Israel IP 2013, a Quantitive Overview

June 17, 2014

 Israel Patent Report 2013

The Israel Patent Office has published its summary of 2013. Their focus is on their efficiency. I have culled and am reporting the information that I believe is of more value to IP practitioners. My interpretative comments are in italics.

To enjoy the graphs and the graphics - a hot air balloon lifting a paper car, and no-doubt signifying hot air, recycling, creativity, and fen-shui, or something, readers can access the original here. I think that this literary digest is more user-friendly. Each to his own.

PATENTS 

The number of patent applications in 2013 was 6184 which is down 9% from 6793 in 2012, and is the lowest number since 2003. Approximately 600 of these applications are Divisional Applications and 6 are patents-of-addition.

The Israel Patent Office notes that since 2012 there has been a 40% discount for local applicants having a turnover of less than 10 million Shekels, but fails to note that there was a massive jump in filing fees of about 40% back then. My take – the Shekel is very strong so Israel is a more expensive destination than some others.

The number of first filings in Israel is 889, which is also a record low, less than at any time in the past decade. It is possible, however, that more Israeli start-ups are first filing in the US, either as Provisionals or regular US applications since the US fees have been going down, and the dollar is weak.

The pendency period prior to examination starting has been dropping steadily and is now 28 months on average, with biotech being especially fast. This may be explained by the increase in Examiners due to the Israel Patent Office becoming an International Search Authority of the PCT, which required the IPO to employ at least 100 examiners.

Second office actions typically issue 5-6 months after a response is filed, which is similar to last year and rather better than in the past. 

On average, examination takes 2 to 27 months, with Biotech taking rather longer on average – 37 months.

The Israel Patent Office has issued 3698 patents in this period, which is more than for any other solar calendar year in the past decade except 2011. 

The number of PCT applications filed in Israel was 1199 which is up from 1113 in 2012, but still below 2011 levels.

658 out these (55%) filing in Israel, have taken advantage of the relatively low International Search Fees and elected Israel as the Search and Examination Authority. 321 selected the EPO and 220 selected the USPTO. 

The report claims that the total number of applications filed by Israelis has remained constant, but more are filed in Israel as opposed to in Geneva. I don’t thing this is true, but do accept that the service provided in Israel is at International levels, with 91% filing electronically. 

What is clear is that in both absolute numbers of originating countries and by Receiving Office, Israel ranks 17, and clearly has a smaller population than any of the countries that have more filings.

Israel is the second fastest receiving office at getting applications to WIPO, with 99.3 applications getting there in les than four weeks, only lagging behind Denmark. This is a fairly useless statistic for the Israeli inventor, but no doubt gratifying to Dr Michael Bart and his team. I have been presently surprised by the quality of Israel generated International Search Reports and have recommended them to clients. In the past the USPTO often failed to provide the International Search Report (ISR) in a timely manner, but they have got better and also better at searching, even occasionally finding relevant art in non-US patent literature. The US fees have dropped somewhat and they may be more popular.

Israel is proud of the speed of PCT examinations, with 90% being examined within 3 months, ahead of the US and EPO. Furthermore, they blame security related examinations being forwarded to the Ministry of Defence for clearance, for the remaining 10% which take 4-5 months to issue.

There is an interesting of table of where incoming patent applications originate, that shows both Paris Convention filings and PCT national phase entries. This is of value when planning overseas marketing strategy.

Lists of the more prolific local and international filers into Israel had few surprises.

Some 20% of patents are issuing by modified examination under Section 17c, relying on a foreign issued patent from one of a list of examining authorities. This number has been dropping steadily since 2010, and is below 2008 levels. 

Some 130 applications were examined out-of-turn by one or other acceleration mechanism. This is higher than in previous years and no doubt reflects the various fast lanes of the Patent Prosecuting Highway, since only 18 applications were considered ‘green’ and fast-tracked thereby 

Of the 3887 applications allowed, 32 were opposed. 27 oppositions were dropped by the opposer and 14 resulted in the applicant dropping the case. Of the four patent oppositions that went full term to decisions, 2 applications were allowed to issue and two were rejected, with the ruled on oppositions taking an average of just over 4 years to be resolved.

Five applications to cancel issued patents were filed with the patent office. 21 final rejections were appealed. 9 requests for patent term extensions were filed and 4 were granted. 41 lapsed patent requests were considered and there are 8 pending decisions for employee inventor compensation. 

In absolute terms, there are fewer applications filed in Israel than in South Africa, New Zealand or Malaysia. In terms of patents per gross national product, Israel lags behind Korea, Japan, USA and most of Europe. 

When normalized for the size of population, Israel remains surprisingly attractive. Israel remains a must-file country for pharmaceuticals, biotechnology, organic fine chemistry (whatever that means) and medical technology. It holds its own in computing. Interestingly, Israel is also noticeable as originating PCT applications for medical technology and pharma, so Israel’s innovative companies are no less significant than the Israeli generic suppliers.

DESIGNS

The number of design applications was 1353 which is the lowest for a decade. 492 of these come from Israel. Of the 861 foreign cases, the US is the most prolific filer, followed by Brazil (104 applications, mostly Stern Jewelry), Europe, Korea, Japan and China.

TRDEMARKS

There were 9580 trademark applications into Israel in 2013. This number is less than 2006 to 2008 but higher than the other years of the last decade. Part of the drop is due to the introduction of multi-class applications, since there is an overall growth in the number of classes being filed in. Multi-class filings and the fact that of the 9580 applications, some 4930 were Madrid Protocol applications, implies less work and income for Israel trademark attorneys in basic filing. There are, however, some 176,978 issued trademarks in force, that need renewing. (Costa Rica has 183,226, and I suspect a better mark to attorney ratio).

As of the end of 2013, there were 20 competing mark cases, 98 trademark oppositions, 14 single party appeals and 40 cancellation or registry correction cases. Overall, the Israel Patent Authority has managed to resolve more of these than have been initiated.

Based on WIPO statistics, Israel ranks 46 in terms of trademark originators, behind Algeria, Kazakhstan, Bosnia and Herzegovina and Azerbaijan. Hoewever, Israel is only 19th in terms of popularity as a destination under Madrid.


New Procedures for Prosecuting Israel Patent Applications

January 14, 2014

Israel patent office logo                        israel patent

The Israel patent office has issued new procedures for patent prosecution.

Notice Prior to Examination

In response to the Notice Prior to Examination, applicants are required to provide a list of relevant prior art including details of citations in corresponding applications in other jurisdictions. Non-patent literature should be supplied in full. Patents cited in the background of the specification do not need to be listed again.

Applicants are also required to provide a full list of corresponding patents and applications in other jurisdictions.

Where there are more than 50 claims, the claim set must be amended or excess claim fees must be paid.

Finally, the first publication of the invention must be reported and failure to do so will be considered as a requirement not met and may invalidate the patent.

Amendments

It is now no longer necessary to submit marked up and clean copies of amended pages during prosecution. Claim amendments should be made by submitting a full set of marked up claims, whereas only amended pages to the specification need be submitted. These amended pages should be marked as {application number}/2, {application number}/3, etc.

On allowance, a complete, clean copy of the patent as allowed should be submitted together with the issue fees.

Comment

I see the logic and approve of the new procedure for making amendments.

Apparently, the new procedures follow a meeting with representatives of the professional organizations. The head of the association of patent attorneys, Dr Meir Noam, is the previous commissioner and does not practice opposite the patent office and hasn’t done so for about a decade. The head of the AIPPI Israel Chapter is a litigator. I therefore wonder to what extent the changes take into account the professionals that prosecute opposite the patent office.


Pharmaceutical Patent Term Extensions – Israel Patent Office Considers Request to Grant Extension for Requesting Extension

January 7, 2014

scar jel

Israel Patent Application Number 217056 to Advanced Biotechnologies LTD. is titled Silicone Scar Treatment Preparation.  The patent application is still pending. According to applicant, the patent covers medical equipment marketed in Israel as Kelo-Cote Jell, Kelo-Cote Spray and Kelo-Cote UV. The products were authorized for sale in Israel from 9 June 2013 and are listed in the medical equipment register of the Ministry of Health. On 26 October 2013, the Applicant requested a three month extension to file a request for patent extension in the event that the patent application is allowed and a patent is granted.

64D. States that:

The Registrar shall not grant an extension order, unless the following conditions have been met:

(1) The material, the process for its production or its use, or the medical preparation that incorporates it or the medical equipment was claimed in the basic patent and the basic patent remains in effect;
(2) in respect of a medical preparation—a medical preparation that incorporates the material is registered in the Register of Medical Preparations under regulation 2 of the Pharmacists Regulations (Medical Preparations) 5746—1986 (hereafter: Pharmacists Regulations);
(3) the registration said in paragraph (2) is the first registration that allows the material to be used in Israel for medical purposes;
(4) no extension order was granted previously in respect of the basic patent or in respect of the material.

Section 64(O)a of the Israel Patent Law grants 60 days for filing a request for a patent term extension and this deadline was missed. HOWEVER, Section 64(O)a relates to ‘medical preparations’.

Despite the contention of the applicant that he was requesting an extension for filing a request for a pharmaceutical preparation, the Commissioner considers that the products in question are not medical preparations but rather ‘medical equipment’, and doesn’t think that the time period of Section 64(O)a of the Israel Patent Law refers to ‘medical equipment’, so there is a lacuna as to what the window for filing the request is.

Medical Equipment is certainly included in Section 64 of the Law:

“medical preparation”—any form of therapeutic drugs that underwent processing, including a preparation for use in veterinary medicine and a preparation of nutritional value intended to be injected intravenously;
“material”—the active component of a medical preparation or salts, esters, hydrates or crystal forms of that component;
“the basic patent”—the patent that protects any material whatsoever, including a process for the production of a material, use of a material, a medical preparation that incorporates a material, a process for the production of a medical preparation that incorporates a material or medical equipment that requires a license in Israel (hereafter: medical equipment).

and it would appear that the requirements to allow a proper period for filing a request for extension are analogous for ‘medical preparations’, see  Re Asta Medica Aktiengesellschaft 101537, 108704, 92904 from 2002.

Consequently, the Commissioner ruled that Applicants have three months in which to submit a request for a patent term extension of the basic patent, from the basic patent No 217056 issuing, if it eventually issues.

COMMENTS

Section 64 A defines a “medical preparation” as any form of therapeutic drugs that underwent processing, including a preparation for use in veterinary medicine and a preparation of nutritional value intended to be injected intravenously. Section 64O. States that an application for the grant of an extension order shall be submitted in the prescribed manner, after the fee has been paid and not later than 60 days from the registration day of the medical preparation under the Pharmacists Regulations.

In this ruling, Commissioner Kling has decided that these materials are medical equipment and not medical preparations, and therefore the 60 day deadline does not apply. There is no deadline for medical equipment, so he is creating one and setting it as ninety days from patent issuing and not sixty days from receiving regulatory approval.

I can see cosmetic preparations being not considered as medical preparations, but in that case they would not be considered as medical equipment either. The title of the application implies that these are preparations, if not necessarily therapeutic. Apart from the hair splitting, I fail to see the logic of granting ninety days from patent issuance for medical equipment but sixty days from regulatory allowance for medical preparations. If there is a lacuna, then the time period for medical equipment should be learned from and be the same as the period for medical preparations.

The preamble of the main claim is “A spreadable preparation for aiding in the healing of wounds”. I think this is a medical preparation and the deadline was missed, not for the first time by the agents of applicant, see here. The time frame is extendible by the commissioner, but the standard should be despite the applicant exercising Due Care. We have no indication what happened and why the application wasn’t made within 60 days.

We note that in the Novartis case then Acting Commissioner Yisrael Axelrod gave a liberal interpretation of the patent term extension rules  in accordance with the 1998 amendment and was subsequently sideways promoted to the Beer Sheva District Court, i.e. literally out into the desert, and the Knesset reworded the law to make his interpretation untenable. The intention of the Knesset was not to grant a reasonable extension under reasonable conditions, but to make it as hard as they could to get patent term extensions. Each amendment to make getting extensions easier was under US political pressure. Each amendment not under US pressure was to make it more difficult.

This is an ex-partes ruling but we suspect that if and when the patent issues, the request for an extension will be opposed and eventually the courts will have their say, if the law concerning patent term extensions is not amended AGAIN in the meantime.  It is probably the numerous amendments to this chapter of the Law under US pressure that has resulted in these “lacunae”.

In the meantime, it appears that RAFA is supplying the product in Israel. See here 


Israel and Korea launch a Pilot Patent Prosecution Highway

December 30, 2013

israel korea relations

The Israeli and Korean Patent Offices have launched a Pilot Patent Prosecution Highway (P-PPH) under which the result of an examination in one of the jurisdictions if it is the office of first filing, may be used to fast track the application in the other.

There are two variations, the regular one is the PCT-PPH under which one office serving as an International Search Authority ISA and/or International Preliminary Examination Authority IPEA, and issuing an International Prelinary Examination Report IPER that is at least partially favorable, by having at least one allowable claim, may be used to fast track examination in the other jurisdiction.

The other variation is called the A PPH – MOTTANAI – where the A may be an indefinite object without antecedent. I have no idea what the MOTTANAI bit stands for.

Under the PPH – MOTTANAI, an application whose claims have been determined patentable in the Office of Earlier Examination (OEE) is eligible to go through an accelerated examination in the Office of Later Examination (OLE), upon an applicant’s request.

COMMENT

I am not sure if all these acronyms are helpful, but imagine that the fast tracking itself may be useful. At least in the electronic materials field, I’ve found the Korean Patent Office very efficient.

I see these international agreements are generally good for Israel politically. Israel and (South) Korea have a lot in common. Whether or not the PPHs (don’t try to pronounce that) will result in more filings in the two countries, it is too early to say. 

The PPHs  are provisional. If there are too many cases fast tracked under the system, the patent offices reserve the right to reconsider. This makes sense. It is a little like queuing with everyone else in the under 10 items, pensioners and handicapped line to the express check-out in the supermarket. One knows how to get into the fast line, but whether or not it is sensible to do so, is another issue entirely.


Withdrawing from Representation Before the Israel Patent Office

July 2, 2013

withdraw 2  withdraw

Aharon Demri, Myrr & Frankincense Fragrances LTD and Vered Arbel opposed Israel Trademark No. 247320 to Eliyahu Twitto.

The mark in question is an image of a woman (da Vinci?) and the words Myrr & Frankincense in Hebrew. The mark is reproduced below.

Myrr & Frankincence

After the opposers withdrew the opposition, the Applicant requested costs for having to fight the opposition. Before responding to the costs, the Opposer’s counsel, Advocates David Walberg &Larry Goldstein requested to withdraw from representation in this case. The request was based on them having lost contact with the clients. They claimed to have tried both telephoning and writing to the client without success.

Apparently hedging their bets, they added a footnote with alternative responses allegedly supplied by the Opposer.

Ruling

The commissioner, Assa Kling ruled that when deciding on whether to accept a request to release an attorney from his representation, it is necessary to find a balance between the responsibilities of the lawyer towards his client on one hand, and the freedom of the lawyer to provide services to whom he likes on the other. Furthermore, one has to bear in mind the public interest that is inherent in the attorney -client relationship. To ensure that the balance is maintained, Regulation 473b of the Civil Procedure Code 1984 and Section 17 of the Criminal Code entrusts the court with the decision regarding whether or not to allow the attorneys to resign from a proceeding.  The commissioner ruled that the same authority is entrusted to him regarding procedures before the patent office in general, and oppositions in particular.

Section 13 of the General Attorney Bar Laws (Ethics Code for Lawyers) 1986 defines the minimum standards for withdrawing from representation:

13 (a). If a lawyer takes on a case, be is not entitled to withdraw unless either:
there are differences between the course of action that the lawyer considers appropriate and that which his client wants, or
there is a legal reason that impairs the lawyer acting, or 
there is a conflict of interest, or
the client does not pay costs or expenses, or
some other reason justifying withdrawing.  

(b) if a lawyer decides to withdraw from representation prematurely, he must, without delay, inform his client, and, to the extent that he is able, he must stop the representation  in a manner that doesn’t prejudice his client’s rights.

(c) in an ongoing precedure before the courts, a lawyer may not withdraw unless doing so is in accordance with all legislation.

In accordance with the above, Circular 15-2012 from 20 November 2012 requires one withdrawing from representation to warn the client of the consequences of the withdrawal.

The attorney – client relationship is not a Catholic marriage, and one cannot oblige an attorney to represent a client for ever, particularly in civil matters. Nevertheless the attorney has to provide full details of his attempts to contact the client to convince the court that due care was taken not to damage the client’s affairs.

In this case, the attorneys merely indicated that they had lost contact and had tried phoning and writing. There was no evidence  submitted with the request to detail these attempts, and no indication that there was an attempt to inform the client of the consequences of withdrawing.  Finally, the Commissioner expressed his lack of comfort with the stage in the proceeding whereat the client disappeared, i. e. where costs are being ruled.

The request to withdraw was refused.

Opposition to Israel Trademark No. 247320 to Twitto, before Commissioner of Patents and Trademarks, 9 May 2013.

COMMENT

I have a certain sympathy with the attorneys here.  I have had (and still have) clients that are pains in the rear end, and clients that are incommunicado at the most inconvenient moment. Probably the worst case of this was a client who initiated a trademark opposition at the Patent Office with me, and a related Court action in the Jerusalem court using different representation and was impossible to contact since he went to participate in Big Brother. We could see the X$%^& on TV but couldn’t get instructions from him…


New Israel Patent Office Circulars

July 2, 2013

The Israel Patent Office has published a new Circular (22-2013) relating to amending patents after grant, and has also updated circular 11-2013 which relates to the Section 18 obligation concerning submitting prior art references to the Israel Patent Office.

22-2013

circular saw

As far as amending patents after grant, amendments are allowed provided that no new material is added and that the claimed invention is not widened. The Patentee must supply clean and marked up pages with a version number and must supply these as .PDF or .TXT file on a DVD so that third parties can review and oppose on publication for opposition purposes. Support for the amendments must also be provided.

11-2013

magic roundabout

With regard to prior art submissions, both the applicant and also third parties submitting relevant prior art under Section 164a within two months of publication of the Notice of Imminent Examination, must supply one copy of non-patent literature on a DVD or CD. The third party deadline is non-extendable.
Circular 13-2012 cancels the following circulars: M.N. 77, M.N 83, M.N. 51 and Circular 5 (Yoel Tzur).


Toll Reader Patent Application Considered Business Method in Israel, and Refused

June 28, 2013

200px-Phantomtollbooth

Raytheon filed Israel patent application number 179203 titled “Licensed Driver application for High Occupancy Toll Lane Qualification” back in November 2006. The application is a national stage entry of PCT/US2005/052162. The corresponding patent issued in the United States as US 7,091,880, and, on 22 January 2007, the applicant brought the claim set of the Israel application into conformance with that of the issued US Patent, and requested allowance in Israel under section 17c.

The claims

The claim set of the corresponding US patent includes 17 claims, of which three, claims 1, 9 and 15 are independent. Claim 1 relates to the method, claim 9 to the system as a whole, and claim 15 to the specific apparatus:

Claim 1 is as follows:

A method of collecting tolls on a high occupancy toll lane comprising: Detecting a count of driver’s licenses inserted into a card reader located in a vehicle using the high occupancy toll lane; and transmitting the count of driver’s licenses to a roadside transceiver for a determination of a toll amount for the vehicle based on the count of the driver’s licenses.

The various dependent claims relate to (claim 2) extracting information concerning the driver’s license from the card reader, (claim 3) using a bar-code or magnetic swipe line on drivers’ license, (claim 4) to determine if the driver’s license is currently in force or not, such that only valid drivers’ licenses are considered. Claim 5 adds other parameters to determine the toll to be collected. Claim 6 uses the number of drivers’ licenses associated with the vehicle as an indicator of the number of passengers for the purpose of determining the toll charge. Claims 8 and 9 add a facility under which if there are no detected registered drivers licenses associated with the vehicle on which to base a toll charge, the lane is illuminated so that a toll may be manually collected

Claim 9, which relates to the system, is as follows:

A toll collection system comprising: a transceiver positioned adjacent to a lane and including a receiver for receiving radio frequency signals; and a transponder positioned on a vehicle using the lane comprising a card reader for reading information from one or more driver’s license inserted into the card reader and a processor operative to generate a licensed driver count related to a count of the driver’s licenses inserted into the card reader, where in the transponder further comprises a transmitter for transmitting a radio frequency signal indicative of the licensed driver count to the transceiver.

Claims 10 to 14 correspond, more or less, to claims 2-8.

 Claim 15 relates to the transponder, and is reproduced below:

 A transponder located on a vehicle and adapted for use on a high occupancy toll lane, comprising a card reader for reading information from one or more driver’s licensed inserted into the card reader, wherein the transponder includes a processor operative to generate a licensed driver count indicative of a count a driver’s licenses inserted into the card reader.

 Claims 16 and 17 depend on claim 15 and relate to the transponder being able to transmit a number of driving licenses to a roadside receiver via radio waves, and to the receiver that can process and determine that the licenses are in force and accordingly adjust the counting.

 The Examination

The Examiner refused to allow the patent under Section 17c, on the grounds that it was directed to a business method, and not to a technical problem, and thus contravened Section 3. Furthermore, he cited prior art that allegedly rendered the claimed invention known / obvious and thus in contravention of Sections 4 and 5. The Examiner relied on the Decision of former Commissioner, Dr Meir Noam concerning Application 131,733 to Tamir which (according to Ms Shoshani-Caspi) codified the 23/94 Jerusalem Court Decision concerning United Technologies vs. Patent Office (District Court Vol. 28(8) 729.  The Examiner essentially considered the method as being a business method, addressing the issue of collecting tolls, but also the components and system standard, and their use as obvious to people of the art.  Furthermore, citing US 5,493,304 to Cunningham et al. and WO 2004038663, as lacking novelty and/or inventive step.

The Chief Examiner upheld the Examiner’s position, and the application was refused. However, the applicant was invited to appeal the decision to the commissioner – hence this hearing.

The Applicant’s position

The applicant had two issues:

  1. Where Section 17c is invoked, the Applicant considered the Examiner was prohibited from raising novelty and inventive step issues.
  2. As far as patentable subject matter was concerned, the Applicant considered that the subject invention is not a business method per se. but rather a technical solution to a problem that although it had financial aspects, was, nevertheless, essentially technical. The solution required a system of elements that worked together and were all essential. Consequently, the patent application could not be dismissed on the grounds that the elements themselves were known, or on the grounds that the this was merely a business method.

The ruling

The adjudicator cited Section 17c and noted that if the application fulfilled all other requirements, the Examiner need not consider Sections 4, 5, 8 ,12 and 13. However, based on the IL 136482 Bromium Formulations LTD. vs Albermarle decision, the Examiner was entitled to reject a Section 17c request based on prior art that he considered rendered the Application non-patentable. Furthermore, since the Examiner considered the application as not fulfilling Section 3, it was legitimate for him/her to do an independent search and cite prior art. See IL 168734 to Anna and Reuven Berman (a decision relating to paying car parking fees).

Ms Shoshani Caspi summarized her position that the Examiners were responsible for ensuring that patents that should not issue didn’t, even if corresponding patents had issued in other jurisdictions having competent Examining authorities.  

As far as the system claim is concerned, there is no argument that the components are known and are not being used in an inventive manner, apart from the application, which is a business method. Based on the Berman decision, and also on IL 171773 to Teicher, the system is essentially a computer based business system and the invention is thus fundamentally related to software and business methods, even though there are hardware elements included. The Adjudicator considers that the system has to be considered in its entirety and not as a collection of elements, and the issue is whether there is an inventive technological solution.

The adjudicator noted that in the background, the applicant himself acknowledged that there such systems were known:

“Automated toll collection systems are known. Typically, these systems comprise a reader transponder or transceiver and at least one vehicle transponder. The reader transceiver includes either laneside, overhead or in-pavement antennas in each traffic lane. The reader transceiver senses the presence of the vehicle transponder by employing a vehicle sensor or by transmitting an RF signal to which the vehicle transponder responds with an identification message.

High occupancy toll (HOT) lanes are in use in many states in an effort to reduce highway demand. In specially designated HOT lanes, vehicles having at least a predetermined number of occupants, such as two or three, (i.e., high occupancy vehicles, or HOVs) are given a discounted toll rate or are not required to pay a toll at all. Single occupancy vehicles (SOVs) may be permitted to use the HOT lanes, but are required to pay a higher toll.

Enforcement of HOT lane qualification is typically performed by having a police officer monitor passing vehicles to ensure that the threshold number of occupants are present in cars using the HOT lanes or benefiting from the reduced or eliminated tolls. Such enforcement is only effective when a police officer is present and is a costly enforcement approach.”

Thus, the inventiveness for which a patent was sought was that defined in the Summary of Invention as follows:

“….by determining a toll amount for the vehicle based on the number of licensed driver occupants, the intent of HOT lanes, of reducing highway demand, is served.”    

The Adjudicator went on to note that “A physical technological process is an expression of a physical thing or a characteristic of a process” and referenced EPO ruling G0003/08.

Furthermore, she ruled that to be patentable, a software invention is required to be more than merely computerizing something that can be done manually. Since the cited references included the same components, she could not see that this invention was anything more than a computerized system for doing something known, and rejected the application.  

COMMENTS

Re Section 17c – Essentially, Ms Shoshani-Caspi’s position is that Section 17c establishes that where a patent has issued from a reputable patent office there is a presumption of validity that is rebuttable. The Examiner may rely on the issued patent not to do further searching or on the conclusion of the foreign Examiner that prior art is not identical or a combination of prior art does not render the invention obvious, but is not obliged to. Furthermore, since the standards of obviousness in each jurisdiction are determined by the relevant case-law, it does vary from country to country. Some combination may be considered non-obvious in the US, Australia or Europe, but may still be obvious by Israeli standards

I think this analysis is correct, but it is a change from the previous practice of the patent office. In consequence of the Israel Patent Office being an International search Authority, there are now some 100 examiners. There are more resources available for examining and we see not relying blindly on Section 17c as a positive development. What will, however, now happen, is that some patent attorneys will refrain from invoking Section 17c and will simply inform the patent office that corresponding patents with corresponding claims have issued elsewhere, providing details. This will probably slow down examination and increase costs to Applicants.

Re the Patentability of Computerized systems – IL 68409 to United Technologies Corporation, dealt with computerizing a system for the energy-efficient flying of a helicopter. The patent office rejected this, but on appeal, the Jerusalem District Court, C.A. 23/94 (Jerusalem) United Technologies Corporation v. The Registrar of Patents, Designs and Trademarks, District Court Decisions, Vol. 26 (8), 729. It would appear that where a system is computerised, to save fuel, the invention is not merely a business method but is technological. I accept that toll collection is more obviously a business method, but both really deal with efficient usage of resources, one case being a road and the other fuel for a helicopter. I can’t see any real philosophical justification to consider the two cases differently. I actually think the District Court was wrong, but the patent office didn’t appeal the ruling and it is thus good legal precedent. Dr Noam did not codify the ruling. He over-ruled it, and, despite the fact that I agree with him substantively, this was beyond his authority. Still, if this is the way the Israel Patent Office sees things, this is how they will rule, unless there is another appeal to the courts.


Should the Shape of Rubik’s Cube be Protectable as a Trademark?

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.


Israel Supreme Court Hears Design Infringement Case and Awards Damages

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.


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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