Trade Secrets in the Employer-Employee Relationship

July 21, 2014

forum shopping

In Israel, workers have freedom of occupation and can change jobs or set up their own businesses and may compete with their former employers. The work relationship often exposes the employee to trade secrets. Ex-employees are obliged to maintain confidentiality with regards to trade secrets and cannot compete with former employers by using such secrets. But was a legitimate trade secret?

Work related disputes are dealt with by the Labour Courts, but what establishes the employer-employee relationship?

Nissim Versano appealed an interim Decision of the Tel Aviv District Court given by Judge Ginat to refer the case to the Labour Court to decide whether or not there was an employer-employee relationship. Judge Amit of the Israel Supreme Court refused the Appeal.

On 25 March 2014, Nissim Versano filed suit in the Tel Aviv District Court, claiming that for a number of years he has been involved in the tobacco industry, and has developed contacts with a number of parties in the field. He claims that he took Moshe Ninio into the business as a partner, with a verbal agreement that Ninio wouldn’t use acquired knowledge against the wishes of Versano.

Versano claimed that Ninio set up a competing shop with similar design, stock and prices to Versano’s and that this created a situation of passing off, Unjust Enrichment and theft of trade secrets.

Ninio claimed that he was an employee of Versano and not a partner. He claimed that the District Court was thus not the correct forum to hear the case which should have been filed in the Tel Aviv Labour Court, and requested that the case be thrown out as not within the jurisdiction of the Tel Aviv Court. To substantiate his case, Ninio appended three salary slips testifying to him being an employee.

Judge Ginat of the Tel Aviv District Court referred the case to the Tel Aviv Labour Court to rule on the issue of whether there was an employee-employer relationship, and Versano appealed this referral.

Versano claimed that the District Court should decide whether it was competent to hear the case and, if not, should refer it.

The Supreme Court ruled that Ginat should either hear the case, refer it or throw it out. In other words, he should have ruled on whether or not it was a labour related dispute, and not referred that decision to the Labour Court. Cases cannot be batted back and forth.

However, the appeal was thrown out. The appellant should have appealed by right instead of requesting right of appeal. If a case is heard by District Court instead of by the Labour or Rabbinical tribunals, there is a right of appeal. However, if a case is transferred to a tribunal, one should appeal immediately.

The Supreme Court could use the Request for Right of Appeal as grounds to rule substantively on the Appeal, but did not see fit to do so.

The issue is a partial transfer, which is correctly seen as an interim decision and therefore there are grounds to file an interim appeal.

The Supreme Court related to a case transferred to the Rabbinical Court by a woman claiming financial support on the grounds of having acquired status of a wife by having had intercourse with a man in a manner establishing common law wife status as being an example of an interim decision that could be appealed, but ruled that in this case, the claim of employee – employer relationship should be heard by the labour tribunal who not only have sole discretion to hear labour disputes but also to rule on whether there is an employer-employee relationship.

Furthermore, cases concerning trade-related disputes having an employer-employee aspect are in the sole jurisdiction of the labour court. Trade secret related cases are also the sole jurisdiction of the labour court if there is an employment aspect to the case.

Once transferred to the Labour Courts, cases should stay there rather than be transferred on.

Appeal to Supreme Court  3930/14 Versano vs. Ninio, by Judge Amit, 26 June 2014

COMMENTS

Having one court only being the correct forum for hearing a case prevents ‘forum shopping’. This decision is likely to have repercussions on employee compensation for patents as well as for trade-secret issues. Many companies might be less than happy with this, since the Labour Courts are seen as being pro-employee. With the Iscar case (Plony vs. Company) on appeal to the Supreme Court, this could get interesting.


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.


Secondary Use Claims – Some Thoughts…

June 27, 2014

second use

Yesterday I attended a meeting of the Association of Israel Patent Attorneys in ZOA  House, Tel Aviv. The invitation and program were blogged here.

The topic under discussion was Secondary Use Claims. Unfortunately, I arrived late and missed the first talk by Adv. Yair Ziv, but caught most of Adv. David Gilat’s presentation, that of Dr Ron Tomer, and that of Ena Pugatsch.

The event was well-organized and well attended. From the remains of the refreshments by the time I arrived, they seemed the usual ZOA fayre. Kudos to the committee headed by Ex-Commissioner Dr Noam, for organizing the event. There were 85 participants in the meeting. This is impressive for a highly specialized topic at an event open to a small organization (noting with approval however, that there were both lawyers and in-house patent coordinators present that are not patent attorneys and thus not members, and also trainees).

Adv. David Gilat posited that drug patents were necessary to compensate the drug developers for their investment, and that secondary uses were also the result of research.  Dr Ron Tomer (confusingly called Dr Yaron Tomer in the original invitation to the event) expertly and clearly countered all of Davidi’s positions, and demonstrated that the pharma industry were creatively filing secondary uses that lacked inventive step and were obvious. He gave various examples. Firstly, he referred to sildenafil citrate, originally developed for treating angina and now used almost exclusively as a treatment for erectile disfunction, as a hard problem. (I thought it was a flaccid problem and a hard solution, but I digress). He went on to argue that an oncological drug for one type of cancer may fairly obviously be tried for another type of cancer since the underlying effects of the drug would treat both mutant cells the same way.  He noted that patents were not awarded for research but for inventions. He claimed that there was nothing new in the drug, despite the new use. He gave convincing examples of ever-greening, and also argued that if it is surprisingly found that a drug treatment for gastro-reflux also kills bacteria in the stomach, then the patient using it takes the same drug for the same purpose that he took it for originally. Since the drug is public domain he could take the generic drug, but to kill the bacteria, he’d have to take the patented drug for a couple of weeks and then move back to the generic. similarly, someone taking a generic statin for cholesterol, on being diagnosed as having genetic cholesterol, would have to switch to the patented version offering protection for this ‘secondary use.’ The talk was intelligent and entertaining, and it was a valuable demonstration of the ubsurd results of secondary use patents.

Ena Pugatsch gave an example of a secondary use claim for a mechanical device that issued in Israel and was upheld by the courts. The device in question was a blackboard that could be used as a screen for showing projected images, where the device and method of manufacture were known but the secondary use wasn’t, and the court upheld the patent. Comparing to European case-law and to US law, she felt that the ruling was ‘problematic’ (a nice way of saying that she considered that the court had got it wrong).

When the floor was opened for questions Mr Zebulun Tomer (Ron’s father and the director of Unipharm) took the opportunity, as he has done on other occasions, to give a little impassioned speech, rather than a question. He made some noises about the results of lobbying and argued that Section 7 prohibits therapeutic treatment of the person and that no-one can convince him that a secondary use is anything other than a method of treatment of the person. Instead of merely pointing out that the issue wasn’t convincing him, but of convincing neutral judge, Adv. David Gilat agreed with him, but said that this was precisely what the Use Claim (Swiss type claims) were for – that is, to allow patents for pharmaceutical methods of treatment despite the prohibition for patents for methods of therapeutic treatment, and this was because of the costs incurred in research and development.

COMMENTS

David Gilat spoke well as would be expected from an experienced litigator. Dr Tomer’s response was also very clear and well constructed. Ena Pugatsch is not an orator, nor is Hebrew her first language (or, I expect, her second language). Nevertheless, her talk, though not the most fluent, was the most thought provoking. All three speakers had far too much content per slide, but none are lecturers. Designing good slides is an art.

David and Ron each presented their opposing positions. As Gilat Bareket represents drug development companies and the Tomer family own Unipharm which manufactures generic drugs, their views were hardly unexpected. I suspect that those in the audience actively involved in prosecuting or litigating pharmaceuticals have equally strong positions based on their source of income. (Richard Luthi, another leading litigator who represents pharma, once told me that under the former Commissioner Dr Noam, the pharmaceutical development industry didn’t have a chance. Whether Dr Naom was biased, whether Unipharm had better arguments, or whether Adi Levit is simply a better litigator, is open to discussion).

The percentage of my income coming from work on pharmaceutical patents is very small. I’ve been involved with both local and foreign clients on both sides of the fence. I tend to find the generic companies’ arguments more persuasive, but can’t tell if this is an inherent bias or whether their arguments are actually better. It is also possible that drugs that are opposed or challenged in cancellation procedures are ones that generally should not have issued, and the both the drug development industries and their litigators have an uphill battle. What is clear, is that Unipharm have had some impressive victories in recent years against Mercke, Smithkline Glaxco, Lunbeck, etc.

Ena’s talk got me thinking. I believe that the original Section 7 law against methods of therapeutic treatment is a historic artefact designed to protect doctors from being sued and represents a moral position that despite obvious utility, novelty and inventive-step, such subject matter would not be patentable. It is a remnant from a period predating the modern pharmaceutical industry. David is correct however. Without effective patent protection, drug development companies would not invest the significant sums required to research and bring a new drug to market. The long approval period also justifies patent term extensions. This development is indeed the result of lobbying, but is, nevertheless, justified. What may not have been justified, is to apply the extensions on cases that were already filed, granting the pharma industry a massive handout that perhaps resulted in them NOT investing in developing new drugs.

Drug developing companies can fairly be accused of ever-greening, and their tactics in filing for secondary uses are commercially driven. However, despite the Special 301 Reports, the generic drug industry are not Robin Hood like outlaws. It is there right to challenge the validity of patents, and some applications are allowed that shouldn’t be. Nevertheless, I suspect that sometimes oppositions are filed for commercial rather than solid legal reasons.

The Swiss Claim (use claim) format is a legal work-around the method of therapeutic treatment clause. Use claims are acceptable in European and Israeli law and are essentially method claims. They do not exist in the US, however in the US one can file methods for therapeutic treatment. What one cannot do, is enforce them against the doctor or surgeon.

After TRIPS, it is clear that one cannot exclude drugs from patent protection. One can still have a principle against patenting methods of treatment. However, countries have to allow patent protection for drugs.

As David Gilat reminded us, patent term extensions were indeed allowed as a package with and justified by a bone thrown to the generic industry – the so-called TEVA amendment, allowing the generic companies to experiment and obtain marketing approval, but not to stock-pile generic patents prior to the patent terminating.  However, one right does not balance the other. Mr Zebulun Tomer is correct that the current balance is the result of lobbying. There were lobbyists on both sides. The ‘one size fits all’ patent law does fail for pharmaceutical patents if such patents have, in the past, been allowed after the 20 year expiry date.

As to second use, the first thing to understand is that use claims are method claims and should be treated as such. The Rav Bareakh crook-lock ruling by the Israel Supreme Court allows contributory infringement and inducement to infringe. However, in Srori vs. Regba, the fact that a sink could be mounted flush with the work surface was insufficient grounds to grant an injunction against the importer, since, As Adi Levit argued effectively, the sinks in question could be mounted under the work-surface, or could be mounted with the lip overlapping the work surface (over-mounted) or could be filled with earth and used as a flower-pot.  Thus, the proper infringers were the kitchen installation companies, and there was no effective bottle neck to sue in the supply chain.  Getting back to secondary uses for drugs, lets assume that using aspirin to dilute blood to prevent thrombosis is indeed novel and inventive. This does not prevent patients buying aspirin over the counter for treating aches and pains and then using it for the new patented use. Manufacturers of aspirin are not infringing the secondary use patent. Similarly, generally speaking, patents for secondary uses are not for the drug itself, but for its use in treating a particular illness. They are method claims. I agree with Dr Ron Tomer that the manufacturer is generally not the infringing party. The physician or patient might be, that the US exception against suing health care officials should apply. There are, of course, some particular dosages that are borderline cases. In such cases, the newly packaged drug is a new product. Whether or not, it is also inventive, is arguable.

Referring back to the blackboard; Ena is correct, it was not a new product, nor was its method of manufacture new. The novelty lay in the method of use, i.e. for projecting an image thereonto. The patent provided grounds for suing schools and teachers for direct infringing – both customers of the patentee and of competitors. This is a patent without teeth. If competing manufacturers note that their blackboards may also serve as a screen, is this inducement to infringe? Maybe it would be better for them to note that although the blackboards may be used as screens, this use is protected by Israel Patent Number IL XXXX, and as long as the patent is valid, is not allowed. This is very different from the crook-lock case where the imported part was designed and manufactured for combining with two common elements to provide the crook-lock, and could only be used for infringing the patent, or for a trivial use such as a paper-weight or land fill.

At the end of the day, it is the job of the patent attorney to draft patentable and enforceable claims. I note that in the US, the pendulum has recently swung away from secondary infringement. See US Supreme Court Ruling 12–786 Limelight Networks v Akamai Technologies Inc et al., June 2, 2014. I believe that often these cases result from poor claim drafting, as do Marksman disagreements. In the past, I drafted and successfully prosecuted a  patent for a kitchen sink AFTER Tsrori vs. Negba. See  US6782593B1.  I’ve also had fun drafting together with Adv. and Patent Attorney Tami Winitz a patent for a new method of using an existing heart valve, where I believe the creative claim-set provides enforceability. See US8408214B2.  Patent attorneys drafting applications try to protect their client’s inventions and stretch the law. Litigators opposing patents do the opposite. We all have our roles to play.

 


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.


Israel Supreme Court Upholds Decision to Ban Book

June 24, 2014

privacy

This decision by the Israel Supreme Court concerns an Appeal by an author against a decision by Judge Kanfi-Steinitz of the Jerusalem District Court that included a permanent injunction prohibiting publication of his book and 200,000 Shekels in statutory damages.

The decision tackles fundamental constitutional issues and is notable for its review of Jewish sources as well as democratic ones.

All human beings have three lives: public, private, and secretGabriel García Márquez

The decision relates to the correct balance between the right of free speech and freedom to create on one side and the right to privacy and good name on the other.

The book in question was marketed as a fictional romance but apparently is heavily based on an affair that started in 2001 and lasted 5 years between the author, a married man with children, and a student. Apparently the book goes into intimate detail in the most intimate details of the relationship including preferred sexual practices of the student.

The student, lived with her boyfriend in the appellant’s neighborhood, and worked in a Jerusalem cinema and studied art. The appellant got to know the defendant in the cinema and eventually an intimate relationship developed. This was kept private at first, but was later known to their close acquaintances and was afterwards described in the novel. Once the relationship became known, the appellant divorced his wife and the defendant separated from her boyfriend.

The defendant’s final art project was prepared whilst the affair was ongoing and related to the male-female relationship. In 2004, the appellant worked on his own creation, a novel based on the drama of the dissolution of a family. The novel describes the intimate relationship between a man of the age of the appellant suffering from an unfulfilled marriage, and a young student that he meets in a cinema. The man’s employment is that of the appellant, the cinema is where the defendant worked and, in the book, the man was married, a parent and living in Jerusalem, and the woman was single, living with her partner in rented accommodation near to the man.

The book was published with much marketing fanfare, including reviews in weekend supplements, television and internet interviews and the like. On publication the woman sued the author and the publishing house claiming that the book was autobiographical and went into intimate detail of the physical aspects of the relationship and was a serious invasion of her privacy, libel and slander and since use was made of her letters, also gave rise to an independent copyright suit. The publishing house recalled the books and stopped their sale, pending the court ruling.

The sides were unable to settle their differences and the Jerusalem District Court issued a temporary injunction against distribution of the book that Judge Gronis (now president of the Supreme Court) refused to annul.

The woman claimed that the book provided her full resume, a description of her appearance, body, likes and dislikes, character, weaknesses, conscience, sexual preferences and intimate relations. It also described her artwork. She argued that the book exposed her to acquaintances and caused her much personal and professional distress.

The author produced expert literary witnesses who argued that the book was a work of fiction, that may have been based to some extent on the author’s experiences, but that is generally the case with fiction, and preventing publishing would damage the literary arts. The author went on to allege that the woman noted the similarities to herself, but was oblivious to the substantial differences. She knew about the book and was given the opportunity to review parts of it, but decided to wait for the publication, and he claimed that this should estoppel her case. He claimed fair use, the right to self-expression, an implicit license to publish since she was aware of the book during its preparation, and that the injunction was a serious damage to his right to create and to self expression.

The publishers claimed that they published the work in good faith as a work of fiction and were unaware of any autobiographical elements. They also noted that they withdrew the book on learning of the woman’s charges.

The District Court’s Ruling may be found here

Grounds for Appeal

In the Appeal, the author argued that the issue was not whether the source of one’s inspiration could be guessed, but whether one would assume that the details described are true. (This is an interesting argument. What the author is suggesting is that if he describes a relationship involving, say bondage, fellatio and cunnilingus, how could anyone other than the partner know what was based on their intimacy and what was the results of his imagination?).

The author argued that although he claimed that the work in question was fictional the District Court’s ruling lacked balance and would effectively kill off the entire genre of autobiography since any book about oneself relates to one’s relationship with others.

The author further argued that to be found guilty of invasion of privacy, intent is required, and was lacking in this case. The woman countered by saying the total disregard of her reputation was sufficient. The author further argued that since the woman’s name does not appear, there cannot be an invasion of privacy. It was, he felt, inconceivable that story-teller could be hauled up in court on grounds of invasion of privacy for alleged similarities between a fictional character and an acquaintance.  The author accused the District Court of unfairly meddling with literary editing. Whilst he could have used a pseudonym, the use of his real name did not necessarily give rise to identification of the inspiration of the woman character.

As to the District Court’s argument that the author could have disguised his source of inspiration, he responded that this was based on hindsight and did not prove that he had malicious intent.

The Author requested the opportunity to reedit his work and remove references that might identify the woman, arguing that a complete ban lacked balance. The Author further argued that the book was praising of the woman’s artistic exhibition and that she was aware that he was writing a book, had shown no interest in reading it prior to publication and had therefore implicitly consented to it being written. He felt that the correct balance between freedom of expression and right to privacy was intent to harm, which was not proven. Furthermore, he argued that even if poor judgment could be shown, that was not, in and of itself, sufficient to find him guilty.

The author argued public interest and produced testimony of a reader who found his treatment of the subject matter helpful. Finally, the author suggested that any damages should be borne by the publishers who benefited from the publication of the book.

 

Counter-arguments

The woman argued that the District Court’s decision was fair and just. She suggested that censorship of autobiographies and creative work should only be allowed in the most extreme circumstances, but felt that this case, where every aspect of her personal and private life were exposed was such an extreme circumstance.

She argued that the District Court had already ruled that this was a publication of an intimate relationship in the guise of a novel, and not a work of fiction. All claims to a the book being a work of fiction were voided by the constant references to events and places that related to her and the author as a couple, and that third parties were aware of.

The woman rejected arguments that the correct defendant was the publisher and that the time past from the affair made the whole issue moot. As to the argument that the similarities were outweighed by the differences, she considered that not to be the case in this instance. She was in favour of literature and was aware that much literature is based on fact. She was against wholesale censorship, but felt that the facts in this case with the major invasion of privacy justified extreme measures.

The woman considered that in such cases, proving intent to harm was not the correct standard and that the total disregard for the effects of publication was sufficient to rule guilt. She noted that in addition to hurting her, the author’s ex-wife and children had also exhorted him not to publish.  She dismissed claims of an effective agreement to the publication by noting that the District Court had accepted that she was unaware of the intimate and graphic nature of the writing.

The Author cited US case law concerning the ‘people’s right to know’. The woman argued that where the persons concerned are public figures and where the level of invasion of privacy is minimal, there is some justification for publication, however she was not a public figure and the invasion of privacy in this case was neither incidental nor trivial. She argued that 200,000 Shekels damages was far from the maximum that the court could have ruled and was therefore reasonable, particularly when compared to rulings in other cases of invasion of privacy. She also argued that she was entitled to copyright damages for reproduction of her love-letters. The court noted that this was not part of the appeal and therefore they could not address this issue.

 

The Ruling

The Supreme Court first established a normative framework for considering freedom of expression, rights to publish an autobiography and rights to privacy and then went on to relate to the specific case.

The court noted the fundamental importance of Freedom of Expression but considered that where it might invade someone’s four cubits of privacy, the issues involved are fundamental to constitutional values. Since the State of Israel is a Jewish Democratic State, the judges first analyzed the issues from Jewish and Democratic sources. In this regard, we note that the main ruling was by the Hallachically Observant Judge Noam Solberg.

Citing Talmud Bavli, Taanit 8bBlessings are only found in that kept out of sight“, Judge Solberg noted that airing private matters in public in an untimely manner without full consent could destroy worlds.

Judge Solberg acknowledged that Freedom of Expression in general and autobiography in particular were vital interests. The court considered that the interaction of these essential values with the conflicting right of privacy is the kernel of this ruling.

The Court considered Freedom of Expression an essential anchor of democracy and of paramount importance in a divided and polarized society such as Israel. Noting that Judaism has always promoted dialogue and discussion as summarized by the maxim “These and these (contrary positions) are the word of the Living God” Talmud Bavli Erubim 13b.

Referring to the classic ruling 73/53 Voice of the People vs. State of Israel, the court noted that the importance of free speech cannot be exaggerated.

The court argued that both the democratic tradition and Judaism accepted plurality of expression and the right to express one’s opinions, and cited the introduction to the Hallachic work Arukh HaShulchan (Yechiel Michel Epstein (1829-1908)) to the effect that the glory of the Holy Torah is a Cocophany of Disparate voices creating a harmony, and referred to Meny Alon in 2/84 Neiman vs. Central Election Committee and to Aviad HaCohen‘s essay “Freedom of Expression, Tolerance and Pluralism in Jewish Law“. The Court posited that Former Chief Justice Barak had accepted that freedom of expression was based on both Democracy and Judaism in 6129/84 Senesh vs. the Israel Broadcasting Authority (1999).

The court went on to note that freedom of Expression is not limited to political views but also encompasses artwork, and protected the rights of artists to break conventional boundaries, citing Appeal to Supreme Court 14/86 Leor v. The Authority for Critiquing Films and Plays, the court noted that it is not just consensus views and opinions that are complimentary to the authorities that are protected, but also the rights to break boundaries and to produce artwork of ‘low inherent value, indecent pornography, political and deviant work.’ Referring to an essay by Alexander Ron in a weekly Study Sheet – Parshat Shevua, BaMidbar 5762, the court argued that such rights were also accepted in Jewish Law.

The court was not sure if Freedom of Creativity was derived from Freedom of Expression or is an independent right, but, paraphrasing the Yom Kippur Hymn, whether independent or derived, there was consensus that the silver smith had the right to both purify and to alloy his material.

As far as Autobiography is concerned, the court accepted that this has equitable value to the author and that people have the right to express themselves, but that this has to be balanced with possible damage to others. Citing Rabbi Kook (first Chief Rabbi of Israel pre-State and something of a mystic):

Literature, drawing and sculpture are realizations of the spiritual values inherent in humanity and as long as there is a drawing based deeply in a soul that has not yet been placed on paper, there is an obligation to produce it“.

The Court noted that without allowing people to express themselves to hear and be heard, to read and to write, man’s humanity is damaged and his spiritual development and intellect are stifled and prevent him from realizing himself.

As far as autobiography is concerned, the court noted that in the era of cheap publishing, internet and blogs, autobiography is not the province of the selected few, but anyone and everyone should be able to express himself and record his life story. Furthermore, truth is not a universal truth knowable in advance, but reveals itself through an appreciation of different life experiences and perspectives and to the extent that more people record their lives, the sum of human knowledge will grow. Since different people are more influential and the media is biased, it is of societal interest to encourage as many people as possible to record their experiences and to the break monopolies on knowledge.

What the court has done is to show that knowledge in general and autiobiography in particular are democratization, giving a vote and a value to the individual separate from the collective.

Citing the Maggid of Mezeritch (a Hasidic Master 1704 – 1772), Judge Solberg challenged the Appelant’s assumption that free speech was necessary for creativity, and suggested that privacy may be more essential. The Maggid noted that the great act of creativity is procreation which is (normatively) a private act. Also, a seed needs to be covered in the dirt and hidden from view to germinate.

He noted that elections are only democratic if they are preceded by an opportunity for people to express themselves and their concerns and accompanied by debate and attempts to persuade by argument.

The court sees a problem with gatekeepers and sensors, media and political censoring  The courts noted that the democratization effect of social media has forced dialogue and change in surrounding totalitarian Arab regimes. Democracy without free speech is considered a soul-less regime.

Nevertheless, despite the centrality of freedom of expression, creative expression and autobiography, the court does not accept these values as being absolute. The court ruled that my freedom of action stops at your nose. My freedom of expression does not allow slander or libel. It does not justify damaging national security, creating a civil disturbance or the right to give false witness in court.

The right to privacy is enshrined in Section 7 of the Basic Law – Respect of Man and His Freedom 1980 which states that each man is titled to privacy. One does not enter a person’s territory without permission. One cannot search a person, his body or chattels, and one must not damage a person’s self expression, writings or records.

The courts have upheld the rights to privacy. This again, is subject to checks and balances:

Objectifying another person for one’s own gains damages his personal integrity:

“Man, and in general every rational being, exists as an end in himself and not merely as a means to be arbitrarily used by this or that will. He must in all his actions, whether they are directed to himself or to other rational beings, always be viewed at the same time as an end… Persons are, therefore, not merelysubjective ends, whose existence as an effect of our actions has a value for us; but such beings are objective ends, ie, exist as ends in themselves.” (Immanuel Kant, Groundwork of the Metaphysic of Morals, 428 (H. J. Paton trans., 1964)).

It is totally forbidden to use someone else’s person for one’s gain, and the privacy of the individual is the hard core (maybe an unfortunate choice of wording?) of his person.

 “The injury is to our individuality, to our dignity as individuals, and the legal remedy represents a social vindication of the human spirit thus threatened rather than a recompense for the loss suffered.” (Edward J. Bloustein, Privacy as an Aspect of Human Dignity: An Answer to Dean Prosser, 39 N.Y.U. L. Rev. 962, 1003 (1964)

To conceive someone as a person is to see him as actually a chooser, as one attempting to steer his course through the world, adjusting his behavior, as his appreciation of the world changes, and correcting course as he perceives his errors. It is to understand that his life is for him a kind of enterprise, like one’s own… To respect someone as a person is to concede that one ought to take the account of the way in which his enterprise might be affected by one’s own decisions. By the principle of respect for persons, then, I mean the principle that every human being, insofar as he is qualified as a person, is entitled to this minimal degree of consideration”(Stanley I. Benn, Freedom, and Respect for Persons, in privacy & personality 1, 9 (J. Roland Pennock and John W. Chapman eds., 2009)).

The right of privacy, is a consequence of the Right of Human Dignity, see Civil Appeal: Eloneal vs. Mc Donald, 45(4) 314, Judge Rivlin there, Anon. in A Barak‘s ruling, Ruth GavesonThe right to privacy and respect, articles in memory of Shelach 61 (1988).

Functional Justifications

Normative existence in a democracy requires trust between people, particularly those in intimate relationships.

There are a number of theories that confidence and privacy are necessary to allow a person to fully develop and realize himself. George Orwelles’s 1984 is given as an example of where this privacy is not respected.

Brandeis:

 “The makers of our Constitution undertook to secure conditions favorable to the pursuit of happiness. They recognized the significance of man’s spiritual nature, of his feelings, and of his intellect. They knew that only a part of the pain, pleasure and satisfactions of life are to be found in material things. They sought to protect Americans in their beliefs, their thoughts, their emotions and their sensations. They conferred, as against the Government, the right to be let alone — the most comprehensive of rights, and the right most valued by civilized men.” (Olmstead v. United States, 277 U.S. 438, 479 (1928).

The man who is compelled to live every minute of his life among others and whose every need, thought, desire, fancy or gratification is subject to public scrutiny, has been deprived of his individuality… Such an individual merges with the mass. His opinions, being public, tend never to be different; his aspirations, being known, tend always to be conventionally accepted ones” (Bloustein,.(1003

See also R. v. Dyment, [1988] 2 S.C.R. 417, and the Birnhack on the Rights for Privacy in Law and Technology.

Privacy differentiates between the ‘I’ and society, and defines a space where the individual is left alone to develop as an individual without external interference (the Dayan case).

Liberty includes the right to live as one will, so long as that will does not interfere with the rights of another or of the public. One may desire to live a life of seclusion; another may desire to live a life of publicity; still another may wish to live a life of privacy as to certain matters, and of publicity as to others. One may wish to live a life of toil, where his work is of a nature that keeps him constantly before the public gaze, while another may wish to live a life of research and contemplation, only moving before the public at such times and under such circumstances as may be necessary to his actual existence. Each is entitled to a liberty of choice as to his manner of life, and neither an individual nor the public has a right to arbitrarily take away from this liberty” (Pavesich v. New England Life Insurance Co., 50 S.E. 68, 71 (Ga 1905)).

 Citing the Medieval commentator Rashi and the Midrash Tachuma on Exodus 34:3, the Ten Commandments were first given publicly with thunder, lightening and the sounding of the ram’s horn (audio-visual extravaganza?), but the evil eye was therefore upon them and they were broken. The second set were given in a small quiet voice and were the ones that lasted.

The decision continues to cite widely from Jewish sources, Aristotle and modern legal and philosophical works to show that Man needs relationships: It is not good for man to live alone Genesis 2:18, Man is a political animal Aristotle Politicals Book I 28-37, a study partner of death (Bavli, Ta’anit 23a). These sources indicate that every one of us is involved in a plethora of relationships in our complex lives, each of which has its own character.

The relationship between man and wife has a  character of intimacy that the Law  protects. Most clearly in the legally defined relationship of Man and Wife, but this is extended to long term, steady Common Law relationships which also have legal recognition and responsibilities of confidentiality. It is precisely for this reason that Rabbinic Responsa Nahlat Sheva, Contracts 9) rules that business circumstances where a man is unable to give witness, his wife is also unacceptable. A man can appoint his wife as his proxy for actions that a third aprty would not be acceptable for,, and In Israel Law of Evidence 1981, in criminal law, spouses may not testify against each other.

In the novel, it is the woman’s right not to be exploited and to have her privacy respected.

COMPARATIVE LAW

English Approach,

In the past, the available tort was Breach of Confidence, which depends on the type of confidence, how it became known and whether there is an assumption of confidentiality.

In the past decade, the British law has expanded this. Lord Hoffman in Campbell:

“The new approach takes a different view of the underlying value which the law protects. Instead of the cause of action being based upon the duty of good faith applicable to confidential personal information and trade secrets alike, it focuses upon the protection of human autonomy and dignity – the right to control the dissemination of information about one’s private life and the right to the esteem and respect of other people.”

In personam rights have in rem obligations. Notice is made of the European Convention for the Protection of Human Rights and Fundamental Freedoms.

Australia

Not all acts taking place in private on ones private property deserve confidentiality, a factory owner claiming that the method that opposums (why isn’t this opposii?) were killed in his factory was confidential, was rejected.

“There is no bright line which can be drawn between what is private and what is not. Use of the term ‘public’ is often a convenient method of contrast, but there is a large area in between what is necessarily public and what is necessarily private. An activity is not private simply because it is not done in public. It does not suffice to make an act private that, because it occurs on private property, it has such measure of protection from the public gaze as the characteristics of the property, the nature of the activity, the locality, and the disposition of the property owner combine to afford. Certain kinds of information about a person, such as information relating to health, personal relationships, or finances, may be easy to identify as private; as may certain kinds of activity, which a reasonable person, applying contemporary standards of morals and behaviour, would understand to be meant to be unobserved. The requirement that disclosure or observation of information or conduct would be highly offensive to a reasonable person of ordinary sensibilities is in many circumstances a useful practical test of what is private. (Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63).

New Zealand – see P v D [2000] 2 NZLR 591 and alsoWilliam L. Prosser, Privacy, 48 Cal. L. Rev. 383, 396-397 (1960).

“20. ….article 10(2), (like article 8(2)of the European Convention for the Protection of Human Rights and Fundamental Freedoms), recognises there are occasions when protection of the rights of others may make it necessary for freedom of expression to give way. When both these articles are engaged a difficult question of proportionality may arise. This question is distinct from the initial question of whether the published information engaged article 8 at all by being within the sphere of the complainant’s private or family life.

21. Accordingly, in deciding what was the ambit of an individual’s ‘private life’ in particular circumstances courts need to be on guard against using as a touchstone a test which brings into account considerations which should more properly be considered at the later stage of proportionality. Essentially the touchstone of private life is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy”

Lord Hoffman in Cambell:

  “I shall first consider the relationship between the freedom of the press and the common law right of the individual to protect personal information. Both reflect important civilised values, but, as often happens, neither can be given effect in full measure without restricting the other. How are they to be reconciled in a particular case? There is in my view no question of automatic priority. Nor is there a presumption in favour of one rather than the other. The question is rather the extent to which it isnecessaryto qualify the one right in order to protect the underlying value which is protected by the other. If one takes this approach, there is often no real conflict. Take the example I have just given of the ordinary citizen whose attendance at NA is publicised in his local newspaper. The violation of the citizen’s autonomy, dignity and self-esteem is plain and obvious. Do the civil and political values which underlie press freedom make it necessary to deny the citizen the right to protect such personal information? Not at all. While there is no contrary public interest recognised and protected by the law, the press is free to publish anything it likes. Subject to the law of defamation, it does not matter how trivial, spiteful or offensive the publication may be. But when press freedom comes into conflict with another interest protected by the law, the question is whether there is a sufficient public interest in that particular publication to justify curtailment of the conflicting right. In the example I have given, there is no public interest whatever in publishing to the world the fact that the citizen has a drug dependency. The freedom to make such a statement weighs little in the balance against the privacy of personal information”

“The weight to be attached to these various considerations is a matter of fact and degree. Not every statement about a person’s health will carry the badge of confidentiality or risk doing harm to that person’s physical or moral integrity. The privacy interest in the fact that a public figure has a cold or a broken leg is unlikely to be strong enough to justify restricting the press’s freedom to report it.” The Baroness Hale Of Richmond

In A v B [2003] Q.B. 195 (C.A. 2002), concerning a British footballer’s one night stand with two women, revealed to the press by one of them, despite anticipated damage to footballer’s family:

“The fact that the confidence was a shared confidence which only one of the parties wishes to preserve does not extinguish the other party’s right to have the confidence respected, but it does undermine that right.  While recognising the special status of a lawful marriage under our law, the courts, for present purposes, have to recognise and give appropriate weight to the extensive range of relationships which now exist. Obviously, the more stable the relationship the greater will be the significance which is attached to it”

As contrasted with Ms Kennitt and Ms Ash:

 “… the relationship between Ms Mckennitt and Ms Ash…was miles away from the relationship between A and C and D. In the preceding paragraph I deliberately and not merely conventionally described the latter as a relationship of casual sex. A could not have thought, and did not say, that when he picked the woman up they realized that they were entering into a relationship of confidence with him.”

Thus in A and B, the shortness of the relationship did not create an obligation of confidentiality on the women, who had the right to enjoy their moment of fame and Mirror payment for their story. Here, the relationship lasted 5 years and the rights and obligations, whilst not sanctified by marriage, are, nevertheless, recognized by the Law.

EUROPEAN LAW

In  Von Hannover v. Germany (no. 2) [GC], nos. 40660/08 and 60641/08 ECHR, the rights of the Monacao royal family to prevent photos of them on holiday is discussed. Considerations regarding bannig  publication include the extent to which the material contributes to public discussion, whether the personalities are public or private, the person’s attitude re publicizing the material in question, content, form and consequences of publication and how the material was obtained.

It is noted that Continental Law greatly respects the rights of public figures to have a private life:

“Even serious public interests cannot justify encroachments of this area; an evaluation according to the principle of proportionality does not take place” (BVerfGE 80, 367 (1989) NJW 1990 563).

Code Civil [C. CIV.]:

“Everyone has the right to respect for his private life. Without prejudice to compensation for injury suffered, the court may prescribe any measures, such as sequestration, seizure and others, appropriate to prevent or put an end to an invasion of personal privacy; in case of emergency those measures may be provided for by interim order.”

AMERICA

Restatement (Second) of Torts, § 652 (1977)  ‘Public disclosure of Private facts’

One who gives publicity to a matter concerning the private life of another is subject to liability to the other for invasion of his privacy, if the matter publicized is of a kind that:
(a)  would be highly offensive to a reasonable person, and
(b)  is not of legitimate concern to the public”

Campbell v. Seabury Press, 614 F.2d 395 (5th Cir. 1980)

“A review of the record in this action clearly shows the requisite logical nexus. An account of the author’s close association with his older brother certainly is appropriate in the autobiography. Likewise, accounts of his brother’s marriage as they impacted on the author have the requisite logical nexus to fall within the ambit of constitutional protection”.

In America, Freedom of Speech is protected by the constitution, privacy, is however, is not. As noted by Judge Miriam Naot, it is thus possible that in a similar case the US, the courts would reach a different conclusion from that of Israel and other Common Law countries

In Bonome:

“As noted above, there is an additional interest in this case: Kaysen’s right to disclose her own intimate affairs. In this case, it is critical that Kaysen was not a disinterested third party telling Bonome’s personal story in order to develop the themes in her book. Rather, she is telling her own personal story–which inextricably involves Bonome in an intimate way. In this regard, several courts have held that where an autobiographical account related to a matter of legitimate public interest reveals private information concerning a third party, the disclosure is protected so long as there is a sufficient nexus between those private details and the issue of public concern. Id.; Anonsen, 857 S.W.2d at 705-06; Campbell v. Seabury Press, 614 F.2d 395, 397 (5th Cir. 1980). Where one’s own personal story involves issues of legitimate public concern, it is often difficult, if not impossible, to separate one’s intimate and personal experiences from the people with whom those experiences are shared. Thus, it is within the context of Bonome and Kaysen’s lives being inextricably bound together by their intimate relationship that the disclosures in this case must be viewed. Because the First Amendment protects Kaysen’s ability to contribute her own personal experiences to the public discourse on important and legitimate issues of public concern, disclosing Bonome’s involvement in those experiences is a necessary incident”.

In Israel, where the rights cannot coexist, it is fitting for the right of expression of one party to give way to the right of privacy to the other.

The Supreme Court quoted Jewish Rabbinic sources, philosophy, political and Israeli and foreign legal sources to try to provide a framework for balancing the conflicting rights of privacy and self-expression. They acknowledged that literature is often based on fact, but upheld the district court’s ruling that acquaintances of the woman would recognize her, and that she was entitled to privacy. The details of the character could and should have been changed more significantly.

The main Judge, Noam Solberg (who is religious and Jewish) declined from illustrating how the woman’s sexual habits were described, since this would damage her privacy, but noted that his ruling was written after reading the novel in its entirety. The ruling of the district court was upheld by all three judges.
Deputy Supreme Court Judge Miriam Naot (Secular, Jewish) also noted that she had read the book but considered that it would be improper to go into the salient details, but she felt that the invasion of privacy exceeded a release of a film of their bedroom romping since it attempted to get into the woman’s  head.

Judge Jubrian (Moslem) felt there was a vital constitutional right to allow of freedom of speech on political subjects, including views that one disagrees with and minority-held extreme views have a right to be heard. This constitutional right does not have the same validity when the rights of others are trampled on. Judge Jubrian ruled than on fundamental political issues the right for the freedom of speech is paramount. In this case the author could have taken pains to create a work of literature that was less invasive. As an alleged work of literature it is not entitled to the protection forwarded to autobiography.

The ruling was held unanimously and the man was fined NIS 750,000 and legal fees.

Civil Appeal 8954/11 Plony vs. Plonit, Supreme Court.

 

COMMENTS

  1. This decision may be slightly off-subject for an IP Blog, but the original case was reported since the woman claimed copyright infringement in personal letters that were reproduced. As the decision is an important one, is well reasoned, and since I am in favour of promoting Jewish Civil Law, I am happy to blog it to bring it to the attention of the English speaking world, and suspect that it will generate a lot of interest. I have reported this case at length since I was approached by a British QC to report on the case.
  2. In Memoirs Of Fanny Hill By John Cleland (London, 1749), a fictional memoir of a woman of pleasure, the male characters are referred to as Lord D, Mr H, etc. Road names are changed. It does seem that this is the correct standard.
  3. In many ways this is the literary equivalent to a recent decision in Germany where a woman who had an affair with a photographer obtained an injunction preventing the publication of compromising pictures of her. Indeed, Judge Miriam Naot ruled that were the man to publish compromising photographs of himself with the student, clearly the court would agree to a request by the student to impound those pictures. The present case was considered more exposing, in that it also attempted to describe what went on in her head.
  4. The Campbell case related to drug dependency of the model Naomi Campbell. The relevance of this decision to newspapers publishing photos and articles concerning royalty and political figures (Duchess of Kent changing bikini, Prince Harry in Las Vegas, Bill Clinton and Monica Lowinski, Mosley Junior with prostitutes in Nazi uniform, Netanyahu’s affair, etc) is clear.
  5. People are entitled to privacy in their private lives. Letting someone into your bedroom does not give him license to expose what happened there to the rest of the world.
  6. I believe that the ease with which anyone can publish words or pictures taken with a mobile phone and reach an unlimited audience with blogs, facebook and the like, justifies the Supreme Court’s stance.
  7. I am unhappy with all three judges referring to the male and female characters as the hero and heroine of the book. I see to reason to romanticize an affair that broke marriage vows and left other people hurt.
  8. Despite the precedents mentioned, the there have been cases of curtailing free speech by both the Israel courts and by the Jewish religious leadership.
  9. The Israeli courts did indeed allow a communist paper to flourish and Kol HaAm is an important decision. Communists are one thing. The same Supreme Court later banned the popular Arutz 7 radio station in an en blanc that doesn’t even mention the value of freedom of speech and expression, ignoring the fact that those who campaigned for this important nationalist voice to be silenced were the same people who wanted Abu Natan, the DJ behind the Voice of Peace to receive a Nobel Prize. The Minister of Communications who created legal private radio stations, Shulamit Alony intentionally crafted the law to block Arutz 7.
  10. Former Arab Knesset members who were later found to be spying for Syria were not banned, but Meir Kahannah was banned from running for the Knesset due to his right wing politics. In general, we note that it is dangerous to ban political parties as it makes outlaws of ideologists and moves them outside the system. It also boosts their attraction.
  11. The books of Maimonides, Gersonides and Spinoza were banned. The Chassidic movement was banned in its day. More recently the late Rav Shach banned Rabbi Steinzalz, Rav Schneerson, Rav Riskin and Rav Lichtenstein. There were recent attempts to dicommuniate Rav Stav. I am scared by those that know the whole truth because God speaks to them. A few years ago, some extreme ultra-Orthodox rabbis created the concept of Daas Torah. They apparently have a monopoly on the truth. Dangerous. Let ideas win in the market place.
  12. Generally, excommunication and banning merely makes a work or a rabbi more popular, this is true of forbidden literature and music as well.
  13. Banned views sometimes become main-stream over time. Let the Sun Rise was banned and is now main stream in Israel. We note that the Rolling Stones are performing in Israel this summer. They’ve been banned before.
  14. Judge Noam Solberg is a settler living in Gush Ezion, a West Bank enclave that is a rebuilding of settlements destroyed in 1948. His ruling was adored by Mekor Rishon and was criticized by HaAretz. We wait to see whether this is a one-off ruling or whether the Jewish scholarly and legal traditional will be influential in future rulings.
  15. So the courts aren’t perfect. I think this ruling is nevertheless correct. I’ve recognized characters in books where the authors haven’t changed names. In general, this should be avoided, at least as far as personal lives are considered.

Employee’s IP – When Things Get Multinational…

June 19, 2014

academic

Smart & Biggar, a Canadian firm with a memorable name has a good article comparing and contrasting the rights of an employer in employee’s copyright and inventions. See here.  

This is an issue that comes up around the world, and which I have reported on and organized seminars on.

Dr Shlomit Yanitzk-Ravid has recently published a book on the subject, based on her PhD theses. There were also a recent Israeli court ruling and a committee decision that referred to that book.

As academics, including Shlomit, spend time on sabbatical and as visiting professors (currently she is seconded from ONO to Yale), there are territorial complications. If a paper is written by a visiting professor whilst staying at a college who supports royalty free publishing, should he/she have to publish in such a journal? What about if the college where he/she is tenured prefers publication in one of their own Law Reviews?

Companies are often multinational. It is not inconceivable that a company formed and headquartered in the US State of Delaware could develop an invention by collaboration between research groups in Israel and Europe. Apart from Employment Law and Patent Law in the different countries, perhaps being different, funding from binational govt. research funds may have strings attached. Some of the research could be done by a post-graduate student in a university. One inventor may be a tenured university professor consulting to industry and another might be an industrialist who teaches a course in the university. Research could be performed in a university of industrial lab, but what if it is performed on a computer terminal in the company whilst logged on to a university computer?

Where I get drawn into these types of issues, I may be consulting to US council of the Head Office, perhaps outside-council, and could be billed by a US law firm. If the company that perhaps owns the IP has a research lab or factory in Israel, should I be charging VAT on my fees even though I am being paid by money that is laundered, conditioned and neatly pressed by the US Law Firm?


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.


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

April 6, 2014

cube in hand

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

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

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

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

Ruling

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

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

Comment

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


Soho in Israel

March 20, 2014

SoHo

Collection Soho LTD owns a chain of design shops selling furniture, kitchenware, ornaments, bags, jewelry and fashion accessories. The chain has been in existence for 10 years, and in June 2013, the company was awarded a trademark for the word Soho in class 35, covering Shops for sale of designed goods in different consumer sections including – foodware and tableware, office supplies, appointment books and planers, calendars, kitchenware, baby and infant products, greeting cards, bathware (sic), furniture.

When Electra Real Estate LTD and Ben Ephraim and Sons, Building and Entrepeneurship LTD publicized a plan for a shopping mall called So Ho, Collection Soho LTD filed for an injunction, under the Equitable Trade Laws and the Trademark Ordinance.

Judge Gidon Ginat of the Tel Aviv District Court heard the case. As is his custom, and as he explained at an AIPPI conference in Israel a few months back, Judge Ginat prefers to address the whole issue in one hearing rather than rule on temporary injunctions and let cases drag out. He ruled that under both trademark infringement and the tort of Passing Off, the relevant test was whether there was an objective likelihood of confusing potential customers such that someone might purchase the goods of one company thinking that they were purchasing the goods of the other company.

Based on the fact that New York and London have Soho districts of a Bohemian, arty character, and with reference to Judge Gronis’ decision (Supreme Court Rules that Usage of “Shemesh” by Competing Restaurant is Kosherconcerning the word Shemesh, where the now head of Supreme Court ruled that registration of the word Shemesh (Sun) as a trademark by a grill restaurant, was insufficient to prevent others from calling their restaurants various names that included the word Shemesh, Judge Ginat ruled that in addition to the classic triple test for likelihood of confusion and the distinctive-indicative-generic term spectrum, he went on to rule that there are words with a universal aura and that it was difficult to accept that someone could take ownership over such words, and felt that Soho was in that category.

Although there is a chain of design shops called SoHo, there are other enterprises using the name Soho as part of their name. Here there was an interest in developing a shopping precinct called SoHo, not a single shop. Judge Ginat felt that there was no real likelihood of confusion, and therefore denied the injunction and ruled that the precinct could use the name SoHo. But should use a different font and not use the phrase Collection SoHo.

In the circumstances, due to the other goods sold in the shopping mall, Judge Ginat ruled that it would be clear to customers that the mall was not related to Collection SoHo, and threw out the case. However, he also ruled that the defendants could not use the same font as that used by Collection Soho LTD or use the phrase Soho Design.

13408.02.14 Collection Soho LTD vs Electra Real Estate LTD and Ben Ephraim and Sons, Building and Entrepeneurship LTD, Tel Aviv District Court before Judge Ginat, 9th March 2014

COMMENT

The term Soho conjures up a bohemian arty sort of lifestyle to Americans due to the neighborhood called South of Houston or Soho for short. To the British, the term indicates London’s historic red light district

There are 13 marks for Soho in the trademark registry, six of which have lapsed and 7 that are in force. For example, International Paper Company of Memphis, Tennessee, U.S.A. has a trademark No. 202063  for Disposable containers for use in the food and beverage service industry, namely, cups, lids, bowls, plates and serving platters; all included in class 21 and mark 202062 for Disposable containers made of paperboard for use in the food and beverage service industry, namely, cup carriers, cup sleeves, boxes, buckets, and bags; all included in class 16. Two of the lapsed marks, Soho and Soho Club were for registered to a Tango LTD, for clothing in class 25.

It is not clear to me why the word Soho should not be monopolized in Israel by registration of a trademark. If such a mark is registered, I fail to understand why the mark owner should not be able to enjoy a monopoly for the word.

I can see that the two signs use different fonts, but only can tell this as they are reproduced side by side. Both signs use san serif thin letters. The H is more or less identical. The S is slightly different and the O is more round in the complainant’s logo and more oblong in the defendants. The overall impression is very similar. I think this indicates intentional passing off, or at least inequitable behavior.

Nevertheless, it is difficult to criticize Judge Ginat for following Supreme Court precedent. His analysis is solid, and he has indeed moved this case quickly through the system. However, I was critical of the original Shemesh decision. Whilst judges are bound by precedents, bloggers aren’t. My concern is that whereas under common law, the likelihood of confusion may be the issue. trademarks are registered and are generally considered a form of property. If a mark is registered for design, why shouldn’t the mark owner be considered just that, an owner of a piece of abstract property? Can the existence of other retailers selling designer goods be considered as dilution? I would argue that judge Grunis’ decision was wrong since it dilutes the Shemesh brand name and this decision has a similar effect.

What Judge Ginat is doing essentially, is ruling that the right of any third-party to use a place-name like Soho for a shopping area over-rides the rights of a trademark owner to stop this unless there is a likelihood of confusion of origin of goods. There are two torts here. Likelihood of confusion and a separate trademark infringement issue. If the only issue is likelihood of confusion, why register trademarks? It will be interesting to see if this decision is appealed, and if so, what the verdict will be.

One final comment: the late Rabbi Irving Jacobs, formerly Principle of Jews College London, once told me that Rabbi Farber, the minister of Soho used to say that on leaving the synagogue one could make the blessing בורה מיני זונות.


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