Sony Clamps Down on Pirate Computer Games

March 26, 2015

Pirate
Sony Entertainment sued Azam Gever claiming copyright infringement and unjust enrichment, alleging that Gever’s computer shop “McKan Computers” on the main road through Osefiya sold fake disks with games for the Sony Playstation console.
In his defense, Gever claimed to be ignorant of the fact that the disks he was selling were not originals. If Gever could successfully convince that he was unwittingly distributing fake disks, he would not be held responsible. If, however, this defense collapsed, he would be held responsible for damages.
Sony claimed to have copyright in the Playstation and Playstation 2, and in software for the Playstation. They also claimed to own trademarks 95025 and 95026 for Playstation. Sony Entertainment Europe was responsible for distributing in Europe, the Middle East, Africa and the Pacific Rim and franchised distribution rights for the software within those territories, including Israel.
Playstation programs can only be played using the Playstation interface due to special encryption. Any copying, burning to disk of a Playstation game will, inter alia, include copying of the encryption which is copyright infringement of Sony’s copyright. Sony claimed that they are in a perpetual war to prevent their software from being pirated, and that they have spent enormous sums in advertising and promoting the console, They have copyright notices on the disks, on the packages, and appearing on screen.
The defendant did not deny selling pirate CDs but denied knowing that they were pirate copies. Sony sent a private investigator to the shop to see what was being sold. The private investigator and his son testified that they were both independently told that the programs were copies, and that the owner had shown a box of bundles of 50 disks, containing 3 or 4 copies of each game. The private investigator testified that he bought five different games at 10 shekels ($2.50) each, paid 50 Shekels and received a tax invoice for 50 Shekels that indicated thatit was for Sony II disks. The private investigator filmed the visit and submitted the footage as an exhibit. The games purchased included Beyond Good and Evil, Dragon’s Quest, God’s hand, Spy Hunter, and Fifa 2013.
The Plaintiff alleged that inspection of the disks showed clearly that they were fakes that infringed Sony’s Copyright since they were not in cardboard packages with shrink-wrapped cellophane or new DVD boxes and did not include instruction booklets. Unlike the originals, the disks did not have pictures on them and were not stamped with Sony’s logo and copyright notice. Sony sent a Cease & Desist letter and asked for the pirated disks to be handed over and for accounts to be produced for calculating profits and infringement revenue. The parties were, however, unable to come to an amicable settlement and so this case was filed. In the statement of case, Gever was accused of copying or creating fraudulent copies, selling or offering to sell these in the course of his business, offering to sell and holding fake copies thereby infringing the copyright, without permission of Sony and without compensating Sony.
In addition to the copyright charges, Sony alleged unjust enrichment under the law of Unjust Enrichment 1979 and various trade related torts for damaging Sony’s reputation.
Sony sued for compulsory damages of 100,000 Shekels per infringement under Section 56a of the Copyright Law 2007. Claiming years of fraud, Sony requested increased damages of 150,000 Shekels and also applied for an injunction against Gever to prevent him from selling fake disks directly or indirectly.
Gever laconically acknowledged ownership of the shop and that he’d sold programs against the tax invoice, but denied selling or trading in fake software. Gever further alleged that he’d bring expert witness that the software was genuine.
In the preliminary hearing, Gever repeated that the disks were genuine and that he was unaware of “the material”. In a second preliminary hearing he again requested to examine the disks. After the parties held a brief discussion, the attorney for the plaintiff stated that the defendant claims that he sells computers, disks is a mere sideline that produces at most, 1% of income and that if it should transpire that the disks are indeed fake, he was unaware of this. In Gever’s own statement under cross-examination, he complained that he wasn’t warned, that he only sells a handful of disks each month and never claimed that they were originals. His lawyer clarified that the intention was to state that his client was unaware that the disks were not real. Meanwhile, the private investigator testified that there were a number of disks with the name of the program marked in permanent ink and that when discussing Playstation 3, the vendor had stated that copying it was problematic. Gever claimed that there weren’t more than 30 disks and that this wasn’t a commercial number. He admitted selling computers for 13 years and that he had sold Playstations for at least a decade, but claimed to sell very little software.
Under cross-examination, Gever claimed to obtain and sell original software on a request basis and to sell a handful of fakes each month. Some his brother supplied, some a friend, not sure from where, some he’d copied himself. He denied selling 60 a year, or 600 over the decade. He considered this non-commercial as he had a limited range of maybe 20 games.
The plaintiff requested to correct the statement of case to request 250,000 Shekels damages, alleging that even at the rate of 5 disks a month, this adds up to hundreds of disks over a decade. (I feel a lawyer joke coming on. It seems that neither the judge, not the attorneys were able to do the calculation).
The defendant objected to the sum being corrected. He also alleged that for sales prior to the new copyright law coming into effect in 2008, the maximum statutory damage is 10,000 Shekels (or 20,000 Shekels for willful infringement.

RULING
Despite Regulation 92 of the Civil Court Procedures 1984 allowing extensive corrections to the statement of case to enable the point of contention to be clarified, correcting the sum after the hearing and before ruling is not allowed as it does nothing to clarify the legal issues and will merely protract the proceedings. The plaintiffs alleged that Gever had sold tens if not hundreds of fakes over a period of years and nothing had changed, so the maximum sum claimed remains 150,000 Shekels.
Judge Weinstein ruled that merely selling fake disks was insufficient to be responsible, but the seller had to be aware that they were fakes. In this instance, some he’d scanned himself, others were supplied from an unknown source so it seems clear that he was aware. Furthermore, a computer seller would be expected to be able to differentiate between originals and fakes. The price of 10 Shekels a game was also a fair indication that they were fake.
The private investigator’s footage showed boxes of 50 or more games, and this was a commercial number. The private investigator’s testimony was sufficient to indicate that the vendor was aware that the goods were fake. However, the issue is moot as during cross-examination he admitted copying some of the programs himself.
The problem, was, as always, the burden of proof required. After humming and hawing about the need to warn others not to copy, the admitted sales of small amounts over time and the evidence of 5 separate games, Ms Weinstein ruled damages of 50,000 Shekels and costs of 10,000 Shekels.
52260-01-14 Sony vs. Gever, Ruling Judge Weinstein 16 March 2015

COMMENT
The disks were sold in Osefiya by Shfaram. In the past, a DVD copying factory was discovered in Kiryat Ata.
Personally, I am inclined to believe that Gever sold very little software. Why should anyone not picky about purchasing originals pay 10 shekels if blank DVDs cost half a shekel and everyone has a disk burner?
Not allowing the sum claimed to be increased is one thing, but I think that on the burden of evidence and not requiring actual damages, but statutory damages, Ms Weinstein had sufficient evidence to rule the 150,000 Shekels damages. Not unreasonable for a sideline operating 10 years.


IL 157,035 – If one accused of infringing a patent does not challenge its validity, is the accused estoppeled?

March 8, 2015

Fig. 3Fig. 6

Israel Patent Number 157,035 is owned by Moshe Lavi. It relates to a shelf for the compressor of an air conditioning unit.

The main claim is as follows:

 A modular bracket for an air conditioner compressor, said bracket comprising a substantially rectangular frame composed of at least two portions, being “U” or “L” shaped provided with surplus holes allowing adjustments to suit the thickness of an air-conditioning compressor to be seated thereon, at least one further structure being attachable to said rectangular frame to provide support thereto.

The patent application was filed in July 2003 and issued in May 2007. In April 2014, Zach Raz, represented by Pearl Adv. filed a cancellation proceedings and, on 27 July 2014 Moshe Lavi, represented by Pearl Cohen Tzedek Latzer Barats filed a request to have the case thrown out.

Note, the Pearls concerned are different lawyers with the same name. To differentiate between them, we will call one firm Pearl and the other Pearl Cohen – Brats.

In an earlier dispute, 47000-02-12 Moshe Lavi vs. Zach Oz Air Conditioning LTD., the parties agreed to an out-of-court settlement in which the applicants for cancellation undertook not to infringe the patent, and, consequently, Pearl Cohen Brats argued that they were estopelled from challenging the validity of the patent.

At this stage Pearl Cohen Brats claims that Zach Oz never raised validity issues which are generally the first line of defense that infringers take, and at this stage, they are estoppled and it is too late for the them to challenge the validity of the patent whether or not the grounds for so doing were known at the time of the previous ruling.

Moshe Lavi represented by Pearl Cohen Brats further alleged that Zach OZ was behaving inequitably and was misusing the legal procedures. This argument was based on the compensation damages awarded in the out-of-court settlement were minimum as the parties were keen to put the legal battles behind them, and, were Moshe Lavi to know that the validity would subsequently be challenged, they would never have agreed to reducing the compensation.

Zach Oz argued that there was no positive declaration of validity or admission of validity in the court case or in the out of court settlement. They further argued that the grounds for invalidating the patent were only discovered after the out-of-court settlement. They further opined that throwing a case out without discussing its merits should only be considered in extreme cases where it is clear that the case is frivolous. Since the issue of infringement and that of validity are not the same, one cannot consider that the previous court ruling prevents the patent office from hearing the case.

Ruling

The Commissioner, Asa Kling noted that throwing out a case on a technicality without hearing it on its merits was an extreme step, and that the Israel Patent Office had an obligation to ensure the integrity of the patent register (see section 73b of the Israel Patent Law 1967) so that the validity of any patent that arguably should never have issued should be challengeable.

Citing Judge Zamir in Appeal 3833/93 Levine vs. Levine:

Access to the Courts is a constitutional right despite there not being a constitution and this right is not yet written into the basic laws, and the courts will uphold this right.

Judge Heishin in 733/95 Orpal Aluminium vs. Klil Industries LTD PD 51(3) 755, 628:

Access to the courts is a basic right as basic rights are commonly understood.
Furthermore, access to the courts is considered a basic right, even if not literally stated in the Basic Laws. It is the air that allows the courts to breathe and is the basis of the judiciary and of the rule of law.

In other words, Heishin was noting that the courts need to be able to hear cases to function and so were loath to throw cases out on a technicality.

Commissioner Kling accepted the need for finality, but ruled that the need for access to courts  and for cleaning the patent register by voiding  a priori non-valid patents was a greater need. He didn’t consider that civil procedures were merely for the benefit of the warring parties and there was an overriding national interest in allowing cancellation proceedings to be judged on their merits. Section 73b rules that such cancellation proceedings could be submitted by anyone.

Based on the statements of case, this instance was not one of those rare cases where access to the courts should be denied.

In paragraph 2 of the statement of case, Lavi (represented by Pearl Cohen Brats) stated that “the patent was granted on 12 May 2007 and is in force for all purposes”. In paragraph 14 of the counter claims Zach Oz represented by Pearl stated that the patent is in force until 21 July 2013, i.e. a further year. It seems that this was simply a misreading of the register. One cannot deduce from this that they accepted that the patent was inviolate and could not be challenged.

Since anyway, anyone can challenge the validity of a patent, and in so doing, serves the public interest, the whole concept of judicial estoppels is irrelevant and this skirmish is simply a waste of precious judicial time.

Essentially the infringer, can, of right, challenge the validity of the patent in the patent office whilst defending himself from allegations of infringement. The legislators intentionally allowed this and the estoppel simply does not exist.

It appears that Lavi (represented by Pearl Cohen Brats) are attempting to learn ex silencio assent to the validity of a patent whose validity was never formally asserted. Although Section 182 allows the alleged infringer to raise invalidity issues in his defense, he is not obliged to do so.

The mere fact that in the previous court case, there were vague references to validity issues, the court never addressed those issues and it cannot be construed that the previous court had affirmed that the patent is valid.

Citing Zaltzman in Court Actions 1991, , the Commissioner ruled that an out-of-court settlement undertaking not to infringe that was subsequently endorsed by the court cannot be considered as if the parties had accepted validity of the patent or that there was indeed infringement. They had merely decided not to bother to have an adversarial dispute that could create estoppels.

Arguably, the claim that the token compensation would not have been accepted had the patentee known that the validity of the patent would subsequently be challenged might be grounds for ruling that the agreement was broken or for claiming inequitable behavior in an appropriate forum but this could not be used to argue that the case should be thrown out without relating to the issues raised, thereby preventing the validity of the patent from being challenged in the patent office.

The Commissioner ruled that each side should bear their own costs for this request to throw out the case.

The patentee was given three months to relate to the validity issue.

COMMENT

Disclosure – Way back in 2007 when Lavi sued Zach Oz, I was approached by Soroker-Agmon on behalf of the defendant to give an expert opinion concerning whether the patent was infringed. I came to the conclusion that there was no infringement unless the claims would be interpreted so broadly that they would be voidable as lacking novelty (the Gillette Defence). I requested a minimal budget to search the prior art as it seemed clear to me that the patent was for a shelf bracket with a triangular brace and it should never have issued anyway. The budget was not forthcoming, and I never got to present my arguments of non-infringement in court as the defendant got cold feet and agreed to the out-of-court settlement so my arguments were never heard. It was and is my belief that the patent in question was not infringed, could easily be voided as lacking inventive step and, with a little searching, should be easy to show was anticipated. No substantive judgment was given.

The issue before the Commissioner was a legal one and was simply whether the arguments for cancellation should be considered on their merits, or whether the party requesting cancellation should be legally prevented from presenting their arguments.

The commissioner is, of course correct to throw out the request to throw out the case on a technicality. Furthermore, as the request was frivolous, and as noted by the commissioner, the request was a waste of Judicial resources, I think he was more than generous in ruling that the parties should bear their own costs.

I understand that back when the infringement case was filed, Zach Oz had minimal resources to fight the patentee and was effectively bullied into submission. As with the Source Vagabond case, a more vigorous defense would have been that the whole lawsuit was frivolous, that the patent was not infringed. Maybe now they’ll do what they should have back then and show that the patent never should have issued.


Trademark for Kappa Cigarette Brand Opposed

February 26, 2015

Kappa

Karelia Tobacco Company Inc filed Israel trademark application 213924 for the word Kappa (non-stylized). The mark covers cigarettes, tobacco and tobacco products, lighters, matches and smoker’s requirements, all in class 34. The application was filed in August 2006, and was accepted in March 2010 and published for opposition purposes. Basic Trademarks S.A. opposed the application. Basic Trademarks S.A. has a brand of sports clothing Kappa – with the logo shown above.

Among other grounds, Basic Trademarks attempted to amend their statement of case to oppose the registration on the Section 7a(d) of the Law to Limit Advertising and marketing of tobacco products. This attempt was thrown out based on a ruling that limiting cigarette advertising was not grounds for preventing a trademark from being registered. Furthermore, tobacco brands could not fairly be considered unregisterable under grounds of Public Order.

Kappa appealed this interim ruling to the District Court (Appeal 15171-02-11) who ruled that public order was a consideration. The statement of case was then amended. The sides submitted their evidence, but forgo the need for a hearing, allowing the Israel Patent and Trademark Office to rule on the Opposition based on the written evidence and submissions.

Opposer’s Case

The Opposer argued that they were a world leading clothing company that made shoes, clothing and head-wear for leisure wear, sports, and for sporty fashion. The mark was well known in the US, Europe, Canada, China and Israel.

The Opposer has 13 marks including the name Kappa in various classes, with and without the logo shown above, where the word Kappa is dominant. The Opposer claims to have invested significant resources in advertising and marketing, worldwide including Israel. The turnover reaches millions of Euros a year. The company promotes sports and international sports competitions.

Due to the advertising, Kappa is a well known mark, as the term is defined in Section 1 of the Ordinance, and thus under Section 11(14) the mark cannot be registered by others in other classes as this would create a linkage to the clothing manufacturer which would damage their reputation.

The mark was also not registerable under Section 11(6) as to register it would dilute the sports company’s mark, damage their reputation and be unfair competition.

Furthermore, following the appeal, the application should be refused under Section 11(5) as being against the public good – Section 7a(d) of the Law to limit advertising and marketing of tobacco products was legislated since tobacco is unhealthy. Finally, the applicant had not actually sold tobacco products under the Kappa brand and so would not suffer significant losses from having the mark refused.

Applicant’s case

Karelia Tobacco Company Inc argued that Kappa is famous only for the word together with the back to back male and female and the word itself is not well known.

Trademarks and branding for cigarettes is allowed in Israel and so public order considerations should be considered irrelevant. The word Kappa is similar, but there is no conceptual relationship between the goods. (What the argument is really saying is that since Kappa promotes a healthy sporty image and cigarettes don’t fit into that image, noone would think that Kappa cigarettes are a product of the sporty fashion company. Both marks are used with other elements and the possibility of damage to Kappa sportswear from Kappa cigarettes is not proven.

The distribution channels and customer base is very different. Kappa is a Greek letter and like Delta, although can be monopolized, cannot be monopolized across classes. For example, the word Kappa is in use by third parties in the print industry.

Both in Israel and abroad the same mark may be used for cigarettes and for sports goods with both marks coexisting. (This argument is plausible, however, no examples are given).

In conclusion, applicant rejects claims of confusion, unfair competition and dilution, and argued that Kappa had not proven that their mark is well known in the meaning of the term as far as well known marks is concerned. Furthermore, the advertising limitations on cigarettes cannot be applied to prevent the mark from registering.

Kappa submitted evidence of turnover and advertising expenditures and a Wikipedia excerpt concerning fashion cigarettes.    It seems that Yves Saint Laurent, Givenchy, Versace, Pierre Cardin, Christian Lacroix and Cartier have, at one time, each allowed their name to be linked to cigarettes. It was argued that sine fashion brands do allow their names to be used with designer perfumes and cigarettes, a cigarette with the same name as a fashion brand could be considered as linked to the fashion brand, creating a confusion regarding origin.

The Ruling

Citing precedents, the Adjudicator Ms Shoshani Caspi ruled that in oppositions, the burden of proof lies with the Applicant. Nevertheless, the Opposer has to base their opposition on facts.

The parties forgo a formal hearing with cross-examination and allowed the Adjudicator to rule on the evidence submitted.

Firstly, Ms Shoshani Caspi examined whether Kappa could fairly be considered a well known mark for fashion at the time that Kappa was filed for cigarettes, allowing it to prevent marks from being registered in additional classes, i.e. not just for fashion accessories.

The determination of whether Kappa could be considered a well-known mark was based on market penetration in the relevant population sector, the extent of usage of the mark and its longevity, long term advertising, inherent distinctiveness, whether the mark was in exclusive use and to what extent the owners of the mark invest in combatting infringers. The mark had to be considered well-known in Israel and not just abroad.

Al the evidence pointed to the mark being well known, despite the fact that generally the name Kappa is generally used together with the logo. The mark has been in use since 1969 and is mostly used in connection with sporty clothing. The opposers have an international portfolio of 600 marks including the word Kappa alone, not just as part of Robe De Kappa or together with the emblem. They have sponsored various football teams in Italy, Holland, France and Spain. The brand has millions of dollars of annual income from sales in Israel and has sponsored various local football teams including HaPoel Tel Aviv and Betar Jerusalem.  Thus the KAPPA mark was well-known in Israel as well.

The second issue is whether, due to the phenomenon of fashion cigarettes, whether the public would identify KAPPA cigarettes with the fashion brand. Here, when extending a mark into new categories of goods, there is a need to act sensitively and to weigh up the interests of the competing parties.

Ms Shoshani Caspi was impressed that both fashion and cigarette usage are susceptible to trends and found the phenomenon of fashion cigarette branding persuasive.

The fact that the cigarette brand had not yet launched strengthened this, and she was also convinced that a brand associated with the fashion house could do harm to the fashion house’ image.

Since the fashion house had a sixty year history and the cigarette company could not provide any reasonable explanation for the choice of name, she suspected inequitable behavior and considered dilution a real possibiliity.

In conclusion, MS Shoshani Caspi ruled that the Kappa fashion mark was well known, that fashion and cigarettes could confuse confusion and dilution and rejected registration of the Kappa brand for cigarettes and rejected the registrations under Section 11(14 and 11(6).

Ruling re Opposition to by Kappa clothing to Kappa as Israel Trademark 213924 “Kappa” for cigarettes, Ms Shoshani Caspi, 22 January 2015

 

COMMENT

The fashion brand argument ignores the fact that haute-couture and sports goods are not the same, and that fashion cigarettes are a relic of a bygone era when smoking was certainly socially acceptable, but more was actually considered cool and sophisticated, and not just among teenagers. Put another way, when cigarettes were fashion accessories, fashion houses were happy to have their names associated with cigarette brands. That is not the case now, as evidenced by Kappa’s arguments. That said, the decision seems reasonable.

 


YES!

February 18, 2015
Yes!

Yes!

DBS Satellite Services 1988 LTD provides satellite television services in Israel that are branded as YES. The Service is licensed by the Communications Ministry.

DBS Satellite Services 1988 LTD sued the brothers Ahmed and Amar Hamuda for trademark and copyright infringement and damages, requesting the following sanctions:

  1. A permanent injunction against the defendants to prevent them from distributing, marketing of selling pirate transmission of the Plaintiff, to cease using the plaintiff’s trademarks, including in third party publications. They requested an injunction against them using the plaintiff’s equipment, or equipment supplied by the plaintiff to their customers, for any but personal use, and to cease any non-personal use immediately.
  2. An order to the defendants or to the receiver to destroy all equipment that enables copyright infringement and all material carrying the YES logo.
  3. An injunction to remove YES’ registered trademarks from the FACEBOOK page for Acre Satellites and from all other publications.
  4. A request to reveal accounts going back seven years.
  5. Statutory damages of 700,000 Shekels under Section 56a of the Copyright Act and Statutory Damages of 100,000 Shekels for trademark infringements (claiming single infringements merely to reduce the court fees) and double costs as a punishment for willful infringement.
  6. Alternatively, compensation of 1,900,000 Shekels for Unjust Enrichment,  (the figures capped to reduce the court fees).

These injunctions were granted by Judge Zernkin, and following the Anton Pillar injunction, equipment and computer records were seized and a summary report was filed to the court by the receiver.

The injunctions were kept in force until the end of proceedings, and for the purposes of the hearing, an order to produce documents and to fill out questionnaires was issued.  This happened in the presence of the defendants who then failed to respond. Consequently, using powers under Section 122 of the Civil Court Procedure 1984, the court ruled that the statement of defense be struck from the record. It is noted that the statement of defense was a mere denial without any explanations.

In a ruling of 27 December 2014, Judge Orit Weinstein requested that the Prosecution supply evidence to substantiate their case and on 15 January 2015 they submitted evidence and affidavits of private detectives, by the VP (Engineering) of YES and the Head of Development at YES.

Based of the evidence submitted, Judge Weinstein ruled that there was sufficient grounds for a judgment against the defendants:

The Defendants broke the security encryption of the satellite transmissions and created a pirate industry, marketing and selling YES’ transmissions piratically, without paying YES, and by undercutting YES’ prices, free-riding on YES. YES’ copyright was infringed by the packaging of the transmission channels and the content, and YES’ trademarks were infringed by being used without permission and illegally.

Consequently, Judge Weinstein ruled that the temporary injunctions would become permanent injunctions, that all equipment be destroyed, following the receiver declaring that he was not holding any assets, there was no need to issue an order against him. The FACEBOOK page should be amended and so should all other publications so as not to include the trademarks of the plaintiff. Judge Weinstein further ruled statutory damages of 700,000 Shekels for copyright infringement and of 100,000 Shekels for trademark infringement, 10,000 Shekels expenses and 40,000 Shekels legal costs.

Civil Proceedings 111147-10-13 DBS Satellite Services (1998) LTD vs. Ahmed and Amar Hamuda.

COMMENTS
I have no sympathy for the defendants in this case. Nevertheless, although the ruling seems very reasonable and the defendants didn’t exactly defend themselves, in the hands of a good lawyer, they could have raised a number of interesting questions. Free riding is not a crime. YES probably does not own very much of the copyright in their transmissions and creating a copyright in a package of channels is stretching things a little. In a recent Supreme Court Ruling concerning parallel imported Tommy Hilfiger shirts here, the Supreme Court allowed the parallel importer to advertise that it was selling Tommy Hilfiger shirts, but not to claim that it was a registered supplier, and to inform customers that they were not entitled to warranties from the official suppliers.  Can one really prevent someone from using the word ‘yes’ on their facebook page or in advertisements?

pirate

Piracy is the crime of boarding shipping on the high seas that is punishable under international maritime law by requiring the pirate to walk the plank.

Arguably with regular TV transmissions, there is a case for Ministry of Communications regulation to divide the radio frequencies into separate bands and to prevent channels interfering with each other. I am not sure that for digital signals sent by satellite this is the case. Certainly government tenders have been abused. The tender for commercial radio that then Govt. Minister Shulamit Aloni put together was designed to prevent Arutz 7 from obtaining a license. The same politicians who called the Arutz 7 team pirates and warned about pirate radios risking plane crashes lauded the late peace activist Abu Natan and his pirate radio ship the Voice of Peace and nominated him for a Nobel Prize. When the Supreme Court voted en banc against Arutz 7, without a dissenting voice even mentioning the value of free speech, it was clear that things have deteriorated a long way since Agranat’s deicison re Kol HaAm.


Registering Designs for Garments

February 9, 2015
Fashion is an industry where the innovator benefits from a lead time as first mover, but most manufacturers follow trends and though designs may be registered, usually they are not. Copyright may protect exact copying, but generally this is also not an appropriate tool.
Recently, the international fashion brand Diesel, represented by Adv. Daniel Freimann, managed to obtain an injunction against Israeli clothing retailers Hoodies for copying a design of jeans.
Diesel's jeans are shown here:

 diesel from front  diesel from back

Hoodies jeans are shown here:

hoodies from front   hoodies from back

Diesel’s design has a high waist, are form hugging and have stitching extending from the bottom of the pockets, at the knees and at the back of the legs.  

This stitching detail is somewhat unique. Hoodies claimed that their jeans were not a copy, and were considerable cheaper and noted that the decorative stitching on the back pocket was somewhat different. They also argued that the Diesel’s design was for blue and white jeans only. The judge accepted that the back pocket stitiching was different, however, since Hoodies’ jeans had the same basic shape and included such stitching. 

Diesel had filed design applications (nos. 50526 and 51929 and claimed 11 and 9 novel features respectively. Hoodies argued that their jeans did not have all the elements. The judge considered that the issue is one of the impression of the garment as a whole and not one of analyzing novel features against a checklist. 

Hoodies accepted that Diesel had a reputation, but not one for the specific design. Since their jeans were sold at about 15% of Diesel’s prices and since the design was not well known, there was no case of passing off or likely consumer confusion. 

As to the registered design, Hoodies claimed that prior to it being filed, the jeans were on sale, so the design registration was void.

Judge Yaakov Shepser of the Central District Court noted that despite the differences, Hoodies had produced no evidence that there were other jeans on the market that were in this style, and that Hoodies’ jeans included at least 4 or the 9 new design elements. The judge also considered that there was a likelihood of consumer confusion. The Judge therefore ruled an injunction against Hoodies.

Hoodies claimed that as a basic Israeli clothing company, they were ‘honoured’ that Diesel had taken note of them.

 COMMENT

If Hoodies can show that the registered designs are void due to publication prior to filing, or at least that the stitching on knees, front pocket and back of trouser leg was used in Diesel or other jeans prior to the design registration, I think they should prevail.

If, however, there are valid design registrations for these features, I think the judge is correct that combining them with different decorative pocket stitches should still be considered infringing

 


Can post priority-date publications that describe clinical practice be considered prior art?

February 5, 2015

exforce

Israel Patent Application No. 140665 to Novartis tited “Use of Combiantion Compositions comprising Valsartan and Amlodipine n the preparation of medicaments for the treatment and prevention of diabetes related hypertension” relates to preparations including  Valsartan and Amlodipine for treating high blood pressure and diabetes.

The application was a national phase of PCT/EP1999/004842 from 9 July 199 and claims priority from an earlier US patent application.  The patent was allowed and published for opposition purposes on 23 December 2012 and is being opposed by both Teva Pharmaceuticals LTD. and by Unipharm LTD.

The Opposers submitted an expert opinion from a Professor Chimlichman to the effect that the combination was known from various publications and his treatment of hyper-tension and thus were lacking novelty at the priority date.

On response to evidence by the Applicant, the Opposers submitted a second opinion in which he relied on two publications from after the priority date to determine novelty and inventiveness at the time of the priority date. Since these publications were not prior art, the Applicant requested that they were deleted from the opinion and expunged from the record.

Professor Chimlichman claimed that his treatment before the priority date was supported by GYH Lip et al., “The `Birmingham Hypertension Square` for the Optimum Choice of Add-in Drugs in the Management of Resistant Hypertension”, Journal of Human Hypertension (1998) 12, 761-763. Whilst the publication itself was certainly published after the priority date, it relates to clinical tests using the combination of the two drugs and must have been written prior to being published and describes what the authors knew prior to the priority date.

Furthermore, a response to Lip et al. subsequently published in the same journal provides additional evidence that the combinatory effect was known.

Whilst accepting that the two publications were not themselves prior art, the opposers argued that they indicate the state of the art at the priority date and should be examined on their merits and not expunged from the record. Furthermore, the additional evidence was brought in response to statements my Professor Daloph, the expert witness of the Applicant.

The Opponents cited Unipharm vs. SmithKline Beechan and Orbotech vs Camtek to support their argument that the papers should be examined on their merits.

The Ruling

Opposers are limited in what they can submit in response to the patentee’s evidence. They are not allowed to widen the statement of case. In this instance the additional evidence is supplementary evidence to support their main grounds of opposition, i.e. that the combination was known. There is no evidence given to explain why these papers weren’t submitted in the original round of evidence. The Opposer submits his evidence first and is entitled to respond to the counter-evidence. This gives him a procedural advantage and allowing the submission of additional evidence that could have been submitted in the first submission unfairly disadvantages the applicant.

In this case, the additional information is not prior art in the public domain, or it would not have been accepted for publication. It post-dates the application and is, therefore, not prior art. The Deputy Commissioner did not consider this material as indicating what was widely known prior to the priority date. The Opposers are trying to use the citations of Lip to show what was known prior to the priority date, and to do this, they should have submitted these citations in their statement of case.

Whilst not wishing to rule out using a paper that provides history of what was known earlier, the Deputy Commissioner warns against the danger of a hindsight bias and of reading the authors conclusions into the prior art.

As to the Opposers argument that the Applicant should have submitted an affidavit to support the evidence, Ms Bracha rejected this as the dates are not contested and so an affidavit is unnecessary.

In conclusion, Ms Bracha ruled that Sections 25-26 and 86-88 of the second opinion should be deleted. Legal costs of 5000 Shekels were ruled against the opposers.

COMMENT

In the DSM  vs. Mifalei Migun case, Judge Judith Schitzer of the District Court correctly ruled that one does not have to submit an affidavit with every piece of evidence or statement, so the Deputy Commissioner is correct on this account.

As to the late submission of evidence however, I think that the Opposers can fairly be penalized for not timely submitting these papers by having interim costs awarded against them for not submitting the evidence earlier, but the evidence should be related to substantively if it testifies to what was practiced prior to the patent being filed and not thrown out on procedural grounds. Ultimately the purpose of the Opposition proceeding is to clarify novelty and inventiveness to protect the public interest. If a drug becomes patented and should not be, the public will pay monopoly prices. Sure, the opposers have to answer as to why these papers were submitted late. Maybe the applicant should be given a second chance to respond and compensated for delays, but I disagree with this decision to throw out what could be key evidence.


Plasson

January 25, 2015

PLasson

Plasson manufactures pipe couplings. Unidelta launched a competing product and Plasson claimed patent infringement of their patents IL 125899 and IL 127327 and passing off and requested an injunction. The District Court accepted the charges that the “main point of the patent” was infringed and issued an injunction preventing the manufacture, import or sale of Unidelta’s pipe connections in Israel as they are a copy of Plasson’s product. On Appeal, the Supreme Court overturned the finding of patent infringement and referred the case back to the District Court. The Supreme Court ruled that where the similarities between the allegedly infringing product and the patented invention lie in features that are in the public domain, there can be no case of infringement.

Background

In addition to literal infringement of the claims of a patent, Section 49 provides grounds for legal remedies where the kernel of the patent is copied. This is rather like the “pith and marrow” doctrine in the UK. Essentially, the Law provides remedies where claim infringement is avoided by a technicality, and may be seen as similar to the doctrine of equivalents. Arguably contributory infringement and inducement to infringe may be considered as judicial extensions of this doctrine. It is important to allow general inventing around, but to avoid situations where poor claim drafting can result in no literal infringement of the claims.  What the Supreme Court has done is to clarify the extent of application of Section 49.

Ruling

Judge Meltzer of the Israel Supreme Court ruled that Section 49 provides monopolistic powers to the patentee to prevent literal infringement of the claims defining the invention and also similar products / processes that infringe the kernel of the invention. In this instance, both parties accept that there is no literal infringement so the only issue is the kernel of the patent. The kernel cannot be wider than that described in the Specification and, where the patent is for a device or system comprising a combination of known parts, the kernel of the patent cannot include the parts themselves. In this instance, the District Court did not address the question of what the kernel of the patent is, and without identifying the kernel of the patent, it is impossible to establish that this is infringed by Unidelta’s product. Once the kernel is established, the court must consider whether the infringing product operates in a similar way to achieve similar results.

The Supreme Court ruled that the patent issued because of a limiting feature added to the other components.

The main claim recites:

“1. A pipe coupling comprising a tubular housing having an axial bore adapted to receive a pipe end to be coupled and having an externally threaded housing portion and an inner housing abutment; a pipe gripping sleeve having formed therein a plurality of substantially equiangularly distributed, axially directed slits extending from a first end thereof to a region adjacent to but spaced from a second and opposite end thereof thereby defining an integrally formed, axially distortable, ring-like sleeve end portion, a first axial portion of said sleeve, through which said slits extend, tapering externally from a peripheral, outwardly directed flanged portion towards said first end and being formed with a plurality of inwardly directed, axially spaced apart serrations; a tubular collar having a first inner axial portion tapering from an inner collar abutment to a first end of said collar and a second inner axial threaded portion extending from said collar abutment to a second and opposite end of said collar; and a flexible sealing ring; the arrangment of said coupling being such that with said pipe end extending through said collar, sleeve, sealing ring and housing, said collar is screw fitted on said housing, said sleeve is located in said housing and said collar with said flanged portion located between said collar abutment and an adjacent end of said housing and said sealing ring is located between said sleeve ring and said housing abutment; screw tightening of said collar on said housing causes the respective tapering portions of the collar and sleeve to be mutually displaced with the gripping contraction of said sleeve about said pipe end and the axial compression of said sealing ring about said pipe end”.

Plasson’s patent is for a ring fitting that includes a wide and flexible ring that enables different sized pipes to be attached together in one smooth motion without dismantling the connector. Since Unidelta’s system did not include this limiting feature, but merely combined pre-existing components to create an alternative pipe fitting, there was no infringement of the kernel of the patent.

Quoting from the specification:

Pipe couplings of the type herein described, which are presently in wide-spread use, normally require pushing the pipe through the seal (typically an O-ring) in the bore of the body member in order to achieve compression of the O-ring on the pipe, and thus a leak free joint. However, for pipes of large diameters, the operation of pushing the pipe through the O-ring seal requires a large force, making the operation very difficult, and sometimes even necessitating an extra operation of chamfering the pipe end for this purpose.

A further disadvantage in the pipe couplings of the type herein described now in use is that such couplings do not tolerate substantial variations in the pipe diameter so that precise pipe diameter tolerances must be maintained, or a large number of different-size couplings must be produced for the different diameter pipes to assure good sealing and gripping actions”.

“…a pipe coupling constructed in accordance with the foregoing features provides a number of important advantages including: convenient assembly, since the particular seal, in its relaxed condition, introduces very little resistance to the forceful entry of the pipe during assembly; …increased diameter range of pipes capable of being coupled, since the two-ribbed (or three-ribbed) sealing ring can accommodate substantial differences in diameter sizes…”.

This emphasizes that Plasson did not invent the only pipe coupling for joining pipes of different diameters, and there patent was limited to one that is easy to seal due to little resistance.

As to passing off, the Supreme Court was critical of the District Court for finding this without explanation of why they considered that this was applicable. The Supreme Court referred the case back to the District Court for further consideration on this issue.

Judge Meltzer established costs against Plasson of 75000 Shekels.

Judge Miriam Naor (now president of the Supreme Court) commended Judge Melzer on reducing the issue to non-technical matters without technalese that regular people could understand.

Appeal 6750/10 Unidelta vs. Palson, Supreme Court 18 December 2014

COMMENT

One wonders who the non-technical people are in this case, plumbers or the President of the Supreme Court? Is the technical issue here flanges and pipes, gaskets and washers, or non-literal infringement, pith & marrow and other legalese?


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