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.


Genes not patentable in the US, but apparently patentable in Israel!

June 13, 2013

jeans

The Supreme Court of the United States ruled today that human genes cannot be patented. This decision, relating to Myriad’s patents for the Brca1 and Brca2 gene sequences that are indicative of a likelihood of breast cancer, may have immediate benefits for some breast and ovarian cancer patients. However, it is likely to have long-lasting repercussions for biotechnology research.

Justice Clarence Thomas wrote the decision for a unanimous court. “Myriad did not create anything,” Thomas said. “To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.”  The justices did however that a type of DNA that goes beyond extracting genes from the body can be patented.

A consortium of cancer patients, researchers and geneticists that interestingly included a group associated with Yeshiva University, argued that Myriad’s patent raised costs, restricted research and sometimes even resulted in women having breasts or ovaries removed without sufficient facts or second opinions.

Association for Molecular Pathology et al v Myriad Genetics Inc et al.  Full decision here.

COMMENT

This opinion is of interest to Israel, not just because of Israeli research into identifying gene sequences associated with different diseases, but because back in October 2008, in Circular M.N. 64, the Israel Commissioner of Patents announced that gene sequences can now be patented in Israel. See Gene Sequences are now patentable in Israel. I am not sure whether Dr Noam actually had the authority to decide that genes were patentable, but until this circular is canceled, the Israel Patent Office will, apparently, continue to grant claims for gene sequences.


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?


Amicus Briefs Filed in Employee Compensation Hearing Regarding a Service Invention

June 6, 2013

briefs

There is an ongoing adjudication regarding a service invention. The hearing is taking place behind closed doors, and is between 1. ” _________” – the plaintiff of the case, and 2. “________”, the defendant.

The adjudication concerns appropriate compensation to the inventor, who is legally bound to assign the invention to the employer, but is entitled to compensation to be decided by a committee set up for this purpose. The Committee is chaired by Professor Englard and additionally consists of the commissioner, Assa Kling, and Professor Michael Tlainker.

A censored intermediate ruling has now issued concerning requests by third parties to submit Amicus briefs. The third parties wishing to be friends of the court are the Association of Israeli Industrialists, the ISS Israel Branch, representing corporate counsel, and Israel Association for Advanced Industries (Hi-Tech).

The larger issues that  require clarification according to the amicii curiae are:

  1. Is the entitlement of an employee inventor to compensation a cognitive right or is it dispositive? In other words, can the employee sign a work contract in which he/she gives up on additional compensation from inventions, above and beyond the salary package?
  2. Is someone working in R&D who is essentially hired to invent in a special category?
  3. Is there a statute of limitations? is there a period after which claims for compensation are considered passe?

The three organizations consider that there is a delicate balance that could be upset here, and awarding compensation to inventors could adversely affect Israel industry, foreign investment in Israel by way of R&D centers, joint ventures, contracting research to Israeli universities, and could ultimately affect everyone by lowering tax revenues and triggering a worldwide recession. (I exaggerate, but only slightly).

The first party (presumably the inventor) considers that the three amicus briefs should not be considered. He/she does not consider that the addition of these parties will add anything to the discussion. He/she believes that they will further drag out an already long-drawn process,  and that general philosophical issues and larger ramifications should be left to academia to discuss and the legislative bodies to right laws about. He?she considers that amicus briefs should be considered in rare cases and only f they raise new, wide issues. Finally, the first party considers that the potential friends of the court have waited too long to submit their request and are guilty of inequitable behavior.

The second party (presumably the employer) considers that there are serious general economic ramifications of this case and that the three associations may contribute to the case by adding their perspective.

In a reasoned analysis, the committee has ruled that they can add third parties as complainants or defendants at their discretion or at the request of the parties or such third parties. The committee further sees itself as authorized to request or accept contributions from interested experts. After Barak’s allowing non-profits to file submissions to the Supreme Court, the court considers itself as having the power to allow submission of amicus briefs, but, quoting Barak in Kozli,  should do so only where there is a compelling interest of the public to do so, and where this adds something to the discussion. Care should be taken to avoid adversely affecting the efficiency of the case and to adversely affect one or other of the main parties. Furthermore, since the committee is the only forum to hear the issue of employee inventor compensation, and since its decisions are final, care should be taken in exercising their prerogative to accepting amicus briefs.

The committee notes that generally the courts are fairly liberal about allowing third parties to submit amicus briefs, but notes that the present case is adversarial, which requires a level playing field. The employer generally has more resources and the employee is thus disadvantaged.

In the specific case the committee was not convinced that accepting the amicus briefs would help the case to be decided efficiently, they did not consider that the third parties had any arguments to contribute that the employer has not thought of, and noted that the individual inventor is disadvantaged with less resources than the employer. The committee rejected the request but did note that the two main parties could themselves submit a document or testimony provided by one of the submitters of amicus briefs, if considered to be of particular relevance.

COMMENTS

This is a hot issue. I organized a conference on this topic a few years ago, which attracted record participation. See here. Speakers included Knesset members, a former Accountant General, representatives of the university tech transfer organizations and industry. It is an issue that is frequently raised by both corporate clients and inventors.  Internationally, there has been a recent change in perspective due to the fact that people change jobs more frequently and may work for more than one company.  It is not easy to come up with fair compensation packages for inventors, where a product’s success may be attributable to other company employees involved in marketing, manufacturing or management. There is a further complication when considering consultants and subcontractors. Particularly where a patent may be attributable to a collaboration of one of more employees and one or more subcontractors, possibly consultants working for universities and the like.

We await the main ruling with interest and hope that the censors will allow enough details to provide some context!

 


General Meeting of the AIPA – Maybe sending out invitations by snail mail could be useful

June 4, 2013

General  MeetingIn a recent post I reported on the forthcoming general meeting of the Israel Association of Patent Attorneys – the AIPA.

I’ve just received a reminder from them, apparently sent to all the email addresses they have, reminding us that if we haven’t paid membership, we should do so.

The email was sent to 100 addresses. Three were to the same Daniella at alternative addresses (none of them correct) and a couple to Yitzhak Rachailowich. in other words, there aren’t 100 discrete recipients.

I am aware of a couple of other practitioner’s emails that aren’t up to date because of practitioners moving firms.

Dr Ben Spungin who joined me last year from Reinhold Cohn complained to me that he wasn’t informed about the General Meeting.  No doubt his former colleagues on the committee forgot to update the membership list.

What is sad about this, is that the invitation was sent out by email only.  That’s fine if a genuine effort is made to keep in contact with the approximately 400 licensed practitioners that are eligible for membership. Unfortunately, this doesn’t seem to be the case.  then again, the elections are unconstitutional and the organization is dormant.

I am doing what I can to publicize this GM, although I don’t see the point of attending.

NOTE – Any vague similarity between the cartoon above and Dr Ed Langer, the treasurer of the AIPA, is purely coincidental.


Teva to Produce Generic Drug for Attention Deficit and Hyperactivity Disorder

June 2, 2013

ADHD
Shire Plc (SHP) has settled a patent lawsuit against Teva Pharmaceutical Industries Ltd. (TEVA). This paves the way for lower-cost generic versions of Intuniv, used to treat attention deficit hyperactivity disorder (ADHD).
Israel based Teva is the world’s largest generic-drug company. According to a statement from Shire, Teva will market a generic version of the Intuniv under license. The license will take effect once another generic-drug maker, Actavis Inc. (ACT), has sold the drug for six months starting in December 2014.
Shire sued Teva, based in Petach Tikva, Israel, in federal court in Wilmington, Delaware, in April 2010 alleging infringement of two patents for Intuniv. Shire previously settled with Parsippany, New Jersey-based Actavis over the patents. A trial of the litigation against Teva and Actavis was held in September.
The case is Shire LLC v. Teva Pharmaceuticals USA Inc., 10-cv-00329, U.S. District Court, District of Delaware (Wilmington).


Best Practices in Intellectual Property 2013

May 30, 2013

KIMI spent a nice day yesterday  at the Tel Aviv Sheraton Hotel, attending a conference entitled “Best Practices in Intellectual Property 2013″.

I sat next to Blogmeister, Professor Jeremy Phillips, who was busy tapping away at his laptop, blogging the event in real time. Rather than duplicate his sterling work, I have decided to link to his posts, but to make my usual inane comments and insights.

The event was well organized by Kim Lindy of IPR. It attracted about 170 participants, albeit including a fair number that were speakers/ sponsors. I didn’t gain a lot of new insights, but it was a good opportunity to see old friends and make new ones.

The first Professor Phillips Review is here: Best Practices in IP 2013: a conference report 1

In the first session, chained by Einav Zilber of Applied Materials, various representatives of large corporations presented on managing a valuable IP portfolio. See Professor Phillips’ comments here. I noted that Luc Savage of France Telecom / Orange was slides with an appropriate colour scheme. Andrew Browne, who is an IP manager for Shell spoke well. It occurred to me, that he was selling Shell on the sea shore.  Last time I saw Andrew, he was working for the Royal Mail and tried to convince me that Postman Pat was an IP right that they had lost. It reminded me of a similar battle fought and lost by the Metropolitan Police against the BBC concerning rights to the TARDIS.

Dr Daniella Azmony  moderated the session on geographic focus, see here regarding filing around the world. She started by pointing out the well known dualism of filing in markets and where competitors are. I would tweak this a little, by noting that a patent may be renewed for up to 20 (or in cases of pharmaceuticals, 25) years from filing, so the real strategy is probable future markets and where competitors may be located.

Looking at where China was 5-10 years ago, makes me suspect that clients should consider filing in India more seriously, as the costs involved are minimal, and India has a population of a billion and a fairly large number of educated engineers.

There were US, German and Chinese patent attorneys making their sales pitches. US attorney Gregory Scott Smith spoke well, but his strategy involving provisional applications, filing a US application a year later without paying the fee and then filing a CIP a further year later, was aimed at cash strapped individuals and start ups, whereas the audience generally consisted of better healed in-house counsel. More worryingly, Gregory presented a somewhat blinkered approach that ignored rights in the rest of the world, i.e. outside of the US. This is not an uncommon perspective from US practitioners (and Examiners), but is, nevertheless, somewhat worrying.

Dynamic DF MP Duo, Drs Rainer and Greiner, did give some insights into what was happening in Europe. Aharon Hurvitz gave a Chinese perspective. Brenda Mtanga, a Zimbabwean patent attorney made a case for filing in Africa, where there is another billion people. Brenda is an old friend of mine. I ran across her in Munich a couple of years ago and in Washington at INTA last year. There are two regional groupings, the ARIPO (English) and OAPI (Fracophone).  One of the countries in the ARIPO group is the Seychelles, and it suddenly struck me that Brenda plugging filing in the Seychelles from the Tel Aviv Sheraton beach front hotel can be summarized as “She sells Seychelles on the Sea Shore!

The afternoon keynote address, Current trends in Patent Enforcement, Licensing and Monetization, by Jonathan Taub of Acacia, was a fairly blatant self promotion, as was the following session on monetization, whose speakers, from their websites, seemed to be incestuously interrelated. See Professor Phillips’ comment here: here.   An amusing point came when one of the panelists suggested that a questioner asking about patent sales, consider going to the LES. The questioner, Hananel Kvatinsky, is the current chairperson of the Israel chapter of that organization!

The final session was on enforcement. Chaired by Zeev Pearl, the panel was challenged to respond to various scenarios, with advice regarding how to deal with threats and opportunities concerning competitors.  We were satisfied to note that Pearl Cohen Zedek Latzer litigator and partner Guy Yonay didn’t advocate litigating under all circumstances, and warned potential complainants to think carefully and noted there was an invalidation risk. Because of this, we find the Source Origin vs. Hydrapak fiasco here  where the judge fined him and/or PCZL a couple of hundred thousand dollars for filing a lawsuit that lacked any arguable basis in fact. all the more worrying.

The breakfast was delicious with fresh coffee and Danish pastries, and during the morning break there was a buffet designed for chocaholics. The lunch was less tasty however, with a choice between a meat and mushroom stew, a lemony chicken breast dish and a fish option, with parev deserts.

Our hostess, Kim Lindy was wearing a black cloak that was sort of like a cut off graduation gown. I suspect she was dressed for quidditch, but there was no broom in evidence.


Unipharm Doing an At Risk Launch of Generic Viagra

May 26, 2013

pfizer-viagra-aAccording to Itzhak Dannon writing in Jewish Business News, the American company Pfizer, the world’s largest pharmaceutical company, recently filed a civil suit in Tel Aviv District Court, seeking  monetary relief to the tune of NIS10 million (over $2,700,000) as well as extensive equitable relief in the forms of a permanent injunction, a writ of mandamus and accounting, against the pharmaceutical company Unipharm of Tel Aviv and Trima Israel Pharmaceutical Products  of Ma’abarot. For more details, see here

 

The lawsuit claims that Pfizer developed and refined the active ingredient of Viagra, sildenafil.  It further claims that earlier this year defendant Unipharm turned to Pfizer and proposed that in return for a financial settlement it would avoid launching a preparation containing sildenafil, to be used to treat erectile dysfunction. The complaint alleges that Pfizer rejected the attempt at extortion and would not even consider such a “business proposal.”  Pfizer avers that it made it clear to Unipharm that any launch of such a product, before its patent expires, will immediately result in legal action it would take against the intended infringer.

According to Pfizer, the defendants could not resist the temptation to make “a quick buck” before the expiration of the patent protecting Viagra and launched a preparation containing sildenafil for treatment of impotency, marketed by them under the name Tarim.

COMMENTS

‘Tarim’ is the second person singular (masculine) of to raise or erect. Not a bad name, I suppose.

I suspect that Unipharm feel that in light of a recent Canadian judgement they can withstand a law suit and Pfizer will have their patent voided – presumably for lack of enabling disclosure and perhaps lack of novelty of the key ingredient. Unipharm has a good track record at having patents for pharmaceuticals voided.  No doubt this case will attract a lot of attention.

 


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