Israel Central Court Judge Puts Her Foot in it!

February 23, 2011

Today’s offering is a decision that someone cruder than me would describe as being, well shitty. It also concerns the shitty behaviour of the Petach Tikva Municipality. The subject matter was an idea to create a DNA database for dogs and to use it to isolate the source of a dog’s excrement found on sidewalks and the like.

After the Mayor of Petach Tikva claimed that the idea was his, Hary Zisso who claims to have first thought of the idea, applied to the Magistrate’s Court for a declaratory judgment that he has copyright in the idea. The judge referred the question to the Central District Court, claiming lack of jurisdictional competence.

Technically speaking, Copyright should indeed go to the District Court to judge. In this case, the judge handling the case may have had jurisdictional competence, but it is long time since I’ve seen a Decision that showed so little understanding of IP Law. Apparently, despite the plaintiff only asking for a declaratory ruling, he managed to obtain a temporary injunction that was overturned on appeal. It is not clear what the injunction covered.

Judge Esther Shtumer ascertained from the evidence that the idea was novel and was Zisso’s. On the basis of this factual determination, then went on to claim that the idea was fixed in a tangible medium by being put into a Power-Point presentation and into various documents and then went on to conclude that in so doing, the idea was not merely an idea or a method or process, thereby being not copyrightable, but was now a copyright protectable idea! She awarded the declaratory judgment and also costs of NIS 10,000.

The case: 1052-1-08 Zisso vs. Petach Tikva Municipality

COMMENTS

It is difficult to know where to begin in explaining what went wrong in this case. Without wishing to sound faecesious, the mistakes pile up excrementally.

  1. Copyright does not protect ideas, only their representations.
  2. Actually ideas cannot be protected. Only their expression and their implementation may be protected, by copyright and patents, respectively.
  3. The slides, letters and any and all documentation written by Zisso are copyright protected (and the affixing of the copyright symbol was not actually necessary). The words “all rights reserved” on these documents is useless and meaningless.
  4. An idea is not a creative work. Zisso’s original documentation is indeed copyright protected, but the idea is still not subject to copyright.
  5. The copyright protection in the slides, correspondence, and other documentation merely makes it an offence for a third-party to copy these documents. What it does not do, is provide protection for the idea expressed in the documents. The idea was not patented, and therefore is in the public domain.
  6. The idea may also have been inventive and it may have been reduced to practice in the various documents, but this is not enough to create patent rights either. To obtain a patent, it is necessary to file a patent application for an idea that is novel, inventive and useful. There are no unregistered patent rights (inter alia, the judge did discuss novelty and the utility may be assumed, nevertheless, I am NOT convinced that the idea was inventive over the two documents alluded to in the decision – this is all academic however. Zisso did not file a patent application, and by publishing the idea, it is no longer patentable in Israel where absolute novelty is required).
  7. Actually, the fact that Zisso appears, on the balance of the evidence, to have had the idea, does not prevent a third party from having independently reached the same idea.
  8. I do not know who invented calculus, Newton or Leibnitz, however, I truly believe that both mathematicians were great enough to have independently created the idea. The special theory of relativity was also an idea whose time had come. Maybe this stupid idea of DNA for dogs as well? – Incidentally, I expect the animal rights champions to complain about this blatant invasion of the dog’s privacy, and the human rights activists to relate to the slippery slope –  מסדרות החלקלק.
  9. The correct way to protect an invention of this nature is either by contract law or by patent law.
  10. Contract law gives in personam rights. If a contractual arrangement between the municipality and Zusso can be shown to exist, breach of contract could be claimed. The contract may be verbal. Contract rights are well within the bailiwick of the Magistrate’s Court. However, they weren’t claimed in time.
  11. IP rights, on the other hand, are in rem. IP issues are correctly referred to the District Court whose judges are ‘legally’ competent, if sometimes, through ignorance of the law or it’s interpretation, factually incompetent, to rule on such issues.
  12. Were Zisso to have filed a patent application, he might have created an IP right in the implementation of the idea. However, he failed to do so. The idea, once disclosed without filing a patent therefore, entered the public domain and was available for anyone not contractually obligated otherwise to use.
  13. There may have been a case of issue of Unjust Enrichment following the Supreme Court decision of A.Sh.I.R., although A.Sh.I.R. dealt with non-registered design rights. I don’t like this judicially created extra-IP tort – and hope the proposed amendment to the Israel Patent Law closes this loophole. (In comparison to what will probably go down in history as the Shit Decision, A.Sh.I.R. begins to look quite attractive). As with contract law, Unjust Enrichment also wasn’t claimed early enough.
  14. The judge should, therefore, have simply concluded that implementation of the idea is not and cannot be considered copyright infringement because it is not a literary, artistic, dramatic or other type of creative work, and thrown the case out.
  15. Zisso should have sought timely legal advice from a competent IP practitioner or a competent contract lawyer. He didn’t, and blew his rights.
  16. The judge could simply have made a declaratory judgment of historical fact and a legal ruling that implementation of the idea is not copyright infringement.
  17. The real problem with this decision is that it upsets the delicate balance between intellectual property and the public domain. It is no less dangerous than Judge Dr Michal Agmon-Gonen’s decision not to recognize streaming of sports events as copyright infringement.
  18. The ramification of Judge Stumer’s ruling is that patents are no longer required. Until the district court of Petach Tikva  made Israel Patent Attorneys redundant there was a need for an invention to not merely be novel and useful, but also inventive. This is no longer the case. In such cases, where the inventor filed a patent application before publishing his idea, on examination by a technical expert, it was possible to obtain a monopoly with fairly clearly defined technical boundaries and clearly defined geographical boundaries. Now, simply writing out an idea gives protection for life of inventor + 50 years and the protection probably extends to all countries having a common copyright treaty with Israel. If this idea is implemented in, say, the US, no doubt Judge Stumer will be willing to grant fines of NIS 100,000 for infringements without showing judgment. Presumably in the case of literature, a book or play similar to an idea expressed in a document by a third-party is now copyright infringement.
  19. Different judges will each interpret the law slightly differently. Nevertheless, there is a need for fidelity. The informed public should be able to determine if an action is illegal or not. IP experts should have a fair idea of what the Law is. The positions of Dr Michal Agmon-Gonen on the one hand, who knows the black letter law, binding decisions and international treaties that relate to IP, but chooses to ignore them, contrasts starkly with the position of Judge Stumer who apparently has no idea of what the Laws relating to IP rights  mean.
  20. Until the courts are reformed, and preferably, specialist IP courts are created, or at least, the judges are given specialist training, the best advice I can give to clients is forum shopping!

Israel Ministry of Trade and Industry Hosts WTO TRIPS Conference

February 22, 2011

The Israel Ministry of Trade, Industry and Labour has hosted a two-day conference on TRIPS.

The impressive speaker’s list on the first day included:

Dr Guy Pessach of the Hebrew University, who spoke about the controversial Premier League decision, (see Moving Copyright Goalposts?), now on appeal. Although I agree that he was correct to emphasize the TRIPS and Budapest elements that Judge Michal Agmon Gonen had ignored,  I think he was wrong to ignore the Israel Supreme Court Decision in Tele-Event that should have been binding precedent.

Mr Wolf Meier-Ewert of the intellectual Property Division of the WTO in Geneva, who spoke with authority about geographic indications and appellations of origin.  He gave the example of Jaffa, Israel’s only appellation in the Lisbon Register. Unfortunately, however, as I pointed out, since the mark is used for oranges grown in Australia and South Africa to provide year round coverage, the mark is somewhat controversial, and, speaking from the floor, Deputy Commissioner of Patents and Trademarks, Noach Shalev Shmulovich, provided more details on the topic.

Adv. Reuven Azoff of the Israel Tax Authority who spoke about enforcement by Customs.  He explained that the cost of storage and destruction of infringing goods was charged to the rights holder, and informed us, when I queried the statement, that Judge Abraham Yaakov’s decision regarding Levi’s Jeans (see Judge slams Israel Customs for billing Levi’s for Storage and Disposal of the Jeans) was being appealed.

Mr Pierre Arhel of the WTO Secretariat lectured throughout the two days. His talks were informative, well constructed and comprehensive. Although his English was flawless, the lectures were given in an Inspector Clousseau type accent that was slightly distracting. Among other issues covered, he presented a short overview of WTO and the main TRIPS agreement, discussed the Public Health dimension of enforcement and the non-WTO Anti-Counterfeiting Trade Agreement ACTA, spoke authoritatively on patents and trade secrets under TRIPS, on how anti-competitive practices could delay the development fo generic drugs, patenting lifeforms and traditional knowledge.

The Honorable Judge Gideon Ginat spoke about IP protection in Israel, and gave a balanced, reasonable presentation.  He believes that in patent cases, the judges should use court appointed experts and that judges within the court should specialize in IP. He is not sure that specialist IP courts are really justified. Judge Ginat endeared himself to me, by introducing himself in the coffee break and informing me that he follows the blog.

The most controversial presentation by far, was given by the Honorable Judge, Dr Michal Agmon-Gonen, who justified her position in the Premier League case by arguing that streaming technologies were not copying and that free access to films, sport events and the like, was a fundamental human right(!)  She acknowledged that viewers rights had no basis in the Law, but felt that they could, nevertheless, be read into the Law. She is concerned by powerful IP lobbies ganging up on the little guy and quoted Lawrence Lessig extensively.

The thing is that Lessig is an academic. Dr Agmon-Gonen is a judge. As an academic position; indeed, as a lobbyist position, her views were admirable. I too, think that the balance has been lost and copyright protection is too long. However, I think that judges should leave policy to the government, legislation to the Knesset, and should also be bound by Supreme Court precedent.  In other words, I am in favour of activism, just not of judicial activism. It was no surprise to learn that Dr. Agmon Gonen was an article clerk for Supreme Court President and Supremo Judicial Activist Aharon Barak.  

It may be that the Knesset is slow in legislating IP rights, but this is no longer a problem. Once public access is defined as a Human Right, no doubt it can be considered a judicially created Basic Law and used to overturn any Knesset legislation. After all, to further democracy, we can’t let the democratically elected legislative and government sign international treaties and write laws can we?    

The event was well put together, mostly interesting, but nevertheless, sparsely attended. We suspect that poor advertising combined with the fact that the event was spread over two days, contributed to this development.

The first day was attended by some 30 participants. From the pile of not collected folders, there were some 30 IP practitioners that registered but didn’t show up. Our firm was, however, well represented, by Adv. Aharon Lewin, head of litigation, by Adv. Aharon Factor who heads up our trademark department and is active in working with customs on enforcement, and by myself.

The organizers generously provided lunch in their canteen and there was coffee and tea, soft drinks and rogeluch and burekas throughout the day. The food was not up to the standard of that provided by IP firms in hotels, but as this was funded by the tax payers,  was, I consider, most appropriate.

The event was held in the Generic Govt. Building opposite the Bank of Israel. I noted with approval that the synagogue there has a dedicated women’s section, and that there was a room set aside for breast-feeding purposes.

We congratulate Barak Sharabi of the Ministry of Industry, Trade and Labor, for putting the thought-provoking and challenging event together.


Coca Cola’s Trade Secret – Alcohol?!

February 20, 2011

According to Globes, an Israel business daily, an Israeli Moslem Arab has filed a class action against Coca Cola and their Israel bottling plant, claiming NIS 1000 damages on behalf of all Israeli Moslems – and there are about 1,200,000 of them.

On what grounds? Alcohol consumption against Islamic law.

I drink Coca Cola, and occasionally alcohol. I am highly skeptical of the claim that Coca Cola’s secret formula contains alcohol. nevertheless, the case could get interesting, not least because there seems to be little Israel case-law on trade secrets.

How will Coca Cola LTD prove that their drink doesn’t contain alcohol?

Will an affidavit be sufficient?

Will the Complainant have to provide some laboratory evidence that there is some ethanol present?

Does Sharaya law forbid alcohol in trace concentrations? Jewish Law tends to ignore trace elements as annulled by the majority, particularly if there is less than 1/60 and it does not have any effect on taste.  If the alcohol (if present) affects the taste, then presumably in Jewish Law it would not be voided.

One thing is certain, Coca Cola is less alcoholic than Shandy. 

For more details, see http://www.globes.co.il/serveen/globes/docview.asp?did=1000624838

We note that it is not April 1, Purim, or even Purim Katan.


Alice in Diaper Land

February 13, 2011

Tal Children’s furniture LTD supplied their baby changing table to Shilav, Israel’s leading chain of baby furniture, clothes and accessories.

In the course of time, Shilav found a supplier, Texture Furniture LTD,  who could supply the identical design at a quarter of the price. Not surprisingly, Shilav switched suppliers. Tal Children’s Furniture LTD accused the second supplier of ‘passing off’ their product and also infringed on their IP rights.

Since any association of the goods by the public was with Shilav, not the manufacturers, and since there were no registered IP rights, the case was dismissed and the complainant was ordered to pay NIS 10,000 costs to each defendant. 

COMMENT

The furniture in question apparently had two small drawers opened by inserting fingers and a couple of larger draws with two handles. The figure taken from Shilav’s current catalogue is thus not identical to the design in question, but is fairly indicative of the type of design masterpiece in question. Also known as Dressing table 57, the unit, together with bed 17 and polka-dot sheets was fancifully marketed as the Alice in Wonderland Set.

The decision is correct, but the mental gymnastics performed by Judge Chana Yinon, the citing of irrelevant case-law and the general write-up of the decision makes for tiring reading. This ruling could have been as short as this summary. 5 pages of discussion was quite unneccessary. 

T.A. 35573-07 Tal Children’s Furniture LTD vs. Texture Furniture LTD


Confusingly Similar aren’t they?

February 12, 2011

Ford has sued Ferrari, claiming trademark infringement following Ferrari calling their new racing car the F150. Apparently, Ford is concerned that some people might buy the racing car by mistake, when meaning to purchase a Ford F150 lorry.

According to media reports, Ferrari have announced that

 ”Ferrari believes that its own contender in the forthcoming F1 championship cannot be confused with any other types of commercially available vehicle of any sort whatsoever, nor can it give the impression that there is a link to another brand of road-going vehicle. Therefore it is very difficult to understand Ford’s viewpoint on the matter. Despite this and to further prove it is acting in good faith and that it operates in a completely correct manner, Ferrari has decided to ensure that in all areas of operation, the abbreviated version will be replaced at all times with the full version, Ferrari F 150th Italia.”

It reminds one of the old joke…


Injunction By ORT Israel Against World ORT Using Name in Israel Overturned

February 10, 2011

ORT is an organization that was incorporated in Russia in 1880. World ORT is headquartered in the UK.

ORT is an organisation born of necessity that endured and flourished because of its ability to adapt to change. The history of ORT began officially in 1880, but a series of events beforehand created the conditions in which the need for such an organisation was imperative.

 

On 22 March 1880, by order of the Russian Minister of interior Affairs, the Organisation for the Distribution of Artisanal and Agricultural Skills among the Jews in Russia ­ ORT ­ was established. The first ORT committee distributed money to Jewish schools for new handicraft and agricultural training. It provided loans to artisans and purchased small tracts of farm land for families to work. For Jews, most of these activities had been expressly banned by law until that point. For more on the history of ORT see http://ort.org/asp/article.asp?id=117

World ORT is the world’s largest Jewish education and vocational training non-governmental organisation. ORT’s network of schools, colleges, training centres and programmes in Israel, Russia, Argentina and many other countries worldwide, benefit more than 200,000 people a year, young and old, Jewish and non-Jewish. For more, see http://www.ort.org/asp/default.asp

ORT Israel is the largest educational network in Israel. Established in 1949, it has trained over 500,000 graduates, most of them in science and technology. The ORT Israel network provides educational programs for over 100,000 students in 160 schools and colleges with 8,000 educators and administrative staff.  For more on ORT Israel – see http://ort.org.il/en/scripts/about.asp

ORT Israel sought and received an injunction against World ORT to prevent them from using the ORT name. On appeal to the Israel Supreme Court, this decision was reversed.

COMMENT

A sad event in the history of two important organizations that may now be separate, but certainly had common roots. There may well be some likelihood of confusion and philanthropists should be able to donate to projects in Israel or abroad according to their preference. One wonders if the institutions couldn’t agree to use the term ORT together with the word World or Israel in a consistent manner, thereby avoiding confusion.

One suspects that donors are interested in funding vocational training not legal battles.


Holocaust Sculpture Battle Settled

February 10, 2011

 

In September 2010, I reported on a case filed in July 2010, by the New Jersey artist David Ascalon, in the U.S. District Court for the Middle District of Pennsylvania. See The moral rights of a sculptor to be identified with his work.  The following report is based on a press release sent to me by Ascalon.

Essentially Ascalon  asserted that his rights under the federal Visual Artists Rights Act of 1990 (VARA) had been violated with respect to a sculpture he created for the Jewish Federation of Greater Harrisburg: a Holocaust Memorial on the banks of the Susquehanna River in Pennsylvania’s state capital, which was installed in 1994.

The complaint alleged that Ascalon’s rights under VARA, which limits how an artwork may be altered or disposed of, were violated by restoration of a decaying element of the original sculpture in which a rust-colored “barbed wire” serpentine element was replaced with shiny stainless steel.

Since the filing of the lawsuit, the Jewish Federation of Greater Harrisburg, who undertook the restoration, and the artist have sought constructive solutions to resolving the dispute in a manner that would help preserve this important memorial for the generations while incurring minimal cost to the parties.

After several months of amicable negotiations among the parties, the parties are pleased to announce that a mutually-agreeable settlement has been reached. The substance of the settlement provides the sculpture will be retrofitted in a manner that upholds the artist’s original intent at minimal costs to the defendants. The original artist shall be provided access to the sculpture to remake the “barbed wire” serpentine element in a highly durable rust-colored steel, and the original artist’s name shall be restored to the sculpture. The parties are pleased that future generations will be able to view the restored Memorial and remember and pay proper respect to the 12 million souls that perished at the hands of agents of intolerance, the Nazi Regime.

The attorney for David Ascalon is Jason B. Schaeffer, Esq. of J.B. Schaeffer Law, LLC of Cherry Hill, New Jersey. The attorney for the Federation is Harvey Freedenberg of McNees Wallace & Nurick LLC of Harrisburg.


Israel Patent Office Refuses to Reinstate Lapsed Design – Claims no Authority to do so

February 7, 2011

In a decision concerning Israel Registered Design Number 40394 to Ran Gorenstein, the arbitrator of Intellectual Property at the Israel Patent Office, Ms Yaara Shoshani-Caspi, refused to reinstate a lapsed design.

Counsel for the registrant of the lapsed design argued that the design had lapsed due to an administrative error, suggested that this was little more than a scribal error in the register, and requested a retroactive extension of the six month grace period for late payment of the renewal fees.

Shoshani-Caspi refused the request, arguing that Section 54 of the design regulations of 1925 only gave the Commissioner of Patents and Trademarks authority to extend time periods detailed in the regulations, and gave no authority to extend time periods in the ordinance itself. She was not impressed with the suggestion that the change was merely scribal, but ruled that this was irrelevant anyway, since according to Section 44 of the Ordinance, the only body with authority to amend the register to include a design no longer listed, was the District Court.


Software Patents in Israel – Guidelines on Hold

February 7, 2011

The last act before leaving office of the previous commissioner, Dr Meir Noam, was to announce that there was a new policy regarding the patentability of software inventions and that guidelines would be forthcoming by the end of January. 

See Patentability of Software – Notice from the Israel Patent Office for more details.

 In a not totally unexpected move. Dr Guy Rotkopf has announced that the guidelines are delayed.

It is not clear when the guidelines will issue, but we will endeavor to report developments whilst they happen!


Retrial Granted In Patent Infringement Case Following Defendant’s Lawyer Making anti-Semitic Slurs

February 1, 2011

 Commil, an Israeli startup closed down and two years later, selling its assets to a new company, Commil USA LLC, a Non-Practicing Entity, who sued Cisco Systems Inc for patent infringement. Commil USA won the case and was awarded $3.7 million, but nevertheless in late 2010, it asked the court for a new trial.

US District Court for the Eastern District of Texas Judge Charles Everingham approved the motion, based on the claim that Cisco’s attorney made antisemitic remarks against the plaintiff, which were welcomed by the jury.

According to an article in Globes, the Israel Business Paper, see http://www.globes.co.il/serveen/globes/docview.asp?did=1000619459&fid=1725

Commil was founded in 2000 on the basis of a patent registered by its founders, and developed Bluetooth applications. The company raised some $15 million capital from DFJ Tamir Fishman Ventures Ltd. (TASE: TFVC), Gemini Israel Funds, Formula Ventures, and Royal Philips Electronics NV. The company developed products that connect mobile and landline networks, enabling mobile carriers to offer customers disruption-free usage by the management of network traffic.

Although Commil’s patent covered all telecommunications fields, the company gambled on Bluetooth becoming the standard, whereas  the market preferred WiFi. The company failed, and, in 2005, Commil fired all its employees. The CEO, Yuval Dovev, decided to return cash assets to the investors. He also put the company’s intellectual property up for sale.

In 2007, Adv. Jonathan David bought Commil’s intellectual property for a few hundred thousand dollars and sued various large telecommunication companies including Motorola Inc., Aruba Networks Inc. and Cisco. Motorola and Aruba settled with Commil USA, but Cisco refused to compromise, and David sued the company in May 2007.

The trial began in May 2010 in the Texas town of Marshall. The jury found that Cisco had violated Commil’s patent and awarded the company $3.7 million. In June 2010, Commil USA filed a motion for a new trial, citing improper remarks by Cisco’s attorney, and what it believed was the low reward; it had asked for $50 million.

The motion for a new trial states that Adv. Otis Carroll of the Ireland Carroll & Kelley PC law firm based in Tyler, Texas described David as a greedy financial investor, who was Jewish by the way, who resided in Israel no less, and sought to take money from the manufacturer, Cisco, which employed thousands of people at its center in Texas. In the closing argument, Carroll made a connection between the case and the trial of Jesus before Pontius Pilate, who ordered the crucifixion. He said that the jurors should stop David before the money window, because he wanted to fill his money bags and take them to Israel.

COMMENT

Aside from the disturbing antisemitic comments, this development is interesting for other reasons. Commil was a high-tech start-up that, like so many, failed.

The CEO, correctly, sold off assets to recoup investor’s losses. Nevertheless, the purchaser, Commil US, is a non practicing entity or troll.

I don’t think it makes the slightest difference morally if the plaintiff is the original company, a new US company set up to collect royalties on technology developed, or a serial troll who purchases patents in order to enforce them. I believe that IP is a property right that may be enforced.

I also believe that US judicial process is overly expensive, have reservations regarding jury trials concerning IP infringement, am not enamoured with the possibility of obtaining injunctions against infringers, favour compulsory licensing and generally feel the US IP enforcement system requires overhauling. Nevertheless, I consider trolling a positive business model.


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