Israel Supreme Court Overturns Ruling Concerning Unjust Enrichment

September 16, 2014
Reversed Challa Cover!

Reversed Challa Cover!

Back in January 2012, then Jerusalem District Court Judge Yaakov Shapira issued a permanent injunction against a Merkaz Matanot 2006, a competitor and former client of the plaintiff, Karshi, prohibiting them from importing, exporting or otherwise trading in ceremonial ritual challah cloths that had a similar general design to those that produced and distributed by Karshi. Their client, Ami Motzrei Noi LTD and their owner were also injuncted and they were See here for more details.

Essentially Judge Shapira who is now the State Comptroller ruled that there was Unjust Enrichment, breach of contract and passing off. I was very critical of the decision, and particularly that Shapira gave a world-wide injunction which seemed to have been beyond his judicial competence.

I am pleased to announce that the Israel Supreme Court has now reversed the ruling.

Essentially, Karshi ordered these ritual cloths having the words ‘שבת קודש’ – ‘Holy Shabbat’ in a fairly standard font embroidered on a piece of chiffon with a more solid fabric border from China.

Judge Chayot ruled that since Merkaz HaMatanot labeled their cloths with a tag stating that the supplier was Merkaz HaMatanot, there was no case of passing off. Merkaz HaMatanot was a retail customer of Karshi as wholesaler and not an agent of theirs, there was no contractual relationship and thus no breach of contract.

Karshi made no attempt to register the design and there was no additional consideration to imply that Karshi had rights in the design. There was no case of inequitable behaviour to answer for so there was no grounds for sanctions under the Law of Unjust Enrichment.

Case: Civil Appeal 1898/12 Merkaz Matanot 2006 LTD vs. Karshi Intenrational LTD. before Judges Solberg, Natyot and Chayot.  Hearing 25/6/2013, decision, August 2014.

COMMENTS

It seems that A.Sh.I.R. is still good case-law, but the judges want some real indication beyond competition to rule Unjust Enrichment.

The cloths in question were variations on a well-known theme. It is suprising how many of these are sold. I suspect that a lot of ritual Judaica (probably including mezuzot and tefilin) are made in China. Being an importer does not create a monopoly. The original decision was wrong (as were decisions by Shapira concerning the Hallel wine trademark and concerning alleged copyright infringement by Naomi Ragen. I am pleased he no longer rules on IP issues. Whether or not he will be a good state comptroller is beyond the scope of this blog, and beyond my competence to comment on.

 


Invitation to the PCTea Party!

September 4, 2014

PC TeabagssewProfessor Phillips at a PCTea Party at the British Houses of Parliamentcinema city

To celebrate 10 years as an owner or partner in my own firm (including the partnership JMB, Factor & Co. circ a 2008-2011), and, a decade of this blog, the readers of IP Factor are cordially invited to toast in the Jewish New Year at a PCTea Party to be held in Cinema City Glilot, Ramat HaSharon. In addition to food, there will be food for thought provided by the preeminent Professor Jeremy Phillips, who will provide some insights on recent world-wide IP Developments, taking his title from Kohelet (Ecclesiastes):

“A time to sow and a time to reap”.

The event will be a party, not a sales pitch. We won’t be giving out literature (and request that competitors don’t either). I won’t even blow my own trombone.

When? 4 PM – 6 PM on October 1, 2014,

Where? Cinema City, Glilot

Academics and associates, competitors, colleagues, commissioners and clients, friends and family, lawyers and litigators, examiners and judges are all welcome.  However, we do need an idea of numbers, both for refreshment quantities and so that we select the appropriate cinema theatre (movie theater for those requiring translation), so we do request that people register here.


Fair Use

July 9, 2014

Shelley-Yachimovich-Labor-Party

Shelly Yachimovich is a member of the Knesset. She used to be a journalist, and during the incidents in question, was the Head of Israel’s Labour Party.

Danon PR Communications publishes a local newspaper in Modiin –  an Israeli city.

On 6 October 2011, the local paper published an interview of a worker in Yachimovich’ headquarters, that was written by Channa Stern. Yachimovich posted this on her website, and the paper asked for it to be removed and for 40,000 Shekels compensation for copyright infringement. When this tactic didn’t work, the paper sued Yachimovich under Sections 11 and 34 of the 2007 Israel Copyright Act and under Section 1 of the Law Against Unjust Enrichment, claiming statutory damages of 100,000 Shekels and legal costs.

Yachimovich claimed that the article was posted under a section of the website devoted to newspaper articles and that the source was clearly marked. The article was posted by a volunteer, and, on the newspaper complaining, it was removed. Nevertheless, no guilt was admitted.

In her defense, Yachimovich claimed that the interview was in a question & answer format, and thus the copyright belonged to the interviewee and not to the interviewer. Furthermore, she claimed fair use under Section 19 of the Copyright Act. She argued that the article had no inherent value, no potential for resale and no way of monetizing, and that the reposting on her website only gave further coverage to the article and to the local paper to a fresh audience who would otherwise not have been aware of it.

Finally, the paper had used a publicity photo of Yachimovich without her permission. Although this was a PR picture, it had cost money. This raised equal and opposite copyright issues. To the extent that there were grounds for copyright compensation in the publication of the article, Yachimovich was entitled to equal compensation in use of her picture and the two payments should be offset. Attempts to reach a compromise failed, and the court was authorized to rule on the basis of the evidence submitted without cross-examination.

The first issue that the court grappled with was whether an interview is considered copyright of the interviewer, or if it is a list of answers attributed to the interviewee?

The court accepted that there was copyright in interviews if there was at least a minimum of creativity in the wording of the questions or their arrangement and editing. There was a cute reference to Peah 1: 1 which discusses minimum standards for various Biblical commandments, including visiting the Temple on pilgrim holidays, where the term for sighting the Temple, is identical to the term for interview.

The amount of creativity was at least that of tables and anthologies, and on the basis of the work-product definition, there was copyright in the publication.

Posting the article on the internet website, where some 20% of the interview was posted was considered republication.

The interviewer is more than merely a technician and has rights in the interview. The question of joint ownership of interviewer and interviewee is discussed at length, and the understanding developed is that of use of jointly owned real estate by one party.

Fair Use

Various decisions relating to summaries of newspapers has established that merely relating to copyright materials as being a review is not sufficient to create a fair use presumption. One paper cannot simply quote large chunks of another and claim fair use. On the other hand, there are no simple tests of quantity or quality, and the issue is one of context. In this instance, Yachimovich has created an anthology of newspaper articles and source was accredited. The use is non-commercial. There was no compelling reason for reproduction under the public’s right to know, but review purposes are also considered fair use. The article was not reproduced in its totality, but rather a selection was made. The reproduction neither damaged the circulation of the original paper, nor boosted Yachimovich’s website’s circulation. Yachimovich claimed that reproducing such articles was common practice, but didn’t provide evidence of this. Nevertheless, the claim of fair use was upheld.

Moral Rights

Although moral rights create separate grounds for claiming damages, in this instance, the source was attributed, so moral rights were not compromised.

Unjust Enrichment

Since Yachimovich did nothing underhand, did not profit herself, or prevent the plaintiff from profiting from the publication, it was considered unfitting to consider unjust enrichment beyond the copyright issue.

Statutory damages

Having established fair use, the question of statutory damages was moot. Nevertheless, the judge saw fit to expand a little.

The plaintiff claimed that Yachimovich had made “Political Gains” and since she was an ex-journalist herself and a Member of the Knesset, she should be an example to the public. The plaintiff further argued that with statutory damages, there was no requirement to estimate the actual damages. However the defendant argued that 100,000 Shekels was exaggerated and baseless in this case.

The court accepted that the plaintiff could save themselves the trouble of estimating and proving exact damages, but the court had the prerogative to rule less than maximum damages if it saw fit. In this case, the defendant had immediately removed the offending article, there was no damages and no claims of inequitable behaviour.

Shamgar from 592/88 Sagi vs. the Estate of Abraham Ninio (2) 254, 265 (1992), was cited and Judge Michal Agmon-Gonen in Zoom p. 601 was referred to, noting that when ruling damages one has to look at the damages caused and the warning effect.

In this instance, the case was taken down quickly. The creative piece was an interview of low inherent worth, and the plaintiff had no suffered any damages as the website was not a competitor to the local paper. The defendant’s profit was indirect and minor. The article was posted by a junior and there was nothing inequitable in the defendant’s behaviour. The bottom line is that there is copyright infringement. It is covered by the fair use exception and the damages are zero.

Regarding usage of the photo of Shelly Yachimovich, the copyright claim was only made by way of offset and not in its own right, so once the damages to be offset are zero, the issue is moot. Nevertheless, the picture is a PR photo that is supplied for use by papers. It is a creative work and is owned by Ms Yachimovich as it was work for hire, created for her. The paper, despite claiming to be a local non-profit publication had intentionally used this creative work.

The picture was used to add colour to the article and this is generally accepted use of publicity photos. Although the paper is given away free, it is a profit generating paper that lives off advertisements. Nevertheless, the article had newsworthiness and furthers free speech and other values leading to a conclusion of fair use. The photo was attributed to “Yachimovich PR” which indicates that there was no attempt to profit by it. The photo was a PR photo that was used for PR purposes, and this is fair use. Thus there was no grounds to grant damages to Yachimovich for using this photograph in this manner.

Since the defendant had raised counter claims, both parties had conducted themselves fairly, and related to the issues raised, the judge did not see fit to rule costs.

Civil Ruling 57588-05-12 Danon PR Telecommunications vs. Shelly Yachimovich, before Judge Ronit FinShuk Alt, 3 July 2014 

COMMENT

This seems to be a good decision. It is a timely one as well. Plaintiffs are too quick to sue claiming copyright infringement. There is and should be a robust fair use doctrine.


Franchisee for Sports Broadcasting Fails to Uphold Rights Against Restaurant Screening Matches

June 25, 2014

Football on TV

Charlton LTD claims to be the franchisee with exclusive rights to license the broadcasting of sporting events and sports channels to satellite and cable distributors in Israel. E.M.T. Gormet LTD is a restaurant that screened sports events for benefit of their patrons. Charlton sued the restaurant and its owners for Copyright Infringement, claiming 85,000 Shekels in statutory damages.

Judge Hadassah Assif of the Hadeira Magistrate’s Court threw the case out and ruled costs of 1500 Shekels against the plaintiff.

The Ruling

Citing Appeal to Supreme Court 2173/94 Tele-Event vs. Golden Channels 55 (5) 529, Judge Hadassah Assif  accepted that there was copyright in sports events. Such copyright belongs to the producers or to licensees. In this case, Charlton was not the producer, but claimed to be a licensee. However, Charlton did not provide evidence of having any contract with producers covering the period of alleged infringement.  Thus despite proving that the restaurant had shown sporting events, Charlton could not prove that they had rights to the copyright. Claims of Unjust Enrichment were similarly dismissed.

As to the owners of the company, the court ruled that companies always have owners and actions of companies are generally performed by people. However, company law distances the owners from actions by the company, and one has to show good reason for raising the mask provided by the company as a legal entity.

It was considered insufficient to merely show court rulings and a licensing agreement from a period three years before the alleged infringement and to claim that the legal circumstances were the same. No evidence to the effect that the existing agreement was automatically renewed was produced.  In the absence of a contract clause or a general principle of law, Charlton failed to establish that they had rights in the sporting event.


Copyright in Software vs. Antitrust

April 29, 2014

copyright in software

Dan-el Advanced Software Solutions launched a software product 15 years ago called Danel 2000 that manages securities and other financial products. The defendant, Gal Snapir developed a competing product in 2009 that plaintiff alleged was a copy of Danel 2000. Dan-el obtained a temporary injunction, and the current ruling relates to an attempt to obtain a permanent injunction and compensation for copyright infringement, theft of trade secrets and unjust enrichment. The defendant claimed that the functionality largely dictates form, and so to prevent unfair monopolies, it should be allowed to copy certain elements of a product.

The present case is interesting, since it relates to the balance between the conflicting interests of unfair and fair competition, monopolies, copyright and trade-secrets. If the source code is not copied, is it legitimate to copy the interface of an established product to facilitate market penetration by making a product familiar and easy to use by users?

Michal Agmon Gonen ruled that despite being functional, the software was a creative work and protected by Copyright Law. Since the software sold by Snapir was significantly similar to that of Dan-el and that he had access to Dan-el’s software, the onus was on him to prove that he had not copied the software. Since he was unable to do so, she found in favour of the plaintiff. The damages awarded were large but not maximum statutory for one (ongoing) case of infringement, and not for each and every installation of the software. Since there were no profits, there was no unjust enrichment, and since she found copyright infringement, she found the additional claim of using trade-secrets unnecessary, particularly as there were no grounds to award damages twice.

Whilst believing that copyright in software should generally be interpreted narrowly, and that the arrangement of material and functionality cannot be protected, Ms Agmon-Gonen noted that there were other competing systems and that the similarities between that sold be defendant and by the plaintiff were significant.

The decision cites a large number of Hebrew research papers, Shlomit Yanitzky-Ravid’s new book, and the related laws. Academics at ONO, Hebrew University, Tel Aviv and Haifa are all cited. There is also extensive reference to case-law. In all, a scholarly but laborious decision.

Background

Dan-el is a lead player in the Israel financial management market with some 40 employees. Banks, insurance companies, funds and investment companies use their software. Danel 2000 is the result of 150 man years at a cost of 12 – 13 million dollars. Gil Snapir is a systems engineer who established a software house 20 years ago that provides dedicated solutions to clients that include health funds, banks, high-tech companies and personnel companies. Until now, software products were provided to order, and Snapir did not provide off-the-shelf software packages. At the end of 2009, Snapir offered Dan-El’s clients a copycat product with same functionality and interfaces, for ease of use. Dan-el sued for compyright infringement, theft of trade secrets and unjust enrichment.

After Dan-El received a temporary injunction, Snapir responded claiming to have independently developed a program with similar functionality that was not to be considered a copy. On 5 January 2010, at a hearing before Judge Zefet, the sides agreed to appointment of an expert who would review the two programs and submit an opinion to the court. Attorney Gad Oppenheimer was appointed as the expert.

On 24 January 2010, Oppenheimer reported that:

  • The two systems are written in totally different programming languages and thus the code is not copied.
  • The interfaces are virtually identical, apart from one program titling a column Client’s Details, and the other Account Details.
  • Identical in every aspect, including number of files, names of fields (except the single example above), and names of variables
  • I found that the source code was not copied. The interface was copied. The database was copied. Snapir’s program copies large chunks of Dan-El’s program, including the interface and the database. These elements are significant parts of Dan-El’s program, and have an accumulative effect when considering whether they were copied, and so I conclude these were copied from Dan-El’s program into Sapir’s.

On the basis of the above report, Judge Zefet decided to implement a temporary injunction.

Request Under Contempt of Court Ordinance

On 11 October 2010, Dan-EL sued that during May 2010 the defendant continued to sell Snapir’s software and to offer it for sale, possibly with minor variations, in contempt of the Court injunction.  The Defendant responded that the New Financier was independent, with a different interface and was not influenced by Dan-El’s program beyond the fact that it provided a complete solution to the managing security portfolios.

On having the case transferred to her, On 21 February 2011, Judge Agmon-Gonen requested that Adv. Oppenheimer review the interface and database of the new version.

On 2 June 2011, Adv. Oppenheimer concluded that the interface of the revised version of the New Financier program had several differences and could not be considered as copied from that of Dan-el but was functionally equivalent. He went on to conclude that the similarities in the “how” were significant, in that the New Financier could not be considered an independent creation, but was significantly influenced by Dan-el’s program and tries to emulate Dan-el’s program, perhaps to enable ease of transfer of users from one system to another, maybe for some other reason.

As far as the database was concerned, Snapir had changed column order and column length and names of fields in the individual tables, but the functions of each table remained the same. He felt that the database could no longer be considered “copied”, but the similarities were too many for it to be considered an independent piece of work. On a scale of 1-10, the similarities, were, he felt 6-7.

Following the report, On 4 January 2012, Ms Agmon-Gonen rejected the Contempt of Court allegations, considering the changes significant enough that there was no prima facie basis to conclude that the temporary injunction was ignored. She noted however, that although her ruling would relate to the original earlier version of Financier, it would have ramifications and relevance to the new version which could be considered a sibling program.

Plaintiff:

The plaintiff alleged that since the interface, database, program structure, system analysis and documents generated by Financier were copied from Dan’el’s program, he was entitled to statutory damages of 100,000 Shekels for every installation of the program at every third-partycomputer.

The plaintiff went on to charge that cracking their source code was achieved with illegitimate means and was to be considered a breach of their trade secret. They requested 100,000 Shekels for this infringement. Furthermore, all profit from this was to be considered unjust enrichment and should be surrendered to the plaintiff.

Defendant:

The defendant argued that the desire to prevent monopolies must allow competing programs to emulate the functionality of market leading software and to have a similar general look and feel so that users could be wooed away.

The defender acknowledged using the plaintiff’s concept, but claimed to have separately and differently implemented it. He claimed to have invested over a million dollars and 13,000 hours in programming in a different language. The interface was graphically similar to that of the plaintiff at the customers’ request and due to functional considerations. The similar purpose of the two programs requires functionality which causes similarities in layout.

Furthermore, if the court finds that there was infringement, it should be considered as a single continuous infringement and not as separate instances for each installation. Snapir denied making any profits, and claimed that the program had been installed on beta sites for testing purposes for a brief period and had no sales.

Snapir claimed that the database was open to users and thus it should be considered “open” and public domain. Judge Agmon-Gonen accepted that this could not be considered a trade-secret, but any assumed license was for clients and not competitors, and Snapir never purchased a single license.

Legal Issues

In here analysis, Judge Agmon-Gonen ruled that one has to first establish copyright and determine its infringement or not, and then address the limits of copyright protection in cases of monopolies and for public interest and the like.

Agmon-Gonen went on to rule that since the alleged copying took place in 2009, the relevant Law was the Copyright Law 2007 and not the older copyright ordinance.

Both sides accept that software is protected by copyright, and both sides accept that underlying concepts are not protected by copyright law. The question is therefore one of acceptable influence of an earlier product to enable market penetration or one of copying of significant elements.

The second issue is one of public interest and in the event of copyright infringement, whether the defendant can claim that fair competition allows a certain degree of copying.

Theoretical background – General

Although copyright covers creative works, it includes software, See Yanitzky-Ravid page 30, 2013. Citing Yanitzky-Ravid page 39, Agmon-Gonen goes into a little aside about utilitarianism and personal development and Economics of the Law. She quotes Yanitzky-Ravid’s conclusion that copyright provides an incentive and a temporary monopoly is acceptable since it results in an increase in the number and range of creative works and enriches mankind.

Agmon-Gonen also cited Guy Pesach as showing that the Supreme Court considers copyright as being utilitarian and as an incentive to create, but notes that creative works are easy to copy and must also be considered as personal to the creator and must be protected.

She noted Orit Fishman Afori’s allegations that copyright was passé in the modern digital era but noted that neither the Israel Courts nor other systems implement this view by cancelling the relevant laws, but that it should be taken into account when applying the law.

Whilst accepting that copyright solved a market failure (that it was easy to copy someone else’s labour) it must be realized that copyright creates other market failures and that it should be interpreted narrowly.

Agmon-Gonen considers that the requirement of originality is a limitation on copyright. She goes on to cite Interlego (copyright in shape of lego bricks – rejected by Israel Court), Geva (copyright in Donald Duck), Tele-event (copyright in sports broadcasting), and Professors Birnhack and Tony Greenman.

Theoretical background – Software in computer programs

According to Judge Agmon-Gonen, software was first recognized as copyright protected in 84/3021 Apple Computers vs. New Cube technologies P.P. 397, 1984. In 1988 the old Copyright Ordinance 1924 was amended to reflect that computer code have all the economic protection of creative works.

Following TRIPS, copyright law was revised to clarify that not only the source code but also the object code in binary format were copyright protected.

Copying does not have to consist of copying code, but may consist of copying the schematics and plans (Melz in Harpaz, with concurrence of Judges Barak and Levin). It may subsist in the program structure and in artwork user inputs, organization and sequence. In Harpaz, the Israeli Court largely followed the US ruling in Whelan Associates vs. Jaslow Dental (1986).

Whelan essentially rueld that everything beyond the purpose of the program was copyright protected. However, in later years, the US courts reduced the application of copyright to elements beyond the code with an understanding that it could limit technology development. In Ashraz and Har-Oz, the Israel courts made similar limitations.

According to Agmon-Gonen, nowadays there are different schools of thought regarding the appropriate scope of copyright protection for structure and the like.

The narrow approach would tend to allow substantial influence of a main program on competing products, particularly if there is a monopolistic situation. This may include the general structure, the arrangement and the look & feel to facilitate market penetration.

Judge Agmon-Gonen acknowledges that for a particular application, the expression of the program is heavily influenced by its functionality and purpose.

Copyright and competition

Judge Agmon-Gonen introduces this section by acknowledging that a creator is entitled to control and rights to his/her creation and that this is supposed to be an incentive to create. On the other hand, Competition Law is designed to enable free market competition and to prevent monopolistic market abuses.

Defendant maintains that both original and improved versions of Financier have similar interfaces to enable market penetration in a market dominated by a market leader. The argument implies that in addition to functional similarities required to achieve the purpose of a program, the consumer requires a similar look and feel to the existing product in order to consider a substitute, and substitute products are a good thing.

The idea is to interpret copyright in a minimalist manner to allow competition. She referred to Herbert Hovenkamp, Mark D. Janis, Mark A. Lamely & Christopher R. Leslie, IP and Antitrust: An Analysis of Antitrust Principles Applied to Intellectual Property Law, ch. 3 (2ed. Ed., 2009, last updated 2013), and Elkin-Coren and Shor-Afori.

Agmon-Gonen noted that the smart phone wars and the Microsoft case in the US show the dangers of unbridled IP protection. She considers the clauses preventing patent abuse and the court’s discretion in awarding copyright damages are there to counteract IP rights and she suggests that US vs. Microsoft Corp. and the Israel case concerning Teva show that limiting business monopolies are required to protect the consumer and to enable free competition.

Judge Agmon-Gonen posits that both IP laws and Anti-trust legislation are complimentary approaches to create competition to spur innovation and progress.

Quoting Ward Bowman Jr., Patent and Antitrust Law: A Legal and Economic Apprisal (1973):

“Both Antitrust Law and Patent Law have a common central economic goal: to maximize wealth by producing what consumers want at the lowest cost…The goal of both antitrust law and patent law is to maximize allocative efficiency (making what consumers want) and productive efficiency (making these goods with the fewest scarce resources).”

And

“The two laws (IP and Antitrust) are not in conflict at all. Rather, they are complementary efforts to promote an efficient marketplace and long-run, dynamic competition through innovation”

Quoting Michal S. Gal, Competition Policy for Small Market Economy 11 (Harvard U. Press, 2003) and with a nod towards Niva Elkin-Coren, Judge Agmon-Gonen realizes that IP rights provide limited monopolies and disrupt free market forces but she does not consider that all IP rights undermine free market economics.

Quoting Ward Bowman Jr., Patent and Antitrust Law: A Legal and Economic Apprisal (1973) again:

“Intellectual property rights do not ‘ipso facto’ confer monopoly power. While they do permit product differentiation, and sometimes give the owner power over price, there is a vast difference between an exclusive right and the sort of economic monopoly that is the concern of antitrust law…”

and

“The intellectual property laws do not purport to confer any monopoly, however, but only the right to exclude others from producing the goods, expression or symbol covered by the intellectual property interest…Patent grant creates an antitrust “monopoly” only if it succeeds in giving me the exclusive right to make something for which there are not adequate market alternatives and for which consumers would be willing to pay a monopoly price.”

“In sum then, the intellectual property grant is a power to exclude…The power to exclude contributes greatly to the value of any property right, but it hardly entails that the thing covered by the right is a “monopoly”. That question must be answered by looking at the range of substitutes that are available”

Getting back to the subject, Judge Agmon-Gonen notes that copyright does not prevent someone independently creating a competing software product for trading securities. She references Elementary and Persistant Errors in the Economic Analysis of Intellectual Property”, 53 V and. L. Rev. 1727 (2000) and also Mark A. Lemley, “The Economics of Improvement in Intellectual Property Law, 75 Tex L. Rev. 989 (1996-97).

In one of her more interesting insights, Judge Agmon-Gonen notes that the incentive was prior to developing the software program, but that the antitrust considerations apply when a single player obtains monopolistic control of a market.

Citing Elkin-Coren again, she notes that software copyright can be abused to prevent competition.

Judge Agmon-Gonen then went on to note that package deals forcing customers to buy up a number of films from one producer and the like can be an abuse (this is interesting and of relevance to releasing songs in albums and forcing students to purchase a text book for one chapter of interest but is totally off the point).

Correctly, Judge Agmon-Gonen notes that the issue of unfair competition has to be proven and not merely alleged. It is necessary in the present case to show that copying the interface was required to prevent unfair competition. Since there were other software packages and the defense was alleged but unsubstantiated, Judge Agmon-Gonen rejected the defense.

In conclusion, Judge Agmon-Gonen considered the seven beta sites of a pilot as being a single infringement with, and found it fit to award a single payment of 90,000 Shekels for copyright infringement to the plaintiff without proof of damages.  She also awarded a permanent injunction against the defendant directly or indirectly selling or maintaining the competing software product. Since she had ruled copyright damages, she felt that there was no grounds to award additional damages for trade secret infringement.  For some reason the bottom line damages becomes 80,000 Shekels instead of 90,000 Shekels (one is presumably a typo, but which?) and 35000 Shekels legal costs.

T.A. 38918-12-09 Dan-el Advanced Software Solutions vs. Snapir, Judge Agmon-Gonen,  9 April 2014.

COMMENTS

I note that somewhat oddly, the programming expert is a lawyer. I’d have expected that he relates to similarities and differences and leaves the conclusions of copying to the judge. I refer readers to Judge Binyamini’s comments on the scope of expert opinions for the court.

The overall background section is a nice overview of copyright statements in the Hebrew Language, that totally ignores rabbinic sources, such as those summarized by Professor Rakover, and also makes little use of the valuable scholarship by non-Israeli scholars writing in English, beyond those quoted in previous Israeli rulings. It is fairly unnecessary and provides little that is new other than a book review of Shlomit Yanitsky-Ravid’s new book.

On the other hand, after her disastrous ruling concerning football broadcasting that was overturned by the Supreme Court (here),  Ms Agmon-Gonen may be reviewing everything to demonstrate that she is aware of what is actually happening in Copyright Law, or is educating herself in what other scholars think. Perhaps I am being unfair, and this ruling reflects a serious attempt to understand copyright. it is a good ruling.

Either way, this decision is rather better than some of her previous ones in that she is confirming to norms and trying to change things by evolutionary rather than revolutionary means. I think that eventually Agmon-Gonen may reach the Supreme Court and this decision shows a maturing of her approach.


A Fairytale Village becomes a Legal Nightmare

April 29, 2014

village

Elamir Amar Saleiman narrated the book “A fairytale village” for Minerva Consultancy. A recording was sold together with the book and there was a dispute regarding Saleiman’s compensation.

Saleiman sued Mr Asaf Golani and Minerva Consultancy claimed moral rights under Section 4a of the Performers and Producer’s act, and claimed that his economic and moral rights in the recordings were trampled on. Suleiman sued under Employment Law, Contract Law and Copyright Law.

The case was originally brought to the Nazareth District Court. Suleiman alleged that he was the sole owner of the recordings, that the defendant had distributed them without his consent and without acknowledging that it was his voice narrating in contravention of the “Presenters and Performers Act 1984.

Suleiman sued for a permanent injunction, for 200,000 Shekels compensation for infringing his commercial and moral rights under Section 56 of the Copyright Law 2007. The Nazareth District Court accepted the defendants request to transfer the case to the Jerusalem Labour Court under Section 79b of the Courts Act which applies to the Labour Courts under section 39 of the Labour Court Act.

In December 2012, Mr Asaf Golani and the Minerva group undertook to produce and market “A fairytale village” which is an anthology of Arab folktales collected in the Galilee. The project was undertaken for the Jewish Arab Peace Center. The project required producing audio recordings to be sold with the book.

The contractual relationship between the Jewish Arab Peace Center and Minerva Consultancy established that copyright was retained by the Jewish Arab Peace Center. Both parties concede that Suleiman was employed by Minerca from December 2003 to November 2005, and the employment contract establishes that:

The employee will work in all fields of endeavor by Minerca, including translation, editing, proof-reading, word processing, abridging, explaining and expounding, consultancy and training, education, producing educational materials and office work in accordance with directions to be received.

The contract established different hourly rates for different types of work. Both sides concede that the worker was obliged to translate and teach, both in community centers and to clients at their homes.

During 2005, Minerva Consultancies hired a recording studio and arranged for Suleiman to record songs and stories from the book. The defendant informed the Peace Center that the book would be sold with 54 pieces totaling 220 minutes of recording on 3 CDs.

In Feb 2006, the plaintiff and his brother Mr Lua Amar sued Mionerva Consultancy for redundancy payments, compensation in lieu of advanced notice, holidays and social benefits, totaling 9008 Shekels. The evidence filed included salary slips. That case was withdrawn following attempts at mediation between the parties.

In October 2010 a separate case was filed, wherein the present defendant Minerva sued Saleiman claiming that the education material sold as Palestinian Arabic for Beginners was infringed by Suleiman distributing educational material under the titled “Land of Israel Arabic for Beginners”.  In that case, Minerva collected damages and obtained an injunction.

Judge Goldman of the Jerusalem Labour Court ruled that the book was a creative work and, since he read stories from the book that were recorded in the accompanying recording, the plaintiff was fairly considered a producer or performer of the creative work. Whether or not he was entitled to compensation under copyright law hinged on whether Suleiman was an employee of Minerva or a partner.

Judge Daniel Goldberg further ruled that the plaintiff had failed to establish that the project was different from his regular work for the defendant and that he was not taking any risk in the success of the project. As a result of this, Judge Goldman established that the relationship between the parties was an employer – employee relationship. Consequently, the Creator’s Rights and Moral Rights were owned by the employer. In such a relationship, there is no obligation to identify the narrator who has no moral rights in the work. Compensation to which Saleiman was entitled were purely monetary and any entitlement was under Employment Law only.

CASE: 31284-07-11 Suleiman vs. Minerva, before Judge Goldman, Jerusalem Labour court, 24 March 2014.


Israeli Photographer Wins Copyright Damages from AlJazeera

February 24, 2014

AljazeeraAl JazeeraDalal

Shmuel Rachmani photographed a bus destroyed on the coastal road in a terrorist attack in April 1978, including photographs of the terrorist, Dalal Mugrabia, and one of a victim. At the time, the photographs were printed in Maariv, then Israel’s evening newspaper, now a weekly.

On 15 March 2010, Israel’s Channel 10 broadcast an item about Dalal Mugrabi during which, the two images were aired together with the Al Jazeera icon, thereby alerting the photographer that Aljazeera had infringed his rights. In the Maariv paper from where the photographs were taken, the name of the photographer was displayed, so Shmuel Rachmani alleged that in addition to copyright infringement, his moral rights were trampled on.

Rachmani sued for a total of 80,000 Shekels, consisting of two counts of willful copyright infringement and two counts of willful moral rights infringement. Under the 2011 Copyright Ordinance, the maximum damages is 10,000 Shekels, but for willful infringement, this may be doubled.

Rachmani also requested an injunction against Aljazeera, but dropped this demand. In separate proceedings Rachmani sued Channel 10 and came to an out of court settlement.

Attempts to mediate a settlement were in vain. During preliminary stages of the trial, 7,000 Shekels in legal fees were awarded to the plaintiff.

THE RULING

Judge Raphael Jacoby of the Jerusalem District Court rejected arguments regarding Jurisdiction under International Law, standing and the like, and considered them damaging to the defendant. He noted that Aljazeera is broadcast on local cable television under license, so the company has local presence.

Jacoby went on to rule that the pictures were creative works that were protected by copyright and dismissed the hot news defense, noting that the images related to a historic event from 36 years ago. He did not consider the usage incidental. He acknowledged that the photographer could not produce the negatives and prove ownership or produce proof that the copyright was not transferred to Maariv, but accepted evidence of the archivist of Maariv that this was the standard work terms between the parties, and the acknowledgment of the photographer in the original newspaper as proof that Rachmani was the copyright owner.

Noting that under the new law, Rachmani could sue for 100,000 Shekels a time, Judge Raphael Jacoby ruled that the damages sought were proportional and ordered that Aljazeera should compensate Rachmani a total of 50,000 NIS for the infringements and should pay a further 15000 Shekels in legal fees.

T.A, 45542-12-11 Rachmani vs. Aljazeera International LTD, Jerusalem District Court, by Raphael Jacoby, 19 February 2014.


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