AKUM Received injunction against Arab Music Website

April 22, 2014

Music Pirate

The District Court has accepted charges brought by AKUM (Israeli artist’s copyright collection society) and the French equivalent for whom it acts as a collection agency, that the INTERNET site Kol ElArav, had played some 20 musical creations without approval, and that AKUM could collect sue on behalf of the French Collection Society. Counter-claims that the congs were owned by an Egyptian production company or that the website had paid royalties were dismissed as unfounded.

A permanent injunction was granted, and the defendant was ordered to pay 75,000 Shekels compensation.


Camtek announces that they have been caught infringing

April 7, 2014

camtek rudolh

Generally press releases published by companies are about the publishing company filing suit against others infringing their IP, or a court ruling in their favour. In a weird development, Camtek, an Israeli wafer imaging and processing company has announced that the district court of Minnesota has entered a summary judgment finding that certain previous models of Camtek’s Falcon systems were capable of infringing upon two claims of a Rudolph patent in the United States.

See here  for more details. Perhaps not surprisingly, Camtek’s shares dropped over 3% on the day.


Should Israel Patent Office Hear a Trademark Cancellation Proceedings Where there is an Infringement Case before the Courts?

April 6, 2014

cube in hand

In June last year, I reported on a decision to allow the shape of the Rubik’s Cube to be filed as a trademark. See here  the mark is Israel Trademark No. IL 228232.

A request to have the mark canceled was filed by Dan S. LTD, To Buy Market LTD and Lula Pozalov.

Since there are pending cases regarding trademark infringement before the District Court, which were filed prior to the cancellation proceedings being initiated, there is a question whether the patent office should hear the cancellation proceeding, or should suspend it, pending the outcome of the case in the District Court.

The request to cancel was filed on 22 October 2013, after Civil Proceedings No. 61560—05-13 was filed in the Central District Court. In the District Court, one of the charges was trademark infringement and one of the defenses offered was that the mark should not have been registered. There is thus duplication of the case in two forums.

Ruling

The Commissioner of Patents, Assa Kling ruled that in  8/78 El Okvi vs. Israel Land Administration, P.D. 29 (2) 477 the Supreme Court ruled that where substantially the same question is addressed in two separate proceedings, despite slight differences in the parties and in the style of the complaint, it may be unfair for the defendant to have to address the same issue twice. The question to be addressed is whether hearing the same case in two forums is a fair use of the court’s time. The court case in the District Court covers the validity of the trademark, trademark infringement and additional issues such as passing off and unjust enrichment. The District Court can and will rule on the validity of the mark and so it makes sense for the Patent Office to refrain from doing so, both to avoid double work and to avoid the embarrassing event of the two forums coming to different outcomes.

In the circumstances, the cancellation proceedings in the Patent Office are stayed pending the court decision.

Comment

The decision makes sense. I think it is good that Israel doesn’t have a bifurcated system like in Germany, and that a legitimate defence against infringement can be that the mark or patent should never have registered. In this case I don’t think the mark should have been granted, and hope the court throws it out. That as may be, it certainly makes sense for the Patent Office to await the court’s decision.


Finjan Files New Patent Infringement Lawsuit Against Sophos

March 16, 2014

finjan logo                                      finjan coffee pot

Finjan, Inc. has filed a patent infringement lawsuit against Sophos, alleging infringement of Finjan patents relating to endpoint, web, and network security technologies.

The complaint, filed in the U.S. District Court for the Northern District of California, alleges that Sophos’ products and services infringe upon six of Finjan’s patents. In the complaint, Finjan is seeking undisclosed damages from Sophos.


Hair-raising

February 19, 2014

head and shoulders pantene

Proctor & Gamble and their local representatives sued for compensation for trademark infringement and passing off after police raided a store-room in the Yagel village and seized thousands of bottles of Head & Shoulders and Pantene shampoo, some full and some empty.

The bottles were counterfeit, but Proctor & Gamble could not prove actual substantive damages, and the Magistrate’s Court ruled 30,000 Shekels (about $7000) in estimated damages.

COMMENT

Counterfeiting causes tremendous damages, not only in lost sales, but in damage to reputation. A lot of R&D goes into developing a liquid gunk that removes oiliness and dandruff without irritating the scalp, which can be washed out leaving a conditioning component behind.  I assume that the counterfeit stuff is less effective.

 


Apollo and Polo vs. Krause Direct Marketing LTD.

January 19, 2014

Summer Holiday  Holiday on the buses

This is a double case concerning alleged infringement of trademarks and counter claims of copyright infringement. The subject matter are backpacks made in China and imported for distribution by Egged, a large Israel Cooperative Bus Company, to children of employees at summer camps ran on behalf of the company. Hence the pictures which relate to perhaps two of the worst British films of the Sixties and Seventies.

The first case concerns a complain by the related companies Apollo ADKS LTD, Promo Polo LTD and Polo Universal LTD which sued Krause Direct Marketing. Apollo et al. claim to own the intellectual property in a backpack manufactured and supplied in 2009 to Egged, a large Israel Cooperative Bus Company. The following year, Krause Direct Marketing provided similar bags complete with the Polo Star registered trademark owned by Apollo et al.

 In the second case Krause Direct Marketing sued Apollo ADKS LTD. Promo Polo LTD and Polo Universal LTD., claiming that in 2010 Apollo et al. used copyright images from Krause’ 2009 catalogue in their 2010 catalogue and website. Since the parties are common, the two cases were ruled on together, despite the issues being different, but the evidence and summaries were kept separate.

Background

Both Apollo and Direct Marketing are private companies that import and distribute a range of goods manufactured by foreign entities, typically in China. The goods are generic items supplied to interested wholesalers who source them, import and sell them on.

Apollo supplies the bags as Polo Star and Direct Marketing supplies the bags as Innopak, Free Style and Green Bag. Until 2010, the two companies had a shared marketing relationship, before the bag related complaint was filed.

Originally, Apollo sued Egged and shareholders of Krause Direct Marketing, but came to a settlement with Egged and dropped the charges against the shareholders.

The history of the bag

In 2009 Egged ordered 8000 bags from Apollo for distribution to children of employees at a private summer day-camp organized by the cooperative. The bags carried both the Polo Star logo and Egged’s logo and Egged ordered some minor changes to the dimensions of the bag, and selected a green colour for the bag. (Presumably the choice of colour reflects the fact that Egged buses are coloured green to indicate their environmental friendliness).

In February 2010, Apollo asked if Egged were interested in a repeat order, but Egged indicated that they were not interested in purchasing an Apollo design. However, in July 2010 it transpired that Egged were distributing bags to their summer campers that had the Polo Star logo, but import tags from Krause Direct Marketing. Apollo claimed that this was infringing their intellectual property.

Krause Direct Marketing accepted that the bags they distributed included the Polo Star logo, but claimed that this was an unintentional mistake that they only realized when Apollo sued them. What had happened was that Egged had requested that they supply them with bags with various changes and improvements such as a lighter coloured fabric with a different texture and wider straps. The bags should have been supplied under the trade-name Innopack, not Polo Star, however the Chinese supplier made a mistake and used the wrong name, and didn’t bring the error to the importer’s attention.

Krause Direct Marketing did a cursory check in Ashdod Port and found that the bags were not marked at all. Due to the tight schedule they simply ordered that large labels be attached. Egged claimed to have also done a cursory check. On receiving a Cease and Desist and a temporary injunction, both Egged and Krause Direct Marketing did a more thorough check of remaining stocks and discovered that some carried the Polo Star logo. In the settlement, Egged agreed to give the bags over to Apollo and to give Apollo the first right of refusal for contracts for up to half a million shekels for the next three years.

Apollo sued Krause Direct Marketing claiming trademark infringement, (unregistered) design infringement and on various other grounds.

Trademark Infringement

Krause Direct Marketing noted that the Polo Star mark had lapsed on 28 May 2010 due to failure to pay renewal fees and was reinstated on 14 July 2010, so was not in force at the time the bags were supplied. Krause Direct Marketing further noted an Israel Trademark Office decision of 24 August 2010 that some marks could not be registered due to the well known Ralph Loren marks for Polo, and so submitted the rather convoluted argument  that if there was a likelihood of confusion it was with Ralph Loren and not Polo Star. Finally, Krause Direct Marketing argued that they had specifically asked the Chinese supplier not to embroider Polo Star’s logo on the bags, and since they were competing with Polo Star and were independently branding a superior product, they had no interest in the Polo Star logo appearing on the bags, so there was no issue of bad faith in Krause Direct Marketing’s behaviour, despite the unfortunate mistake with the branding.

In response, Apollo argued that in civil trademark disputes there is no need to show that the infringer intentionally infringed, and that the act of infringement was enough to create a basis for claiming damages. Furthermore, Krause Direct Marketing had not proven that they did not want to benefit from Polo Star’s mark and certainly had not taken adequate precautions to avoid infringing. Apollo alleged that the storeman of Egged noted that of the remaining 3220 bags, 1270 carried the Polo Star mark, and so apparently around 40% of the order of 8000 bags, i.e. 3400 bags infringed Apollo’s mark.

Unjust Enrichment

Apollo claimed to have designed and developed a unique bag that Krause Direct Marketing were able to supply to Egged at a 15% discount since they did not have the development costs.

Krause Direct Marketing argued that Apollo’s original design was taken from Krause Direct Marketing’s catalogue. Egged ordered changes to that. Apollo thus did not design the original bag, and the bag that Krause Direct Marketing supplied was upgraded and used different fabrics, different colours and incorporated additional changes.

Krause Direct Marketing further argued that they had only lost money on the episode since they had to compensate Egged, had lost future marketing opportunities with Egged to Apollo and bags with Polo Star logo instead of the Innopack logo did damage to Innopack’s market presence.

Passing Off

Since the bags supplied by Krause Direct Marketing bore the Polo Star logo and was a Polo Star design, there was a clear case of passing off, and Apollo claimed statutory damages of NIS 100,000.

Krause Direct Marketing argued that since there was one customer (Egged) who had not wanted Polo Star bags, there was no passing off. The bags included an attached label stating the origin and were of a different design from the Polo Star bags of the previous year, which themselves had only had a limited distribution of 5000 or so, and so had no reputation anyway.

Other claims

For good measure, Apollo claimed that Krause Direct Marketing’s actions were robbery, interference in other’s business, commercial malpractice due to failure to take precautions, trademark dilution, deceiving the consumer, false marketing, and infringing statutory rights.

Krause Direct Marketing denied these, claiming that none of these additional charges were proven.

The ruling

In the ruling on the trademark infringement, Apollo’s claims were thrown out and Apollo was ordered to pay 25000 Shekels compensation to Krause Direct Marketing.

On the second case of copyright infringement, where Krause claimed that Apollo et al. had used images from their catalogue, the judge accepted that there was copyright in the catalogue images and that it was infringed. Apollo was ordered to pay 24,000 Shekels to Krause Direct Marketing and 10,000 Shekels legal fees.

COMMENT

I waded through 35 pages to write up this case. I suspect it should never have made it to court.


Teva’s at risk launch of a generic version of Atripla for treatment of AIDS withstands challenge in Canada

January 15, 2014

Atripla    atripla 3

On January 13, 2014, the Canada Federal Court dismissed an application by Bristol-Myers Squibb, Gilead Sciences, LLC and Merck Sharp & Dohme Corp.  under the Patented Medicines (Notice of Compliance) Regulations for an order prohibiting the Minister of Health from issuing a Notice of Compliance for Teva’s generic version of its Atripla® tablets (2014 FC 30).

Atripla® tablets are a combination of three anti-retroviral medicines that is used to treat HIV/AIDS.  The three active ingredients are efavirenz, emtricitabine and tenofovir disoproxil fumarate.

Merck et al. sought an order prohibiting the Minister from issuing a Notice of Compliance to Teva until after the expiry of Canadian Patent No. 2,279,198  on February 2, 2018.  The 198 Patent disclosed and claimed novel processes for making a particular crystalline polymorphic form of efavirenz called “Form I”.  However, the only claims at issue were those that claimed Form I per se.

For Teva to infringe the patent, the patent has to be valid and Teva’s actions have to infringe.

Teva alleged that claims 1 to 3 of the Patent were invalid on several grounds, including obviousness, double patenting, claims broader than the invention made or disclosed, lack of utility and anticipation.

With respect to non-infringement, the central issue was whether the crystalline form of efavirenz in the Teva tablets (“Form Teva”) would convert to the claimed Form I during or after the manufacturing process.  As a preliminary point, Merck argued that an adverse inference ought to be drawn for Teva’s refusal to produce samples of its final tablets.  No adverse inference was warranted, however, since Form Teva could be made from a publicly available process and Teva had provided details of its manufacturing process.  With this information, Merck was able to perform experiments in an attempt to establish that Teva’s tablets contained Form I efavirenz.

Merck’s conversion experiments on Form Teva included grinding with a mortar and pestle, heating, and combined grinding and heating in an attempt to demonstrate conversion to Form I. 

Justice Barnes found that the experiments were irrelevant because they were not representative of the Teva manufacturing process.  Specifically, Merck’s expert did not grind the ingredients in a manner analogous to Teva’s manufacturing process. In the grinding experiments, the expert was unaware of the size of the samples that were ground, did not record the grinding pressure applied, and could not recall if he was present for the grinding.  As a result, the Court was unable to conclude that the energy applied during Merck’s grinding studies accurately approximated the forces applied during Teva’s manufacturing process.  Accordingly, the court found that Merck failed to meet its burden of proving that the Teva tablets will contain Form I efavirenz and the application was dismissed.

The Court declined to rule on Teva’s invalidity allegations, instead basing its judgment solely on Teva’s justified allegations of non-infringement.

In this respect, Justice Barnes noted that voluminous evidentiary record, the relatively short period of time remaining in the 24-month automatic stay period, and his finding with respect to non-infringement made it “unnecessary and probably unwise to attempt to resolve the validity issues.”  Nonetheless, Justice Barnes did observe that Teva presented a stronger obviousness case than was previously before him in the Mylan case which dealt with the same patent (2012 FC 1142).


Israel Supreme Court Upholds Ruling of Non-infringement of Breaking & Entering Patent, but does not Invalidate it

January 14, 2014

breaking and entering

In 1998, Ofer, Extinguishing, Extracting and Saving LTD supplied hydraulic systems for breaking into looked buildings manufactured by Holmatro to the Israel Ministry of Defense, where they were deployed by the armed forces for use in urban warfare. Further systems were sold in 1999 and 2000.

From 2000 to 2006, the Israel Ministry of Defense ceased to order from Holmatro and purchased systems from Hydro-Na LTD.

In 2007, needing to purchase 562 such systems, the Israel Ministry of Defense issued a tender in which Hydro-Na submitted a bid. However, in November 2011, the Israel Ministry of Defense announced that they would purchase future systems from Sun Hitech.

Hydro-Na filed Israel Patent Number 184211 on 25 June 2007 and it issued on 4 May 2009.

The first claim of Hydro-Na’s patent is as follows:

A system for forcible opening of an entryway by applying pressure to adjacent boundary surfaces, said system comprising:

  • a hydraulically operated pump unit for providing pressure to the system;
  • a hydraulic cylinder unit comprising a piston rod
  • a first anvil comprising a narrow wedge-shaped portion removably and rotatably mounted on the proximal end of said piston rod, said first anvil formed with downwardly facing friction gripping grooves on its surface; and
  • a second anvil comprising a pair of narrow, spaced-apart wedge-shaped prongs formed on the sides of a rotatable ring removably mounted on said hydraulic cylinder until, said second anvil formed with upwardly facing friction griping grooves on its surface;

Such that when the wedge-shaped portion of said first anvil is seated between the wedge shaped prongs of the second anvil so as to be aligned therewith and said first and second anvils are forcibly inserted in a seam between adjacent entryway boundary surfaces, operation of the pump unit applies pressure via the first anvil on a first adjacent boundary surface while said second anvil applies a contrary gripping counterforce on a second adjacent boundary surface, forcibly opening said entryway of said adjacent boundary surface.

There is a second independent claim and also a method claim, but the above claim illustrates the invention fairly well.

Hydro-Na also filed three Israel design applications for various sub-components.

Hydro Na tried unsuccessfully to obtain an injunction against Sun HiTech and to have their bid in the tender thrown out on various grounds as not fulfilling the tender requirements. The injunction was refused and the tender bid was upheld.

On allowance of the patent in May 2009 after accelerated examination, Hydro-Na sued Sun Hitech LTD, its shareholders and the Israel Defense Ministry for patent infringement and claimed 3,376,940 NIS (about a million dollars) in damages, filed for recall of the systems, and for a temporary injunction. The grounds were patent infringement, unjust enrichment, passing off, etc.

Judge Zerankin of the Haifa District Court ruled (T.A. 34912-11-09) that the patent was probably invalid since there were earlier systems known to Hydro-Na that were not disclosed to the patent office during prosecution, but noted that the rotatable ring was apparently novel and arguably inventive. He did not invalidate the patent, but found that there was no infringement since Sun HiTech’s system did not include this novel feature.

As to the designs, the Judge Zerankin ruled that the mechanical components weren’t designs in the meaning of Section 2 of the Patent and Design Ordinance.

Hydro-Na appealed to the Israel Supreme Court.

On appeal, Judge Amit noted that most of the issues were factual and had been examined by the Court of First Instance and appeals were not to retry evidence but only legal analysis.

In cases like this where the defense of the defendant is invalidity of the patent, the plaintiff has only to show infringement, since the rebuttable assumption is that the patent is valid and the defendant has to prove that this is not the case.

The expert witness for Sun Tech LTD, patent attorney Dr Goldreich, showed that there were a large amount of prior art, none of which was brought before the patent office.

Attorney Ed Langer appeared as expert witness for Hdro-Na, but since he wrote the patent and could not provide adequate justification for not relating to prior art, his testimony was found unreliable.

Judge Amit considered the Court of First Instance had been overly cautious in not canceling the patent in question, both on its merits and when considering the issue of equitable behavior with regards to the legal requirement of disclosing the prior art. He assumed that they not only withheld information from the court but also from their patent attorney. Nevertheless, he noted that he wasn’t required to relate to the validity of the patent since it could be shown that it wasn’t infringed.

As to various other claims by Hydro-Na, Judge Amit quoted Ecclesiastes (Koheleth) 7:14 ” It is good that you should take hold of this, and from that withhold not your hand, for the one who fears God shall come out from both of them.” Essentially, he dismissed them as “also ran”.

In conclusion, Judge Amit accepted the earlier court’s finding that ‘cold’ door forcing systems were on the market long before Hydro-Na’s application was filed. To the extent that Hydro-Na deserved a patent, it was for the rotatable ring which was not found in the competing system that won the tender. He noted that Hydro-Na failed to file abroad despite a market potential of NIS 150-225 Million Shekels and deduced that they were well aware that their patent was extremely narrow and easily invented around.

The appeal was unanimously rejected by a triumvirate of the Supreme Court consisting of Judge Amit (who wrote the appeal) and Judges Melzer and Solberg who affirmed his ruling.

Costs of NIS 50,000 were awarded to the Sun Hitech LTD and a similar sum to the Israel Ministry of Defense.

Civil Appeal: 7623/10 Hydro–Na et al. vs. Sun Hitech et al., 12 January 2014

COMMENT

The District Court applied the Gillette Test by declaring that the patent wasn’t restricted to the rotatable ring, it would not have issued.

The Supreme Court did a marvelous job citing the various sections of the Law and analyzing them. It was a little pedestrian and boring, so I haven’t reproduce in full.

I believe that the failure to disclose the prior art should have invalidated the patent and consider both Haifa Court and Supreme Court as being overly cautious in not doing so. What is the point of having a duty of disclosure if, on proof that the applicant withheld information, the court doesn’t invalidate the patent?

Whether or not Dr Goldreich was correct in her analysis that the rotatable ring wasn’t sufficient to be considered inventive, I wonder if there isn’t room for a procedure for referring a patent back to the patent office for reconsideration in view of additional prior art?

As to the registered designs, if Hydro-Na had sold them to the Israel Ministry of Defense prior to registering, they are invalid. Similarly if the same design is used by others. I haven’t read the original decision by Judge Zerankin but it seems that he considers such devices as inherently not-registerable, however, I think this understanding is incorrect. It is a shame that the Supreme Court hasn’t really addressed this issue, as although the Israel Patent Office has established practices regarding registering functional elements, there seems to be little binding legal precedent on this issue.

Finally,  is it ethical for attorneys-at-law or patent attorneys that drafted and prosecute a patent give a validity opinion? Is there attorney-client privilege and is it considered waived when client calls on the attorney as an expert witness? It would have been nice if the Surpreme Court had taken this opportunity to provide guidance to patent attorneys in this matter.


Israel’s Vringo Obtains injunction Against ZTE

December 17, 2013

VRingo

Vringo Inc. (VRNG) have announced that a Germany court found that Chinese telecommunications company ZTE Corp. (000063.SZ, 0763.HK, ZTCOY) infringed one of its European patents and is required to pay damages. The total amount of damages is still being determined. ZTE was also ordered to cease and desist distribution of base stations that were found to infringe Vringo’s patent. A ZTE representative wasn’t immediately available for comment.

Shares of Vringo, a small mobile technology and intellectual-patent firm, jumped 5.5% premarket to $3.25. As of Monday’s close, the stock was up 7.3% so far this year.

The court ruling is subject to appeal. Also, since Germany has a bifurcated system, the validity of the patent involved is being considered in a separate proceeding, as ZTE filed an action in a federal patent court in Germany trying to nullify the patent.

Vringo filed patent infringement cases against ZTE in five countries and has a preliminary inquiry in Spain. The patents involved relate to wireless infrastructure and handsets. The suits were filed in India, the U.K., Germany, France and Australia.

Last year, Vringo was awarded about $30 million in damages and granted future royalties by a federal jury in its patent suit against a handful of technology giants, including Google Inc. (GOOG) and AOL Inc. (AOL). Vringo had sued the search companies for allegedly infringing two of its patents related to advertising placement in search results.


Subsidiary of Israel’s Finjan sues Proofpoint

December 17, 2013

FinjanIsFinjan 2

Israel’s Finjan Holdings, Inc.  announced today that its subsidiary, Finjan, Inc. (Finjan) has filed a patent infringement lawsuit against Proofpoint, Inc., and its subsidiary Armorize Technologies, Inc. alleging infringement of Finjan patents relating to endpoint, web, and network security technologies.

The complaint, filed Monday December 16, 2013 in the U.S. District Court for the Northern District of California, alleges that Proofpoint’s products and services infringe upon eight of Finjan’s patents. In the complaint, Finjan is seeking undisclosed damages from Proofpoint and Armorize.

“As the result of extensive R&D, Finjan has been awarded a considerable patent portfolio covering core inventions in behavior-based intrusion prevention and detection technologies commonly deployed across the endpoint, web and networking markets,” commented the Company’s President, Phil Hartstein. “Finjan is committed to protecting its proprietary inventions through active enforcement of patent rights, where necessary. This action against Proofpoint is intended to highlight our commitment to protect our intellectual property and particularly, against an unlicensed company in direct competition with our existing licensing partners.”


Follow

Get every new post delivered to your Inbox.

Join 256 other followers