ASPECTS OF COMPETITIVE ADVERTISING IN THE DIGITAL AGE

25.05.2017

 

By Lawrence Hoffman

In an article appearing in The Trademark Reporter of the International Trademark Association (https://goo.gl/YjK6sL), we discuss a March 2017 decision by the Tel-Aviv District Court in a case involving Food Giant Nestle and its Nespresso® coffee system and a tiny Israeli competitor Espresso Club. The decision gives good insight into several aspects of competitive advertising in the Digital Age.

The Nespresso® coffee system consists of an espresso machine and coffee capsules. According to competitor Espresso Club’s business model, the machine is free, but the customer contracts to purchase an agreed number of capsules per month.

World-famous actor George Clooney is a widely-recognized spokesman for Nespresso. His ads are humorous with a high-class sophisticated theme. In 2015, Espresso Club began running parody ads using a Clooney-lookalike. The ads carried a legend that the actor was not George Clooney.

The parody came through loud and clear. The idea was to make Nespresso® look like the high and mighty, nose in the air brand, but that ordinary people could enjoy the same coffee experience from down-to-earth Espresso Club. One of the ads showed an Espresso Club customer drinking his coffee in a tee shirt instead of a fancy suit which he had removed.

Nespresso’s suit contained claims for trademark and copyright infringement, trademark dilution and unjust enrichment. In March 2017, the court dismissed the case, and ordered Nespresso® to pay Espresso Club’s expenses, including legal fees of NIS 110,700 (about $25,000). Reportedly, the Supreme Court has refused to take the case on appeal.

The INTA article delves into reasons the Espresso Club program was well planned and discusses parody advertising in the context and references a recent U.S. appellate decision that addresses the law at length.

The legal underpinnings of the right of publicity under Israeli law in comparison with that in the U.S. is also addressed, including the U.S. Federal Trade Commission Guide Concerning the Use of Endorsements and Testimonials in Advertising.

The article ends with a non-commercial example of parody at its best in the context of an April fool’s prank.

 

 

 

 

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