Haya Rivka Windling-Yoskovitz imports and sells wrapping materials and decorations for events through a company variously named “The Tasteful Choice”, Organza and Organza 2010, from 2006. Some of her wrapping materials were used in a retail outlet called ‘Petite Sweets’ in Ashdod. She carries a range of about 2000 goods.
Dekel Manufacturing, Import & Export of Decorative Goods LTD., managed by Amir and Haim Sandick imports and distributes ornaments and presents. Their catalog includes a range of some 6000 goods.
Windling-Yoskovitz sued Dekel and the Sandick brothers claiming that they were distributing two wrappings that she had designed and had manufactured in China. The first design was for “tallit bags” – organza bags with blue or black stripes and fringes, available in three sizes, that were intended to recall the Tallit, or ritual prayer shawl. The bags were intended for use for holding party favours or cutlery, and to be used for decoration at Bar Mitzva events. The second design was for cellophane wrapping material including the words Yom Holedet Sameyach (Happy Birthday in Hebrew) and Mazal Tov (literally, good luck but perhaps congratulations would be a better translation).
Dekel had imported the cellophane wrapping material from China and it seems that it was superfluous manufacture from Windling-Yoskovitz’ order that had found its way onto the Chinese wholesale market. The tallit bags sold by Dekel were made from them, and were slightly different from Windling-Yoskovitz’ design, but clearly inspired by her.
The case was brought before Judge Grosskopf of the Tel Aviv District Court in September 2009, with a request for an injunction and that the defendants produce financial details regarding sales of these items. The defendants countered by requesting that the court throw out the charges, arguing that the plaintiff had no exclusive rights and that there was no legitimacy to prevent free competition regarding the distribution of these goods.
The plaintiff claimed a range of grounds using what Judge Grosskopf referred to as the “try it” approach. These included copyright, passing off, theft of trade secrets, misleading the consumer and unjust enrichment.
COPYRIGHT – Judge Grosskopf noted that Section 7 of the new Copyright Law follows Section 22(1) of the Copyright Ordinance and rules that there is no copyright in articles of manufacture that could be protected by a design registration, unless there was never any intention to mass produce. Since the plaintiff did not register her design, she was not entitled to IP protection under copyright or registered design rights.
PASSING OFF – As to passing off, quoting Judge Rivlin from the recent Tali Dadon Yifrach case and noted that the tort of ‘passing off’ created a monopoly and so its use should be excised with care. The requirement for passing off to be grounds for legal recourse were that the plaintiff had a reputation for the goods and that consumers would wrongly assume that the goods originated the plaintiff. In this case, he ruled based on witness statements, that the clientele were ambivalent as to who the importer was and were interested only in price.
THEFT OF TRADE SECRETS – Grosskopf dismissed this, since the articles were easily retro-engineered and purchasing or manufacturing in China wasn’t a trade secret.
MISLEADING THE CONSUMER – Grosskopf noted that the consumer here was the retailers, not the end users, and thus consumer protection was not an issue. Furthermore and unnecessarily, there is no likelihood of confusion, since the customers were ambivalent of who the importer was.
UNJUST ENRICHMENT - Judge Grosskopf established that this was the only real legal question and then embarked on a detailed analysis, widely quoting from Professor Grosskopf’s (himself) treatise on the topic. Grosskopf’s position is that enrichment for the innovator comes from market lead. Where appropriate, this can be extended by registering designs. Grosskopf felt that the organza bags were registerable but the cellophane wrapping lacked the minimal requirements to be considered a design. Were Dekel to have systematically copied the plaintiff’s designs, unjust enrichment would be appropriate, but that was not the case here. The cellophane was bought off-the-shelf in China and the bags were not on-on-one copies, but merely shared the same design concept and thus just enrichment should be limited to the natural advantage of the plaintiff by virtue of being the first to distribute.
Based on his analysis, Grosskopf dismissed the charges, but refrained from awarding costs.
The Case: T. A. 18395-09-09 Haya Rivka Windling-Yoskovitz vs. Dekel Manufacturing, Import & Export of Decorative Goods LTD., 10 June 2012 by Judge Professor Ofer Grosskopf.
In my opinion, Judge Grosskopf is one of the better IP judges. This decision is erudite and generally correct, and contrasts nicely with the Karshi decision issued by Shapira of the Jerusalem District Court. See here. Reading between the lines, and noting that Grosskopf mentioned that the wording Mazal Tov and happy birthday were rendered in simply fonts, I think it is clear that he was aware of Shapira’s decision and is criticizing it in veiled form. It is unfortunate that the verdict in these cases seems to depend more on the judge than on the facts of the case.
Neverthless, Grosskopf is wrong both in his original essay and in his quote of it, in stating that after seeing commercial success, creators can register their designs, and that failure to do so requires explanation. In Israel this is not the case. Once a product is available, it cannot be registered as a design as absolute (local) novelty is required. There is no grace period.
As to the cellophane with Hebrew writing on it lacking the minimal standards to be registered as a design, I am not convinced. By that I mean that the wrapping material is sufficiently designed to establish that it was designed by Windling-Yoskovitz and purchased off the shelf in China by Dekel. It is an object of manufacture and can be described and illustrated. I think it is a design that could have been registered in Israel. Of course, ruling is of value in indicating if a judge would uphold such a design registration.