Supreme Court clarifies passing off law in nursing bra case

In Shimoni v Mobi Birenbaum Ltd (Case CA 9568\05, June 25 2007), the Supreme Court of Israel has upheld an earlier ruling and has found that the respondents' nursing bra did not infringe the appellants' rights in the design of their own model of bra.

The second appellant, Leading Lady Company, manufactures nursing bras known as Model 437 (Ladies 437). The nursing bras manufactured by Leading Lady are marketed in Israel by the first appellant, an individual named Henya Shimoni. The appellants claimed that the respondents' nursing bra (Mobi 122) is an imitation of Ladies 437. The Tel Aviv District Court issued a temporary injunction in favour of the appellants, but denied them a permanent injunction.

On appeal, the appellants limited their claims to one cause of action, namely passing off. The appellants claimed that Mobi 122 was an imitation of Ladies 437, which allowed the first respondent, Mobi Birenbaum Ltd, to usurp a market share from the appellants.

The Supreme Court first examined the tort of passing off and clarified that it may not be used as a basis for a claim every time unfair competition occurs. Also, the mere copying of an article does not constitute proof that the plaintiff acquired goodwill in the product or that passing off was established. Therefore, each case should be examined upon its specific facts, in light of the two basic elements of the tort of passing off, namely the existence of goodwill and likelihood of confusion that the goods that are offered by the defendant are those of the plaintiff or that they are otherwise connected to the plaintiff.

In the present case there was no reason to interfere with the district court's finding that the appellants had not made a showing of goodwill in the specific model of nursing bras. The appellants had to show that the public attributed the model Ladies 437 to their business. The district court held that the appellants had failed to prove the existence of goodwill sufficient to establish the tort of passing off. It noted that the appellants had not provided data regarding:

• its direct marketing efforts;
  
  
• the volume of sales of Ladies 437; and
  
  
• the amount of investment in the publicity for this specific model (as distinguished from the general advertisements of the company).

Although the Supreme Court agreed with the district court's finding that no goodwill was shown, it went on to examine the issue of deception or confusion. The court accepted the holding of the district court that no risk of confusion existed. The test for showing likelihood of confusion between Ladies 437 and Mobi 122 was based on an examination of the similarity between:

• the appearance of the two models of bras;
  
  
• the names used for the bras; and
  
  
• the circles of customers of the bras and their channels of marketing.

Two further tests were also taken into consideration, namely examination of the general circumstances that were relevant to the case and the test of common sense.

After examining the evidence, the court concluded that there was considerable similarity between Ladies 437 and Mobi 122. It noted that this similarity went beyond the functional requirements for a nursing bra. The court assumed that the marketing channels and the circle of customers were also similar. Nevertheless, the name of the bras was clearly distinguished, and their packaging was very different. There was also a difference in the labels affixed to the products and in the location of such labels. In this regard, it held that the difference in the appearance and in the name allowed clear identification of Mobi 122 as a bra manufactured by Mobi and not by Leading Ladies. In addition, the differences between the products' packaging and the lack of evidence that the bras were sold outside their packaging or without their identifying labels meant that passing off was not established.

Finally, although the matter was abandoned in the course of the appeal, the Supreme Court addressed the question of whether the appellants had a case against the respondents under the cause of action of unjust enrichment. It reiterated the concept that even in the absence of a cause of action under the traditional IP laws, a plaintiff may find relief under the cause of action of unjust enrichment. However, the Supreme Court expressed a rather narrow view of the applicability of the law of unjust enrichment to the situation of copying and noted that "only in exceptional cases" shall the applicability of the unjust enrichment law be proper, depending on the product's uniqueness, its innovative nature, as well as the time, money and human resources that were invested in its development.

David Gilat, Gilat Bareket & Co - Reinhold Cohn Group, Tel Aviv