June 17, 2013

Cube

I received an email from an Israeli Patent Attorney last week with the rather inflammatory heading “is the Rasham [Israel Registrar of Patents and Trademarks MF] an idiot or was he bribed?”

Somewhat intrigued, as the patent attorney in question is one of the most intelligent people I know, I opened the email to see what was bothering him.  The email contained a link to an article in the business newsletter “Calcalist” to the effect that a company called Seven Towns had received trademark protection for the Rubik’s Cube, and an Israel IP law firm was sending out Cease & Desist letters to various toy shops with requests for damages. The article in question is to be found here.

From Wikipedia:

Rubik’s_Cube is a 3-D combination puzzle invented in 1974[1] by Hungarian sculptor andprofessor of architecture Ernő Rubik. Originally called the “Magic Cube”,[2] the puzzle was licensed by Rubik to be sold by Ideal Toy Corp. in 1980[3] via German businessman Tibor Laczi and Seven Towns founder Tom Kremer,[4] and won the German Game of the Yearspecial award for Best Puzzle that year. As of January 2009, 350 million cubes had been sold worldwide[5][6] making it the world’s top-selling puzzle game.[7][8] It is widely considered to be the world’s best-selling toy.[9]

Reading the article, and reading between the lines, it appears that the patent attorney in question (i) believed that the Israel Registrar had granted a three dimensional trademark for Rubik’s Cube, and (ii) considered this ridiculous.

In an earlier article I discussed a recent decision by the patent office to grant a three dimensional trademark for the Crocs  beach clog, and so could see how my colleague was envisioning a product that had not been patented or registered as a design back in  when it was invented, could somehow, after decades of being considered in the public domain, become private property, enabling a trademark registrant to sue third parties. (The Interlego decision makes it clear that 3D Lego bricks are not protectable by copyright, so we can assume that Rubik’s Cube isn’t either).

However, before assuming that the Israel Trademark Office had got it wrong, I checked the database. There are actually two trademark entries owned by Seven Towns, both covering the same mark, but in different classes. The mark in question  IL 228232 is reproduced below.

IL 228232

The mark covers three dimensional puzzles in class 28, but is not a three dimensional mark. It is a 2D visual representation of a cube. Of course, to be drawn on paper it has to be, but there are accepted ways of showing three dimensional designs on a flat piece of paper. One can show top, bottom, left, right, front and back elevations, with a perspective view. That is how design applications are filed. That was not done here. More importantly, there is no indication in the certificate that the trademark is for a three dimensional object.

We note however, that the mark issued under Section 16 on the basis of a foreign registration (European Community Trade Mark No. 162784), which arguably is for a three dimensional cube. That mark is under cancellation proceedings.

If the mark, whether 3 dimensional or flat, is used as an indication of origin, it may be what could be considered as trademark infringement.

According to the Calcalist the lawyers who are going after toy vendors include Adv. Noe Shalev Slyomovics, (pronounced Noach Shmulovits, and usually spelled that way in this blog, but I have copied his preferred Hungarian spelling from his business card).

Noe Shalev Slyomovics is the former Israel Deputy Commissioner of Patents & Trademarks. He returned to private practice after Adv. Assa Kling replaced Dr Meir Noam as Commissioner.

I sent Adv. Noe Slyomovics an email, and it transpires that he was able to convince the trademark office that making cubical shaped “Rubik’s Cubes” is arbitrary, since there are a number of other options that use the same mechanism and achieve the same result. Some examples of alternative “Rubik’s Cubes”, courtesy of Adv. Slyomovics are depicted below:

dsc02227 (1)dsc02349

There are also a number of similar sliding puzzles that are not actually 3×3 cubes, but use different mechanisms.

Adv. Slyomovics considers Rubik’s 3×3 cube choice as arbitrary and equivalent to the others, and successfully argued that like the Toffiffee candy or the Ferrero Roche praline, Rubik’s cube was entitled to trademark protection, and there are legitimate grounds to badger other toy manufacturers.

I disagree. I consider the fact that all the equivalent puzzles are generically referred to as spherical cubes and similar oxymora, is indicative that the cube is the natural shape and the variations are inferior. As with Crocs-  , I believe that the puzzle should be in the public domain as it was not protected.

Apropos, I also have problems reconciling Gronis’ Toffiffee decision with the Apropo-(bugles)  decision.


June 13, 2013

Car Flag

This case, concerning sales of flag poles for attaching flags to cars, that infringed a registered design, is a landmark case, in that this is the first time that the Israel Supreme Court has ruled on damages for design infringements. With the high-profile Apple vs. Samsung case in the US and Europe, and a new Israel Design Law in the works, this ruling is a significant one.

The case relates to a subcontractor who was contractually bound to use a supplier’s mold for fabricating plastic flag holder staves for hanging flags from cars. The design of the flag holder staves was registered. In the aftermath of the 9/11 disaster in the US, there was a tremendous demand for car flags as a sign of patriotism and empathy, and the subcontractor decided to make and supply such flag posts directly, bypassing the supplier.

The Case

They Appellant supplies flags on flagpoles, including flags on poles that are attachable to the windows of cars. These are very popular in Israel around Independence Day. The appellants have registered designs for car flag poles, The defendant, Super Plast Company Ltd., makes plastic products, and the second defendant is its owners. Super Plast signed an agreement with the appellants to manufacture car flag poles for them, in accordance with the registered design and using a mold for injection molding the car flag poles that is owned by the Appellant.

Following the 9/11 disaster, there was a surge of patriotism in the US that created a demand for flags and flagpoles, including car flags and car flag poles and the Appellant ordered more poles from Super Plast. However, Super Plast manufactured and sold approximately 1,000,000 flag poles directly to customers, in contravention of their contract, and in infringement of the registered design. They didn’t have time to fulfill the Appellant’s order, since they were using the appellant’s molds to manufacture flagpoles for third parties.

District Court’s Decision

The District Court set the damages due to the appellants by the defendant at NIS 200,000 or about $55,500, based on a calculation of 1 million infringing car poles being sold at a profit to Super Plast of 20 aggarot (about 5.5 ¢)  per pole.

The appellants claimed that the District Court erred in quantifying the damage as the profits made by the infringers – their unjust enrichment, but should be calculated on the basis of potential sales lost by the appellant, which they’d estimated as NIS 3.8 per product for a flag on a pole. According to appellants calculation, the damages should have been NIS 3,600,000. Alternatively, and noting that the defendants had provided partially records only, appellants claimed compensation without proof of damage as provided for in Section 13 of the Commercial Wrongs Act, at NIS 100,000 per infringement, and since defendants had dispatched 36 separate orders for flag poles over the 5 1/2 months period from 9/11 over which there was a high level of demand, the appellants reached the same sum of NIS 3.6 Million in statutory damages without proof.  The defendant accepted the district court’s ruling and noted that the issues were essentially factual and that the Court of Appeals rarely got involved in such issues.

The Ruling

The Supreme Court held that Section 37(2) of the Patent and Design Patent Ordinance – which deals with infringements of registered designs allows calculation of damages based on damage caused to the rights owner, i.e. the loss of potential profits that could have been made or compensation based on the infringer’s actual profits, (unjust enrichment).

The Supreme Court noted that it had never ruled on registered design law before, and believed that there were three main questions:

  1. What are the principles for calculating compensation for the to the owner of the design patent? Can compensation be granted on the basis of loss of profit caused to the designer or should it be based on actual profits of the infringer?
  2. Will compensation based on lost profit be calculated according to real profit loss or to potential profits lost? of profits? Specifically, should the compensation for infringement be based on estimated real damages caused to the appellants as a result of them not selling the flag poles, or should the damages be calculated on the basis of lost profits from not being able to sell a million car flags on their poles.
  3. Should the Court rule statutory compensation without proof of damage as a substitute remedy, and what constitutes an infringement? Specifically, should separate batches be considered as separate infringements, or should the whole case be considered as one registered design being infringed?

Since the current archaic ordinance is a leftover from the period of the British Mandate, the Supreme Court considered it reasonable to adopt common law principles and ruled that the Patent and Design Patents Ordinance should be interpreted to allow compensation for breach of right in registered designs on either the basis of loss of profits to the rights holder, or of infringer profits, which ever is higher.

In lieu of Israeli precedents, the ruling brought comparative analysis from UK and US case-law, including classic British cases relating to the equivalent of the Mandatory Ordinance still in force. The ruling quoted from American Plywood, the classic US case that relates to damage calculations, and also to the recent Apple vs. Samsung design cases.

The Supreme Court ruled that where a registered design owner bases a claim on lost profit, it is necessary to prove a causal link between the loss of profit claimed and the infringing act. For such proof, in line with the general Israel case-law on torts, the Supreme Court ruled that there is a requirement for the profits to be foreseeable and listed four conditions that are required to be fulfilled:

  1. proof of market demand for the product covered by the registered design
  2. lack of substitute products in the relevant market
  3. the plaintiff’s ability to supply the demand
  4.  the per unit potential profit loss to the registered designer

The Supreme Court went on to analyze the case in accordance with these principles and ruled that:

  1. a partial demand for the product, i.e. pole with flag, was proven, but that at least some of the flag poles sold would have been sold to manufacturers who would have assembled the flag and pole combination themselves. Indeed, the appellant had been known to sell flag poles only.
  2. the registered design is unique in the relevant market
  3. the lack of the designer’s ability to supply the demand stemmed from the defendant’s independent sale
  4. Fourth, during the high demand period following 11/9 events, sales of poles reflected the market demand for the whole product (pole+flag) and it was proven that, absent the infringements, the appellants would have sold the poles and flags in a similar amount as the defendants did.
  5.  This was constituted the basis in damage to the appellants for calculating the amount of compensation.

The Supreme Court found that, but for the infringement, the appellants would have sold at least 250,000 units of the whole product but no more than 377,100 units, these numbers being based on orders and inquiries to the appellant. It was noted that there were other car-flag posts on the market of other designs, and that eventually cheap car flagpoles were available from China. On the basis of this range, which indicates that potentially somewhere between a quarter and a third of flag poles would have been sold as whole units, but noting that the registered design didn’t actually cover the flag+pole but the pole only, for calculation purposes, the Supreme Court estimated the number of flag+Pole combinations that would have been sold was 300,000. However, the estimated profit of sales of pole + flag was NIS 2.65, since there were costs involved as well, thus, the loss of profit for appellants was estimated as being NIS 795,000.

In addition, there were a further 700,000 poles that the infringer made and sold, and the appellant was entitled to the unjust enrichment from these, which was calculated as a further NIS 121,006 due to unlawful production of poles prior to 11/9 attacks.

As for the statutory compensation, the Supreme Court ruled that in the specific circumstances there is no justification for ruling statutory damages  since there is a way to remedy the appellant based on loss of profits.

In conclusion, the total damages awarded were NIS 916,006, to which was added a NIS 150,000 in legal costs.

The case: Appeal to Israel Supreme Court, Ronit Digley Umot Ltd. v. Rony Shatan (Hon. Jdg. Solberg, May 13, 2013).

COMMENTS

Apart from the fact that this is the first time that the Supreme Court has addressed the issue of calculating design damages, we suspect that with the recent high profile Apple vs. Samsung cases concerning the design of smart phones, the judges couldn’t resist having their say.

In Apple vs. Samsung the functionality of a product is copied, and the design is part of a trend towards general simplification of design. The Apple i-Phone was certainly an inspiration of the Samsung design, and whether or not a court finds an allegedly infringing smart phone as too similar to a registered design in Europe or to a design patent in the US is merely a matter of whether it is too similar. It must be appreciated that there are arguments for both sides – which is probably at least contributory to the European and US courts reaching different verdicts. In this case, a subcontractor knowingly used a mold belonging to the plaintiff. This is a case of willful infringement that in the US would probably carry triple damages. Noone who follows this blog will accuse me of being anything a fan of A.Sh.I.R. and I believe that to obtain protection one should register one’s design. I am an unrepentant formalist. Nevertheless, in a case like this I see a justification in allowing claims of Unjust Enrichment, since the defendants willingly abused their contractual obligations to make a fast buck.

The issue of profit to infringer or loss to supplier is a general one. For example, the US calculates the value of infringing products originating in China in terms of value on arrival in the US, whereas China argues that the cost on exiting China should be used. The US suppliers sell the goods at about 10 times what they pay for them in China.


Teva to pay out $1.6 Billion to Pfizer and Takeda in Damages for Infringing Patent for Protonix.

June 12, 2013

protonix moleculeProtonix

Protonix is a heartburn treatment that was developed and patented by Nycomed which was later purchased by Japan’s Takeda Pharmaceutical Co.  Nycomed had licensed Protonix to Wyeth, which Pfizer subsequently  purchased.

Israel’s Teva Pharmaceutical Industries Ltd. and India’s Sun Pharmaceutical Industries launched at-risk generic versions of Protonix. Teva started selling its generic version of Protonix in December 2007. Sun then launched its own version in early 2008, both before the U.S. patent covering the drug expired in 2011.

back in 2010, a jury decided that the patent protecting Protonix was valid, and the U.S. District Court for the District of New Jersey then upheld that decision. A settlement was reached shortly after the start of a federal trial to determine damages. Under the settlement, Teva Pharmaceutical Industries Ltd. will pay $1.6 billion while India’s Sun Pharmaceutical Industries Ltd. will pay $550 million in infringement damages, for selling their generic equivalents of Protonix before the expiry of the patent protecting the drug. According to Associated Press, Pfizer Inc. will apparently pocket 64% of the settlement.

Gives you heartburn, doesn’t it?


Alternative Dispute Resolution

June 11, 2013

ADR logomore ADR

I’ve just been to a most enjoyable, informative and stimulating one day mini-conference on 6 June 2013, on the topic of Alternative Dispute Resolution that was hosted by the Hebrew University, in Bet Mayersdorf, on their Mount Scopus campus. The event was cosponsored by WIPO and the Israel Patent Office.

The conference was organized by Dr Guy Pessach, and kicked off with welcome remarks from Professor Yuval Shany, the Dean of the Law Faculty.

asa kling (cropped)The Commissioner, Assa Kling, then spoke. He rather confusingly kept relating to the Patent Office, which seemed a little unfair after all the effort exerted by his predecessor to change the name of the the Israel Patent Office to Israel Patent Agency. Then again, it makes me feel more comfortable since I sometimes make the same mistake in this blog!

We note that both Professor Shany and Dr Pessach were comfortably informal in shirt sleeves, whereas the Commissioner, Assa Kling, wore a suit and tie. His deputy, Ms Jaqueline Bracha and the third arbitrator at the patent office, Ms Yaara Shoshani Caspi both were black pants-suits. I am not sure if the formal dress adopted by the arbitrators of the patent office was indicative of their elevated statuses, or whether academics on their home ground are generally more comfortable.  In shabby contrast to the senior patent office staff, the two male stajers were looking scruffier than even by my standards, wearing rugby shirts, jeans and three days of stubble, so there doesn’t seem to be a patent office uniform, per se.

I’d never actually met the Deputy Commissioner, Ms Jaqueline Bracha before. I found myself sitting next to her, and when the commissioner, Assa Kling, went up to give his words of welcome, quipped that he was going to speak in Klingon. She giggled. When she later swapped smart phone messages with the Commissioner, realized my indiscretion.

wichard.jpg_1271692375 (2)The first keynote lecture was given by Mr Johannes Christian Wichard, the Deputy Director General of the Global Issues Sector of WIPO. Mr Wichard gave a very interesting overview of WIPO’s mediation and arbitration mechanisms. He wowed the audience with impressive statistics concerning the number of domain name conflicts WIPO manages to resolve, and then spoke in more detail about what, to me, was the more interesting topic of patent dispute resolution by mediation and arbitration, giving real life examples, but with names of parties withheld, and the costs involved. Of course the costs to WIPO and the mediator are NOT the full costs, as generally the parties are represented by legal counsel.  Nevertheless, the talk provided food for thought as an alternative approach to solving conflicts, particularly where the parties are involved in an ongoing relationship, such as where a patent dispute arises between a supplier and the customer.

Dan Or-HofAfter a coffee break, in which food for thought was discussed over danish pastries and a fruit platter, Adv. Dan Or-Hof of PCZL gave a comprehensive review of the Domain Name Dispute Resolution before the organization that administers domain names in Israel. The speed and efficiency of the system seems admirable, with the full procedure taking less than two months. Nevertheless, it appears that ICCOS only hears about 4 cases a year.

I was somewhat surprised that someone from PCZL (Pearl Cohen Zedek Latzer) would advocate alternative dispute resolution. I have a personal dispute with that law office since I was not paid for the work I performed in good faith for their clients during the period I worked there at the beginning of last year. My several and various requests for some sort of arbitration or mediation have been ignored, as have my requests for an explanation of their behaviour. No doubt Mark Cohen – the partner I was working under – and Zeev Pearl have some counter-claims against me, but I don’t know what they are, so cannot address them. Pearl has threatened me not to sue, but doesn’t really leave me much choice. If the Israel Association of Patent Attorneys was more active, perhaps they could arbitrate or mediate in cases like this. As it is, I have no option but to go to court, which will presumably end up more costly for both sides.

The next lecture was given by Adv. Ms Yaara Shoshani-Caspi, a judicial officer of the patent office who spoke about whether mediation or arbitration by the patent office adjudicators could supplement the formal in partes opposition and cancellation procedures. After presenting some background and statistics, she made some very interesting observations and finished with reference to UK Patent Office practice, where mediation and arbitration is more established.

Adv. Shoshani-Caspi preceded here substantive comments with a disclaimer that the views expressed were hers alone, and not representative of the patent office. The conference was conducted in English, and Ms Caspi therefore chose to read her presentation, which she read eloquently and confidently. Nevertheless, the fact that it was a read speech gave it a feeling of it being an official position paper, which perhaps, a more informal slide based presentation would have avoided.  Apart from guest speaker Johannes Christian Wichard, who could have been given the paper to read himself, I think every one else present would have been at least as comfortable listening to the talk in Hebrew.  After the presentation, the commissioner reiterated that the views expressed by Ms Shoshani-Caspi were hers alone and did not reflect patent office policy. This was particularly the case since there was no legal basis for the patent office to meet the parties early on, less formally, to try to determine the actual points of contention and to resolve them more efficiently. We note that he seems less cavalier than his predecessor with regard to making the system more efficient by innovative practices not supported by the regulations.  Hearing the statistics regarding the number of cases the three patent office adjudicators manage each year, I was impressed with their efficiency and workload. I sometimes disagree with the odd decisions, but it is usually a question of nuance.

The fact that Ms Shoshani-Caspi read her talk made it a little more difficult to concentrate, but we note that the audience did seem very attentive. Being easily distracted I noted how much luxurious hair she had, hanging loosely around her face. Whereas she had let her hair down, this contrasted nicely with the distinguishingly balding commissioner who seemed more to be let down by his hair.

I asked Dr Guy Pessach if the lunch was for all participants or just speakers. He said that they were catering for 20, and kindly invited me along. I thus found myself lunching with the opposition, sitting between Commissioner Kling and Ms Shoshani-Caspi, with Deputy Commissioner Jaqueline Bracha and the head of the trademark department Ms Anat Levy sitting opposite.  I would have quite happily paid for my lunch, but leaving Bet Meyersdorf to find a canteen and to find my way back through the rat’s maze of the Mount Scopus campus is daunting. (I did my PhD on the architecturally less interesting but more user friendly Givat Ram campus).  I note that the number of participants in the morning session significantly outnumbered those who returned for the afternoon, and suspect that the catering arrangements contributed to this. The fact that the afternoon session was more copyright and less patent oriented, may, also have resulted in some of the patent attorneys leaving early. Perhaps the solution is to provide a lunch for all participants, for a reasonable fee, which the cost per head in universities and the like, is generally reasonably from my experience organizing similar events, but to provide free tickets to speakers and VIPs?

In the afternoon there were two presentations on collecting societies and alternative dispute resolution.

yorik_ben_david_bThe first speaker,  Mr Yorik Ben David (No relation to my former partner, Jeremy M Ben-David, as far as I know) is the CEO of Israel Copyright Collecting Society, ACUM, who started his presentation by informing us that he’d just flown in from Washington via New York, was jet-lagged, and therefore apologized in advance if he didn’t recognize any of the somewhat familiar faces in the audience. Alas, Poor Yorik, he knew them well…

It seems that AKUM’s collection strategy is to first invite people to pay a reasonable license, then threaten them, then invite them to arbitration and only as a last resort, to sue. About a decade ago whilst I was working for Seligsohn and Gabrieli, I remember that the firm used to sue copyright infringers left, right and center on behalf of the collecting society, and apparently the change of strategy is due to AKUM being recognized as a monopoly, following their bullying tactics against the Israeli radio station Galei Zahal.

Mr Ben David also described AKUM’s internal arbitration mechanism for dealing with cases of alleged plagiarism, seen as coming under copyright law, and arbitrated by retired Supreme Court Justice Theodore Ohr. He noted that the fee structure used was based on that of the courts – which seemed a little like plagiarism to this blogger…

Reuven BeharAdv. Reuven Behar, senior partner of Fischer, Behar, Chen Weil Orion & Co. who had apparently represented Cable provider HOT against AKUM, gave an alternative perspective.  He noted that there was a proliferation of rights collecting societies, some of whom had broken away from others, but all wanted a bigger piece of the pie. He was critical that royalty calculations were generally made on the basis of income rather than profit. We were impressed with Adv. Behar’s presentation, which was fluent and interesting. We were further impressed that, despite him being an attorney, and in flagrant copyright infringement, Adv. Behar was dressed identically to Mr Ben-David, wearing a blue button down shirt over a white teeshirt. It seems that in the interest of comfortableness,  Adv. Behar is willing to forgo the comfort blanket of black suit and tie that other attorneys seem to require as a badge of their profession.

Dr Orna RabinowichDr Orna Rabinovich-Einy of Haifa University gave the final lecture. Dr Pessach introduced her as Israel’s leading expert on Alternative Dispute Resolution. Her presentation was very fluent, very animated and very informative. She spoke a lot with her hands and didn’t use slides. The talk was peppered with references to various ADR theorists and models. I didn’t have the background to follow everything she was saying, at the pace she was saying it, and suspect that that was true of others in the audience as well. I was convinced that she was indeed at least one of the leading experts and a competent and experienced lecturer. I would have preferred ideas to be developed a little more. Particularly as the talk was after lunch and to the end of a fairly heavy program.

Alternative Dispute Resolution is becoming more popular. The IP Watchdog has just posted an article on the topic. See here 

guy pessachDr Pessach is to be congratulated for organizing a thought provoking and stimulating conference. It is a shame that the turnout was a little low, and we suspect that poor publicity and generally late announcing of the event, was a contributory factor to this. There have also been three other conferences in as many weeks, Bar-Ilan and Colb (which I missed as I was in China but which apparently was also poorly attended), Shaarei Mishpat + patent office on design law, and Kim Lindy’s best practices, which was aimed mostly at in-house counsel, who one would have thought would be an ideal audience for today’s proceedings. Maybe cosponsoring with LES, AIPPI or IPR would be a good way to advertise the event a little more widely?


Design Registrations Cancelled After Court Rules Lack of Novelty on Filing Date

April 8, 2013

Eli Shafir owned three registered designs – 44798, 44799 and 44800.  On suing A. A. Maayanot LTD. for infringement in the Haifa District Court, A. A. Maayanot LTD. filed a cancellation action in the Israel Patent Office. Judge Dr. Adi Zarkan of the Haifa District Court ruled that the marks were invalid since they lacked absolute novelty when they were filed (there is no grace period under the Design Ordinance).

Consequently, the Patent Office cancelled the designs. The parties agreed to allow the patent office to decide appropriate costs. After comparing similar actions in Termo Gumi  see http://blog.ipfactor.co.il/2011/04/06/designs-for-rubber-seals/ and in Wolfman vs. Ackerstein  http://blog.ipfactor.co.il/2009/12/14/israel-patent-office-publishes-decision-on-design-for-kerb-stone/ and on weighing up the relative amounts awarded and the amount of material in each file, the adjudicator of Intellectual Property ruled costs of  NIS 2000 plus lawyer’s fees of NIS 10,000.

COMMENT

The decision doesn’t relate to the nature of the goods at all.  However, the court ruling indicates that the designs related to water purifying equipment imported from China. See ’ת”א (חיפה) 21858-08-10 – אליהו שפיר ואח’ נ’ א.א. מעיינות בע”מ ואח

We note that under the relevant somewhat archaic design ordinance, an importer can register a design for something imported from abroad. Only absolute local novelty is required. Apparently, this wasn’t available locally.

it is not clear why the adjudicator compared this to other design rulings and not to patent or trademark cases, of which there are rather more and these are certainly more recent.


Posting RSS feed items not considered copyright infringement

February 22, 2013

RSS

Petah Tikva Magistrate’s Court Judge Oshrit Rothopf has ruled that a News Website News1.co.il did not infringe Tomer Apfeldorf’s copyright by posting items from his RSS feed.

Apfeldorf, a lawyer and blogger, claimed that News1 had posted both written content and visual items from his RSS feed; in some cases changing aspects of the posted items. News1 did not deny that it had posted content from Apfeldorf’s RSS feed, but claimed that because of the nature of RSS feeds and Ofaldorf’s use of this technology, the posting of such items, even without permission, did not violate copyright law.

News1 argued that RSS is a family of Web feeds – data formats used for automatically providing Web users with frequently updated content without their having to search for the content once they have subscribed to the “feed.” Those who subscribe via a weblink from the online site from which they wish to receive the feed will get regular updates aggregated into a standardized format and sent to them. The feed may include anything from blog entries and news headlines to audio and video items.

Apfeldorf had a copyright law expert, Gad Oppenheimer, testify on his behalf that News1’s posting of items from his RSS feed violated copyright law. Oppenheimer emphasized that the purpose of RSS is to maximize distribution and ease of receipt of content from the content creator to others, but that its use does not grant a special right to those who receive the content to post it themselves or to do anything else with the content other than to view it. Oppenheimer essentially argued that there was nothing special about RSS feeds or Ofaldorf’s use of them that would allow posting content without permission.

However, as an expert witness for the defendant, Dr. Yuval Dror testified that RSS and Ofaldorf’s use of the technology did remove the normal constraints of copyright law. According to Dror, using RSS and particularly sending full content through a feed and not mere headlines, is a sign that the content creator wants to maximize the exposure of his content, including by having those who receive the RSS feed post it on their own sites. Dror also argued that the creators of RSS were innovators most concerned with free distribution, sharing and posting of cultural content, not with aggressively defending copyright considerations.

The court accepted Dror’s argument, noting that News1 credited Apfeldorf each time it posted his items, ruling that others could expect that he did not object to their reposting his items, and doing so was fair use. Furthermore, the court noted that once Apfeldorf informed News1 that it did not have his permission to post from his RSS feed, News1 immediately took down the posts. Both giving credit and immediate removal upon receiving a warning were taken by the court as indicative that News1 was acting in good faith.

It is important to note that the court did not hold that posting items from the RSS feed of a third party was never copyright infringement.

The case: CF 45536-07-11 Apfeldorf v Itzhak et al. – ruled by Oshrit Rotkopf.

COMMENTS

I think that Judge Rothopf got this right. Using RSS feeds implies a waiver to recycle the material with credit.

The present blog article is a reworking of a piece by Jeremy Bob that was published on the Jerusalem Post website – see http://www.jpost.com/NationalNews/Article.aspx?id=303992
I think it is fair use. I generally obtain and review the original court decisions which are public domain, but I do not believe that news facts are subject to copyright – although am, of course familiar, with arguments to the contrary by the suffering newspaper industry. I have both removed Jeremy Bob’s opinions and analysis and credited the source. I consider this to be fair use and indicative of good faith.

Copyright Law really does need to be reevaluated in the modern world. The Current Israel Law provides for very high compensation per infringement without proof of damage. This is often unreasonable and inappropriate  There is a general lack of consistency in copyright rulings by the courts.


Gilead and Teva Reach Agreement Regarding HIV Patent Validity Suit, Avoiding trial

February 20, 2013

viread

Teva Pharmaceuticals and Gilead Sciences Inc. agreed to settle a patent dispute over Viread, a treatment for HIV infection and chronic Hepatitis B, avoiding a trial that was scheduled to start today. Teva will be permitted to begin sales of a generic version of Viread on Dec. 15, 2017.  “We believe strongly in the validity of our intellectual property,” John Milligan, Gilead’s president, said in the statement yesterday. “This settlement, however, removes some uncertainty and minimizes further distraction.”

Gilead, based in Foster City, California, sued Teva in 2008 and again in 2010, claiming that Teva’s applications to the U.S. Food and Drug Administration to make drugs to treat HIV infections in adults infringed four of its patents. Teva, based in Petach Tikva, Israel, had said in court papers that Gilead’s patents were invalid and therefore couldn’t be infringed.

The trial in New York has been adjourned until the completion of the settlement agreement.

The case: Gilead Sciences v. Teva Pharmaceuticals USA, 10-01796, U.S. District Court, Southern District of New York (Manhattan).


Bavaria Contemplating Making Mein Kampf Freely Available When Copyright Runs Out in 2015

October 25, 2012

Mein Kampf (My Struggle), written in 1924 while Hitler was languishing in a Bavarian prison, was the manifesto of the Nazi Party and is a vicious anti-Semitic tract and rambling memoir.

The book is not banned in Germany but the state of Bavaria claims copyright in Mein Kampf. Until now, they’ve suppressed the book and have used their control of the copyright to prevent others from publishing the book.  As of 2015, the book enters the public domain and so this will no-longer be possible.

Apparently, the Bavarian state has announced that it would release and widely distribute an edition with historians’ commentary as well as a separate version for schools in 2015 in order to beat commercial publishers.

Bavarian Finance Minister Markus Soeder defends this on the grounds that the tract must be “de-mystified” and calling on the federal German government to get involved.

COMMENT

I do not think that copyright law should be (mis)used to keep a book out of publication. If the issue of racist hatred, incitement to violence, anti-Semitism, etc.  outweighs the issue of Freedom of Speech, then distributors of the book should be prosecuted for disseminating the literature. In the Internet age, I don’t think that it is possible to suppress a book anyway.

Bavarian plans to publish the book and distributing it for free or for less than commercial costs of distributing means that the Bavarians are continuing the Nazi party policy of subsidizing and distributing the work. From 1936 it was a Nazi Party present to newly-weds. Up until 1945, some 10,000,000 copies were sold in Germany.  this Bavarian plan seems designed to continue Hitler’s plan of making sure that the book is widely read.


Israel Supreme Court Rejects Adidas’ Appeal Re Four Stripe Sneakers

October 4, 2012

Back in January 2011, I reported that Adidas lost in court against Galel Yassin, a West Bank Arab who imported sports shoes with four stripes. See West Bank Arab Prevails Against Adidas – Four Stripe Cheap Training Shoes Do not Infringe.

Adidas appealed the ruling by Judge Michal Agmon-Gonen but lost again! The judges ruled that the word Sydney displayed prominently on the shoes made them sufficiently different from Adidas’ shoes, that there was no likelihood of confusion. They further ruled that there was no unjust enrichment, no passing off and no dilution.

Judge Chayot ruled that intellectual property was a basic right protected by the Basic Law of Property. She considers the specific three stripe mark problematic and notes that there are decisions for against Adidas in similar cases abroad. She also noted that Judge Gronis (now Head of the Supreme Court) gave Adidas an injunction, indicating that in his opinion, they had a case. After pontificating about the triple test, she dismissed the appeal, and ruled that Adidas should pay NIS 25,000 lawyers fees to Yassin and also for storage of the shoes.

Judge Rivlin dissented on grounds of Unjust Enrichment. In Rivlin’s analysis, the law of trademarks doesn’t cover cases where there is no likelihood of confusion and purchasers willingly purchase counterfeit goods. He would therefore apply Unjust Enrichment, expanding the A.Sh.I.R. case.

With some reservations, Judge Elyakim Rubenstein backed Judge Chayot and noted that in previous rulings concerning Adidas by Judge Gronis, now President of Supreme Court, the issue raised was comparing trademarks and not shoes as a whole. In other words, there was precedent that four stripes are confusingly similar to three stripes and a word like Sydney should have no effect. Rubinstein notes that Yassin’s shoes recall Adidas’ but there is no real likelihood of confusion.

Rubinstein rejects the social activism of Agmon-Gonen, but thinks that the word Sydney prevents confusion.

Rubinstein notes that both Joseph and Tamar, Daughter of King David wore striped garments and considers stripes to be general forms of decoration. He also related to a decision concerning Klil who marked their profiles with three stripes.

Rubinstein does, however, correctly point out that the A.Sh.I.R. ruling related to identical copies of goods not registered and therefore disagreed with Rivlin that it could be applied to any case where there is no infringement merely because of an assumed loss of income to Adidas, not proven. Rather surprisingly, he cited the Talmudic concept of one benefitting from goods of another without the other suffering a loss (Talmud Babli, Baba Kama 20:1).

Where all three judges agreed however, was that they rejected the social activism of District Court Judge Michal Agmon-Gonen that cheap look-alike brands should be available for the financially challenged.

MY COMMENTS

Chayot is wrong to consider trademarks as basic property. Copyright, patents and designs protect creativity. Trademarks are fundamentally different. They indicate the origin of goods.

I am not sure I agree with Rubinstein re Sydney on shoes removing the likelihood of confusion. Sydney is a place name. It was the site of a previous Olympic Games. Is it too much of a leap of imagination to consider that Adidas might add place names to a line of their shoes? Is the issue only one of likelihood of confusion of purchaser? What happens if someone sells fake goods as fake goods? Will third parties necessarily know that the goods are fake and what they cost?

I don’t think either of the Biblical examples of striped clothes, nor Klil are particularly relevant. Three stripes of a certian thickness on the sides of a shoe, are still different and distinct from striped garments per se. Klil make window frames by extrusion. The only non-functional decoration that can be extruded is a line or stripe. The only way to mark their goods was with stripes.

Rubinstein’s application of the Talmudic principle of benefiting without causing damage to third party is also a little weird. The principle is generally used to argue that Hebrew Civil Law does not recognize copyright infringement in listening to music or downloading films if one would not pay the price. It is a strange twist to apply this to trademark law as argument against dilution.

The ruling is problematic. Adidas makes an enormous range of shoes. The common  feature is the three stripes. It is reasonably to argue that four stripes are not confusingly similar to three stripes, but arguing that other graphics or words are present implies that the average user is familiar with Adidas’ various models. This is not the case. Nor is it relevant.  A trademark should enable a company to identify itself by the mark, regardless of other features. The four stripes were put on sports shoes. If the shoes are of comparable quality, there is a likelihood of confusion. If they are put on cheaper shoes, even if there is no likelihood of confusion, there may be a case of dilution. The only issue to my mind is whether three stripes and four stripes are confusingly similar.

I think Rubinstein is correct not to apply the Law of Unjust Enrichment in cases where there is no IP infringement, and personally believe that A.Sh.I.R. should be relegated to the garbage can. That said, I don’t understand why in light of the principle of Unjust Enrichment, one cannot argue trademark infringement more broadly, to cover cases of third parties being confused and dilution.

Whether or not the four stripes on the shoes in question are confusingly similar to three stripes is an interesting question. Three marks may once have been a weak trademark that was a form of decoration, but it is now a very well-known mark on shoes. It indicates the manufacture.

All in all, an interesting but not particularly erudite decision. The case is a difficult one though. Still at least the judges were attempting to grapple with IP issues and not trying to solve social ills.


Are ‘Design Concepts’ Protectable in Israel?

July 11, 2012

Haya Rivka Windling-Yoskovitz imports and sells wrapping materials and decorations for events through a company variously named “The Tasteful Choice”, Organza and Organza 2010, from 2006. Some of her wrapping materials were used in a retail outlet called ‘Petite Sweets’ in Ashdod. She carries a range of about 2000 goods.

Dekel Manufacturing, Import & Export of Decorative Goods LTD., managed by Amir and Haim Sandick imports and distributes ornaments and presents. Their catalog includes a range of some 6000 goods.

Windling-Yoskovitz sued Dekel and the Sandick brothers claiming that they were distributing two wrappings that she had designed and had manufactured in China. The first design was for “tallit bags” – organza bags with blue or black stripes and fringes, available in three sizes, that were intended to recall the Tallit, or ritual prayer shawl. The bags were intended for use for holding party favours or cutlery, and to be used for decoration at Bar Mitzva events.  The second design was for cellophane wrapping material including the words Yom Holedet Sameyach (Happy Birthday in Hebrew) and Mazal Tov (literally, good luck but perhaps congratulations would be a better translation).

Dekel had imported the cellophane wrapping material from China and it seems that it was superfluous manufacture from  Windling-Yoskovitz’ order that had found its way onto the Chinese wholesale market.  The tallit bags sold by Dekel were made from them, and were slightly different from Windling-Yoskovitz’ design, but clearly inspired by her.

The case was brought before Judge Grosskopf of the Tel Aviv District Court in September 2009, with a request for an injunction and that the defendants produce financial details regarding sales of these items. The defendants countered by requesting that the court throw out the charges, arguing that the plaintiff had no exclusive rights and that there was no legitimacy to prevent free competition regarding the distribution of these goods.

The plaintiff claimed a range of grounds using what Judge Grosskopf referred to as the “try it” approach. These included copyright, passing off, theft of trade secrets, misleading the consumer and unjust enrichment.

COPYRIGHT – Judge Grosskopf noted that Section 7 of the new Copyright Law follows Section 22(1) of the Copyright Ordinance and rules that there is no copyright in articles of manufacture that could be protected by a design registration, unless there was never any intention to mass produce. Since the plaintiff did not register her design, she was not entitled to IP protection under copyright or registered design rights.

PASSING OFF – As to passing off, quoting Judge Rivlin from the recent Tali Dadon Yifrach case and noted that the tort of ‘passing off’ created a  monopoly and so its use should be excised with care. The requirement for passing off to be grounds for legal recourse were that the plaintiff had a reputation for the goods and that consumers would wrongly assume that the goods originated the plaintiff.  In this case, he ruled based on witness statements, that the clientele were ambivalent as to who the importer was and were interested only in price.

THEFT OF TRADE SECRETS – Grosskopf dismissed this, since the articles were easily retro-engineered and purchasing or manufacturing in China wasn’t a trade secret.

MISLEADING THE CONSUMER – Grosskopf noted that the consumer here was the retailers, not the end users, and thus consumer protection was not an issue. Furthermore and unnecessarily, there is no likelihood of confusion, since the customers were ambivalent of who the importer was.

UNJUST ENRICHMENT - Judge Grosskopf established that this was the only real legal question and then embarked on a detailed analysis, widely quoting from Professor Grosskopf’s (himself) treatise on the topic. Grosskopf’s position is that enrichment for the innovator comes from market lead. Where appropriate, this can be extended by registering designs. Grosskopf felt that the organza bags were registerable but the cellophane wrapping lacked the minimal requirements to be considered a design. Were Dekel to have systematically copied the plaintiff’s designs, unjust enrichment would be appropriate, but that was not the case here. The cellophane was bought off-the-shelf in China and the bags were not on-on-one copies, but merely shared the same design concept and thus just enrichment should be limited to the natural advantage of the plaintiff by virtue of being the first to distribute.

Based on his analysis, Grosskopf dismissed the charges, but refrained from awarding costs.

The Case: T. A. 18395-09-09 Haya Rivka Windling-Yoskovitz vs. Dekel Manufacturing, Import & Export of Decorative Goods LTD., 10 June 2012 by Judge Professor Ofer Grosskopf.

COMMENTS

In my opinion, Judge Grosskopf is one of the better IP judges. This decision is erudite and generally correct, and contrasts nicely with the Karshi decision issued by Shapira of the Jerusalem District Court. See here.  Reading between the lines, and noting that Grosskopf mentioned that the wording Mazal Tov and happy birthday were rendered in simply fonts, I think it is clear that he was aware of Shapira’s decision and is criticizing it in veiled form. It is unfortunate that the verdict in these cases seems to depend more on the judge than on the facts of the case.

Neverthless, Grosskopf is wrong both in his original essay and in his quote of it, in stating that after seeing commercial success, creators can register their designs, and that failure to do so requires explanation. In Israel this is not the case. Once a product is available, it cannot be registered as a design as absolute (local) novelty is required. There is no grace period.

As to the cellophane with Hebrew writing on it lacking the minimal standards to be registered as a design, I am not convinced. By that I mean that the wrapping material is sufficiently designed to establish that it was designed by Windling-Yoskovitz  and purchased off the shelf in China by Dekel. It is an object of manufacture and can be described and illustrated. I think it is a design that could have been registered in Israel. Of course,  ruling is of value in indicating if a judge would uphold such a design registration.

 


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