Software Rewrites

May 11, 2015

medical software

ICM is a software program designed for doctors, clinics and hospitals. A Mr Yehuda Ungar had the requisite skill set and experience to develop the program and signed a founders agreement with Yaakov Cashdi and others, the result of which was ICM Links Technologies and Information LTD, a company dedicated to creation of the ICM software for managing a medical database.

Cashdi, the other founders and ICM LTD claim that Yehuda Ungar copied and marketed the program to Bircon LTD, infringing their rights and becoming enriched at their expense.

The plaintiffs have sued for a declarative judgment that Ungar has infringed the founders agreement; an accounting regarding Bircon LTD’s use of the program and 750,000 Shekels compensation.

Statement of Case

The plaintiffs, Yaakov, Eli and Milik are shareholders of Ordan Computers and Data Systems which is a software developer that specializes in administrative software for clinics and medical chains.

Yehuda Ungar developed his ICM system that is complimentary to Ordan’s program and Ungar approached Yaakov, Eli and Milik to create a business partnership for the continued development, marketing and sales of ICM in Israel and abroad. Yaakov, Eli and Milik agreed and ICM Links Technologies and Information LTD was established.

Under the agreement, Ungar was to transfer all rights, source code and documentation to the company and to make his experience and medical file management available to the company.

Yaakov, Eli and Milik were to dedicate their resources, knowledge and experience to the program and eventually to market it.
The contract also included a non-complete clause for a minimum of three years and at least six months longer than any of the founders were serving as director, employee or shareholder in the company. The shares were divvied up and all share holders were to serve as directors for at least 24 months.

In 2003, Yehuda Unger met with a Mr Tenne, the manager of a chain of clinics who agreed that the chain could serve as a beta site for the software. The plaintiffs thought that the beta testing was going well, but in March 2004, Unger informed them that Mr Tenne had given notice to stop the trials. The plaintiffs failed to raise investment capital and further development stopped, freezing the company.

Yehuda Unger offered to resign and find alternative employment until a further opportunity would present itself. As a severage package Unger requested the right to compete, and to use ICM’s program whilst remaining a director and shareholder. Yaakov, Eli and Milik refused these conditions and contact between the parties was lost. In July 2008, Yaakov, Eli and Milik discovered that despite being an employee and shareholder, Unger had continued to develop the software together with Mr Tenne through Mr Tenne’s company Bircon LTD, which had marketed the product, earning money for both Unger and Tenne.

Yaakov, Eli and Milik considered Unger’s behavior as breach of contract, unjust enrichment and fraud. They further considered Bircon LTD as guilty of unjust enrichment and copyright infringement and sued for:

  • A declaratory judgment that the program was the property of ICM that Yehuda Unger was in breach of contract and breach of trust as a shareholder and director
  • Copies of accounts regarding the software
  • An injunction against further use
  • 100,000 Shekels in statutory damages and
  • 750,000 Shekels in lost earnings resulting from the breach of contract.

Statement for the Defense
Yehuda Unger is a systems analyst with 30 years of experience in managing software projects. Via his wholly owned company Irit Model, he has been working since 1995 at developing the ICM medical record database platform.

Unger alleges that Yaakov, Eli and Milik approached him in 2002 and suggested that Ordan would market the ICM platform either as stand-alone software or together with their ‘Clinica’ program.

Following this approach, a marketing and joint venture agreement was signed in July 2002. Six months later, Yaakov approached Yuhuda Unger and offered that Yaakov, Eli and Milik would purchase his shares via Ordan.

Under the agreement, via Ordan, Yaakov, Eli and Milik would transfer 40,000 Shekels a month. However, they did not meet this, and in September 2003, they informed Unger that they did not have the resources to fund ICM.

According to Unger, at Bircon, he programmed from scratch using public domain code and his personal knowledge, without using ICM, its source code or other resources. Unger even filed a counter-claim but subsequently retracted it.

The subsequent case relied on testimony from the parties, software engineers of both Ordan and Bircon and Dr Matthew Golani as an expert witness to the court.

Ruling
Ordan marketed Clinica and Irit marketed an early version of ICM to the Eynayim chain of clinics that was under the management of a Dr Levinger. The sides realized that they each had complementary software products that were half a solution and they discussed working together. After negotiations, in July 2002, the parties signed a marketing agreement under which Ordan would market ICM. About six months later, at the beginning of 2003, the sides discussed Ordan purchasing ICM and a framework agreement was signed. Following this, Unger continued working on ICM, but as an employee of Ordan and the code was transferred to Ordan which allocated a programmer to the project and Milik undertook the marketing.

In parallel with the ongoing development work, the parties negotiated a full contract, under which Unger was to be paid “consultancy fees” and a new company was to be set up. The contract was signed in July 2003.

Judge Shwartz summarized the agreement and interpreted the lacuna. and the various parties’ actions in following signing of the agreement.
He found Unger’s programming for Bircon was unjust enrichment, breach of copyright and brach of contract, but held Tenne and Bircon innocent of wrong doing.In Conclusion, Judge Swartz ruled that:

ICM LTD was the right holder in the software.

  • Unger breached the founder’s agreement
  • Unger is forbidden to make any use of the software without permission from ICM LTD.
  • Unger has to pay ICM LTD 100,000 Shekels statutory damages.
  • Unger has to pay costs of 4500 Shekels and 25,000 Shekels legal fees.

47761-11-11 Cashdi et al. vs. Under et al., ruling by Judge Shwartz, 26 April 2015.

COMMENTS
To a large extent, the issue is factual rather than legal. Judge Shwartz has to rely on the agreement as signed to work out what the parties intended.


Vanunu’s hand

April 15, 2015

learned hand

Zoom 77 A. Sh. LTD has sued Buzz Television LTD for copyright infringement in that Buzz Television broadcast the well known photograph of Israeli traitor Mordechai Vanunu’s hand pressed against the van Uno car window, with the information that he was abducted in Rome by Israel’s Secret Service.

Instead of arguing for informational, non-profitable purposes, de minimis fair use, I am not reproducing the offending image here. Those interested in it can type Vanunu hand into their search engines.

Buzz Television LTD included the image (Vanunu’s Hand, not Learned Hand) in a documentary called the Israel Connection that was produced for Israel’s Educational Television channel. They did not receive permission to include the image and Israel’s Education Television was sued and obliged to pay compensation. See Civil Case 9260-09-12 Zoom 77 A. Sh. LTD vs. Israel Educational Television, 16 January 2014.

(ת”א (מחוזי י-ם) 9260-09-12 זום 77 א.ש (2002) בע”מ נ’ הטלוויזיה החינוכית הישראלית (16.1.2014
Buzz Television LTD used a clip including the image on their website as well, also without permission and without indicating the copyright owner. This second usage is the basis of the current law suit in which Zoom 77 claimed 80,000 NIS compulsory compensation without proof of damage under Section 56 of the Israel Copyright Act 2007.
Buzz Television LTD accepted that the image was owned by Zoom and that displaying it on Buzz’ website was an infringing use. The point of contention was the appropriate compensation in the circumstances.

Section 56b of the Law brings various relevant considerations for setting the compensation including the scope of infringement, its longevity, its seriousness, actual damages, profits to the infringer, the defendant’s activities, the relationship between plaintiff and defendant and inequitable behaviour.

In the present instance, Judge Gideon Gidoni of the Jerusalem Magistrate’s Court noted that the photograph has significant journalistic value and was used to market and promote the defendant’s activities. On the other hand, no evidence was given by the plaintiff regarding the traffic to the website in general and the clip in particular. The Defendant claimed that the clip was a minor component on the website and hardly watched.

No evidence was provided as to how long the image was displayed, but one can assume that the defendant was involved in the case against Israel Educational Television 18 months earlier, and could and should have taken down the clip. Buzz Television is a production company working in the media industry and should be aware of copyright issues and should consequently be highly aware of other’s creative rights. The cost of licensed use of the image was 1600 Shekels.

Judge Gidoni noted the damages paid by Israel Educational Television 18,000 Shekels for first infringement and then 50,000 Shekels for a second infringement last year, and that this was a repeat, albeit indirect infringement of the same product.

He also related to third parties reproducing other news images, including Rachmani v. Israel News 2011 (15000 Shekels for an iconic news image)  the learned, but perhaps not very analytic judge ruled compensation of 25000 Shekels. Civil Appeal Basketball League Management vs. Rachmani (the famous Tal Brody lifting the European trophy “we are on the tablecloth map” where 18000 Shekels was ruled and Kfar Blum Kayaks vs. Manara Cliff 2012, where 75000 Shekels was awarded for moral rights infringed by not mentioning the name of the photographer of the tourist attraction.

In another recent case, Zoom sued Tratkover and was awarded 22000 Shekels.

Judge Gidoni ruled 25000 Shekels compensation, 1000 Shekels costs and 3000 Shekels legal fees.

Sh-14-02-30214-730 Zoom 7 vs.Buzz television re Vanunu’s hnad photo, Judge Gidoni, Jerusalem Magistrates Court, 8 April 2015.

COMMENT

Vanunu set up the picture. The handwriting, font and content of the writing on his hand is his copyright. He was also responsible for positioning his hand on the car window and for his posture. Perhaps he deserves royalties as much as he is deserved his jail sentence?  The journalists that caught the image did very little artistic creation, and arguably whoever crops the image for insertion into a newspaper deserves as much credit and name recognition.

There is certainly a value in fidelity of the law, and levels of compensation for similar infringing acts by different parties should, perhaps, be similar. I would, however, like to feel that judges can analyze and reach sophisticated conclusions and not merely bean count.

I believe that there are iconic images, film clips, sound tracks and the like that have a place in any documentary or dramatization of significant history. I think it ridiculous that a birthday party in a film won’t include children singing Happy Birthday. A film of Martin Luther King couldn’t reproduce his “I have a dream” speech.

In Israel, Holocaust Memorial Day starts this evening. When looking for two rapper versions of Israel’s National ANthem, Hatikveh that were the basis of a copyright infringement proceedings, I discovered a BBC radio clip of the first Friday night Kabbalat Shabbat Service from Bergen Belsen after the camp was liberated. After singing the Hatikveh, one clearly hears the then British Chaplain, the Late Reverend Hardman announcing that the people of Israel live. I sent the clip to his grandson, Danny Verbov who thanked me, and told me that he;s sent the clip about one a month. He kindly sent me a copy of Rev Hardman’s sermons that he’d edited. (I am ashamed to say that I used to go out to play during the sermons).

Now, Danny (and presumably the BBC) could have sued me for downloading and copying or linking to copyright material. At one suing a month Danny would solve the problem of spam email and have a nice sideline. Thankfully he is a mensch and has more sense.

I’d like to see standard reproduction royalties for usage of these literary and artistic creations.

I have illustrated this post with a picture of the US judge who detailed the various considerations regarding compensation for patent infringement in Georgia Pacific vs. American Plywood. The reason for referencing this is not just that he found 15 Factors of relevance, which sounds like an extended family seder, or even that the judge is called Learned Hand. I think his analysis is of relevance when calculated copyright royalties as well as patent royalties.

As always, comments and feedback are welcome.


Clip Fresh Ruling Upheld On Appeal

February 25, 2015

clip-fresh

Back in July 2014, the Israel Patent Office allowed the Clip Fresh logo mark of Farm Chalk LTD to be registered despite an opposition from earlier registered ‘Click and Fresh’ to Millennium Marketing Intertrade (1999). The Examiner considered the likelihood of confusion to be unproven. See here for more details.

Millennium Marketing Intertrade (1999) appealed the decision and the decision regarding costs (reduced from 92,932 Shekels to 80,000 Shekels) to the Tel Aviv District Court under the Right to Appeal.

They considered that despite the different appearance of the marks, when the sound of the mark is considered, there is a likelihood of confusion.

Furthermore, “By Farm Chalk” –which appears in the mark, was never actually used, rather the mark holder used the slogan “Keep it Fresh”, so the decision to allow the registration on the grounds that the words By Farm Chalk prevented confusion should be reversed.

.The Appellant argued that the F of Fresh looks like an ampersand (&) and the mark holder simply adapted their mark and was confusingly similar in appearance. Furthermore, the costs of 80,000 Shekels were disproportionate to the work involved in the opposition.

The mark holder argued that the Appeal should have been filed within 45 days and was actually filed 4 months after it issued and so should be thrown out. Furthermore, the Click and Fresh mark only issued after disclaiming the descriptive words ‘click’ and ‘fresh’ and so cannot be considered misleading the public as to the source of the goods. The costs were not much different from costs awarded in other cases and Appeals to reduce costs should only be accepted in extreme circumstances.

The appeal was filed within 45 days of the costs ruling though not within 45 days of the main ruling. Judge Yehudit Shnitzer considered that the costs of 80,000 Shekels were indeed significant and could be grounds for deciding to file an appeal. She therefore was prepared to review the case and rule on its merits.

As to the phonetic similarity, Judge Shnitzer considered that food containers are not bought by requesting the goods by brand over the counter, but by picking up and examining the goods. She therefore considered that the difference in visual aspects of the marks outweighed the similarities in sound.

Neither mark would have issued for the words, only for the stylized logo. In an appeal regarding the registration of a mark there was no room to consider whether the mark was actually used as registered, since this was a separate ground for canceling a mark after a period of time, but not within the scope of the appeal. Since the click and fresh registration only issued by disclaiming the words ‘click’ and ‘fresh’, the protection afforded by the sounds of these words is very limited.

The marks have to be considered in their entirety, with the emphasis on the visual aspects not the audible ones, and noting similarities in disclaimed words, but not giving such disclaimed words much weight.

As there are a lot of similar goods on the market, someone interested in a specific brand would be expected to take care.

It is important to prevent trademark abuse and policy dictates having to avoid trademarks providing an effective monopoly on goods having certain characteristics, rather than serving as an indication of source. Allegations of free riding, unfair competition and confusing the public were rejected in favour of free competition.

As to the costs awarded, Judge Shitzer noted that the costs were based on actual cost submissions and were calculated and not random. She accepted that there were cases with a single hearing and no witnesses from abroad where the costs awarded were much lower. She did not, however, consider the costs to be outrageous and did not see fit to interfere.

After ruling to reject the Appeal, Judge Shitzer awarded a further 30,000 Shekels costs against Millenium Marketing Intertrade (1999).

Appeal to Tel Aviv District Court 27992-08-14 Millenium Marketing Intertrade 1999 vs. Farm Chalk Investment LTD. Concerning Israel trademark opposition ruling concerning Farm Chalk’s stylized graphic mark by Asa Kling, the appeal ruling by Judge Shnitzer, February 2015    

COMMENT

This decision vindicating the Commissioner’s ruling is correct. I think that the decision also shows that Ms Yaara Shoshani-Caspi’s ruling re Humus B’Ribua is wrong.


YES!

February 18, 2015
Yes!

Yes!

DBS Satellite Services 1988 LTD provides satellite television services in Israel that are branded as YES. The Service is licensed by the Communications Ministry.

DBS Satellite Services 1988 LTD sued the brothers Ahmed and Amar Hamuda for trademark and copyright infringement and damages, requesting the following sanctions:

  1. A permanent injunction against the defendants to prevent them from distributing, marketing of selling pirate transmission of the Plaintiff, to cease using the plaintiff’s trademarks, including in third party publications. They requested an injunction against them using the plaintiff’s equipment, or equipment supplied by the plaintiff to their customers, for any but personal use, and to cease any non-personal use immediately.
  2. An order to the defendants or to the receiver to destroy all equipment that enables copyright infringement and all material carrying the YES logo.
  3. An injunction to remove YES’ registered trademarks from the FACEBOOK page for Acre Satellites and from all other publications.
  4. A request to reveal accounts going back seven years.
  5. Statutory damages of 700,000 Shekels under Section 56a of the Copyright Act and Statutory Damages of 100,000 Shekels for trademark infringements (claiming single infringements merely to reduce the court fees) and double costs as a punishment for willful infringement.
  6. Alternatively, compensation of 1,900,000 Shekels for Unjust Enrichment,  (the figures capped to reduce the court fees).

These injunctions were granted by Judge Zernkin, and following the Anton Pillar injunction, equipment and computer records were seized and a summary report was filed to the court by the receiver.

The injunctions were kept in force until the end of proceedings, and for the purposes of the hearing, an order to produce documents and to fill out questionnaires was issued.  This happened in the presence of the defendants who then failed to respond. Consequently, using powers under Section 122 of the Civil Court Procedure 1984, the court ruled that the statement of defense be struck from the record. It is noted that the statement of defense was a mere denial without any explanations.

In a ruling of 27 December 2014, Judge Orit Weinstein requested that the Prosecution supply evidence to substantiate their case and on 15 January 2015 they submitted evidence and affidavits of private detectives, by the VP (Engineering) of YES and the Head of Development at YES.

Based of the evidence submitted, Judge Weinstein ruled that there was sufficient grounds for a judgment against the defendants:

The Defendants broke the security encryption of the satellite transmissions and created a pirate industry, marketing and selling YES’ transmissions piratically, without paying YES, and by undercutting YES’ prices, free-riding on YES. YES’ copyright was infringed by the packaging of the transmission channels and the content, and YES’ trademarks were infringed by being used without permission and illegally.

Consequently, Judge Weinstein ruled that the temporary injunctions would become permanent injunctions, that all equipment be destroyed, following the receiver declaring that he was not holding any assets, there was no need to issue an order against him. The FACEBOOK page should be amended and so should all other publications so as not to include the trademarks of the plaintiff. Judge Weinstein further ruled statutory damages of 700,000 Shekels for copyright infringement and of 100,000 Shekels for trademark infringement, 10,000 Shekels expenses and 40,000 Shekels legal costs.

Civil Proceedings 111147-10-13 DBS Satellite Services (1998) LTD vs. Ahmed and Amar Hamuda.

COMMENTS
I have no sympathy for the defendants in this case. Nevertheless, although the ruling seems very reasonable and the defendants didn’t exactly defend themselves, in the hands of a good lawyer, they could have raised a number of interesting questions. Free riding is not a crime. YES probably does not own very much of the copyright in their transmissions and creating a copyright in a package of channels is stretching things a little. In a recent Supreme Court Ruling concerning parallel imported Tommy Hilfiger shirts here, the Supreme Court allowed the parallel importer to advertise that it was selling Tommy Hilfiger shirts, but not to claim that it was a registered supplier, and to inform customers that they were not entitled to warranties from the official suppliers.  Can one really prevent someone from using the word ‘yes’ on their facebook page or in advertisements?

pirate

Piracy is the crime of boarding shipping on the high seas that is punishable under international maritime law by requiring the pirate to walk the plank.

Arguably with regular TV transmissions, there is a case for Ministry of Communications regulation to divide the radio frequencies into separate bands and to prevent channels interfering with each other. I am not sure that for digital signals sent by satellite this is the case. Certainly government tenders have been abused. The tender for commercial radio that then Govt. Minister Shulamit Aloni put together was designed to prevent Arutz 7 from obtaining a license. The same politicians who called the Arutz 7 team pirates and warned about pirate radios risking plane crashes lauded the late peace activist Abu Natan and his pirate radio ship the Voice of Peace and nominated him for a Nobel Prize. When the Supreme Court voted en banc against Arutz 7, without a dissenting voice even mentioning the value of free speech, it was clear that things have deteriorated a long way since Agranat’s deicison re Kol HaAm.


Plasson

January 25, 2015

PLasson

Plasson manufactures pipe couplings. Unidelta launched a competing product and Plasson claimed patent infringement of their patents IL 125899 and IL 127327 and passing off and requested an injunction. The District Court accepted the charges that the “main point of the patent” was infringed and issued an injunction preventing the manufacture, import or sale of Unidelta’s pipe connections in Israel as they are a copy of Plasson’s product. On Appeal, the Supreme Court overturned the finding of patent infringement and referred the case back to the District Court. The Supreme Court ruled that where the similarities between the allegedly infringing product and the patented invention lie in features that are in the public domain, there can be no case of infringement.

Background

In addition to literal infringement of the claims of a patent, Section 49 provides grounds for legal remedies where the kernel of the patent is copied. This is rather like the “pith and marrow” doctrine in the UK. Essentially, the Law provides remedies where claim infringement is avoided by a technicality, and may be seen as similar to the doctrine of equivalents. Arguably contributory infringement and inducement to infringe may be considered as judicial extensions of this doctrine. It is important to allow general inventing around, but to avoid situations where poor claim drafting can result in no literal infringement of the claims.  What the Supreme Court has done is to clarify the extent of application of Section 49.

Ruling

Judge Meltzer of the Israel Supreme Court ruled that Section 49 provides monopolistic powers to the patentee to prevent literal infringement of the claims defining the invention and also similar products / processes that infringe the kernel of the invention. In this instance, both parties accept that there is no literal infringement so the only issue is the kernel of the patent. The kernel cannot be wider than that described in the Specification and, where the patent is for a device or system comprising a combination of known parts, the kernel of the patent cannot include the parts themselves. In this instance, the District Court did not address the question of what the kernel of the patent is, and without identifying the kernel of the patent, it is impossible to establish that this is infringed by Unidelta’s product. Once the kernel is established, the court must consider whether the infringing product operates in a similar way to achieve similar results.

The Supreme Court ruled that the patent issued because of a limiting feature added to the other components.

The main claim recites:

“1. A pipe coupling comprising a tubular housing having an axial bore adapted to receive a pipe end to be coupled and having an externally threaded housing portion and an inner housing abutment; a pipe gripping sleeve having formed therein a plurality of substantially equiangularly distributed, axially directed slits extending from a first end thereof to a region adjacent to but spaced from a second and opposite end thereof thereby defining an integrally formed, axially distortable, ring-like sleeve end portion, a first axial portion of said sleeve, through which said slits extend, tapering externally from a peripheral, outwardly directed flanged portion towards said first end and being formed with a plurality of inwardly directed, axially spaced apart serrations; a tubular collar having a first inner axial portion tapering from an inner collar abutment to a first end of said collar and a second inner axial threaded portion extending from said collar abutment to a second and opposite end of said collar; and a flexible sealing ring; the arrangment of said coupling being such that with said pipe end extending through said collar, sleeve, sealing ring and housing, said collar is screw fitted on said housing, said sleeve is located in said housing and said collar with said flanged portion located between said collar abutment and an adjacent end of said housing and said sealing ring is located between said sleeve ring and said housing abutment; screw tightening of said collar on said housing causes the respective tapering portions of the collar and sleeve to be mutually displaced with the gripping contraction of said sleeve about said pipe end and the axial compression of said sealing ring about said pipe end”.

Plasson’s patent is for a ring fitting that includes a wide and flexible ring that enables different sized pipes to be attached together in one smooth motion without dismantling the connector. Since Unidelta’s system did not include this limiting feature, but merely combined pre-existing components to create an alternative pipe fitting, there was no infringement of the kernel of the patent.

Quoting from the specification:

Pipe couplings of the type herein described, which are presently in wide-spread use, normally require pushing the pipe through the seal (typically an O-ring) in the bore of the body member in order to achieve compression of the O-ring on the pipe, and thus a leak free joint. However, for pipes of large diameters, the operation of pushing the pipe through the O-ring seal requires a large force, making the operation very difficult, and sometimes even necessitating an extra operation of chamfering the pipe end for this purpose.

A further disadvantage in the pipe couplings of the type herein described now in use is that such couplings do not tolerate substantial variations in the pipe diameter so that precise pipe diameter tolerances must be maintained, or a large number of different-size couplings must be produced for the different diameter pipes to assure good sealing and gripping actions”.

“…a pipe coupling constructed in accordance with the foregoing features provides a number of important advantages including: convenient assembly, since the particular seal, in its relaxed condition, introduces very little resistance to the forceful entry of the pipe during assembly; …increased diameter range of pipes capable of being coupled, since the two-ribbed (or three-ribbed) sealing ring can accommodate substantial differences in diameter sizes…”.

This emphasizes that Plasson did not invent the only pipe coupling for joining pipes of different diameters, and there patent was limited to one that is easy to seal due to little resistance.

As to passing off, the Supreme Court was critical of the District Court for finding this without explanation of why they considered that this was applicable. The Supreme Court referred the case back to the District Court for further consideration on this issue.

Judge Meltzer established costs against Plasson of 75000 Shekels.

Judge Miriam Naor (now president of the Supreme Court) commended Judge Melzer on reducing the issue to non-technical matters without technalese that regular people could understand.

Appeal 6750/10 Unidelta vs. Palson, Supreme Court 18 December 2014

COMMENT

One wonders who the non-technical people are in this case, plumbers or the President of the Supreme Court? Is the technical issue here flanges and pipes, gaskets and washers, or non-literal infringement, pith & marrow and other legalese?


Chinese Copycat Products not illegal and down will come baby, cradle and all…

January 25, 2015

rockabye

Dvaron Import-Export sell a baby rocker.  The products were manufactured and imported from China. Fisher Price Inc. and Mattel Inc. sued claiming copyright infringement, passing off, trademark infringement and Unjust Enrichment. They alleged that their intellectual property was infringed by the product, it’s upholstery and instruction manual which they claimed were accurately copied. Both Dvaron Import-Export and directors Aharon Stein and David Ben Shushan were sued.

The Nazareth District Court threw out the charges noting that there was no patent or design registration and that the defendants had not infringed any trademark registered by Fisher Price or Mattel. Claims for reputation and confusing the public as required for a finding of “passing off” were also rejected.

The Court ruled that copying products per se. where there are no registered rights, does not, in and of itself, create grounds for an injunction. Each case has to be judged on its merits. There is no copyright in the design of functional articles, including their form, although sometimes articles includes artistic elements that are protectable.  Copyright does not apply to rocking chairs or to their upholstery which should be protected by a design registration.

Copyright does cover instruction manuals however, as these are literary creations. However, the defends are not responsible for the contents of the instruction manual infringing the copyright of Mattel or Fisher Price as they could not know that Mattel or Fisher Price had copyright in this, and they are thus innocent infringers. The Chinese manufacturer had indeed reproduced Fisher Price illustrations but one would not generally notice this or Fisher Price logos in the images, and purchasers would only see the instruction manual after purchase.

As to Unjust Enrichment, in 5768/94 A.Sh.I.R. the Supreme court found that applying this doctrine where there is no infringement of registered IP rights requires an additional element of bad faith which, in the present instance is not found

Fisher Price Inc. and Mattel Inc. could not show a reputation in the product. The mere copying is not in and of itself an additional element of bad faith and the charges were rejected.

As the charges were rejected, the issue of personal liability of the directors was moot.

Costs of 30,000 Shekels were awarded against  Fisher Price Inc. and Mattel Inc. As to goods seized under an Anton Pillar injunction by Tel Aviv Magistrate’s Court, Judge Ben Hamu referred the parties back to that court to rule on the issue.

T.A. 39534-02-12 Fisher Price et al vs. Dvarron et al., Judge Yosef Ben Hamu, 8 January 2015.


Israel Patent Application Number 142789 – The European Patent Wrapper

January 15, 2015

file wrapper

DSM IP Assets owns Israel Patent Application Number 142789.

PMS Armory Factory LTD opposed the patent issuing. The opposer wished to enter the file wrapper of the corresponding European patent application into the evidence, but the Adjudicator of IP, Ms Shoshani Caspi refused to allow this as the request was submitted late in the proceedings. The opposition was rejected on 17 October 2013 and the Opposer appealed to the District Court.

On 12 August 2014 Judge Shitzer ruled that the file-wrapper of corresponding patent application EP 1137828 should be admitted as evidence. See here. The Applicant appealed this to the Supreme Court who ruled that the case was ongoing and so they were not yet prepared to get involved.

The Applicant therefore requested an expedited decision by the Patent Office regarding EP 1137828 so that they would be able to benefit from the application before it finally lapsed in 4 1/2 years. The Opposer rejected this request, claiming that it gave the impression that they were time-wasting. They requested due process including the right to cross-examine the witness. Applicant argued that the file wrapper did not need to be submitted by a witness that would be available for cross-examination. The District Court merely ruled that the evidence was admissible. Submitting via a witness who would be cross-examinable was a mere time-wasting exercise.

The Opposer argued that the European file wrapper raised technical issues that required clarification, and the applicant argued that this was widening the grounds for opposition. The sides each tried to get the other’s case thrown out on technicalities and argued as to who should be cross-examined first to avoid giving one side an advantage over the other.

Ms Yaara Shoshani Caspi ruled that as the European file wrapper was ruled as admissible by the courts, its relevance should be determined and now was not the time to try to stop it being considered by a technicality. She went on to rule that the European file wrapper should be submitted with a statement of its relevance to why the claimed invention is not patentable and the applicant could respond to the statement. There was a need to finish the opposition without further ado to provide legal clarity to the sides and to third parties regarding the validity or otherwise of the patent.

The Opposer should submit the European file wrapper in full within 14 days with no moe than six sides of arguments and the applicant would have 14 days to respond. The opposer would then have 7 days to sum up in three sides. That would be the time to decide whether a witness should be available for cross-examination. Should there be a hearing the sides would be required to sum up orally, and a final ruling would issue soon after the summary / hearing. No costs were awarded at this time.

 


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