In 1998, Ofer, Extinguishing, Extracting and Saving LTD supplied hydraulic systems for breaking into looked buildings manufactured by Holmatro to the Israel Ministry of Defense, where they were deployed by the armed forces for use in urban warfare. Further systems were sold in 1999 and 2000.
From 2000 to 2006, the Israel Ministry of Defense ceased to order from Holmatro and purchased systems from Hydro-Na LTD.
In 2007, needing to purchase 562 such systems, the Israel Ministry of Defense issued a tender in which Hydro-Na submitted a bid. However, in November 2011, the Israel Ministry of Defense announced that they would purchase future systems from Sun Hitech.
Hydro-Na filed Israel Patent Number 184211 on 25 June 2007 and it issued on 4 May 2009.
The first claim of Hydro-Na’s patent is as follows:
A system for forcible opening of an entryway by applying pressure to adjacent boundary surfaces, said system comprising:
- a hydraulically operated pump unit for providing pressure to the system;
- a hydraulic cylinder unit comprising a piston rod
- a first anvil comprising a narrow wedge-shaped portion removably and rotatably mounted on the proximal end of said piston rod, said first anvil formed with downwardly facing friction gripping grooves on its surface; and
- a second anvil comprising a pair of narrow, spaced-apart wedge-shaped prongs formed on the sides of a rotatable ring removably mounted on said hydraulic cylinder until, said second anvil formed with upwardly facing friction griping grooves on its surface;
Such that when the wedge-shaped portion of said first anvil is seated between the wedge shaped prongs of the second anvil so as to be aligned therewith and said first and second anvils are forcibly inserted in a seam between adjacent entryway boundary surfaces, operation of the pump unit applies pressure via the first anvil on a first adjacent boundary surface while said second anvil applies a contrary gripping counterforce on a second adjacent boundary surface, forcibly opening said entryway of said adjacent boundary surface.
There is a second independent claim and also a method claim, but the above claim illustrates the invention fairly well.
Hydro-Na also filed three Israel design applications for various sub-components.
Hydro Na tried unsuccessfully to obtain an injunction against Sun HiTech and to have their bid in the tender thrown out on various grounds as not fulfilling the tender requirements. The injunction was refused and the tender bid was upheld.
On allowance of the patent in May 2009 after accelerated examination, Hydro-Na sued Sun Hitech LTD, its shareholders and the Israel Defense Ministry for patent infringement and claimed 3,376,940 NIS (about a million dollars) in damages, filed for recall of the systems, and for a temporary injunction. The grounds were patent infringement, unjust enrichment, passing off, etc.
Judge Zerankin of the Haifa District Court ruled (T.A. 34912-11-09) that the patent was probably invalid since there were earlier systems known to Hydro-Na that were not disclosed to the patent office during prosecution, but noted that the rotatable ring was apparently novel and arguably inventive. He did not invalidate the patent, but found that there was no infringement since Sun HiTech’s system did not include this novel feature.
As to the designs, the Judge Zerankin ruled that the mechanical components weren’t designs in the meaning of Section 2 of the Patent and Design Ordinance.
Hydro-Na appealed to the Israel Supreme Court.
On appeal, Judge Amit noted that most of the issues were factual and had been examined by the Court of First Instance and appeals were not to retry evidence but only legal analysis.
In cases like this where the defense of the defendant is invalidity of the patent, the plaintiff has only to show infringement, since the rebuttable assumption is that the patent is valid and the defendant has to prove that this is not the case.
The expert witness for Sun Tech LTD, patent attorney Dr Goldreich, showed that there were a large amount of prior art, none of which was brought before the patent office.
Attorney Ed Langer appeared as expert witness for Hdro-Na, but since he wrote the patent and could not provide adequate justification for not relating to prior art, his testimony was found unreliable.
Judge Amit considered the Court of First Instance had been overly cautious in not canceling the patent in question, both on its merits and when considering the issue of equitable behavior with regards to the legal requirement of disclosing the prior art. He assumed that they not only withheld information from the court but also from their patent attorney. Nevertheless, he noted that he wasn’t required to relate to the validity of the patent since it could be shown that it wasn’t infringed.
As to various other claims by Hydro-Na, Judge Amit quoted Ecclesiastes (Koheleth) 7:14 ” It is good that you should take hold of this, and from that withhold not your hand, for the one who fears God shall come out from both of them.” Essentially, he dismissed them as “also ran”.
In conclusion, Judge Amit accepted the earlier court’s finding that ‘cold’ door forcing systems were on the market long before Hydro-Na’s application was filed. To the extent that Hydro-Na deserved a patent, it was for the rotatable ring which was not found in the competing system that won the tender. He noted that Hydro-Na failed to file abroad despite a market potential of NIS 150-225 Million Shekels and deduced that they were well aware that their patent was extremely narrow and easily invented around.
The appeal was unanimously rejected by a triumvirate of the Supreme Court consisting of Judge Amit (who wrote the appeal) and Judges Melzer and Solberg who affirmed his ruling.
Costs of NIS 50,000 were awarded to the Sun Hitech LTD and a similar sum to the Israel Ministry of Defense.
Civil Appeal: 7623/10 Hydro–Na et al. vs. Sun Hitech et al., 12 January 2014
The District Court applied the Gillette Test by declaring that the patent wasn’t restricted to the rotatable ring, it would not have issued.
The Supreme Court did a marvelous job citing the various sections of the Law and analyzing them. It was a little pedestrian and boring, so I haven’t reproduce in full.
I believe that the failure to disclose the prior art should have invalidated the patent and consider both Haifa Court and Supreme Court as being overly cautious in not doing so. What is the point of having a duty of disclosure if, on proof that the applicant withheld information, the court doesn’t invalidate the patent?
Whether or not Dr Goldreich was correct in her analysis that the rotatable ring wasn’t sufficient to be considered inventive, I wonder if there isn’t room for a procedure for referring a patent back to the patent office for reconsideration in view of additional prior art?
As to the registered designs, if Hydro-Na had sold them to the Israel Ministry of Defense prior to registering, they are invalid. Similarly if the same design is used by others. I haven’t read the original decision by Judge Zerankin but it seems that he considers such devices as inherently not-registerable, however, I think this understanding is incorrect. It is a shame that the Supreme Court hasn’t really addressed this issue, as although the Israel Patent Office has established practices regarding registering functional elements, there seems to be little binding legal precedent on this issue.
Finally, is it ethical for attorneys-at-law or patent attorneys that drafted and prosecute a patent give a validity opinion? Is there attorney-client privilege and is it considered waived when client calls on the attorney as an expert witness? It would have been nice if the Surpreme Court had taken this opportunity to provide guidance to patent attorneys in this matter.