Trademark for Kappa Cigarette Brand Opposed

February 26, 2015

Kappa

Karelia Tobacco Company Inc filed Israel trademark application 213924 for the word Kappa (non-stylized). The mark covers cigarettes, tobacco and tobacco products, lighters, matches and smoker’s requirements, all in class 34. The application was filed in August 2006, and was accepted in March 2010 and published for opposition purposes. Basic Trademarks S.A. opposed the application. Basic Trademarks S.A. has a brand of sports clothing Kappa – with the logo shown above.

Among other grounds, Basic Trademarks attempted to amend their statement of case to oppose the registration on the Section 7a(d) of the Law to Limit Advertising and marketing of tobacco products. This attempt was thrown out based on a ruling that limiting cigarette advertising was not grounds for preventing a trademark from being registered. Furthermore, tobacco brands could not fairly be considered unregisterable under grounds of Public Order.

Kappa appealed this interim ruling to the District Court (Appeal 15171-02-11) who ruled that public order was a consideration. The statement of case was then amended. The sides submitted their evidence, but forgo the need for a hearing, allowing the Israel Patent and Trademark Office to rule on the Opposition based on the written evidence and submissions.

Opposer’s Case

The Opposer argued that they were a world leading clothing company that made shoes, clothing and head-wear for leisure wear, sports, and for sporty fashion. The mark was well known in the US, Europe, Canada, China and Israel.

The Opposer has 13 marks including the name Kappa in various classes, with and without the logo shown above, where the word Kappa is dominant. The Opposer claims to have invested significant resources in advertising and marketing, worldwide including Israel. The turnover reaches millions of Euros a year. The company promotes sports and international sports competitions.

Due to the advertising, Kappa is a well known mark, as the term is defined in Section 1 of the Ordinance, and thus under Section 11(14) the mark cannot be registered by others in other classes as this would create a linkage to the clothing manufacturer which would damage their reputation.

The mark was also not registerable under Section 11(6) as to register it would dilute the sports company’s mark, damage their reputation and be unfair competition.

Furthermore, following the appeal, the application should be refused under Section 11(5) as being against the public good – Section 7a(d) of the Law to limit advertising and marketing of tobacco products was legislated since tobacco is unhealthy. Finally, the applicant had not actually sold tobacco products under the Kappa brand and so would not suffer significant losses from having the mark refused.

Applicant’s case

Karelia Tobacco Company Inc argued that Kappa is famous only for the word together with the back to back male and female and the word itself is not well known.

Trademarks and branding for cigarettes is allowed in Israel and so public order considerations should be considered irrelevant. The word Kappa is similar, but there is no conceptual relationship between the goods. (What the argument is really saying is that since Kappa promotes a healthy sporty image and cigarettes don’t fit into that image, noone would think that Kappa cigarettes are a product of the sporty fashion company. Both marks are used with other elements and the possibility of damage to Kappa sportswear from Kappa cigarettes is not proven.

The distribution channels and customer base is very different. Kappa is a Greek letter and like Delta, although can be monopolized, cannot be monopolized across classes. For example, the word Kappa is in use by third parties in the print industry.

Both in Israel and abroad the same mark may be used for cigarettes and for sports goods with both marks coexisting. (This argument is plausible, however, no examples are given).

In conclusion, applicant rejects claims of confusion, unfair competition and dilution, and argued that Kappa had not proven that their mark is well known in the meaning of the term as far as well known marks is concerned. Furthermore, the advertising limitations on cigarettes cannot be applied to prevent the mark from registering.

Kappa submitted evidence of turnover and advertising expenditures and a Wikipedia excerpt concerning fashion cigarettes.    It seems that Yves Saint Laurent, Givenchy, Versace, Pierre Cardin, Christian Lacroix and Cartier have, at one time, each allowed their name to be linked to cigarettes. It was argued that sine fashion brands do allow their names to be used with designer perfumes and cigarettes, a cigarette with the same name as a fashion brand could be considered as linked to the fashion brand, creating a confusion regarding origin.

The Ruling

Citing precedents, the Adjudicator Ms Shoshani Caspi ruled that in oppositions, the burden of proof lies with the Applicant. Nevertheless, the Opposer has to base their opposition on facts.

The parties forgo a formal hearing with cross-examination and allowed the Adjudicator to rule on the evidence submitted.

Firstly, Ms Shoshani Caspi examined whether Kappa could fairly be considered a well known mark for fashion at the time that Kappa was filed for cigarettes, allowing it to prevent marks from being registered in additional classes, i.e. not just for fashion accessories.

The determination of whether Kappa could be considered a well-known mark was based on market penetration in the relevant population sector, the extent of usage of the mark and its longevity, long term advertising, inherent distinctiveness, whether the mark was in exclusive use and to what extent the owners of the mark invest in combatting infringers. The mark had to be considered well-known in Israel and not just abroad.

Al the evidence pointed to the mark being well known, despite the fact that generally the name Kappa is generally used together with the logo. The mark has been in use since 1969 and is mostly used in connection with sporty clothing. The opposers have an international portfolio of 600 marks including the word Kappa alone, not just as part of Robe De Kappa or together with the emblem. They have sponsored various football teams in Italy, Holland, France and Spain. The brand has millions of dollars of annual income from sales in Israel and has sponsored various local football teams including HaPoel Tel Aviv and Betar Jerusalem.  Thus the KAPPA mark was well-known in Israel as well.

The second issue is whether, due to the phenomenon of fashion cigarettes, whether the public would identify KAPPA cigarettes with the fashion brand. Here, when extending a mark into new categories of goods, there is a need to act sensitively and to weigh up the interests of the competing parties.

Ms Shoshani Caspi was impressed that both fashion and cigarette usage are susceptible to trends and found the phenomenon of fashion cigarette branding persuasive.

The fact that the cigarette brand had not yet launched strengthened this, and she was also convinced that a brand associated with the fashion house could do harm to the fashion house’ image.

Since the fashion house had a sixty year history and the cigarette company could not provide any reasonable explanation for the choice of name, she suspected inequitable behavior and considered dilution a real possibiliity.

In conclusion, MS Shoshani Caspi ruled that the Kappa fashion mark was well known, that fashion and cigarettes could confuse confusion and dilution and rejected registration of the Kappa brand for cigarettes and rejected the registrations under Section 11(14 and 11(6).

Ruling re Opposition to by Kappa clothing to Kappa as Israel Trademark 213924 “Kappa” for cigarettes, Ms Shoshani Caspi, 22 January 2015

 

COMMENT

The fashion brand argument ignores the fact that haute-couture and sports goods are not the same, and that fashion cigarettes are a relic of a bygone era when smoking was certainly socially acceptable, but more was actually considered cool and sophisticated, and not just among teenagers. Put another way, when cigarettes were fashion accessories, fashion houses were happy to have their names associated with cigarette brands. That is not the case now, as evidenced by Kappa’s arguments. That said, the decision seems reasonable.

 


February 11, 2015
Not that kind of niagara!

Not that kind of niagara!

Israel Patent 202468 to Sassy and Dalia Kazir issued on 1 March 2012 for a “toilet water supply system and method therefor”. The patentee paid the renewal fee in a timely manner but did not send proof of payment to the patent office and the patent lapsed.

Mr Katzir submitted an affidavit to the effect that within a week of receiving notification that the patent was not in effect, they requested reinstatement.

In the circumstances, the Deputy Commissioner ruled that the Section 60 requirements that the applicant did not intend the application to lapse and acted in a timely manner to reinstate were fulfilled and a ruling to reinstate will publish for opposition purposes.

COMMENT

It is, of course, ludicrous that one can pay renewals on-line at the Israel Patent Office, filling in the patent number, and then one has to print out the payment slip and send to the patent office so that it arrives there in a timely manner. This requirement results in regular rulings and wastes everyone’s time.


A Request for a Patent Term Extension for IL 117459 “DNA ENCODING HUMAN PAPILLOMAVIRUS TYPE 18″ to Merck

February 10, 2015

gardasil

IL 117459 “DNA ENCODING HUMAN PAPILLOMAVIRUS TYPE 18″ to Merck Sharp & Dohme Corp. was filed on 13 March 1996, and is due to expire on 13 March 2016.

Back in August 2007 a Request for Patent Term Extension was filed based on the commercially available preparation Gardasil. The pharmaceutical preparation contains four active ingredients: Protein L1, types 6, 11, 16 and 18.

The patent claims the Protein L1 type 18 as a product of genetic engineering. The patent relates to the other types of Protein L1 except for HPV 6 L1 for which no patent applications were submitted anywhere. The protein HPV 16 L1 was not claimed in any patent application filed in Israel. HPV 11 L1 was claimed in IL 117591 and expires on 21 March 2016. However, no applications for patent term extensions were filed for this protein.

The legal question that this decision addresses is whether a patent term extension can be requested for a patent that protects only one active ingredient of a pharmaceutical preparation.

The claims of IL 117459 cover a gene sequence of Protein L1 type 18, a vector including the gene sequence, a cell embodying the vector a process of expressing the gene sequence and a preparation that causes a vaccination to the protein including the gene sequence.

The senior examiner considers that Gardasil includes four proteins and any changes in any of them or preparations of three or less will result in a different medicament. Consequently, she considered that there is an inconsistency between the medicine and the claimed invention, in that not all the active ingredients of the claimed invention are in the basic patent.

The Applicant countered that claim 12 of IL 117459  covers a composition that includes (inter alia) HPV 18 L1 and thus the patent does not limit itself to this substance. Consequently, Applicant claims that IL 117459 is a basic patent as defined in Section 64a of the Israel Patent Law 1967 and as referenced in Section 64d. The Law does not require that a basic patent should include all active ingredients of a commercial product, and only one such active ingredient need be listed. Support for this interpretation was argued based on the wording of 64h(d) which relates to an active ingredient included in a preparation and claimed in the basic patent

The Applicant alleged that interpretations that a basic patent should include all active ingredients of the commercially available preparation is contrary to the underlying logic of the legislation and it is unreasonable to include such a limitation by judicial interpretation.

The senior examiner rejected these arguments and the Applicant requested an oral hearing which was held on 28 October 2014 and the Applicant was granted until 10 December 2014 to submit a summary of his arguments.

Section 64d states:

The Commissioner should not grant a patent term extension unless all the following apply:

  • the composition, process for its preparation and usage thereof, medical preparation including the composition, its process for preparation and medical equipment are claimed in a basic latent that is in force.

Section 64a defines the terms ‘composition, ‘medical preparation’ and ‘basic patent’ as follows:

  • Medical preparation – any form of medical drug that has been processed, including preparations for veterinarian applications and those having nutritional value that are injected intravenously.
  • Composition – the active ingredient or salts, esters, hydrates or crystals of the composition.
  • Basic Patent – a patent protecting any composition, production method, use, medical preparation including the composition, or any medical equipment requiring regulatory approval in Israel.

Based on the court ruling concerning the Appeal to patent term extension for IL 97219 to Novartis (26/12/2005) the term composition means a single active ingredient.

In Novartis, then Commissioner Dr Meir Noam (himself a chemist) ruled that the term basic patent in both Section 64a and 64d relates to the first patent that protects an active ingredient and that the term composition is in the singular, implying that one new ingredient is sufficient and that novel combinations of known ingredients cannot be considered as a basic patent.  A preparation that includes one new ingredient that requires regulatory approval may be protected by extending a basic patent. Combinations, aggregations and synergies of known ingredients may be patentable but such patents are not basic patents.

In this instance, the issue is the regulatory approval of a combination of active ingredients, not the basic patent. Gardasil includes four active ingredients. Each one provides a parallel vaccination effect and maintains its pharmaceutical character. The four proteins are separately synthesized by fermentation in recombinant Saccharomyces cerevisiae (a species of yeast) but are combined into one treatment for economical reasons and due to ease of use.

(HPV Type 16 L1 and HPV type 18 L1 are also components of the registered drug Cervarix registered to a third party, and the proteins are each separately active.  However, Cervarix was registered after Gardasil).

Since the drug Gardasil comprises four separately active ingredients that each has an independent effect and do not work as a synergy, the Commissioner accepted that Gardasil could serve as the first regulatory approval of HPV type 18 L1. He found support in the ruling fo Judge Dotan in the Novartis case. He noted that Merck could have requested regulatory approval for the four proteins separately and the discussion would be moot. Finally, citing the Neurim ruling (13281-06-12 based on the ECJ ruling that Melatonin for treating insomnia was not obvious in light of veterinary treatment for causing sheep to rut earlier), it is clear that the purpose of the Law is to provide patent term extensions for new types of treatment, and there was no reason why the Applicant should have had to register each active ingredient separately.

Furthermore, in Appeal 223/07 Lundbeck vs. Unipharm it was ruled that patent term extensions should be analyzed from an IP perspective and not from a pharmaceutical perspective. The Supreme Court upheld this ruling.

Furthermore, in the medical register, Gardasil is listed as including four active ingredients, including HPV 18 L1, and this is, indeed, the first medical registration of this ingredient in Israel.

Consequently, based on the extension awarded in the UK for EP 1359156, the Israel patent was extended 493 days to 19 July 2017.

Ex Partes ruling concerning patent term extensions to IL 117459 “DNA ENCODING HUMAN PAPILLOMAVIRUS TYPE 18″ to Merck Sharp & Dohme Corp. by Commissioner Asa Kling, 11 January 2015.

COMMENT

This is a publication of an ex-partes ruling. It is possible that local generic manufacturers such as Teva or Unipharm may challenge this.


On Blood Pressure and Diabetes. Can citations post-dating the effective Filing Date be used as evidence of what was known at the time of filing?

February 10, 2015

 

blood pressure

Israel Patent Application No. 140665 to Novartis relates to preparations including Valsartan and Amlodipine for treating high blood pressure and diabetes. The application is a national phase of PCT/EP/1999/004842 and claims priority from an earlier US patent application.

The patent was allowed and published for opposition purposes on 23 December 2012 and is being opposed by both Teva Pharmaceuticals LTD. and by Unipharm LTD.

The Opposers submitted an expert opinion from a Professor Chimlichman to the effect that the combination was known from various publications and his treatment of hyper-tension and thus were lacking novelty at the priority date.

On response to evidence by the Applicant, the Opposers submitted a second opinion in which he relied on two references that were published after the priority date to determine novelty and inventiveness at the time of the priority date. Since these publications were not prior art, the Applicant requested that they were deleted from the opinion and espunged from the record.

Professor Chimlichman claimed that his treatment before the priority date was supported by GYH Lip et al., “The `Birmingham Hypertension Square` for the Optimum Choice of Add-in Drugs in the Management of Resistant Hypertension”, Journal of Human Hypertension (1998) 12, 761-763. Whilst the publication itself was certainly published after the priority date, it relates to clinical tests using the combination of the two drugs and must have been written prior to being published and describes what the authors knew prior to the priority date.

Furthermore, a response to Lip et al. subsequently published in the same journal provides additional evidence that the combinatory effect was known

Whilst accepting that the two publications were not themselves prior art, the opposers argued that they indicated the state of the art at the priority date and should be examined on their merits and not expunged from the record. Furthermore, the additional evidence was brought in response to statements my Professor Daloph, the expert witness of the Applicant.

The Opponents cited Unipharm vs. SmithKline Beechan and Orbotech vs Camtek to support their argument that the papers should be examined on their merits.

Ruling

Opposers are limited in what they can submit in response to the patentee’s evidence. They are not allowed to widen the statement of case. In this instance the additional evidence is supplementary evidence to support their main grounds of opposition, i.e. that the combination was known. There is no evidence given to explain why these papers weren’t submitted in the original round of evidence. The Opposer submits his evidence first and is entitled to respond to the counter-evidence. This gives him a procedural advantage and allowing the submission of additional evidence that could have been submitted in the first submission unfairly disadvantages the applicant.

Comment

Although not allowed to be added to the record, as it could have been submitted earlier, this ruling does seem to indicate that such post priority publications may indeed be used to show what was prior art.


Section 34 – Where an Opposition is dropped and the Adjudicator rules invalidity based on submissions

February 9, 2015

diamond

Section 34 of the Israel Patent Law enables the Adjudicator of a patent Opposition to step into the shoes of the Opposer and rule on the validity of the Opposed patent, even if the opposition is withdrawn.

IL 156034 relates to a system for detecting and mapping flaws in diamonds. The opposer Sarine Technologies submitted a user manual and an affidavit that showed that their competing system was prior art.

The Opposition was dropped, but Ms Bracha ruled that on the evidence, the patent was shown to have been invalid as lacking novelty, inventive step and adequate disclosure.

The Applicants, Serguei Borisovish Sivovolenko and Diamcad N.V and their attorneys, Pearl Cohen-Zedek Latzer Baratz creatively argued that since the Opposer’s expert witness testimony had gone unchallenged it could not be relied upon, and Section 36 should only be used in the most extreme circumstances. They also noted that a Russian court had ruled that a key publication was not being prior art.

Ms Bracha rejected this position as untenable and noted that since Applicant could have challenged the evidence, and failed to do so, it had effectively accepted its validity. The assertion that a Russian court had rejected a piece of evidence as being prior art was not supported by any documentation and anyway was hardly binding on the patent office.

Background 

This application is the national phase of a PCT application filed on 3 December 2001, which claims priority from a European application filed on 4 December 2000. The Application was allowed and published for opposition purposes in the March 2008 journal which published in June 2008 (things have improved since then).

In September 2008, Sarine Technologies LTD filed an opposition, however, on 9 December 2013 the parties announced that they were terminating the opposition without costs. This announcement followed the filing of claims and counter claims and evidence, and after a date for a hearing was set.

On 27 January 2014, the Deputy Commissioner Jacqueline Bracha used her authority under Section 34 to rule that on the submitted evidence, that the claimed invention lacked Novelty and Inventive Step and refused to allow the patent to issue.

On 26 March 2014, the parties challenged her ruling and requested a hearing. They claim to have dropped the affidavit and need to cross-examine the key witness for reasons of costs.

Applicant’s claims 

Applicant claimed that Section 34 which allows the commissioner to act as adversary, instead of merely umpiring an opposition was only to be used in exceptional cases. It only allows the Applicant an opportunity to review newly submitted evidence and not to review the examiner’s work and does not allow the commissioner to rule as if the opposition is not withdrawn. Relying on the user guide of the opposer’s system and on the affidavit of their witness is incompatible with the intention of the legislators intention behind Section 34. The Applicant claimed that wholesale reliance on section 34 would adversely affect the chances of parties coming to an amicable settlement and waste judicial resources.

The applicant claimed that the opposer’s system and user guide had not published and was not in the public domain, and thus the Regulation 74a ruling relying on these was invalid. To strengthen this argument, evidence was brought that in the corresponding Russian proceedings the court had ruled that the opposer’s system was not prior art.

The Applicants considered that there was no evidence that the competing system had been available to the public and, since the opposition was withdrawn, the applicant could not cross-examine Mr Caspi and consequently one could not rely on the User Guide as evidence of the competing system being prior art.

Since Ms Caspi was not cross examined on his statement as the opposition was dropped, it could not be relied upon as evidence. Furthermore, the evidence when submitted was to support the claims of his employer who were then opposing the patent and thus was hardly objective.

Furthermore, even were the competing system to be fairly considered prior art, the claimed invention was novel and inventive thereover due to it mapping flaws in diamonds and taking into account reflection and viewing angles. The opposing system modeled diamonds in three dimensions to measure them and not to locate flaws as claimed in the present system.

The opposition related to eight pieces of prior art and the Applicants claimed that only the refraction angle of the immersion media was measured and not that of the diamond itself.

Claim 4 provides a means of mapping flaws which is novel and inventive over the prior art.

Applicant claims that lacuna in the specification and in whether or not it is enabled as required by Section 12, are not grounds for opposition, and once allowed by the Examiner, cannot be addressed in Section 34 rulings. Finally, Applicant alleges that persons of the art would be able to implement the claimed invention having read the specification, and thus it was sufficiently enabled.

The Ruling

The patent application relates to a method and system for locating flaws in a diamond held in a holder

Claims 1 to 3 relate to a method for localizing inclusions in a diamond wherein

  • said diamond is fixed on a holder
  • A scan is taken of the outer surface of the diamond at an arbitrary initial position
  • The inclusion in the diamond is observed in at least a first and a second direction of observation
  • Wherein the translation and rotation for every direction of observation is registered with reference to the initial position
  • Wherein the registered translations and rotations, the scan of the outer surface and knowledge of the refractive index of the diamond are fed in a computer to calculate 3d image including the inclusion with respect to outer surface in order to localize the inclusion with respect to the outer surface of said diamond.

Claim 4 recites a holder, light source, rotation system for manipulating the holder, a scanner for scanning the face of the diamond, a camera or microscope, a computer and a system for applying the method of claims 1 to 3.

Section 34 grants the Commissioner authority to not grant a patent where an opposition if withdrawn if during the opposition grounds for not having allowed the patent were uncovered. There is little discussion of Section 34 in the case law as it is a relatively rare phenomenon.

The opposition process is considered as a continuation of the examination and is designed to prevent unjustified patents issuing. Merely having survived the formal examination does not, in and of itself entitle an applicant to a patent. The patent office uses the tools at its disposal to uncover prior art and the opposition provides interested parties the opportunity to bring additional art to the attention of the commissioner. Allowance is no guarantee that a patent will be granted.

The Deputy Commissioner considers the Opposition as a kind of judicial review and the Commissioner (or deputy Commissioner / adjudicator standing in his shoes) can review the examiner’s work and over rule it. He has the authority to consider all materials of record and the narrow interpretation proposed by Applicant is rejected.

As to the evidence, the user manual dated fro 1995 and shows that DiaExpert’s  competing system was available years before the application was filed.  When Opposer alleged that the system was on sale from 1996, this was not challenged by Applicant. Now that the opposition has been dropped, there is still no evidence that challenged the availability of the system from 1996. In such cases, the Applicant has to provide evidence rebutting the assumption of availability. The purpose of the Patent Law is to prevent ideas already in the public domain from being patented. Without evidence to the contrary, Ms Bracha saw no reason to reverse her decision that the manual was in the public domain and was prior art. Furthermore, Applicant had had an opportunity to challenge the Opposer’s submission that the system and its user manual was prior art and had not done so.

The assertion that a Russian Court had accepted that the opposer’s system was not prior art was not backed up with any evidence, so Ms Bracha saw no reason to relate to it. Indeed, a ruling by a different court is not binding in Israel.

Mr Caspi’s affidavit went unchallenged. That does not mean that since the Applicant chose not to challenge it, the affidavit is not admissible. Rather, it appears to have been accepted as unchallenged. Both the Applicant and Ms Bracha could have cross-examined Mr Caspi, but decided to accept his testimony. True, he was a witness for the opposition and an employee of theirs, but that is of interest only when deciding how much weight to place on a testimony when challenged. No substantive grounds to challenge this testimony were submitted. The court needs to be wary of accepting evidence at face value submitted by those with invested interest, but the Applicant could have cross-examined the witness and chose not to.

When combining the user manual and the other pieces of prior art, claims 1 to 3 and 4 all lack novelty and inventive step. Ms Bracha went on to argue that Section 12 was also fair grounds to reject a patent during oppositions, since Section 34 allows the adjudicator at the patent office to refuse to grant a patent on any grounds under which it never should have been allowed.

Section 34 ruling concerning IL 156034 to Serguei Borisovish Sivovolenko and Diamcad N.V. Ruling by Ms Bracha 25 January 2015.

COMMENTS

The Deputy Commissioner is correct on all counts. The Opposer is really serving the public interest in challenging the validity of allowed patents. In addition to personal commercial considerations, the opposer represents the public. Section 34 is designed to prevent the bribing or buying out of an opposer from resulting in an opposition being dropped and the patent issuing automatically.

The Patent Office is authorized to continue an opposition by stepping into the public’s shoes and has to consider the public interest, and must refrain from granting patent.

The arguments submitted in this case by Pearl Cohen Zedek Latzer Baratz are untenable. They seem to think that if their client comes to an arrangement with an opposer so that the opposer drops the opposition, the patent office should rubber stamp this state of affairs rather than to review the case on the evidence, contrary to Section 34.

Maybe PCZL may be congratulated on their creativity. Possibly as advocates for their client, they can be forgiven for filing spurious arguments without a chance of success. After all, when one goes out to do battle, one can only fight with the weapons available. In this case it seems that the applicant should have come to a settlement with the opposer before the evidence was submitted. Once the cat was out of the bag it was too late.

I am reminded that at a recent meeting between trademark examiners and the profession Ms Dor Cohen-Zedek, the head of the trademark department at PCZL argued that in competing marks cases and oppositions there should be a presumption of validity for her clients.


Michel Mercier

February 5, 2015

Michel Mercier

This is an interesting hair pulling cat fight between Michel Marcier LTD represented by Adv Ron Klagsbald and Michel Mercier represented by Reinhold Cohen.

The parties have been punished for wasting the patent office’s time.

In 2012, Michel Mercier filed Israel Trademark No 251414 “Michel Mercier” for Products for cleaning, treatment, care, coloring and styling of hair; hair colors and hair color removers; soaps; perfumery; essential oils in class 3, Electric and non-electric devices for combing hair, hair styling, hair cutting, hair removal and hair treatment; parts and fittings for the aforementioned devices, in class 8, Hair dryers for domestic use and for professional use in class 11, Hair brushes and combs, electric and non electric in class 21, Retail sale and wholesale services, on-site and online, of products, devices and accessories for hairdressing, hair care, hair cleaning, hair treatment, hair coloring, hair styling and hair decorating in class 35, and Hair dressing schools; educational services, courses, seminars, organization of conferences, events and exhibitions; all in the field of hairdressing, hair care, hair cleaning, hair treatment, hair coloring, hair styling and hair decorating in class 41 and Hairdressing, hair care, hair cleaning, hair treatment, hair coloring, hair styling and hair decorating; beauty salons services; spa services; Information and consultation in respect of hairdressing, hair care, hair cleaning, hair treatment, hair coloring, hair styling and hair decorating, on-site and online in Class 44.

In 2011, Michel Mercier LTD. filed the name “Michel Mercier” for hair-brushes in class 21.

The Israel Trademark Division of the Patent Office refused to register both marks under section 29 of the Ordinance.

The parties requested coexistence under Section 30, but the Israel Trademark Division of the Patent Office would not ratify the agreement as being against the public interest, since there would be confusion regarding the source of the goods. The case was referred to the Deputy Commissioner who gave the parties on opportunity to submit evidence that there would be no likelihood of confusing the public and set a date for a hearing.

On the day before the hearing, the parties requested postponement claiming that there was an agreement being hammered out with an arbitrator and that some issue had come up which they were attending to as fast as possible and would reschedule.

The hearing was scheduled two months earlier and the parties did not provide an explanation for requesting postponement only the day before. The postponement wasted judicial and administrative resources and wasted time of legal aids and trainees who prepare for such hearings, and time spent in setting up and preparing for this hearing could have been used to hear other cases.

Citing Judge Levine in 3135/00 Saliman Sulman and others vs. George Shokire Accountant and Others, she noted that the litigating parties are not the only people affected by this ‘request’ which did not leave time her time to consider and which became a fait accompli cancellation as neither party showed up.

Ms Bracha therefore fined each party 2500 Shekels to be paid into the public purse of the Patent Office.

Ruling re Competing Marks Michel Mercier, Ms Bracha, 13 January 2015 


PCZL (Pearl Cohen Zedek Latzer LLP) Appeals Source Vagabond Decision Sanctioning the Law firm for bringing Frivolous Law Suit.

January 21, 2015

shlooker

Background

Source Vagabond is one of a number of companies making personal portable water supplies that are known in Israel as Shlookers – a shlook being slang Hebrew for a sip.

On August 2, 2011, Source Vagabond sued Hydrapak for, inter alia, infringing “at least claim of the US 7,648,276 patent, either literally, or under the doctrine of equivalents.” On September 16, 2011, Hydrapak served a sanctions motion under Rule 11 which provides that, before a motion for sanctions is filed, the party against whom the sanctions will be sought must be notified of the potential Rule 11 violation and given a twenty-one-day period to withdraw the offending claim. Fed. R. Civ. P. 11(c)(2). Source declined to withdraw. On October 6, 2011, Source filed an Amended Complaint, and on October 12, 2011, Hydrapak served an amended Rule 11 motion.

The court of first instance ruled that granted Hydrapak’s motions for summary judgment and Rule 11 sanctions on April 11, 2012.

Regarding claim construction, the court said there was “nothing complicated or technical” about the claim limitation “slot being narrower than the diameter of the rod,” and that none of the words of this limitation “requires definition or interpretation beyond its plain and ordinary meaning.” Accordingly, the court gave “slot being narrower than the diameter of the rod” its“plain and ordinary meaning.”

The district court stated that Source’s proposed claim interpretation “violates all the relevant canons of claim construction” and that even under Source’s own construction, Hydrapak did not infringe. It also found the literal infringement claim “lacked evidentiary support no matter how the claim was construed” and “the difference is apparent to the naked eye, and the tape measure leaves no room for doubt.”

Specifically, the district court determined that in Hydrapak’s products the slot is larger than the diameter of the rod, even under Source’s proposed construction. The original decision ruling that the case was frivolous and fining attorneys PCZL is reported here.

Source Vagabond and Pearl Cohen Zedek Latzer appealed the ruling.

The Appeal

On appeal, judge Cott determined that the sanctions were bases on two grounds:

“Source made frivolous legal claims in its submissions to the Court, in violation of Rule 11(b)(2); and Source failed to conduct an adequate investigation before filing this lawsuit, in violation of Rule 11(b)(3).”. He recommended Source’s counsel (i.e. Pearl Cohen Zedek Latzer pay $187,308.65 in partial attorney’s fees, but that Source not be sanctioned.

The logic, explained by the district court was “Given counsel’s sole responsibility, as a matter of law, for the violations of Rule 11(b)(2), and counsel’s additional responsibility for the failure to investigate under Rule 11(b)(3), I recommend that Yonay and Shuman be held responsible for any monetary sanction. I further recommend Yonay and Shuman’s law firm, Pearl Cohen Zedek Latzer LLP be held jointly and severally liable in accordance with Fed. R. Civ. P. 11(c)(1).

Hydropak successfully argued that it should receive legal fees for defending against te reconsideration motion, and the court concurred, raising the damages to $200,054.

The decision was appealed to the Court of Appeals of the Federal Circuit.

Court of Appeals of the Federal Circuit Ruling

In patent lawsuits, defending against baseless claims of infringement subjects the alleged infringer to undue costs, and this is precisely the scenario that Rule 11 contemplates.

The District Court found that Source had an obligation to demonstrate why they believed they had a reasonable chance of proving infringement, and that Source failed to show either literal infringement or infringement under the doctrine of equivalents. The issue revolved around the meaning of “slot being narrower than the diameter of the rod”. The district court dismissed Source’s construction stating, “an ‘analysis’ that adds words to the claim language [without support in the intrinsic evidence] in order to support a claim of infringement” does not follow “standard canons of claim construction.” Additionally, the surrounding claim language demonstrates that the “the slot,” “the rod, and “the portion of the container . . . folded over the rod” are distinct from each other. The claim language does not compare the size of the slot to the size of the rod together with the folded over container. Source had the ability to draft the claim that way but did not. It cannot correct that failure by adding words to otherwise unambiguous claim language. In other words, there is a limit to what one can argue a claim means.

Finally, Source argues that Hydrapak’s proposed construction “would render the entirety of claim 1 nonsensical.” This is a fascinating admission that not only does the scope of the claim as prosecuted by PCZL not include the product fabricated by Hydrapak, but that the claim is actually meaningless.

On Appeal, the Federal Circuit stated that “The district court properly determined that “claim construction is a function of the words of the claim not the ‘purpose’ of the invention,” and that Source’s construction “violates nearly every tenet of claim construction and amounts to a wholesale judicial rewriting of the claim.” Source was required to “perform an objective evaluation of the claim terms” to satisfy its obligation to conduct a reasonable pre-suit evaluation. Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1329 (Fed. Cir. 2011). By proposing a definition that ignores the canons of claim construction, Source did not meet that standard. The district court did not abuse its discretion in imposing Rule 11(b)(2) sanctions based upon Source’s frivolous claim construction arguments.

Regarding the doctrine of equivalents:

(“[N]either the attorney’s affidavit nor plaintiff’s ‘pre-suit analysis’ . . .[ever] mentioned, let alone analyzed, how Hydrapak’s product infringed Source’s patent under the doctrine of equivalents.”). Counsel was obligated to come forward with a showing of exactly why, prior to filing suit, they believed their claim of infringement under the doctrine of equivalents was reasonable. See View Eng’g, 208 F.3d at 986. Source did not comply with this requirement below. Under these circumstances, the district court did not abuse its discretion in finding a Rule 11 violation. The cost of $200,054 against Guy Yonay and against Pearl Cohen Zedek Latzer was affirmed.

Court of Appeals Federal Circuit, SOURCE VAGABOND SYSTEMS and Pearl Cohen Zedek Latzer LLP v. HYDRAPAK, INC., decided June 5, 2014

COMMENTS

I apologize to readers for being tardy in reporting this decision from June 2014. It has only recently come to my attention. Guy Yonay accused me of unfair reporting of the original decision and argued that the judge was clearly wrong, and Zev Pearl accused me of publishing lies. I think this decision, which may be found in full here appeal PCZL vindicates my reporting.

The court is correct that the attorneys are responsible for filing the frivolous law-suit. Why did this happen?

Well, the decision states that “Guy Yonay and Clyde Shuman are partners in the law firm Pearl Cohen Zedek Latzer LLP. Prior to the present action, Mr. Yonay prosecuted the ’276 patent application. In the underlying district court litigation, Mr. Yonay signed the original Complaint on behalf of Source, and Mr. Shuman signed the Amended Complaint.”

I would suggest that the first problem is that Yonay apparently prosecuted the claim before the patent office (and may have drafted the application) and then went on to litigate it. This is never good practice. Before litigating one should seek an independent opinion of the chances of prevailing. Yonay could not objectively review the claims he’d prosecuted. He appears to be confused between the purpose of the product and the claimed structure. With mechanical patents one cannot, by obtaining a patent for a specific device, prevent third parties from competing with devices having different structures that are well beyond the ambit of the claims, by arguing that they achieve the desired aim and are thus functional equivalents.

In general, it is ill-advised for the prosecutor of the patent to litigate it in court. Indeed, it is ill-advised for the prosecutor and litigator to belong to the same firm. At least on Appeal, Pearl Cohen took an external counsel, Jenks.

The managing partner of PCZL, Zev Pearl is not licensed to practice in the US. There is, however, a senior partner, Mark Cohen, who is US licensed. Both these gentlemen could and should have prevented the frivolous case being filed. Their failure to do so explains why the courts find the firm responsible and not just Yonay and Shuman.

In a newspaper article on trolls that originated in PCZL was published in the Jerusalem Post and also appears on the Pearl Cohen website, it is implied that only under new Obama legislation, can non-practicing entities be sued for costs in unsuccessful law suits. The implication is that prior to the proposed legislation trolls had nothing to lose by filing frivolous lawsuits and that practicing entities have nothing to lose as they are not trolls. This decision shows the error in this approach. Any entity, whether practicing or otherwise, must have reasonable grounds of validity and infringement to bring a case against a third-party to court. The courts have the authority to sanction the plaintiff and their legal counsel for filing frivolous cases. Pearl Cohen should have known that the interpretation they were giving to the claim was untenable. It was not infringed. The courts were therefore correct in fining PCZL.

 


Follow

Get every new post delivered to your Inbox.

Join 407 other followers