June 17, 2013

Cube

I received an email from an Israeli Patent Attorney last week with the rather inflammatory heading “is the Rasham [Israel Registrar of Patents and Trademarks MF] an idiot or was he bribed?”

Somewhat intrigued, as the patent attorney in question is one of the most intelligent people I know, I opened the email to see what was bothering him.  The email contained a link to an article in the business newsletter “Calcalist” to the effect that a company called Seven Towns had received trademark protection for the Rubik’s Cube, and an Israel IP law firm was sending out Cease & Desist letters to various toy shops with requests for damages. The article in question is to be found here.

From Wikipedia:

Rubik’s_Cube is a 3-D combination puzzle invented in 1974[1] by Hungarian sculptor andprofessor of architecture Ernő Rubik. Originally called the “Magic Cube”,[2] the puzzle was licensed by Rubik to be sold by Ideal Toy Corp. in 1980[3] via German businessman Tibor Laczi and Seven Towns founder Tom Kremer,[4] and won the German Game of the Yearspecial award for Best Puzzle that year. As of January 2009, 350 million cubes had been sold worldwide[5][6] making it the world’s top-selling puzzle game.[7][8] It is widely considered to be the world’s best-selling toy.[9]

Reading the article, and reading between the lines, it appears that the patent attorney in question (i) believed that the Israel Registrar had granted a three dimensional trademark for Rubik’s Cube, and (ii) considered this ridiculous.

In an earlier article I discussed a recent decision by the patent office to grant a three dimensional trademark for the Crocs  beach clog, and so could see how my colleague was envisioning a product that had not been patented or registered as a design back in  when it was invented, could somehow, after decades of being considered in the public domain, become private property, enabling a trademark registrant to sue third parties. (The Interlego decision makes it clear that 3D Lego bricks are not protectable by copyright, so we can assume that Rubik’s Cube isn’t either).

However, before assuming that the Israel Trademark Office had got it wrong, I checked the database. There are actually two trademark entries owned by Seven Towns, both covering the same mark, but in different classes. The mark in question  IL 228232 is reproduced below.

IL 228232

The mark covers three dimensional puzzles in class 28, but is not a three dimensional mark. It is a 2D visual representation of a cube. Of course, to be drawn on paper it has to be, but there are accepted ways of showing three dimensional designs on a flat piece of paper. One can show top, bottom, left, right, front and back elevations, with a perspective view. That is how design applications are filed. That was not done here. More importantly, there is no indication in the certificate that the trademark is for a three dimensional object.

We note however, that the mark issued under Section 16 on the basis of a foreign registration (European Community Trade Mark No. 162784), which arguably is for a three dimensional cube. That mark is under cancellation proceedings.

If the mark, whether 3 dimensional or flat, is used as an indication of origin, it may be what could be considered as trademark infringement.

According to the Calcalist the lawyers who are going after toy vendors include Adv. Noe Shalev Slyomovics, (pronounced Noach Shmulovits, and usually spelled that way in this blog, but I have copied his preferred Hungarian spelling from his business card).

Noe Shalev Slyomovics is the former Israel Deputy Commissioner of Patents & Trademarks. He returned to private practice after Adv. Assa Kling replaced Dr Meir Noam as Commissioner.

I sent Adv. Noe Slyomovics an email, and it transpires that he was able to convince the trademark office that making cubical shaped “Rubik’s Cubes” is arbitrary, since there are a number of other options that use the same mechanism and achieve the same result. Some examples of alternative “Rubik’s Cubes”, courtesy of Adv. Slyomovics are depicted below:

dsc02227 (1)dsc02349

There are also a number of similar sliding puzzles that are not actually 3×3 cubes, but use different mechanisms.

Adv. Slyomovics considers Rubik’s 3×3 cube choice as arbitrary and equivalent to the others, and successfully argued that like the Toffiffee candy or the Ferrero Roche praline, Rubik’s cube was entitled to trademark protection, and there are legitimate grounds to badger other toy manufacturers.

I disagree. I consider the fact that all the equivalent puzzles are generically referred to as spherical cubes and similar oxymora, is indicative that the cube is the natural shape and the variations are inferior. As with Crocs-  , I believe that the puzzle should be in the public domain as it was not protected.

Apropos, I also have problems reconciling Gronis’ Toffiffee decision with the Apropo-(bugles)  decision.

Leave a Comment » | Copyright, design, infringement, Intellectual Property, IPO, Israel, Israel Copyright, israel design ruling, Israel Patent, Israel Patent Office Rulings, Israel Related, Israel Trademark, Licensing, Patent trivia, trolls, Uncategorized | Permalink
Posted by Dr Michael Factor

June 13, 2013

Car Flag

This case, concerning sales of flag poles for attaching flags to cars, that infringed a registered design, is a landmark case, in that this is the first time that the Israel Supreme Court has ruled on damages for design infringements. With the high-profile Apple vs. Samsung case in the US and Europe, and a new Israel Design Law in the works, this ruling is a significant one.

The case relates to a subcontractor who was contractually bound to use a supplier’s mold for fabricating plastic flag holder staves for hanging flags from cars. The design of the flag holder staves was registered. In the aftermath of the 9/11 disaster in the US, there was a tremendous demand for car flags as a sign of patriotism and empathy, and the subcontractor decided to make and supply such flag posts directly, bypassing the supplier.

The Case

They Appellant supplies flags on flagpoles, including flags on poles that are attachable to the windows of cars. These are very popular in Israel around Independence Day. The appellants have registered designs for car flag poles, The defendant, Super Plast Company Ltd., makes plastic products, and the second defendant is its owners. Super Plast signed an agreement with the appellants to manufacture car flag poles for them, in accordance with the registered design and using a mold for injection molding the car flag poles that is owned by the Appellant.

Following the 9/11 disaster, there was a surge of patriotism in the US that created a demand for flags and flagpoles, including car flags and car flag poles and the Appellant ordered more poles from Super Plast. However, Super Plast manufactured and sold approximately 1,000,000 flag poles directly to customers, in contravention of their contract, and in infringement of the registered design. They didn’t have time to fulfill the Appellant’s order, since they were using the appellant’s molds to manufacture flagpoles for third parties.

District Court’s Decision

The District Court set the damages due to the appellants by the defendant at NIS 200,000 or about $55,500, based on a calculation of 1 million infringing car poles being sold at a profit to Super Plast of 20 aggarot (about 5.5 ¢)  per pole.

The appellants claimed that the District Court erred in quantifying the damage as the profits made by the infringers – their unjust enrichment, but should be calculated on the basis of potential sales lost by the appellant, which they’d estimated as NIS 3.8 per product for a flag on a pole. According to appellants calculation, the damages should have been NIS 3,600,000. Alternatively, and noting that the defendants had provided partially records only, appellants claimed compensation without proof of damage as provided for in Section 13 of the Commercial Wrongs Act, at NIS 100,000 per infringement, and since defendants had dispatched 36 separate orders for flag poles over the 5 1/2 months period from 9/11 over which there was a high level of demand, the appellants reached the same sum of NIS 3.6 Million in statutory damages without proof.  The defendant accepted the district court’s ruling and noted that the issues were essentially factual and that the Court of Appeals rarely got involved in such issues.

The Ruling

The Supreme Court held that Section 37(2) of the Patent and Design Patent Ordinance – which deals with infringements of registered designs allows calculation of damages based on damage caused to the rights owner, i.e. the loss of potential profits that could have been made or compensation based on the infringer’s actual profits, (unjust enrichment).

The Supreme Court noted that it had never ruled on registered design law before, and believed that there were three main questions:

  1. What are the principles for calculating compensation for the to the owner of the design patent? Can compensation be granted on the basis of loss of profit caused to the designer or should it be based on actual profits of the infringer?
  2. Will compensation based on lost profit be calculated according to real profit loss or to potential profits lost? of profits? Specifically, should the compensation for infringement be based on estimated real damages caused to the appellants as a result of them not selling the flag poles, or should the damages be calculated on the basis of lost profits from not being able to sell a million car flags on their poles.
  3. Should the Court rule statutory compensation without proof of damage as a substitute remedy, and what constitutes an infringement? Specifically, should separate batches be considered as separate infringements, or should the whole case be considered as one registered design being infringed?

Since the current archaic ordinance is a leftover from the period of the British Mandate, the Supreme Court considered it reasonable to adopt common law principles and ruled that the Patent and Design Patents Ordinance should be interpreted to allow compensation for breach of right in registered designs on either the basis of loss of profits to the rights holder, or of infringer profits, which ever is higher.

In lieu of Israeli precedents, the ruling brought comparative analysis from UK and US case-law, including classic British cases relating to the equivalent of the Mandatory Ordinance still in force. The ruling quoted from American Plywood, the classic US case that relates to damage calculations, and also to the recent Apple vs. Samsung design cases.

The Supreme Court ruled that where a registered design owner bases a claim on lost profit, it is necessary to prove a causal link between the loss of profit claimed and the infringing act. For such proof, in line with the general Israel case-law on torts, the Supreme Court ruled that there is a requirement for the profits to be foreseeable and listed four conditions that are required to be fulfilled:

  1. proof of market demand for the product covered by the registered design
  2. lack of substitute products in the relevant market
  3. the plaintiff’s ability to supply the demand
  4.  the per unit potential profit loss to the registered designer

The Supreme Court went on to analyze the case in accordance with these principles and ruled that:

  1. a partial demand for the product, i.e. pole with flag, was proven, but that at least some of the flag poles sold would have been sold to manufacturers who would have assembled the flag and pole combination themselves. Indeed, the appellant had been known to sell flag poles only.
  2. the registered design is unique in the relevant market
  3. the lack of the designer’s ability to supply the demand stemmed from the defendant’s independent sale
  4. Fourth, during the high demand period following 11/9 events, sales of poles reflected the market demand for the whole product (pole+flag) and it was proven that, absent the infringements, the appellants would have sold the poles and flags in a similar amount as the defendants did.
  5.  This was constituted the basis in damage to the appellants for calculating the amount of compensation.

The Supreme Court found that, but for the infringement, the appellants would have sold at least 250,000 units of the whole product but no more than 377,100 units, these numbers being based on orders and inquiries to the appellant. It was noted that there were other car-flag posts on the market of other designs, and that eventually cheap car flagpoles were available from China. On the basis of this range, which indicates that potentially somewhere between a quarter and a third of flag poles would have been sold as whole units, but noting that the registered design didn’t actually cover the flag+pole but the pole only, for calculation purposes, the Supreme Court estimated the number of flag+Pole combinations that would have been sold was 300,000. However, the estimated profit of sales of pole + flag was NIS 2.65, since there were costs involved as well, thus, the loss of profit for appellants was estimated as being NIS 795,000.

In addition, there were a further 700,000 poles that the infringer made and sold, and the appellant was entitled to the unjust enrichment from these, which was calculated as a further NIS 121,006 due to unlawful production of poles prior to 11/9 attacks.

As for the statutory compensation, the Supreme Court ruled that in the specific circumstances there is no justification for ruling statutory damages  since there is a way to remedy the appellant based on loss of profits.

In conclusion, the total damages awarded were NIS 916,006, to which was added a NIS 150,000 in legal costs.

The case: Appeal to Israel Supreme Court, Ronit Digley Umot Ltd. v. Rony Shatan (Hon. Jdg. Solberg, May 13, 2013).

COMMENTS

Apart from the fact that this is the first time that the Supreme Court has addressed the issue of calculating design damages, we suspect that with the recent high profile Apple vs. Samsung cases concerning the design of smart phones, the judges couldn’t resist having their say.

In Apple vs. Samsung the functionality of a product is copied, and the design is part of a trend towards general simplification of design. The Apple i-Phone was certainly an inspiration of the Samsung design, and whether or not a court finds an allegedly infringing smart phone as too similar to a registered design in Europe or to a design patent in the US is merely a matter of whether it is too similar. It must be appreciated that there are arguments for both sides – which is probably at least contributory to the European and US courts reaching different verdicts. In this case, a subcontractor knowingly used a mold belonging to the plaintiff. This is a case of willful infringement that in the US would probably carry triple damages. Noone who follows this blog will accuse me of being anything a fan of A.Sh.I.R. and I believe that to obtain protection one should register one’s design. I am an unrepentant formalist. Nevertheless, in a case like this I see a justification in allowing claims of Unjust Enrichment, since the defendants willingly abused their contractual obligations to make a fast buck.

The issue of profit to infringer or loss to supplier is a general one. For example, the US calculates the value of infringing products originating in China in terms of value on arrival in the US, whereas China argues that the cost on exiting China should be used. The US suppliers sell the goods at about 10 times what they pay for them in China.

Leave a Comment » | design, infringement, Intellectual Property, IPO, Israel, Israel Court Ruling, israel design ruling, Israel IP, Israel Related, Opinion, registered design | Permalink
Posted by Dr Michael Factor

Design Registrations Cancelled After Court Rules Lack of Novelty on Filing Date

April 8, 2013

Eli Shafir owned three registered designs – 44798, 44799 and 44800.  On suing A. A. Maayanot LTD. for infringement in the Haifa District Court, A. A. Maayanot LTD. filed a cancellation action in the Israel Patent Office. Judge Dr. Adi Zarkan of the Haifa District Court ruled that the marks were invalid since they lacked absolute novelty when they were filed (there is no grace period under the Design Ordinance).

Consequently, the Patent Office cancelled the designs. The parties agreed to allow the patent office to decide appropriate costs. After comparing similar actions in Termo Gumi  see http://blog.ipfactor.co.il/2011/04/06/designs-for-rubber-seals/ and in Wolfman vs. Ackerstein  http://blog.ipfactor.co.il/2009/12/14/israel-patent-office-publishes-decision-on-design-for-kerb-stone/ and on weighing up the relative amounts awarded and the amount of material in each file, the adjudicator of Intellectual Property ruled costs of  NIS 2000 plus lawyer’s fees of NIS 10,000.

COMMENT

The decision doesn’t relate to the nature of the goods at all.  However, the court ruling indicates that the designs related to water purifying equipment imported from China. See ’ת”א (חיפה) 21858-08-10 – אליהו שפיר ואח’ נ’ א.א. מעיינות בע”מ ואח

We note that under the relevant somewhat archaic design ordinance, an importer can register a design for something imported from abroad. Only absolute local novelty is required. Apparently, this wasn’t available locally.

it is not clear why the adjudicator compared this to other design rulings and not to patent or trademark cases, of which there are rather more and these are certainly more recent.

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Posted by Dr Michael Factor

What happens to Rights where Israel Patent Office Mail Goes Astray?

October 30, 2012

Design examinations should take up to 12 months. If no response is sent to an office action, a notice of abandonment is eventually sent, that gives the applicant two weeks to respond.

Concerning Design Application Nos. 45247 and-45248, Safety Kleen Systems and their IP representative argued that they never received the office actions, nor the notice of abandonment, but only later discovered that the Application had gone astray when they requested that the Patent Office send copies of the most recent correspondence in the file by email.

The agent for the applicant claimed that an Office Action was not received and the Patent Office should have sent the notice by registered mail.

Ms Jaqueline Bracha, the Adjudicator at the Israel Patent Agency rejected this argument, pointing out that the relevant regulations allowed sending by mail, and that this was routinely done. She went on to rule that the corresponding civil court procedures were considered irrelevant where there were specific design regulations. Since the public could rely on the design register, it would be wrong to allow abandoned design applications to be resurrected.

COMMENT
This seems a little unfair as the Israel Patent Agency does send correspondence to the wrong address from time to time. I have certainly received correspondence addressed to other patent offices, but put in the wrong envelope, but then again the excuse of lost in the post is the oldest one in the book. In the specific case, there should have been two Office Actions and two Notices of Abandonment and the time lapse from filing until the issue of Examination was raised was a few years. In these circumstances, the decision not to reopen the case seems more reasonable.

 

Leave a Comment » | design, israel design ruling, Israel IP, Israel Patent Agency, Israel Patent Office, Israel Patent Office Rulings | Permalink
Posted by Dr Michael Factor

Book Review: Intellectual Property Law and Practice in Israel

July 15, 2012

When I first saw this book I suspected from its thickness (36 mm (1 15/32″  thick) that the authors had resorted to the well known strategy of adding appendices such as copies of the Israel Patent Law, Trademark Regulations, Copyright Ordinance and the like. This is not the case. The book runs to 632 pages of analysis, with a further 50 pages taken up with a table of cases and an index. There is no gratuitous padding. The book is simply a fair attempt to provide a detailed overview of IP in Israel and its length reflects its comprehensiveness.

As a thorough overview of intellectual property law in Israel, the book succeeds. It covers patents, copyrights, trademarks and designs, unjust enrichment, trade secrets, passing off and related rights.  It is the result of significant research by the authors, and though one can quibble with the odd opinion expressed, the book is authoritative. It is certainly a worthwhile addition to the library of any practicing Israeli patent attorney or IP lawyer.

Unfortunately, the readability of the book suffers from the lack of professional editing and the writing style provides constant reminders that the authors are not native English speakers. Paragraphs are long-winded and repetitive. Sentence syntax reminds one that the authors are used to writing in Hebrew. Sometimes, such as where copyright infringement by DJs at ‘wedding hauls’ is discussed, the typos are amusing. Generally, they are simply tiresome. I suspect that tighter writing could have slimmed down the book, shortened paragraphs and made it easier to comprehend without compromising on its comprehensiveness. That said, when allowing for the fact that the authors are not writing in their native language, the standard of the English is impressive. It is certainly better than my Hebrew. Nevertheless, the book is a little tedious and difficult to read because of language issues, and it’s a shame.

As would be expected from a legal text, judicial doctrines are discussed with reference to the case-law. Since the cases referred to are rarely available in English, I believe that the book would have been enhanced by an appendix abstracting the details of each case and providing a one page overview covering the specific issues and the legal significance. The cases could be arranged by subject or chronologically, with reference keys to facilitate the reader to find precedents of interest. I note that Machshavot who publish such overviews of case-law (in Hebrew) do not have a volume covering IP decisions. Although such an appendix would make a long reference work even longer, I think this would be a worthwhile addition, and would probably result in the thematic sections being shortened and would minimize repetition.

I suspect that the authors, who are both attorneys-in-law, in choosing to refer to follow the US convention and refer to licensed Israel patent attorneys as ‘patent agents’ will not endear themselves to their fellow professionals with technical backgrounds who universally and correctly translate the Hebrew term as Patent Attorney and refer to themselves as such. The training in IP law that Israel Patent Attorneys undergo includes two-year mentoring which is twice as long as that of law students. Both the written and the oral exams are difficult and the oral exam in particular, has a very low pass rate, particularly when considering the academic qualifications of the participants. Indeed I suspect that this book will be very widely used by trainee patent attorneys preparing for the Israel Patent Office oral exam.

The book, including it’s cover, weighs in at 1022 grams. It’s an attractive volume.

Intellectual Property Law and Practice in Israel by Eran Liss and Dan Adin, Oxford University Press May 2012  – ISBN: 9780199917419 (13-digit)  ISBN: 0199917418 (10-digit) – $225 from the publishers.

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Posted by Dr Michael Factor

Are ‘Design Concepts’ Protectable in Israel?

July 11, 2012

Haya Rivka Windling-Yoskovitz imports and sells wrapping materials and decorations for events through a company variously named “The Tasteful Choice”, Organza and Organza 2010, from 2006. Some of her wrapping materials were used in a retail outlet called ‘Petite Sweets’ in Ashdod. She carries a range of about 2000 goods.

Dekel Manufacturing, Import & Export of Decorative Goods LTD., managed by Amir and Haim Sandick imports and distributes ornaments and presents. Their catalog includes a range of some 6000 goods.

Windling-Yoskovitz sued Dekel and the Sandick brothers claiming that they were distributing two wrappings that she had designed and had manufactured in China. The first design was for “tallit bags” – organza bags with blue or black stripes and fringes, available in three sizes, that were intended to recall the Tallit, or ritual prayer shawl. The bags were intended for use for holding party favours or cutlery, and to be used for decoration at Bar Mitzva events.  The second design was for cellophane wrapping material including the words Yom Holedet Sameyach (Happy Birthday in Hebrew) and Mazal Tov (literally, good luck but perhaps congratulations would be a better translation).

Dekel had imported the cellophane wrapping material from China and it seems that it was superfluous manufacture from  Windling-Yoskovitz’ order that had found its way onto the Chinese wholesale market.  The tallit bags sold by Dekel were made from them, and were slightly different from Windling-Yoskovitz’ design, but clearly inspired by her.

The case was brought before Judge Grosskopf of the Tel Aviv District Court in September 2009, with a request for an injunction and that the defendants produce financial details regarding sales of these items. The defendants countered by requesting that the court throw out the charges, arguing that the plaintiff had no exclusive rights and that there was no legitimacy to prevent free competition regarding the distribution of these goods.

The plaintiff claimed a range of grounds using what Judge Grosskopf referred to as the “try it” approach. These included copyright, passing off, theft of trade secrets, misleading the consumer and unjust enrichment.

COPYRIGHT – Judge Grosskopf noted that Section 7 of the new Copyright Law follows Section 22(1) of the Copyright Ordinance and rules that there is no copyright in articles of manufacture that could be protected by a design registration, unless there was never any intention to mass produce. Since the plaintiff did not register her design, she was not entitled to IP protection under copyright or registered design rights.

PASSING OFF – As to passing off, quoting Judge Rivlin from the recent Tali Dadon Yifrach case and noted that the tort of ‘passing off’ created a  monopoly and so its use should be excised with care. The requirement for passing off to be grounds for legal recourse were that the plaintiff had a reputation for the goods and that consumers would wrongly assume that the goods originated the plaintiff.  In this case, he ruled based on witness statements, that the clientele were ambivalent as to who the importer was and were interested only in price.

THEFT OF TRADE SECRETS – Grosskopf dismissed this, since the articles were easily retro-engineered and purchasing or manufacturing in China wasn’t a trade secret.

MISLEADING THE CONSUMER – Grosskopf noted that the consumer here was the retailers, not the end users, and thus consumer protection was not an issue. Furthermore and unnecessarily, there is no likelihood of confusion, since the customers were ambivalent of who the importer was.

UNJUST ENRICHMENT - Judge Grosskopf established that this was the only real legal question and then embarked on a detailed analysis, widely quoting from Professor Grosskopf’s (himself) treatise on the topic. Grosskopf’s position is that enrichment for the innovator comes from market lead. Where appropriate, this can be extended by registering designs. Grosskopf felt that the organza bags were registerable but the cellophane wrapping lacked the minimal requirements to be considered a design. Were Dekel to have systematically copied the plaintiff’s designs, unjust enrichment would be appropriate, but that was not the case here. The cellophane was bought off-the-shelf in China and the bags were not on-on-one copies, but merely shared the same design concept and thus just enrichment should be limited to the natural advantage of the plaintiff by virtue of being the first to distribute.

Based on his analysis, Grosskopf dismissed the charges, but refrained from awarding costs.

The Case: T. A. 18395-09-09 Haya Rivka Windling-Yoskovitz vs. Dekel Manufacturing, Import & Export of Decorative Goods LTD., 10 June 2012 by Judge Professor Ofer Grosskopf.

COMMENTS

In my opinion, Judge Grosskopf is one of the better IP judges. This decision is erudite and generally correct, and contrasts nicely with the Karshi decision issued by Shapira of the Jerusalem District Court. See here.  Reading between the lines, and noting that Grosskopf mentioned that the wording Mazal Tov and happy birthday were rendered in simply fonts, I think it is clear that he was aware of Shapira’s decision and is criticizing it in veiled form. It is unfortunate that the verdict in these cases seems to depend more on the judge than on the facts of the case.

Neverthless, Grosskopf is wrong both in his original essay and in his quote of it, in stating that after seeing commercial success, creators can register their designs, and that failure to do so requires explanation. In Israel this is not the case. Once a product is available, it cannot be registered as a design as absolute (local) novelty is required. There is no grace period.

As to the cellophane with Hebrew writing on it lacking the minimal standards to be registered as a design, I am not convinced. By that I mean that the wrapping material is sufficiently designed to establish that it was designed by Windling-Yoskovitz  and purchased off the shelf in China by Dekel. It is an object of manufacture and can be described and illustrated. I think it is a design that could have been registered in Israel. Of course,  ruling is of value in indicating if a judge would uphold such a design registration.

 

Leave a Comment » | Copyright, design, Fair Use, infringement, Israel, Israel Court Ruling, israel design ruling, unjust enrichment | Permalink
Posted by Dr Michael Factor

Israel Court rules that there is copyright in a font and Microsoft ordered to pay 512,000 New Israel Shekels

July 9, 2012

Back in October 2010, we reported an interim decision by Judge Grosskopf that fonts are copyright protectable. See /copyright/

Professor Grosskopf has now issued a full ruling on the subject as follows:

Fonts are copyright protected. Koren is a copy of the famous font that Eliyahu Koren developed in the 1950s for printing the Bible which is copyright protected. Koren-Guttman, available in Hebrew Office packages is considered a copy of Koren’s font.

As of 1 January 2013, Microsoft will no longer be able to provide Koren-Guttman or Narkiss fonts bundled into Microsoft Office software but Microsoft will not have to recall software distributed that includes the font.   In addition, Microsoft will have to pay 400,000 New Israel Shekels in statutory damages and 112,000 New Israel Shekels costs to the plaintiffs, Zvi Rosenerg, Masterfont and Koren Publishers.

The statutory damage award was reached by awarding maximum statutory damages under the old copyright ordinance of NIS 20,000, but awarding this sum per font for each software program, and considering variant fonts such as bold and italic as separate infringements, noting that they are separate designed fonts and not created on-the-fly by applying a transformation to the main font.

The Case: T. A. 5315-04-08 Koren Publishing House and Others Vs. Microsoft Israel and Others. 

COMMENT

In the text shown above, the opening phrase of the Bible, “In the Beginning, G-d created…” is shown in both Koren and Microsoft’s variant font. The similarity is quite striking. Microsoft’s defence was that fonts should be protectable as designs and not as copyright, and where not registered, and therefore are in the public domain. Of course, were the font registered, it would have long ago entered the public domain as design registration in Israel is good for up to 25 years. Copyright is for life of author + 70 years. Eliyahu Koren passed away in 2001, so it will be a while before his iconic font can be distributed for free.

It is not clear that the standard term of copyright protection is appropriate for fonts. Grosskopf is critical of the one size fits all copyright approach but believes that the courts should apply the law, and leaves copyright reform to the Knesset.

2 Comments | Copyright, Intellectual Property, Israel, Israel Copyright, israel design ruling, Israel IP, Uncategorized | Permalink
Posted by Dr Michael Factor

Protecting Designer Clothing from Cheap Imitations

July 9, 2012

The Israel clothing designer Tally Dadon-Yifrach sells her designs under the label Vision.  The clothing was available through various outlets, including Griffin Fashion in Azor and Givatayim, in Forty-Second in Tel Aviv and elsewhere. Her clothing is also worn by singer Sarit Hadad, and she’s had joint ventures with Uri Geller, but these nuggets of information in the ruling are somewhat irrelevant as the clothing that was the basis of this ruling, is not related to those designs.

Ms Dadon-Yifrach was rather put out to discover a dress and some Bermuda shorts that were virtually identical to her designs sold under the label Odevo in these outlets and others for rather less than the price tag on her clothing.

The designer sued the various shop owners and people behind the Odevo label for passing off under the trade laws, unjust enrichment, inequitable behavior under the Law of Contract, false labelling and unacceptable interference in trade practices under the trade laws, misleading under the Laws for protecting consumers, and so on.  With a mix of statutory damages and estimated loss of sales, the designer sued for NIS 440,000.

The defence offered by the defendants was that the dress in question was itself a copy of a Lee Cooper design, and that the Bermuda shorts and other items were generic to the fashion industry, and similar items were available from a number of designers and also from general retail outlets for the previous couple of seasons.

Judge Esther Stammer  of the Central District Court acknowledged that the fashion industry did not generally file designs and that registration generally took longer than fashions to change, but nevertheless ruled that in the absence of a design registration there was no copyright in clothing.  She dismissed the credibility of some of the key witnesses for the defence and accepted testimony from private investigators that salespeople offered the cheap look-alikes as substitutes. She also differentiated between clothing sharing a common inspiration and close copies and accepted that the Odevo garments were cheap copies of the Vision garments. Nevertheless, since they were marketed under a different label she dismissed the charges of Passing Off. 

As to Unjust Enrichment, Judge Stammer accepted that there were grounds for ruling unjust enrichment in this case, but ruled that the complainant had failed to prove that she had invested heavily in developing the designs and the other side had benefitted financially, since she had not invested sufficiently in assembling evidence showing sales revenue and the like.

The case was dismissed and both sides ordered to bear their own costs.

The case: T.A. 9278-08-08 Dadon Yifrach vs. A. T. Snap LTD and Others.   

COMMENT

This case is interesting as Judge Stammer seems to follow Judge Grosskopf’s criticism of A.Sh.I.R. regarding the ‘additional element’ required for the tort.  Should clothing design be protected without registration? This is a worldwide issue. I suspect that one’s viewpoint on the issue is probably a reflection of one’s income and fashion consciousness as much as ideology.

Leave a Comment » | Copyright, counterfeit, design, infringement, Intellectual Property, Israel, Israel Court Ruling, israel design ruling, Israel IP, Uncategorized | Permalink
Posted by Dr Michael Factor

Legislation by Interpretation – Israel Commissioner of Patents Considers Internet Publication Abroad as Published in Israel

March 22, 2012

Challenging an Examiner’s decision based on Patent Office Circular M.N. 69, Sertic Vanja filed an appeal arguing that Israel Design Number 45452 was a novel design in Israel, and previous Internet Publication in a foreign patent office database was not novelty destroying, and could not be considered as exhibition in Israel unless some evidence of someone in Israel actually viewing the design prior to a local design application being filed is furnished.

The Commissioner of Patents, Assa Kling followed the guidelines of judicial interpretation laid out by former Israel Supreme Court President Aharon Barak, and maintained that on a case-by-case basis he was entitled to interpret the meaning of local publication to include something on the Internet. The appeal was dismissed.    

BACKGROUND

In Israel, Designs are regulated by the Design Ordinance of 1926, dating from the British Mandate. It seems that with existential threats to our existence and belligerent neighbors, and with deep internal religious, philosophical, ethnic and cultural divides,  the Israel Government gives less priority to Israel Intellectual Property legislation than what I, as a practitioner, would like. 

One interesting anachronism of this state of affairs is that absolute local novelty is required to register a design and to enjoy a limited monopoly of up to 14 years for the registered design.  Thus not unlike the state of affairs in the Principality of Venice in the 13th Century, the first importer or manufacturer of a good in Israel can, by prior registration of something well-known abroad, prevent others from importing or selling similar items.

In an attempt to bring the Israel Design legislation into the 21st century, in Circular M.N. 69, that issued back in December 2008, the previous Commissioner Dr Meir Noam ruled that internet publication in a patent office database abroad that was accessible in Israel, was sufficient to qualify as a previous publication that bars registration. I was critical of that decision, see here , arguing that this was primary legislation requiring an act of the Knesset and was well beyond the legal competence of a commissioner of patents.

COMMENTS

Commissioner Kling’s ruling is reasonable, but so is the position of the applicant. If this is appealed, it could go either way.

There is a second problem. It would appear from this case going to appeal that following circular M.N. 69, the examiners in the Design Department are not merely comparing design applications with earlier designs registered in Israel, but are searching some foreign design databases. The USPTO examiners don’t do that. In Europe there is no examination. The courts are not bound by the commissioner’s decision to register or not, since following A.Sh.I.R., there are de facto none-registered design rights in Israel, at least in cases of inequitable behavior.  

This case is fascinating since no one argues that laws need to be interpreted in light of changing circumstances. Certainly that is the Common Law tradition that underpins the British Design Ordinance, and is the nature of Israeli Law as expounded by Barak, the leading philosopher thereof. It is also true of Jewish Law, known as Hallacha, from the verb meaning to go, indicating its dynamic nature.

The analogy with Hallacha underlines the problem. If Jewish law had not adapted, the religion would not have survived over the millenia. Slavery and bigamy, sacrifices, most of the laws of ritual impurity (taboo, the monarchy, and other laws, both positive and negative, remain on the statute books, but are of academic interest (Talmud Torah) only.  However, on one hand, the so-called ultra-Orthodox are unable to come to terms with radically new historic realities such as an independent Jewish State for the first time in two millenia and as a group, are dysfunctional members of the wider community, not working, not serving in the army, and not prepared to serve as government ministers, shirking responsibility and unable to adapt. On the other hand, the early leaders of Reform Judaism converted to Christianity and it is safe to say that Reform and Liberal streams are unable to sustain themselves in the diaspora and neither have significant followings in Israel. 

Nevertheless, the courts are out of sync with the patent office in this regard. As illustrated in the Karshi decision, the Jerusalem District Court Judge Shapira who is slated to be the next State Comptroller and Ombudsman, but may hear this case if it is appealed, considers that originating a design concept creates rights even where no design is registered.  

It is not clear to me if the previous publication in this case was publication by the applicant or by another. The decision does not make this clear. From the letter of the ordinance, it does not matter – there is no publication in Israel and the article is in the public domain.  Judicial interpretation regarding the purpose of the Law is more complicated. – Judge Shapira would presumably hold that failure to file a design application in Israel is immaterial – there are constitutional creator’s rights. The Commissioner, meanwhile, would argue that the design is in the public domain.  The last time the Israel Supreme Court entered the fray, in A.Sh.I.R.,  it upheld non-registered design rights and undermined the entire system.

This is the problem with judicial interpretation of the purpose of a law where there is no commonly agreed philosophical underpinning:

  1. Is design registration a necessary act to create rights in a creation (as is the case of patents and in US, a design is a type of patent), or
  2. Is design registration simply a way of clarifying who created, as with copyright registration or in Europe, where the act of creation creates unregistered design rights for the short-term, and registration increases this period but there are natural rights of the creator?
  3. Do first to import or first to teach an idea locally have design rights in Israel? This is what the archaic law suggests and is what both the present commissioner and his predecessor reject as not tenable in the modern world, but this is also what wannabee entrepreneurs that come to me for consultancy seem to believe they are entitled to, and also seems to be what the courts do!

Sertic Vanja appears to be an inventor of illuminated display boards. let’s assume that the design in question relates to an original display board that he created but failed to register in Israel within the 6 month Paris Convention period, or filed in US or Europe after first displaying there, taking advantage of grace periods not available in Israel.   The patent office will not register the design as it is previously published abroad in a patent office database, internet searchable, and therefore in the public domain. Meanwhile, a prominent judge in the Jerusalem District Court that applicant could appeal to doesn’t believe that designs need to be registered at all, and on being shown proof that the applicant created a design concept, would provide broad sweeping protection, regardless of whether the design were protected or not!  

There is an urgent need for the Knesset to pass a new Design Law.  Judicial interpretation by functionaries on matters of legal principle is unsatisfactory.

The case: Appeal against rejection of Design Application Number 45452 to Sertic Vanja, issued by Commissioner Assa Kling on 28 February 2012.

Leave a Comment » | Internet, israel design ruling, Israel IP, Israel Patent Office, registered design | Permalink
Posted by Dr Michael Factor

Halla Cloth Monopolies

March 11, 2012

 Halla cloths are decorative napkin-like covers used on the Sabbath, that symbolize the dew on the double portion of manna collected by the Children of Israel on Fridays in the wilderness.

Back in 2008, Judge Y Shapira issued a temporary injunction against importers of halla cloths, which are decorative napkin-like covers that symbolize the dew on the double portion of manna served to the Children of Israel on Fridays in the wilderness, that are used to cover the traditional double plated loaves used for grace before meals on Shabbat and festivals.

The importer’s designs were similar to those of the plaintiff in that they had “For Sabbath and Festivals” written in the middle, were square, had a semitransparent central region and solid border, they were not copies but variations on a theme. The plaintiff, Karshi, had not registered his design. Since his design was mass-produced, there was no copyright. Nevertheless, Judge Shapira issued a temporary injunction. Oddly, the injunction ruled that selling the product anywhere in the world was illegal, despite IP rights being local and the judge not having territorial jurisdiction outside Israel. See here

In January 2012, Judge Shapira ruled on this case. In his ruling Judge Shapira felt that the evidence shows that the defendant went toChina and ordered similar products to those imported by Karshi, exploiting the market research and product performed by Karshi.

It appears that Shapira believes that one can acquire rights in a design concept. After cross-examining the witnesses, Shapira decided that the imported cloths were inspired by, though not identical to Karshi’s. Shapira then decided that making the temporary injunction permanent was in order, and awarded statutory damages and costs.

the case: T.A. 3402/09 Karshi International vs. Merkaz HaMatanot (2006) LTD, Ezer Deker, and Ami Decorative goods LTD,
15 January 2012, by Judge Y Shapira.

COMMENT

In A.Sh.I.R. the Israel Supreme Court ruled that even if a design is not registered, where the defendant is guilty of non-equitable behavior it is possible to grant injunctions or rule damages under the Law of Unjust Enrichment. Shapira evidently sees this case as falling into that category. Personally, I would prefer to see the Law of Unjust Enrichment being used more sparingly and don’t believe it provides grounds for sanctions against an importer who manufactures similar but not identical goods, having a common design concept.

Whilst accepting the Honorable judge’s argument that sometimes the reputation lies in the design itself, I don’t believe anyone looking for a modest engagement or wedding present cares two hoots about the identity of the importer of a halla cloth. I think people buy such items if they like the design.

As with clothing, any trend or fashion will ultimately start with some brave individuals who dress differently or sell clothing that is slightly different in cut or material. I believe that these leaders are entitled to the advantages accruing of being first off the blocks. They may be entitled to prevent direct copying, which is passing off. They are not entitled to rights in their design concept. We all build on the work of others. No design is totally original.

Leave a Comment » | design, Israel Court Ruling, israel design ruling | Permalink
Posted by Dr Michael Factor

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