Adv. & Notary
ISRAEL – STATUTORY LIQUIDATED DAMAGES FOR IP INFRINGEMENT
In a recent ruling, the District Court of Tel-Aviv, Israel, may have laid the foundations for ground-breaking jurisprudence in favor of the owners of registered intellectual property rights in Israel, which is seen as the technology start-up capital of the world.
As all intellectual property practitioners know, it is one thing to prove the validity of registered intellectual property and the infringement of that IP by a third party, but it is another thing altogether to prove a claim for damages.Customary practice, in Israel and around the world, of calculating such damages either on the basis of damages actually proved to have been sustained by the plaintiff, or on the basis of profits accrued by the infringer, have often been shown to be unsatisfactory in protecting the plaintiff’s rights. The costs and difficulties of proving such damages often dissuade a plaintiff from making the effort, with the result that many plaintiffs will satisfy themselves with a successful injunction award, and forego collection of damages.
One of the ways in which plaintiffs have sought an award of damages without the efforts required to prove the amount of such damages, has been to ask the courts to award “statutory damages” or “liquidated damages”, namely, an amount of damages which the court assesses based on the seriousness, duration and extent of the infringement itself, regardless of the loss actually sustained by the plaintiff or the profit actually accrued by the infringer.
Although legislation in Israel regarding copyrights and passing-off include provisions for statutory damages “without proof of actual damage” in an amount of up to NIS 100,000 (approximately US$28,000) per infringement or per cause of action, similar provisions are notably missing from the legislation protecting patents, designs and trademarks.
For many years, IP practitioners have asked the courts, in cases of design, patent and trademark infringement, to award statutory damages, based on an analogy to the laws that include such provisions. Traditionally, courts have resisted such requests.
However, in a recent ruling in the matter of Mishan v. Tal, the District Court of Tel-Aviv, ruling on a design infringement, held that such analogy was appropriate, and awarded damages, “without proof of actual damages” in the amount of NIS 100,000.
It is far from certain that this is going to prove to be a watershed ruling: the Supreme Court has not yet affirmed this approach; it has not yet been applied with respect to infringement of patents or trademarks; it has not yet been adopted in other court rulings of note. However, it is just possible that the “dam” of proof of damages has been breached, and that other courts will be more willing now to follow in the wake of the District Court of Tel-Aviv, and allow such analogous awards of damages in respect of patent and trademark infringement also.
There is no doubt that such a development could greatly benefit the owners of registered intellectual property rights in Israel.
© 2014 Aryeh Reif. All rights reserved.
Aryeh Reif, founder of Reif & Reif Law Offices, specializes in the fields of intellectual property law and commercial law, which he has practiced for 20 years.
Mr. Reif began his legal career in the legal department of Mul-T-Lock, a world leading lock company, followed by several years’ employment as an associate in various law firms in Israel. In the year 2000, Mr. Reif founded Reif & Reif. Mr. Reif continues to serve in an Of Counsel capacity to several other law firms, in his fields of expertise.