerning the mental element required for assisting the tort. That does not exempt every technical contributor or mean that the same mental requirement governs every direct infringement claim. The nature and elements of the alleged responsibility must be specified.
What Is the Significance of a Cease-and-Desist Letter?
A warning letter to the company may prompt cessation of infringement, establish the rights holder’s position and become significant evidence if sales continue. It does not automatically make every officer who received a copy personally liable.
If specific evidence already connects a manager to the alleged acts, the letter may identify those acts and request cessation directly. A blanket threat to sue all directors and shareholders, without a factual foundation, may be difficult to sustain.
Timing also matters. Sending a warning may lead to the removal of product listings, advertisements and evidence of the supply chain. Rights holders should preserve available evidence before the first contact, particularly where the goods are sold online or the seller can rapidly change its public materials.
Personal Liability and Monetary Remedies
Even if personal infringement is established, the remedies require separate examination. A director is not automatically liable for every sum sought against the company. The claimant must identify the specific cause of action, the connection between the individual’s conduct and the alleged injury, and the applicable basis for damages or restitution.
Trademark infringement under the Israeli Trademarks Ordinance does not invariably provide an automatic statutory award without proof of loss. Depending on the claims, a court may examine proven loss, an appropriate estimate, accounting or restitution. If passing off is pleaded as a separate tort, the relevant statutory compensation scheme and its requirements must be analyzed independently.
Amounts should not be multiplied merely because the company and several individuals are named as defendants; there should be no duplicate compensation for the same loss. See Yonatan Drori, Monetary Remedies in Intellectual Property Proceedings (Hebrew, 2015), Chapter 9, Sections 2, 4 and 5, considered with subsequent case law.
Defending a Personal Claim Against a Corporate Officer
The officer may dispute both the underlying trademark infringement and personal involvement. The mark may not be infringed, the use may have been authorized, a statutory defense may apply or the claimant’s registration may not cover the use alleged.
Even if the company is found liable, the individual can require proof of his or her own conduct. Responsibilities within the company, relevant communications and steps taken to prevent or stop disputed sales may all be important. A director who sought to stop unauthorized use may present a different evidentiary position from one who specifically approved continued sales.
It is not enough simply to argue, “I acted on behalf of the company.” Under Tzuk Or, that fact is not a blanket defense to a tort personally committed. The effective defense responds to the legal elements and the evidence of the individual’s actual role.
Selecting Defendants in an Israeli Trademark Lawsuit
Adding managers to litigation should follow factual investigation, not serve as an automatic pressure tactic. A poorly supported personal claim can enlarge the proceedings and expose the claimant to costs. Conversely, suing only the corporate entity may overlook a person whose proven acts independently satisfy the infringement cause of action.
For foreign instructing counsel, the decision should be made after reviewing the Israeli company’s structure, relevant license and supply contracts, the persons who controlled marketing and imports, and the evidence connecting them to the period of infringement.
For the broader enforcement framework see Trademark Infringement Litigation in Israel, Online Trademark Infringement in Israel and Drori Stav IP’s Trademark Litigation Practice.
