Opposition to Patent on Grounds of Failure to Cite Prior Art Results in Withdrawal and Hugh Cost Ruling

February 10, 2016

tweedledumdee
Orbotech and Camtek are old enemies. Camtek have successfully opposed a number of Orboetch patents from issuing in Israel.

This time, it was Orbotech, represented by Gilat Bareket who successfully opposed Camtek’s patent application No 208585 for “SYSTEMS AND METHODS FOR NEAR INFRA-RED OPTICAL INSPECTION”, and when the application was abandoned, filed a request for 100,400.5 Shekels in accumulated costs.

The request was supported by Affidavits and invoices. Orbotech further claimed that Camtek failed to inform the Israel Patent Office of three citations against the corresponding application in China. In Israel, there is a duty of disclosure of relevant prior art. In this case, Orbotech alleges that Camtek new about these citation in December 2013 and responded to the Chinese patent office in April 2014. However, the citations were not reported to the Israel Patent Office which allowed the patent at the end of November 2014. Orbotech considers that this act of bad faith made the Opposition proceedings necessary and so Camtek should be punished for failing to report the art.

Orbotech opposed the allowed application on 26 February 2015 and requested and received an extension to file their statement of case. On 20 April 2015, they approached Camtek and requested that they abandon the application noting Camtek’s failure to inform the Israel Patent Office of the publications cited in China. Camtek ignored this approach.
On 25 June 2015, Orbotech filed their statement of case. On 21 September 2015, Camtek abandoned the application. Orbotech claimed costs of 100,400.5 Shekels, for learning the application, reviewing the file wrappers in Israel and China and supported the cost analysis with affidavits.

Camtek (represented by Adi Levit) responded that the costs were unreasonable, disproportionate and Orbotech’s counsel’s rates were unreasonable. They alleged that the statement of case included short and irrelevant publications, and argued that it was unreasonable to issue costs as if the opposition was fought to the bitter end. Finally, regarding the Chinese citations, as the case was allowed under Section 17c on the basis of US 8,492,721. Camtek argued that they were not obliged to inform the patent office about the citations in China.

Orbotech countered that in the past similar costs had been awarded for a statement of case that resulted in a patent application being abandoned. They argued that there was nothing to prevent the Patent Office from ruling on Camtek’s hehaviour during patent prosecution and noted that Camtek had received costs at a similar hourly rate when they had won previous encounters.

Orbotech was referring to IL 179995 where the agent of record, Reven Brochovsky forgot to challenge the costs submitted by Adi Levit on behalf of Camtek, and so the rather enormous costs of 296,895 Shekels were awarded. See here and here.

In her analysis, the Deputy Commissioner Ms Jacqueline Bracha ruled that there were three issues:

  1.  Reasonable costs for an opposition that resulted in an allowed patent being abandoned after the statement of case was filed.
  2. The duty of disclosure regarding the Chinese citations
  3. Whether Camtek’s failure to disclose the Chinese citations resulted in the Statement of Case being required.

Clearly the three questions are inter-related and the reasonableness of the costs is determined by the extent that the failure to disclose required the statement of case to be submitted and in what detail.

The Deputy Commissioner understands Section 18 as requiring the Applicant to continuously update the Israel Patent Office regarding art cited abroad up until allowance of a case.

This case was allowed on 30 November 2014 and Camtek knew about the citations before this time.

Section 18 does not differentiate between the duty of disclosure for a patent being allowed after examination on its merits under Section 17a and 17b, and a patent allowed under section 17c based on a corresponding application being allowed by an examining jurisdiction that the Israel Patent Office is prepared to rely on.

Furthermore, Section 17d notes that the Israel Patent Office can refuse to allow a patent under Section 17c based on art that they are aware of or is brought to their attention during the examination process. This is seen to counter Camtek’s interpretation of the Duty of Disclosure since regardless of Section 17c during the examination process, i.e. prior to allowance, the Applicant is still obliged to provide the patent office with details of relevant prior art.

Additionally, as clear from IL 219586 Data Detection Technologies vs. Collischan GMBH& Co. (9 March 2015) and from 33666-07-11 Unipharm vs. Sanofi (8 October 2015),  there is a duty n the applicant of candour and equitable behaviour.

Furthermore, the purpose of the duty of disclosure and logic undermine any interpretation that invoking Section 17c removes the obligation to report prior art, and the obligation starts prior to examination so is independent of section 17c.

Thus Camtek’s argument that since allowance was under section 17c, there was no need to inform the patent office about the Chinese citations is rejected.

The timeline makes clear that Camtek’s failure to inform the Israel Patent Office regarding the prior art was an omission that is unacceptable, but since the Applicant abandoned the patent, the issue of applying the sanctions under Section 18c is moot.
In the cancellation request concerning 94634 Israel Industrialists vs. R Roy Calne (26 April 2015) it was ruled that Applicants behavior during an opposition can certainly affect costs. The question remains whether the Applicant’s behavior during the patent prosecution can affect the costs awarded in the opposition proceeding.

Citing BAGATZ 891/05 Tnuva Cooperative vs. The Office for Imports PD 60(1) 600, 615, the Deputy Commissioner reasoned that where applicant’s behavior results in an opposition proceeding being required, it is reasonable to apportion costs accordingly.
The question of whether the patent would have issued had the Chinese patents been made of record is moot as the Applicant finished the prosecution without citing them. However, it was this failure that resulted in the opposition being necessary and this issue being raised.

Camtek’s complaint regarding Gilat Bareket’s hourly rate is not accepted since the rate is similar to that charged by other offices. Examination of the number of meetings and lawyer arguments indicates that they were justified. The only thing not justified was the costs related to the extension for filing the statement of case, and so 18886 Shekels were deleted from the requested costs. Noting that Orbotech did try to bring this case to a close without filing a statement of case by informing Camtek of their failure to report the Chinese citations and giving them an opportunity to withdraw the application, the Deputy Commissioner ruled that 98,514.5 Shekels costs be paid.

COMMENT

Adi Levit does not prosecute patents so did not prosecute this patent and was not responsible for the failure to cite the Chinese patents. He was, however, responsible for the Unipharm vs Sanofi decision, where he successfully argued the duty of candour. This undermines his argument regarding the duty of disclosure when invoking Section 17c.
That said, one wonders to what extent Orbotech needed to simply compare the prior art cited in Israel with that cited abroad and oppose the patent on the grounds of failure to disclose, and to what extent, studying the citations was necessary. 98,514.5 NIS does seem an awful lot of money for a statement of case in an opposition of this kind.


Costs in Aminach vs. Gabai

February 10, 2016

SIDS
Aminach is a large mattress manufacturer. They opposed a patent application No. 179840 filed by Moshe and Anat Gabai that allegedly reduced likelihood of Sudden Infant Death Syndrome (SIDS). Theyir invention was a foam mattress with holes punched out so that a face down child could not be suffocated by rebreathing trapped exhaled carbon dioxide.

The Israel Patent Office refused the patent by accepting Aminach’s submission that the mattress did not have proven efficacy. The Applicants appealed this ruling to the courts and the whole thing went to the Supreme Court and back down, and eventually the patent was registered but with a narrower claim set which specified that the the mattress may help in cases of SIDS attributable to rebreathing the same air.

Our report on the original ruling is here. Our report on the Supreme Court ruling is here.

Aminach, represented by Colb, filed for costs of 444,615.99 Shekels for all actions. As a fall-back position, they requested costs of 300,796.37 Shekels for the costs from when the Gabais appointed legal counsel, and as a further fall back position, costs of 113,841.36 Shekels from when the case was referred back to the Patent Office.
The Gabais, now represented by Glazberg, Applebaum & Co, opposed this. The courts decided not to rule costs and this was an active decision and not a lacuna and the issue was therefore moot. As to the patent office costs, the Gabais claimed that essentially they had won, and all Aminach had achieved was a claim narrowing. The Gabais alleged that the costs were incurred because Aminach and their lawyers had leveraged their greater resources.

The Gabais claimed that the costs were unnecessarily incurred. For example, Aminach did not need to compare their products with the patent claims. Aminach argued that where the courts had not ruled costs, they could be ruled, and where actual costs were considered excessive, the patent office could award what they considered to be reasonable.
Aminach were awarded 40,000 Shekels legal fees and 5,597 Shekels costs for the original opposition. They were awarded a further 20,000 Shekels by the District Court who upheld the Patent Office Decision and was not prepared to review additional experimental evidence. The Supreme Court didn’t award costs (arguably declined to do so), and nor did the District Court when ruling that the case should be returned to the patent office. This decision was also appealed to the Supreme Court as was a request to stay the ruling until the end of the process. No costs were awarded for this either.

The Deputy Commissioner then accepted new evidence and the Applicants corrected the specification. Costs of 5,500 Shekels were awarded to Aminach.

The Deputy Commissioner noted that all courts had addressed the costs issue, even if to rule that costs were not granted. She also noted that Section 162B of the Israel Patent Law 1967 only empowers the Patent Office to rule costs for proceedings before it. Unless the courts specifically delegate the awarding of costs to the Patent Office, it has no authority to rule costs for appeal proceedings before the courts. Further support for this was found in section 462 of the Civil Court Procedure and in the cost ruling regarding IL 165705 Israel Aircraft Industries vs. Rafael Advanced Warfare LTD, 12 July 2012. Furthermore, Circular MN 80 if these have already been awarded.

The only costs to be considered, therefore, are the costs related to the additional evidence submitted by each side after the Supreme Court ruling and the subsequent hearing including cross-examination of the expert witnesses and the correction to the specification for which costs were previously awarded.

The Deputy Commissioner then went through the various invoices and decided which ones related to the proceedings before her and concluded that costs of $21,864.55 were attributable to the proceedings before her. She also noted that the Gabais had chosen to cross-examine witnesses and submit evidence prior to narrowing the claim set which had incurred the costs.

COMMENT

I rather enjoyed this epic battle between the little inventor who was not represented, and an Israel corporation with expensive IP counsel. I suspect that the Israel Patent Profession as a whole found it quite entertaining. I was critical of the original patent office ruling to cancel the patent on appeal and do not think that the patentees can fairly be criticized for conducting tests and submitting and cross-examining expert witnesses, whether or not they could have reached a compromise with Aminach.

In awarding full actual costs for the proceedings before her, I feel that Deputy Commissioner is punishing the patentees for what was originally a poor decision by her. If the Supreme Court felt it could rule on the Appeal against the District Court’s ruling without awarding costs, we think that the patent office could have as well.

Although it is detailed and not obviously unreasonable, maybe the Gabbais and Glazberg will appeal the cost ruling anyway?

Obviously apparently healthy babies could die for a number of reasons, some of which doctors may not yet understand. Nevertheless, it would be interesting to see if baby mattresses with air holes become common place and if this has a statistically significant effect on SIDS which is very distressing for the families concerned.


Circular 19/2012 Updated to Reflect On-line filing, but what about the Abstract?

January 28, 2016

abstract painting

Now that the Israel Patent Office is set up for and accepts on-line national phase entry of patent applications, Applicants can either file on paper or directly on line. The relevant Circular 19/2012 has been updated accordingly.

One can upload the Specification, Figures, Claims and genetic sequence if relevant using fields in the on-line interface.

COMMENT
My second attempt at filing on line went like a dream. I do, however, have one little problem: what about the Abstract?

In the old days, Applications in Israel did not have Abstracts and the Examiner, on allowing the application would write an abstract to accompany a representative image in the patent office journal where the allowance was published for opposition purposes.

More recently, the Applicant (or his representative) was requested to prepare an abstract, which was typically not a problem as the abstract from the PCT or priority document was used.

Now abstracts are sometimes like abstract works of art. One can read anything into them, and the author’s intention and the litigator’s understanding may both be equally legitimate which is one reason that statements made in the Abstract are rarely given much weight.

The problem I have is that the interface does not have a tab for uploading the Abstract and the updated Circular does not refer to this either.

One could submit the abstract as the last page of the description or appended to the claims. Not knowing what to do, I used the genetic sequence if relevant tab to upload a file labeled Abstract and assumed that someone in the patent office would realize that the attachment was not a genetic sequence but an abstract and deal with it accordingly. I thought that fairly quickly the Israel Patent Office would add a further field for uploading the Abstract as the PCT Easy software has one. Now I am not sure. Maybe the Examiner is going to write one as in the old days? Maybe with greater classification and full text searches the abstract has been deemed unnecessary? Does anyone know? Does anyone except me care?


M.N. 81 Canceled

January 27, 2016

division

We were not surprised that following the Genentech decision, The Commissioner circular M.N.  81 was canceled and later circulars that referred to it were amended.

This means that anyone (not just Genentech) can file a divisional from what is itself a divisional patent application in Israel.

We expected this to happen as one has to have common ground rules for all applicants.

There is, however, a downside to this. In cases that have a tendency to go litigious, such as with pharmaceuticals, there is an incentive on the applicant to keep a divisional application alive long after the parent application issues, so that the claims thereof can be amended following litigation on corresponding patents abroad, and judicial rulings concerning wording, claim structure and the like. This makes attacking such patents difficult as they become a moving target.

On grounds of ultra vires, I was unhappy with M.N. 81, but I do feel that on substantive grounds there is room to amend the law. I just feel that it requires the Knesset to do so. Possibly claims in the parent that were canceled due to plurality of invention objections should be allowed to be reintroduced, but I am not sure that allowing anything arguably based on the specification to be reintroduced at any time by keeping a divisional application alive is necessarily a good policy.

Note, there is a dirty word in Israeli legal circles for people with views like me. I am dismissed by the crusader crowd as being a ‘formalist’. I am aware of the arguments that we need judicial fiddling to protect democracy. However, I see them as Orwellian, and inherently dangerous.


IL 214003 to Moshe Binyamin Remains Closed

January 17, 2016

Diy brain surgery.jpg      magic bracelet

In December we reported that a private inventor, Moshe Binyamin had filed a request for his closed patent application be reopened. The case was considered abandoned when the inventor failed to respond to the Notice Prior to Examination.

The inventor represented himself. Generously, the Deputy Commissioner Ms Jacqueline Bracha gave the applicant seven days to file a detailed Affidavit as to why the case was abandoned. Since the case had published and over a year had passed since it was abandoned and the applicant failed to provide an adequate explanation for the case going abandoned and did not attend a hearing, The case remains closed.

COMMENT
It seems that Ms Bracha was more than generous towards this inventor. Representing oneself in legal matters is not usually a good idea.

The invention is for some sort of bracelet with magical health powers. This is a very good idea. As the revival of the application was rejected it remains in the public domain. Unfortunately it doesn’t seem to be fully enabled and I doubt its efficacy.


Inventor Compensation Under Section 134 of the Patent Law

January 13, 2016

compensation       employment-agreement (1)

Section 134 of the Israel Patent Law allows for a committee including the Commissioner of Patents, a judge and one other to decide whether an employee is entitled to compensation for a service invention, and how much this should be.

In Barzani vs. Iscar, the Supreme Court through out Barzani’s appeal of the committee ruling and denied his request for compensation.

The Israel Supreme Court (Appeal 3564/12 Dr Nimrod Bayer vs Florality LTD) overturned a District Court decision that upheld a waiver signed by Dr Bayer and Dr Nimrod Bayer requested that the committee decide on appropriate compensation. The committee chaired by Judge Professor Itzhak Engelard and including the Commissioner of Patents Asa Kling and Professor Shmuel Peleg. issued a ruling on 24 December 2015.

It seems that in this instance, the parties came to an agreement. Consequently the request for compensation submitted to the committee was refused. The ruling clarifies that this decision does not affect Dr Beyer’s moral rights to be considered the technological driver of the company or affect third party rights. It puts an end to the issue and no costs are awarded but the decision is published with the names of the parties at their request.

COMMENT

We suspect that the anonymous suspension procedure we reported in 2014 related to this case. Not much can be learned from this ruling except that the committee does meet. At least occasionally.


Subsidizing Israeli Colleges of Further Education to File Patents in Israel

January 11, 2016

college discounts college discount 2

In a new regulation that came into effect at the beginning of the year, colleges of higher education that are recognized by the Committee that recognizes Israeli institutions granting degrees are entitled to a discounted filing fee.

Whereas regular Israeli applicants and foreign applicants, including universities and colleges have to pay 2017 Shekels, the Israeli colleges are entitled to a 40% discount.

For the past year or so, individual Israeli inventors and  companies with minimal income are entitled to such discounts, and I note that in the US there are different fees for micro-entities, small entities and large companies excluding colleges, so Israel is not alone in this. Nevertheless, I fail to see justification for favouring Israeli colleges of education.

The general justification for the patent system is that a limited monopoly is provided in return to teaching something new. College academics publish papers anyway.  That as may be, if such colleges have tech transfer companies and file patent applications in order to license them or spin off a start-up company in their incubator, why shouldn’t they be treated like any other commercial institution?

There doesn’t seem to be a need to provide incentives to colleges to file patent applications as the Israel universities are among the most prolific Israeli applicants anyway, with the tech transfer companies of the Weizmann Institute, Hebrew University and Ben Gurion University all appearing in the list of the top ten most prolific local filers for 2014, and the Technion tech transfer and Yeda (Weizmann tech transfer) appearing in the list of the top ten most prolific local patentees of 2014.

I am wondering whether a discount in filing fees per application of 807 Shekels or just over $200 provides any incentive to the tech transfers to file patent applications? Is there any national agenda that provides a logic for encouraging them to file applications in Israel? If there is some justification for a policy of encouraging Israel universities to file patents, why not ear-mark some government funding for this purpose instead of blatantly discriminating against foreign universities – not that a $200 will likely impact their patenting strategy either.

I generally advise clients to first file in Israel. There are some attorneys that advise first filing a US provisional application. Does a $200 discount affect the advice one would provide to a college or university? I am not convinced.

 


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