Diluting Nespresso Coffee by Parody – Background to Israel Supreme Court Ruling

Nespresso what elseNespresso has an international advertising campaign featuring George Clooney. A compilation of these may be found here.  Apparently the subliminal message is that if one “drinks different”, one will drive luxury cars, become a fabulously wealthy successful actor (who nevertheless needs to advertise coffee to make a living), and be surrounded by very attractive females in exotic locations.

This-is-not-George-Cloony-israeli-coffee-club-clooney.pngA competing company, Espresso Club, parodied the Nespresso adverts in Israel. Their main parody may be found here.

The District Court found the comparative advertisements that used a Clooney look-alike, as not infringing Nespresso’s copyright or trademarks. They further found that there was no Unjust Enrichment or slander. See here. 

Nespresso has now appealed this decision to the Supreme Court. The case was heard by Judges Hendel, Solberg and Kara. The main ruling by Judge Hendel is as follows.

The product in the limelight in this appeal is an advertisement for coffee machines and capsules. The claim is that this advert is an invalid copying of the Appellant’s advertisement for a coffee product, starring George Clooney. In the advertisement in question, a double of George Clooney appears, without hiding the fact, indeed there is a subtitle on the screen, clearly stating and emphasizing that the actor is a double. The proceeding is at a crossroads. One way to the junction is in the business world – an advertisement intended to create a good impression of the advertiser (the respondent) by aping the appearance of the competitor (the Appellant), who is shown in a negative light. The other three routes leading to the junction are IP related, being copyright, trademark and unjust enrichment. The unique meeting of the issues raises the following questions:

  1. What is the legal status of an advertisement parodying a competing product
  2. Does such a parody infringe the copyright of the main product?
  3. Do the clear hints regarding the competing manufacturer damage his reputation or take advantage of it in a way that infringes their trademarks?
  4. In a panoramic view, if these laws and others, such as the law against slander, and the fair trading law of 1999, do not protect the manufacturer from parodying advertisements, shouldn’t the law against Unjust Enrichment provide protection? These considerations show the need to define, test and rule regarding parody – the branch of humor in the legal field.

Background, Previous Proceedings, an Overview

George clooneyIn the background, there is a wide ranging advertising campaign regarding the Coffee brand Nespresso which involves two Swiss companies and an Israeli company, and which uses a character personalize by the actor George Clooney. The advertisements show Clooney ogling at attractive women, driving expensive cars and drinking Nesspresso coffee. Some advertisements show Cooney entering a Nespresso shop with the intent of being noticed due to his personal reputation, but where he is overshadowed by the quality Nespresso coffee. The advertisements use the catchphrase “Nespresso, what else?” A further characteristic of some of the advertisements is the luxury associated with the store and with the Nespresso coffee, which is stressed by the elegant and expensive clothing of the actors, the background music, and the famous and attractive actors appearing in the advertisements. Finally, in some of the advertisements, the Clooney character is not fully self-aware and does not read the situation correctly, which is expressed in the coffee and not him gaining the attention of the passersby.

Espresso club advertThis is the background of the advertising campaign of Espresso Club Ltd., a competing company selling coffee machines and accessories in Israel. In their campaign, Espresso Club made a series of advertisements that are at the basis of these proceedings. In the opening scene of the main advertisement, there is a very similar character to that of George Clooney in appearance and dress, alongside which appears the words “The Presenter is not George Clooney”. This appears at the beginning of the advertisement. A double of Clooney goes out of a coffee shop, similar to that in the Nespresso advertisement, holding a bag of quality paper and in the background there is a tune reminiscent of that of Nespresso, but the narrator states “there is nothing like a new espresso machine”. The Clooney double looks at a woman crossing the street and she looks back, and then he notes an Israeli in normal clothing, that stops the sound track and says in Hebrew “Hello, stop talking to yourself, your are being towed!”. The Clooney double responds “Wait, but I left the car with the valet”, and the Israeli says, “No, with the parking inspector”. Then one sees the Clooney double’s car being towed away and the Israeli explains that one can order the respondent’s coffee to one’s home and doesn’t have to purchase the coffee machine itself. Furthermore, he teases the double by noting that he smiles at girls all day, speaks to himself, and dresses like a bridegroom to go shopping for coffee. The advertisements finish with a voice over announcing the possibility of obtaining a coffee machine delivered to one’s home without paying for it under certain circumstances.

Being towedThe defendant made a further couple of advertisements in a similar light. A double of George Clooney enters his car and orders the chauffeur to drive. The Israeli knocks on the window and asks the Clooney lookalike if he knows that Expresso Club does free deliveries of coffee machines, and if he knows that he doesn’t have a chauffeur and is in the car by himself? The camera pans out and we see that the Clooney double is indeed sitting in the back seat of an empty car. A further advertisement shows the Israeli asking the Clooney double who is about to purchase a coffee machine “Do you live in a movie?”, and the double answers to the affirmative. The plaintiff also refers to a bunch of clips on the defendant’s Facebook™ page that show the Clooney double together with a the Israeli from the advertisements. Under the double there is the caption “The presenter is not George Clooney”, and both characters hold gift packages on which are drawn coffee machines. In the analysis below, the main advertisement is considered, unless other advertisements are required to reach a verdict.

dilution-coffeeOn appeal, the Appellant reiterated their claim that their reputation was damaged in various ways; trademark infringement due to the logo that was similar to Nespresso, the shop that was modeled on a Nespresso shop and due to the Clooney double, dilution of reputation and damage to reputation by using a double thereby causing Clooney to be identified with the competing product and by scoffing at his character; passing off by misleading the consumer to think that there is a connection between the Appellant and the goods of the defendant; misleading description – a concept covered indirectly by the earlier forum without being mentioned by name. The Appellant alleges that one could mistakenly understand that they do not deliver to the home. Alongside the claims regarding reputation, it is alleged that the defendant’s adverts infringe the copyright of the Appellant, both generally, and specifically by lampooning the Clooney character. In particular, it is claimed that the purpose of the publicity is to create a similarity between the the Nespresso goods and those of the defendant by copying significant bits of the of the Appellant’s adverts. It is further alleged that even if the advertisements are found to be satirical or parody, and not an attempt to show a similarity, the defendant can still not claim “fair use” since the use commercial. The Appellant claims that the advertisements are Unjust Enrichment and Unfair Competition, since there is a strong public interest to prevent a company using a competing brand in their advertisements. The Appellant referred to comparative law from other jurisdictions. Finally, the Applicant disagrees with the finding that there was no proof of damage from the Defendant’s actions, and considers the costs awarded against them as exaggerated.

The Defendant disagrees, relying on the findings of the District Court. However, in a counter-appeal they asked that the expenses of 110,700 NIS be reconsidered.

Neal_HendelFrom a legal perspective the case is one of Copyright, Trademark Infringement and Unjust Enrichment. Supreme Court Judge Neal Hendel asks which is dominant? At the beginning of the Hearing, at the behest of the Court, the attorneys of the Appellant addressed this issue and claimed Unjust Enrichment. This response is not self-evident, and is not definitive. Understanding the case, in particular a bird’s eye view of the Appeal, helps clarify things. The dispute before the court is one of an advertising battle. Advertisements serve competing companies as a battlefield and in some instances, do not only praise the advertiser’s product, but also may be derogatory regarding competing products. This battle can include the appearance of a trademark of a competitor in an advertisement, as the Appellant alleges happened in this instance; and an advertiser may parody the competitor’s campaign; however these elements are not essential for the companies to do battle. Some adverts relate to the competitor without actually displaying the competitor’s trademark; particularly in markets where the identity of the competitor is clear. A company can also lampoon a competitor without making use of the competitor’s advertisements, but merely of the company and their reputation. Such an advertising campaign might be devoid or trademark or copyright issues, but the competitor might still want to prevent the advertisements being used. In his eyes, the issue is the damage he perceives, degrading, use of his reputation to promote the competing goods and the resulting economic losses. One can therefore understand the damages that he considers that the other has been enriched at his expense, the desire to create “rules of competition” that define the borders of allowed advertising, and the legal systems that have chosen to regulate advertisements of this nature. However, the Appellant’s position is one thing and the legal regime is something else. It may be insufficient to show malicious intent to prevent the defendant from arguing that the case is not one of Unjust Enrichment.

That as may be, The Appellant stressing Unjust Enrichment does not rule out arguing specific and detailed clams that relate to copyright, trademarks, passing off and unfair descriptions. It is clear that to the extent that these were infringed, the Appellant is entitled to the defense of the Law. However, this raises a central question in this instance – the borders of trademark and copyright. Do these cover cases of comparative advertisements and parody, either on their own, or together with other laws, or does the legislation include a lacuna in this instance, which Unjust Enrichment could be used to fill? To answer this question, it is insufficient to merely look at what these laws include, but one has also to look at what they exclude which may be a deliberate exclusion or simply an omission. Firstly, what is included is considered; where the Appellants copyright or trademarks infringed, and was there unfair trade under the Trade Tort? Afterwards, and based on the result of this inquiry, the normative status of parody advertisements in Israel is considered together with Unjust Enrichment.

The trademark issues are discussed here.

The passing off and unjust enrichment are discussed here.

Further posts regarding copyright and unjust enrichment will be published shortly.



Categories: bad faith, Copyright, Fair Use, famous marks, inequitable behaviour, Intellectual Property, Israel Copyright, Israel Court Ruling, Israel IP, trade dress, trademark, trademarks, unjust enrichment, בית משפט, החלטת בית משפט, זכות יוצרים, סימן מסחר, סימני מסחר, סמני מסחר, עשיית אושר, קניין רוחני, קנין רוחני

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