Nespresso Parody – False Description and Passing Off

nespresso logoThis is one of a series of posts concerning parody advertisements. The background is to be found here.

Within the family of “charges relating to reputation” that were claimed by the Appellant Nespresso against Espresso Club regarding their parody advertisements, alongside trademark infringement and dilution, is ‘false description and passing off’, which are the first two torts in the Commercial Torts Law, 5759-1999. Since these grounds do not raise significant issues in this instance, we can dismiss them briefly.

false meter“False Description” – the main claim of the Appellant in this instance is that the respondent’s advert that made a big point of them delivering ‘to the door’, gives the impression that Nespresso does not make home deliveries, and this is not the case. If it was possible to conclude this from the adverts, then this might contravene section 2(a) of the Commercial Torts Law:

“A trader will not publish information and will not cause information to be published that he knows or should know is not the case, regarding the business, profession, property or services of himself or others (henceforth ‘fake description)”.

espresso club logoThe District Court rejected this claim and determined that there is no basis in the respondent’s advert to conclude that the Appellant does not do deliveries. Judge Hendel concurs with their finding. The main points of Espresso Club’s advert are as follows: a young person says to George Clooney’s double that he should stop talking to himself and tells him that his car is being towed, he teases him that he smiles at women all the time, and dresses like a bride groom to shop for coffee.

Being towedTrue, during the advert, and in connection to the car being towed, the young Israeli tells the double that one can order coffee machines to one’s home. But from the context one cannot reasonable conclude that the respondent’s competitors don’t provide the same service. The emphasis is on the respondent’s business model and not on their competitor’s conditions. Furthermore, one has to be careful. One cannot require that an advert of this type is required to note at all stages, not just what the advertiser provides, but also what its competitors offer. Obviously, if an advert claims that only the advertiser offers a service or product, such a ground of complaint could exist. However, this is not the case in this instance. Unfortunately for them, the appellant has the burden of proof as the plaintiff, and did not provide any evidence for their claim, such as a consumer survey that could be challenged under cross-examination. Consequently, the burden of proof is not met.

Passing off montageA further claim that is related to the tort of false description was raised by the Appellants under the heading “passing off”. According to this claim, a number of viewers who saw the advert thought that it was an advert of the Appellants (Nespresso), and that they had launched a campaign to provide free coffee machines to people fulfilling certain conditions. This should have been classified as “false description” and not as “passing off”, as will be explained in the next paragraph.

false positivesSubstantively, in most cases – and so the laws similar to this tort historically developed, like insulting falsehoods, false description does not have to be a negative description about a competitor and his products, or a laudatory description about the advertiser (see the wide survey in Civil Complaint 3322/16 I. D. A. Insurance Company vs. the Association of Insurance Brokers in Israel, paragraphs 39-51 (30 April 2017).  Thus, regarding coffee machines, one can publish positive information regarding a competitor – that he has launched an attractive campaign. However, one should note that the language of the law makes clear that a false description does not have to be a negative description about a competitor and his products, or a laudatory description about the advertiser’s, but all false descriptions, positive or negative, can be the basis of false advertising. The logic for this is that a false positive description about a competitor can also cause damage, since the customers may feel umbrage on discovering that the information is false. Fair competition requires negating such business practices where the main thing is not the content but rather the impression made on competitors. That as may be, Judge Hendel agrees with the court of first instance that there was insufficient evidence to establish a claim of misleading the consumers. The suspicion of being misled is examined from the perspective of the reasonable potential customer, and the test is objective.  Whilst consumers’ impressions can be weighty evidence, in this instance the appellant simply produced 5 or 6 cases where viewers claimed that they were under the impression that the advert originated with the appellant. A handful of consumers cannot be used to base a complaint of the likelihood of confusion, particularly about a subtext, and does not indicate a likelihood of confusion. A small number of mistakes can be explained away in different ways, for example by the number of viewers that did not watch the whole advert or did not pay attention. Without wishing to provide a number for proving a risk of misleading, the odd instances brought is not enough to be persuasive and to raise the burden of proof.

“Passing Off”. The tort of passing off is defined in Section 1 of the Commercial Torts Law, 5759-1999 states that “A trader will not give the impression that a product he sells or a service he provides will be considered as the product or service of a competitor or that the goods or services are connected”. The case-law shows that one has to prove two things: a risk of being mislead and a reputation/ (See re Angel, paragraph 9). In this instance the Appellant raised two claims.

nespresso vs espressoThe first claim is that some consumers mistook the respondent’s advert for one by the Appellant, and thus there exists the legal requirement for misleading to establish the tort. However, as stated, this risk has not been proven, and the odd example brought is insufficient to base the case. For this reason, the Appellant’s claim is to be rejected. The court notes, however, that were the likelihood of being misled to have been proven, this could be enough to show that the description was inaccurate, but not enough for passing off. There is no claim before the court, that consumers wanted to purchase the appellant’s goods (Nesspresso’s) and mistakenly purchased those of the respondent (Expresso Club), but rather the opposite; the Appellant claims that people inadvertently purchased their products. This is supported in the present case since the purpose of the advert was not to copy the competitor but rather for Espresso Club to distinguish itself from Nespresso so passing off is not an issue. If one prefers, sending customers to the competitor is not ‘stealing’ from them. The problem that the claim, if accepted, raises, is that a result of the false description claimed by the Appellant, they received inquiries!

Espresso club advertThe second claim of the Appellant is that the very usage of the Clooney double to promote their goods, is passing off, since the viewer may thing that Clooney promotes the respondent’s products, or that there is a connection between the two products. This claim was raised but not substantiated. There does not seem to be any basis for the Appellant’s claims. Someone knowing the Nespresso products certainly realized the sting in the adverts, and eve if not, would not mistakenly purchase the competing product by mistakenly thinking that the Clooney double creates a connection between the companies or that Clooney was somehow related to Expresso Club. This is the case when one considers the competition in the coffee market, the price of the coffee machines and their capsules, the cast that each advert of the respondent stressed throughout the advert that a double was used, and the mocking of the ‘coffee culture’ that Nespresso was trying to project. Someone not familiar with Nespresso would certainly not purchase an Espresso Club system based on Clooney’s reputation as a producer for the Appellant. It will be remembered that the words “The presenter is not George Clooney” accompanied all the adverts. This is the picture that arises from watching the adverts, and the Appellant did nothing to present any evidence or fact that nibbles away at this conclusion, even when looking at a number of pictures on the respondent’s website which also shows the Clooney double labeled as such, and, together with the younger Israeli, offering home delivery without additional payment. Watching the adverts teaches that this is a relatively small element of the advertising campaign based on the clips, and are not free-standing advertisements intended to give the impression that Clooney has stopped advertising for Nespresso.

The conclusion from this is that the claims of passing off and false description are not proven.

Categories: false description, inequitable behaviour, Israel Court Ruling, Israel IP, passing off

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