Cialis Again – District Court Rules that Only Parties to an Opposition have Standing to Appeal the Decision

February 10, 2014

assume a spherical cow

Lilly Icos produce a drug called Tedalafil, which is used to treat male impotence due to erectile dysfunction. The drug, is marketed as Cialis. When their patent application number IL 146742 covering the drug was allowed, TEVA opposed the patent issuing. After cross examination of expert witnesses but before final summaries were submitted, a commercial arrangement between Lilly Icos and Teva resulted in the opposition being dropped. However, then Deputy Commissioner, Noah Shalev Smylovezh ruled that the ‘inventive step’ on which the patent had been allowed was that fine grinding increased the solubility of the active ingredient. He ruled that this was obvious, and so, under authority of Section 34 of the Israel Patent Law, he rejected the patent anyway. This decision of his is correct. Dissolution is a surface effect and for a given mass of material, the more finely ground, the larger the surface area to volume ratio.

Expressed mathematically:

Assume spherical particles:

For a given mass M, the number of  particles n =  M / (4/3πr^3)

The surface area A of each sphere is 4πr^2

Thus the total surface area A = n 4πr^2 = 3M/r

As r shrinks, the surface area increases.

Since perfect spheres have the lowest surface area to volume ratio of any solid (which is why soap bubbles are spherical), for any other shape, the surface area increases even faster as the dimensions decrease.

The standard of obviousness for patentability in Israel is ‘obvious to try’ – see Fosamax decision by Dr Meir Noam, which was upheld by Israel Supreme Court.

Section 30 is there to prevent patents issuing that shouldn’t. This is a patent that then Deputy Commissioner, Noah Shalev Smylovezh had concluded lacked inventive step, and so  under Section 34 he refused the patent, thus ensuring the integrity of the register, allowing generic competition and allowing impotent men and their partners to benefit from cheaper erections.

An earlier posting on Noah Shalev Smylovezh’ decision may be found here.

The applicants requested further clarification, but Deputy Commissioner Noah Shalev Smylovezh’s contract as Deputy Commissioner had ended and he had returned to private practice. Ms Yaara Shoshani, an adjudicator at the Israel Patent Office took over his open files. She clarified the decision but gave the parties 30 days to respond. After reviewing their submissions, she decided not to use her powers under Section 34 of the Law, and to allow the patent to issue. Her reasoning, which overturns Dr Noam’s ruling regarding obvious to try is found here. Essentially she replaces the ‘obvious to try’ standard, with a ‘not necessarily the first thing one would try’ standard.

Unipharm appealed this decision to the Jerusalem District Court, where Judge Ben-Zion Greenberger heard the case.

Unipharm claimed that there was a chain of events that had resulted in a miscarriage of justice and requested that the Jerusalem District Court rehear the case. They claimed that the onus was on the applicant to prove that they deserved a patent and merely because the opposition was dropped, the basic requirement of a non-obvious inventive step remained missing.

Instead of addressing this issue, agent for patentee argued that Unipharm lacked standing since they were not a party to the opposition and therefore the case should be thrown out under Section 421 of the Civil Procedure Law and / or regulations 101 and 102. Unipharm countered that under the Patent Law, 174(a) anyone who sees himself hurt by a patent office decision has the right of appeal.

The Court ruled that before addressing the substantive patentability issue, it should address the issue of standing and relate to the correct interpretations of Sections 30, 34 and 174(a) of the Israel Patent Law and Section 421 of the Civil Procedure Law and / or regulations 101 and 102.  On this point, it ruled not to allow Unipharm standing, and so the patent remained valid and the decision of the Ms Yaar Shoshani Caspi, overturning Deputy Commissioner Smylovezh’ ruling was not addressed.

COMMENTS

This is an unsatisfactory state of affairs. The reason why the Commissioner (or his delegate) has authority under Section 34 is so that in cases where the parties do a deal and an opposition is withdrawn, but the person hearing the case believes that there are grounds for invalidating the patent, the patent office is supposed to continue in the hearing in-partes and rule on validity on the merits.

Ms Shoshani Caspi’s position disagrees with Dr Noam’s standard of obvious – obvious to try. It also overturns Noah Shalev Smylovezh’ conclusions. Unipharm should have filed an opposition, but missed the deadline. Nevertheless, Judge Ben-Zion Greenberger’ws ruling that Unipharm has no standing means that he is avoiding judicial oversight of this decision and doing so on a technicality.

The arguments put forwards by both parties had the usual dose of ‘smoke and mirrors’. The Judge quoted Barak and claimed to be doing an analysis of what the purpose of the Law was, and decided that the correct balance between patentee and opposers and rest of the public was to allow the opposers to appeal, but not third parties.

There is some logic in interpreting patent law in light of standard civil court procedures. But, clearly all generic manufacturers and importers are affected by this decision, whether or not they were a party to the opposition. indeed, the public – at least the male impotent members subsection of the public – is served by preventing monopolistic pricing on the drug in question. It therefore seems to me that the Court of Appeal should address the issues of patentability, specifically the issue of obviousness on its merit.

Maybe a user of Cialis should have filed the case, perhaps as a class action? Perhaps the way forward is for Unipharm to file cancellation proceedings and to make sure that the issue of inventive step is considered on its merits. Alternatively, they can appeal this decision to the Supreme Court.

We note that in a recent decision the Supreme Court ruled that when hearing an appeal of an opposition ruling, the district court can even hear new evidence if appropriate. In that decision, which also challenged a strange Israel Patent Office decision, the Supreme Court ruled that appeals of Patent Office decisions are different from regular appeals of court decisions and an appeal may, if warranted, be a new trial with new evidence. I think that in the present case, it is likely that the Supreme Court would refer the case back to the District Court to consider on its merits. If that happens, I believe the ruling should be reversed.


We All Make Mistakes, Dr Cohen…

November 19, 2013

In earlier blog posts, I reported on two rulings by the Deputy Commissioner, Ms Jacqueline Bracha concerning a late submission of a trademark opposition.  In the first blog post I reported the Original Decision wherein she refused to grant a retroactive extension on the grounds that under her understanding of the Law, she doesn’t have legal competence to do so (ultra vires), and, in the second blog post, I reported on a Second Decision  concerning a Request for Reconsideration which she also dismissed out of hand.

I was somewhat surprised to receive a rather heavy handed and threatening email from Dr Shlomo Cohen  (mis-addressed as Mr, instead of Dr, but common courtesy doesn’t seem to be Dr Cohen’s strong point).

Dr Cohen’s email is reported, verbatim, as follows:

Without Prejudice
For Immediate Action
November 11, 2013
Re: A Further Tortuous Publication
Mr. Factor,
In your recent “IP Factor” publication you have once again provided misleading wrongful information, again with a clear intent to harm us.
I refer specifically to the text in your recent publication “but apparently due to a human error by their representatives, Dr. Shlomo Cohen & Partners, Law Offices, the opposition was submitted on 2 October 2013, missing the three month deadline of 30 September 2013 by a couple of days”. This language is wrong, misleading and intentionally harmful.
As you well know this is not the first time you have acted maliciously in an attempt to twist facts and injure this firm.
This time we will enforce our rights in full!
We demand that you:
a. Immediately (by Tuesday November 12, 2013 at 10:00am) remove this language from your publication.
b. Within three days (by Thursday November 14, 2013 at 2:00pm) publish an apology and retraction for this wrongful language with a text to be approved by us no later than Wednesday November 13 at noon.
c. Pay us statutory damages of NIS 100,000, by Sunday November 17, 2013
d. We will then follow up on your previous injurious malicious publications and demand full compensation for them as well, as we have warned you in the past
If you do not comply with these demands, at the times stated, we will take all necessary legal action to enforce our rights
No further warning will be sent.
Shlomo Cohen
Dr. Shlomo Cohen & Co.
Century Tower
124 Ibn Gvirol
Tel-Aviv 6203854, Israel
Phone: (972-3) 527 1919
Fax: (972-3) 527 2666
E mail: cohens@shlomocohen.co.il
Web: http://www.shlomocohen.co.il
IMPORTANT: The contents of this email and attachments are confidential and may be subject to legal privilege and copyright. Copying or communicating any part of it to others is prohibited and may be unlawful. If you are not the intended recipient, please delete it immediately and notify us by telephone. Thank you.

I was somewhat surprised to receive this notification, since Ms Bracha had clearly reported the grounds for the request for the extension in her decision. accusations of publishing misleading wrongful information should not be taken lightly.  I wondered if I had misunderstood the ruling.  I rang the Israel Patent & Trademarks Office to try to obtain clarification. After all, in a previous report concerning a missed deadline, due to poor phrasing, I’d erroneously attributed an action of the client’s representative (meaning CEO) to their legal representative. Mistakes do happen. Unfortunately, but not surprisingly, Ms Bracha’s secretary referred me to the legal aids who informed me that they don’t clarify decisions. Very helpfully however, they forwarded me the correspondence in the file which is all public domain. This is a link to the Original Submission by Dr Shlomo Cohen, Law Offices. Here is a Notarized Translation.

I was bemused. I really could not see what Dr Cohen was objecting to. I decided to ask him. Here is my email to him:

Dear Dr Cohen,

I apologize for not responding to you earlier.  I wished to first review the decision and also the appeal wherein you tried various creative interpretations of the Law which were dismissed out of hand by the deputy commissioner. I don’t see how my report may fairly be considered wrong, misleading and intentionally harmful. In case, the Deputy Commissioner had made a mistake or I had misinterpreted her ruling I have now obtained and reviewed the file. I am at a total loss to understand what you are objecting to. Please clarify and I will consider correcting. If after clarification, it appears that an apology is called for, I have no problem apologizing. I did, indeed, make a mistake regarding an action wrongfully attributed to a different IP firm due to poor wording of the decision, and I immediately published a retraction and apologized. In this case, however, I don’t see that there is anything to apologize about. I report decisions of the Israel Patent Office and of the course. I try to do it fairly and objectively. If you have a genuine grievance, you are invited to come over to my office and we’ll talk about it over lunch.
If you prefer, simply answer the following questions:

1. Did someone in your office miss the three month deadline for filing a trademark opposition?

2. Was this due to human error?

3. Was the human error that of someone in your office?

4. Was my decision an unfair summary of the patent office ruling as published?

5. Did the original decision by Ms Bracha, or the second one following the creative if somewhat strange reconsideration request report that someone in your office had made a mistake?

6. Was this a mistake by the Deputy Commissioner Ms Bracha?

7. If my report was wrong and misleading, how do you understand the third paragraph of the letter from your firm and line 5 of the appended affidavit of Adv. Liron Cohen of Dr Shlomo Cohen – Law Offices?8. If my report was wrong and misleading, presumably the affidavit of Adv. Liron Cohen of Dr Shlomo Cohen – Law Offices was inaccurate or misleading. In this case, why did Adv. Robert Doriano of your firm sign it?

Wishing you a Shabbat Shalom,
Dr Michael Factor

The response was somewhat abrupt, but hardly enlightening as to the grounds of his complaint:

Mr Factor,
I have no intention of engaging in your haggling.
Remove your falsehoods by noon Friday or face the consequences.

I find Dr Cohen’s attitude distressing. I try to fairly and objectively report on all decisions of the patent office and the courts. Where the identity of the legal representatives is pertinent, I think it is fair to report this. In this case, I believe it is fair and relevant.

Readers will note that Dr Cohen’s letter is titled “A further tortuous publication”. It refers to ‘once again’. For interested readers, in an earlier post, I referred to the Omrix case where Dr Cohen & Partners Law Offices represented the State of Israel against a company benefiting from a technology that the State of Israel considers to be based on service inventions.

I take exception to Dr Shlomo Cohen stating that his is not the first time I have acted maliciously in an attempt to twist facts and injure his firm. I try to report facts accurately.

Regarding lies, slander and defamation, it is pertinent to note that back in 2005 and 2007, Dr Shlomo Cohen filed suit in the Israel Magistrates Court, against Globes, an Israel business newspaper, making similar allegations. In her ruling, the Honorable Judge Oshri Frust-Frankel noted that “we are dealing with repeating a publication that benefits from complete and total defence, since that published was the content of a court ruling, that issued during legal proceedings…“. In her review of similar decisions, the Judge also noted that the “reporting should reflect that said or written in the proceedings being reported, and should be fair.” The second article, which published prior to the first case being ruled on, fairly reflected the decision of the court and was thus a permitted publication.

Of course, I can’t stop Dr Cohen from suing me if he feels injured. However, I have given him every opportunity to explain what his grievances are.  I suppose it would be churlish to point out that in a decision last week,  NIS 60,000 in legal fees were awarded against Dr Cohen when he lost an appeal for a frivolous lawsuit filed against Bezeq and Netvision that was thrown out by the court of first instance.  See ע”א 3407-09-12, שלמה כהן נ’ נטוויז’ן ואח’ / פס”ד.


Non-licensed practitioners

September 27, 2013

blazing saddlescrazy

Non-licenses practitioners come in different shapes and sizes.

General search terms from a computer in Israel, for ‘patents’, patent attorneys, Israel Patent Office, etc., turns up paid adverts from non-licensed practitioners, what I would call cowboys and cowgirls – self styled patent experts. Some of these refer to themselves as IP Managers. These tend to be paralegals who have set up by themselves and offer portfolio management services.

There are also self-styled patent writers, patent searchers, US licensed practitioners who are not licensed in Israel, would-be patent attorneys who can’t pass the exams, retired examiners and struck off IP lawyers from abroad.

Under Section 154 of the Israel patent Law it is illegal for anyone who is not licensed in Israel as a patent attorney or as an Attorney-at-law to draft patent applications, or to provide any IP services in Israel, including procedural work opposite foreign patent offices.

Section 154 is as follows:

Rights of patent attorneys

154. (a) Patent attorneys have the exclusive right to deal in Israel, for remuneration, with applications for patents, designs and trade marks and with the preparation of any document to be submitted to the Registrar, the Office or to an authority for the protection of industrial property in another country, to represent the parties and to handle and represent in any proceeding before the Registrar or in the Office.

(b) This section does not derogate from the right of an advocate or of a State employee to perform the said acts within the scope of his functions.

This Law should be read together with Sections 19 and 20 of the Israel Bar Law, and doing so makes it clear that providing IP advice (consultation) is also illegal for anyone who is not a licensed Israeli attorney-at-law, or a patent attorney.

Subsequent to both the Israel Patent Law and the law of the Israel Bar, there was a Basic Law, Freedom of Occupation. The courts have used this to find certain laws that restrict employment illegal. It is not inconceivable that a court would find a US patent agent working in Israel to help local clients file and prosecute patents in the US as doing nothing wrong and would limit the application of Section 154 Law that forbids them to do so. This is, however, speculation.

The Israel Patent Office website carries a warning:

הובא לידיעתנו, כי אנשים שאינם עורכי דין או עורכי פטנטים עוסקים לכאורה, בשכר, בפעילות שנתייחדה לעורכי דין ולעורכי פטנטים, ובכלל זה הכנת מסמכים המוגשים לרשם הפטנטים בישראל ובחו”ל, גם אם אינם חותמים על המסמכים בשם הלקוח.כל אדם מהציבור הזקוק לשירותי ייעוץ ורישום בתחום הפטנטים, סימני המסחר והמדגמים מוזהר בזאת שלא לפנות לאותם גורמים הפועלים בצורה בלתי חוקית, שכן הסתייעות באותם גורמים עלולה לגרום להם נזק בלתי הפיך.

This is a rough translation:

Let it be known that people who are not patent attorneys or attorneys at law apparently practice, for payment, services that can only be provided by patent attorneys or attorneys at law, including preparation of documents for submitting to the Israel Patent Office and to foreign patent offices, even if they don’t sign in the name of the client. Any member of the public who needs advice or registration services relating to patents, trademarks and designs is hereby warned not to turn to such illegal practitioners, since doing so may result in irreversible damage.

Unfortunately, (apart from this notice) neither the patent office, the Ministry of Justice, the Israel Bar or the Association of Patent Attorneys has done anything to combat the non-licensed practitioners who draft patents and give advice, based on a little experience as an inventor, a trainee attorney, as an examiner or as a paralegal, or based on having read a book like Patent it Yourself.

The cowboys are not only a problem to licensed practitioners. They are a problem to the wider public as well. As their work is illegal, they do not have and cannot have malpractice insurance.  This means that if they screw up, and this is not an unlikely scenario, the client has no recourse.

Patent Attorneys are bound by attorney-client privilege. Clients can discuss their inventions with licensed practitioners and if they have complaints about malpractice, can complain to the Israel Patent Office. The patent attorney could have his license suspended. Discussing with a cowboy practitioner provides no protection whatsoever.

There are some patent searchers as well that offer patentability searches direct to the public. Because patent attorneys are legally responsible for their opinions, they can’t compete on price with patent searchers who are often skilled in library science but don’t have an understanding of science or technology, and don’t have knowledge of patent law. I’ve seen searches from patent search firms that give patentability opinions. I think that this is illegal for them to do, and well beyond their competence.

What about foreign licensed practitioners who advise clients in Israel about the law in a jurisdiction that they are licensed in?

Gerson Panitsch is a partner of Finnegan, the largest US IP firm who spends time in Israel. He claims to advise clients regarding enforcement in the US, and does not practice Israel Patent Law. Under the Israel Law above, this does not matter. His practicing here is still illegal under Israel Law. Gerson Panitsch points out that Israel is obliged under International treaties to allow foreign law firms to set up branches here. Maybe he is correct. I don’t know. Even if he is, it does not make his activities in advising his Israeli clients, a legal activity.

It is not just Finnegan of course. Other large US patent litigation firms such as Quinn Emmanuel and Fish Richardson also come over to tout for litigation work in the US. Their running educational events like mock trials would not be considered illegal. Their advising Israel firms on IP litigation matters in the US at their hotel in Tel Aviv, would, however, appear to be illegal.

The territorialism of IP licenses is perhaps at odds with the multinational nature of patent law. Then again, if we accept that the majority of wealth in the twenty first century is in non-tangible assets such as patents and trademarks, it seems sensible and correct for governments to regulate the industry and set standards of minimum competence, and have procedures for suspending a license of someone who malpractices.

Lawyers, doctors and surgeons, nurses and others who are trained abroad are required to requalify in Israel. Why should patent attorneys be different? The Israel Law has procedures for waiving certain requirements, and a shortened internship may be in order. I think that foreign licensed practitioners wishing to practice in Israel should be required to pass an oral and written exam though, and to have at least a minimal competence in both Hebrew and English.

Since the US is the largest Jewish community in the diaspora, there are a large number of US patent agents and attorneys who immigrate to Israel and not all of these requalify locally. Some can’t be bothered to. Some can’t seem to be able to pass the exams. Some have trained as patent attorneys locally, past the US exams as patent agents but have not been able to pass the exams here. It would appear that their advising clients in Israel is against section 154 of the Israel Patent Law.

The United States Patent and Trademark Office (USPTO) is generally accepted as being the most important patent office in the world. For some technologies, such as fast changing fields like telecommunications for example, patent applications are often only filed in the US. Nevertheless, at least until the America Invents Act (AIA) which did a lot to close the gap between US patent practice and that of the rest of the world, the United States had the most unique and eccentric patent law of any economically significant regime, and possibly still does. Think first to invent, the applicant being the inventor by default and not his employer, business method patents, patents for methods of medical treatment, etc. The United States concept of Unity of Invention is different from that in Europe.

Perhaps because of the size of the United States market, very many United States patentees only file their applications in the United States. At international conferences, it seems to me very clear that US practitioners are less aware of patent laws and strategies in other jurisdictions. They seem to be less cosmopolitan in outlook and more parochial, than patent attorneys from elsewhere.

Use of a US provisional application as a priority document makes a lot of sense for a US inventor in the United States who would otherwise need a license to first file abroad. It makes far less sense to an Israeli who can first file in Israel, then expedite examination and get an indication of patentability from a patent office that is recognized to provide International Search Reports (ISRs). The Application may be abandoned before publishing if necessary.

On occasion, I have advised clients to first file in UK, in Taiwan, in the US (both provisional and non-provisional, in New Zealand and with a PCT application. The strategy I chose depends on where the markets are, where competitors are, where client is based, on the nature of the technology and other considerations. It is a generality, but I find that US attorneys are less knowledgeable about strategy. Perhaps in some cases, the US practitioner is not really competent to advise Israeli companies and inventors, because of a sort of blinkered vision?

So should a competent experienced US licensed practitioner have to requalify before giving advice to Israeli clients? I suspect that my US licensed friends will have a different answer to those licensed in Israel who see work being handled by US practitioners. But where the US practitioner is advising the Israeli client about US law, and drafts and files on their behalf in the US, does it make sense that the US practitioner can sit in New York or Washington and discuss the matter over the phone or by email with the client, but can’t legally meet the client in Tel Aviv or Jerusalem to discuss the matter?

“If the law supposes that,” said Mr. Bumble,… “the law is a ass—a idiot. If that’s the eye of the law, the law is a bachelor; and the worst I wish the law is that his eye may be opened by experience—by experience.”

That as may be. Should one take legal advice from someone who is flouting the law? I think not.

Immigration into Israel is not only from the US of course. There are ex-patent examiners from the former Soviet Union and Ukraine that havbe relocated to Israel. Should these be able to practice here without requalifying?  No doubt the US practitioners will have reservations about the patent regime that trained the Ukrainian patent attorneys and perhaps about their English skills – although in my experience, not only do Russian immigrants have vastly better English skills than the Russian skills of their US counterparts, but often have English skills that are almost mother tongue level.

I’ve been recently contacted by a South African Patent Attorney who has relocated here. No doubt his English skills are excellent. In South Africa, patents are allowed automatically without substantive examination, unless there is an attempt to uphold them against an infringer. Should the South African by able to practice without requalifying? I don’t think so.

In summary, I am in favor of the status quo that requires foreign trained patent attorneys and lawyers to have to pass exams to practice here, and think that local hands on practical experience is also of value. At present that is the law.  It is also apparently illegal for foreign patent attorneys to practice before their native patent offices from the territory of the State of Israel. I think that this could usefully be revisited.

It is a shame that the Israel Bar and the Association of Patent Attorneys in Israel does nothing about this. Nor do they act against those who have no license whatsoever from anywhere, but still draft patent applications, help clients file in Israel and elsewhere.

What about Israelis who practice abroad, in foreign jurisdictions?

This can work the other way as well. For example Pearl Cohen Zedek Latzer (PCZL) is an Israel Law firm that specializes in IP Law. They have set up a New York Office, and one in Boston.

None of the named partners, Pearl, Cohen Zedek or Latzer are licensed in the US however.

Zeev Pearl is the managing partner of the New York office and his name is on the door, but it appears that he is not licensed to practice law in New York or anywhere else in the US – either that, or he is very discrete about his qualification on the PCZL website.

Perhaps Pearl is careful to explain to everyone entering the US office that he is not licensed in the US and not qualified to give advice there.

There are also general Israel Law firms such as Shibboleth that have opened US offices.

I can’t opine about the legality of this situation since I am not licensed in the US.

For those interested in exploring this further, see

New York City : 1st Department, Chief Counsel, First Judicial Department, Departmental Disciplinary Committee, 61 Broadway, 2nd Floor, New York, NY10006, (212) 401-0800, Fax: (212) 287-104

Website: www.courts.state.ny.us/ip/attorneygrievance/complaints.shtml

Also see the unauthorized practice of law committee in New York.  Their contact information is as follows:

Kathleen Mulligan Baxter, New York State Bar Association, One Elk Street, Albany, NY12207, Tel: 518/463-3200, Fax: 518/487-5694

kbaxter@nysba.org

See also ABA Formal Opinion 01-423 Forming Partnerships With Foreign Lawyers (2001).

Report 201H (Licensing of Legal Consultant)

Report 201J (Temporary Practice by Foreign Lawyers) as presented by the ABA Multijurisdictional Practice Commission and adopted by the ABA House of Delegates in 2003.

See Also Report 107C as Amended by the ABA Ethics 20/20 Commission (ABA Model Rule on Pro Hac Vice Admission) that was adopted by the House of Delegates in 2013.


Herods Hotel and Harrods of Knightsbridge – Coincidence or Dilution and Passing Off?

June 21, 2013

harrods awning       herods downloadAfter suffering from an overload of aggravation, in making near impossible deadlines for demanding customers, I took off 36 hours, and holidayed in Tel Aviv – doing what veteran patent attorney Simon Kay would call having a highly recommended one night stand with one’s wife. We stayed at the luxury Herods Hotel in Tel Aviv, which is an over-priced makeover of the Leonardo Plaza Hotel. It is one of a chain of premium hotels in the Fattal Group which includes a hotel at the Dead Sea, and one in Eilat. We enjoyed the fantastic breakfast, seawater swimming pool beach front and friendly staff.

Herod the Great, King of Judea, was a colossal builder, who built the port of Caesarea, the Mausoleum of the Patriarchs in Hebron, did major renovations of the Second Temple, including, arguably, the Western (Wailing) Wall remnant, and constructed luxury palaces under difficult conditions at Herodian, Jericho and Masada. Herod also murdered his father-in-law, various wives and children, making Henry VIII’s behaviour seem normative, and raises associations of unfriendliness to couples and children that I suspect the Fattal chain (Fattal not fatal) might be less than interested in recalling. The most famous hotel in Jerusalem is the King David, and there is also a King Solomon. So why not a Herod or King Herod? No reason. In English, a hotel belonging to Herod, would be called Herod’s Hotel with an ‘apostrophe S’. I am not an expert on American syntax and grammar, but I believe that in Americanese, the same rules apply.  The Tel Aviv beachfront hotel is, however, not called the King Herod Hotel, or Herod’s Hotel. It is called the Herods Hotel. In London, there is a rather famous luxury department store called Harrods. The Harrods’ Livery is green. Often, a rather yellowish green, but on the awnings and other features, it is a racing green more reminiscent of the Mini Cooper than of the vintage Rolls Royce parked outside the Tel Aviv Herods Hotel which extensively uses the same shade of racing green. Furthermore, Although Harrods is often written in a distinctive joined up script, it is sometimes written in a serif font in capitals, and that is how it is written vertically on the corner of the famous store. The name Herods Hotel is written in a similar font. The Tel Aviv Herods Hotel was formerly the Leonardo Plaza Hotel Tel Aviv, and is a rather square, not particularly distinctive building.

In the ‘Eilat Herods Palace Hotel’ the ‘apostrophe S’ is likewise missing. More obviously noticeable is the distinctive architecture of the Eilat hotel which was built as the Herods Palace Hotel. Herods Elat There is nothing reminiscent of the huge rectangular building blocks, laid in horizontal courses with flat projecting central bosses surrounded by narrow, shallow marginal drafts providing a finely chiseled, frame-like effect that is instantly recognizable as Herodian. There are, however, pointed turrets and other architectural features that seem to be rather distinctively Harrodian (of Knightsbridge).

Herods Dead SeaThe logo of Herods Dead Sea is in a dirty yellow that is similar to the colour of the font used in Harrods’ sign. The background of the logo in the Tel Aviv Herods Hotel is in a racing green that is similar to Harrod’s awnings.

Under the Paris Convention, well-known marks don’t need to be registered to file suit for passing off, dilution, and the like. Although not in the same class, luxury goods and luxury hotels are both aimed at the luxury end of the market, and there does, therefore, seem to be a case of dilution, and possibly confusion. On the other hand, nothing is created in a vacuum, and some level of influence and suggestiveness might be considered legitimate.

Harrods does not have a retail outlet in Israel, and abandoned their Israel mark for their logo, but they do have trademarks for Harrods Online and Harrods Direct, indicative that they do provide goods to Israelis over the Internet. Israelis are notoriously bad at spelling, and English names like George when spelled in English on Israeli road signs  are rarely spelled correctly. A double RR or an E instead of an A are unlikely to be considered as significant. The mark would be pronounced almost the same. The hotel does not spell Herods in Hebrew, where Herod is pronounced Hordus, reflecting the Roman influence.

The original trademarks for the hotel were for Herod’s with an apostrophe S, but their more recent marks are for Herods without the apostrophe. I think that were the hotel to have chosen a different colour scheme to the racing green, I would be less bothered, but that, together with the missing apostrophe seems to me to be at the very least dilution of the famous British mark.

Then again, I studied engineering at Imperial College in South Kensington, just down the road from Harrods of Knightsbridge. When, at age eleven, I went to Carmel College, my school uniform was purchased there. It could be that my sensitivity to the similarities is influenced by my background, and the average tourist, whether foreign or Israeli, might not see the similarity. Furthermore, as an IP professional and blogger (critic), I am perhaps not the typical consumer, and maybe I see infringement where the average holiday-maker simply sees a hotel?


Israel Supreme Court Hears Design Infringement Case and Awards Damages

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.


Israel Supreme Court Overturns Doggy DNA Ruling

May 24, 2013

pooperscooper

Back in February 2011, Judge Stumer of the Petach Tikveh District Court ruled that the implementation of an idea to collect DNA of dogs to enable prosecution of their owners who have fallen foul of the law by their pets fouling pavements (sidewalks) was copyright infringement. My original posting on the decision, together with an analysis of what was wrong with it, may be found here.

Judge Noam Solberg has no issue with the factual finding of the District Court that the idea originated with Zisso, the original plaintiff and defendant on appeal, but on a matter of Law confirms that implementation of an idea is not copyright infringement.  the implementation of the idea, if protectable at all, might be protectable by a patent if considered novel, inventive and useful, but as Zisso didn’t file a patent application, the issue is moot and the idea is now in the public domain. Attempting to claim that there is unjust enrichment or an assumed contract is an illegitimate attempt to widen the charges on appeal. Similarly, attempts to claim infringement of the original PowerPoint presentation by the Petach Tikveh Municipality using a similar presentation is widening the original claim.

Judges Naor and Jubran concurred with Solberg. The Petach Tikveh Municipility was awarded NIS 25000 in legal costs.

The Case: Civil Appeal 2682/11 Petach Tikveh municipality vs. Harry? Hairy? Hurry? Zisso

COMMENT

Readers will be pleased to learn that the Israel Supreme Court has reversed what may be the worst IP related decision that an Israel Court has ever issued.

Neil Wilcoff has recently been blogging about various courts getting patent law wrong. It seems that Judge Stumer isn’t the only Judge to make an embarrassing mistake.  Nevertheless, one wonders if there isn’t a case to be made for specialist IP courts?


Crocs’ clog registered as a trademark in Israel

February 13, 2013

CrocThe iconic Crocs’ beach clog has been recognized as a 3 dimensional trademark in Israel.

The trademark application was filed back in 2008, and was originally refused as back then, 3D marks were generally not accepted. Now, over four years later, with applicant’s representatives filing enormous amounts of evidence including surveys, etc., and several appeals and hearings, the mark has been registered.

To enable registration, the arbitrator of intellectual property, Ms. Yaara Shoshani Caspi  has ruled that the functional and aesthetic considerations are minor, considering the iconic clog as being clompy and unaesthetic, but acknowledging that there are at least contributory aesthetic and functional considerations. She was impressed that more than a million pairs were sold in Israel. She found persuasive the applicant’s argument that without trademark protection, enforcement of their rights would be difficult.

She noted, however, that a Venice court recently came to a different conclusion where the trade mark was found to be invalid as the shape, though ugly, added value. Although Crocs lost the trade mark in Venice, they won the case because unfair competition was found. See Court of Venice, Decision of 15 February 2012, Crocs, Inc. v. Supermarket Della Calzatura sas. and Progetti srl.

The Ruling: Israel TM Nos. 212302 and 202303 by Yaara Shoshani Caspi, 15 January 2013.

COMMENTS

Despite having a reputation for Venetian blindness, I think the Italian court got it right.

The former commissioner, Dr Meir Noam, believed that objects that are registerable as designs should not be registerable as trademarks. He saw IP as a house, where different types of protection were like different rooms. It seems that this doctrine of not allowing double protection has now been abandoned by the patent office, and we see this development in a positive light.

We accept the applicant’s argument that without trademark protection, enforcement of their rights would be difficult, but not that the argument is circular in that it assumes that Crocs has rights to the shoe design. Arguably, if they did not register a design in Israel for the shape of the clog, they do not have rights to stop others from making similar footwear.  Then again, in the notorious Ashir case, the Supreme Court accepted the Tel Aviv District Court’s arguments that copying a product not registered as a design could be an actionable offence under the tort of Unjust Enrichment. We therefore, do not see that there is a need to allow the clog to be registered as a design.

The shape of Crocs’ clogs is, of course, dictated by the shape of the foot and by manufacturing concerns using injection molding of the resin. the holes are necessary or at least recommended in plastic shoes which don’t otherwise allow the feet to breath. The general design allows the foot to be inserted and removed easily. there is arguably nothing that is not either functional or aesthetic, and I would argue that most features of the Crocs clog are both.

On the other hand, the design is easily recognized and associated with the company Crocs. Furthermore, the original shoe design is now used for marketing purposes and as a sign.

If the shape is used as a sign on Crocs shops, then it is a 3D trademark being used as an indication of origin. But, in such a case, a beach clog carrying a clear non-Crocs logo, say a non-black stud with a tortoise on it or something, or simply without the stud, should be fairly vendable as generic resin beach clog. Unlike a distinctive bottle design for perfume or spirits, the Crocs clog is a functional shape. Bottles can have different dimensions and shapes and still function for storing the contents, whereas a clog shape is foot shaped.

What is a pity about this decision, is that the interaction between design and trademarks is not explained.

I also suspect that this decision is generally too late, in that Crocs are no longer widely worn, and are mostly seen as beach wear. Like all fashion items, there is a limited shelf life. They seem to have mostly been supplanted by Havaianas’ flip-flops, also beach wear that seem to have become ubiquitous a couple of years ago, when, fortuitously, I was in Rio de Janeiro, so could buy for friends and family. Personally, I don’t find flip flops or Crocs comfortable. I suspect that this year beach goers will wear some other type of foot wear.

Arguably, as this pair of iconic footwear is referred to in Israel as Crocs, maybe the name is now a generic term for beach clogs and the trademark for the name should be struck from the register as well, as has happened for words like thermos, aspirin, elevator and escalator.

At the end of the day, the real question is one of policy. Should a successful design be registerable as a design before being available locally (current law), or should designs require world-wide novelty? should Israel adopt a grace period?

Should a design be available for anyone to use after a period? Should iconic shoe designs, such as Doc Martens (which I wore in college 20 years ago, before they became a worldwide trend – making me a fashion leader?), Crocs, flip-flops, etc. be protectable for ever by trademark registrations, or, should people be able to purchase cheaper competitors?

Maybe Israel should adopt a trade-dress register? I am currently reading a book about trade-dress in the US. Trade-dress is a separate type of intellectual property that is related to, but distinct from designs and trademarks. It was sort of recognized via the back door in a 2007 decision relating to a trademark application for Imperial Vodka that was quashed as the get up was a clear imitation of the Absolut Vodka bottle. See http://blog.ipfactor.co.il/2007/05/24/imperial-vodka-trademark-rejected-as-too-similar-to-absolut-vodka/


Maybe Oral Exams for Israel Patent Attorneys Should be Scrapped?

July 31, 2011

After a two-year internship working for a licensed Israel Patent Attorney, a trainee patent attorney in Israel must take a written exam that tests patent drafting skills and an oral exam before a panel of three. The oral exam is supposed to test knowledge of IP Law.

The Exams are held twice a year and there is generally a high failure rate in the oral exam. Failing once or twice due to nerves or lack of preparation is reasonable, but there seems to be a large number of candidates that seem to keep failing.

For the past couple of years I’ve been getting a crop of thank-yous from successful candidates that have found this blog helpful in reviewing the case-law.  I also hear complaints from unsuccessful candidates who feel the system is unfair.

A candidate who knows all the black letter law, the regulations, the Patent Office circulars, the major decisions and recent case-law for patents, plant-patents, trademarks, designs and copyright and who has a fair understanding of US, European and Far East patent law, should get through without any difficulty.

The problem is that hesitating or not knowing some fairly archaic or obscure regulation can result in failure. The system lacks transparency. Different candidates are asked different questions. Firms sending more than one candidate are sometimes surprised by who passes and who fails. As there is no record, there is no appeal.

Because of the close-knit nature of the profession, it frequently happens that a candidate has worked for one or other of the judging panel and a change in judges is required. Different judges will react differently. There appears to be some subjectivity in the procedure.

I note that in the US and in Europe, candidates sit written theory exams. With written exams, particularly short-answers or multiple choice type questions, candidates can be tested more thoroughly on more material. This is how attorneys-at-law are examined.

One could have clear requirements for passing, such as, say, 80% correct answers.

Such a system would be fairer and remove much of the complaints – whether justified or not – from candidates who feel hard done by.


Israel Court rules that ‘Dr Relax’ neither infringes Dr Gav nor Relaxon trademarks

July 5, 2011

Night Sleep Center Plus LTD has marketed beds under the name Dr Relax.

Two other bed manufacturers, Relaxon (Israel) the best Furniture in the World LTD and The Center for Health LTD having trademarks Relaxon and Dr Gav (Gav is Hebrew for back) respectively, sued for both trademark infringement and passing off. 

 In an interesting and well-reasoned ruling, Professor Ofer Groshkopf, a law professor at Tel Aviv University who serves as a Tel Aviv District Court Judge ruled that Dr Relax does not infringe either mark.

Simply put, he considers that there is no likelihood of confusion between the marks, and pointed out that ‘Dr’ is a general indication of medicine and academic research and relax is a general term.

Both words are generic and their combination neither sounds like nor looks like either mark. Since there is not confusing similarity, there is no trademark infringement. Furthermore there  is no passing off.

Judge Grushkopf also noted the somewhat similar image of someone reclining that appears in both Dr Gav and in Dr Relax, but considers the different positioning of the graic element, its generic nature, and the different colour schemes were insufficient to create a likelihood of confusion.  He also rejected a survey performed by the plaintiff as not providing the correct indication of confusing similarity in a purchasing environment.

Judge Grushkopf was impressed by the fact that neither plaintiff sued when the defendant first started using the Dr Relax brand, but only did so some time later following other disputes between the parties. This was seen as undermining the plaintiffs’ claims of inequitable behaviour.

It transpired that when the brand Dr Relax was first used, six years earlier, Night Sleep Center Plus LTD created a confusingly similar catalogue to that used by Relaxon (Israel) the Best Furniture in the World LTD, which is the local representative of Elran, a Canadian company.  Furthermore, evidence was provided that a sales person had indicated to a private investigator that the Dr Relax products were identical.

For each of these separate passing off actions, the Judge awarded statutory damages of NIS 100,000 to Relaxon, but did not consider these ‘sins at birth’ were sufficient justification to prevent the now successful competitor from using the brand 6 years later. 

Judge Grosskopf noted that both complainants had filed oppositions to the Dr Relax trademark application, but indicated that he would not relate to its registerability.

 In an interesting aside, Judge Grosskopf argued the minority opinion in a Supreme Court precedent concerning McDonalds and suggested that he would be inclined to allow a portmanteau mark such as “Mac King” for hamburgers, despite clearly being inspired by Mc Donalds and Burger King. In this case, where neither Dr nor Relax are distinctive in and of themselves, the issue is different.

A final point worthy of note: the Judge started his ruling with a preface discussing the Biblical prohibition of mixtures,  such as wool and linen combinations (shaatnez) and growing vegetables in a vineyard (Klai haKerem). He quoted Leviticus 19:19 and Deuteronomy 22:9-11 and the commentary of Rashi and Nachmanides comments thereon.   After pointing out that there was no Biblical injunction against mixed trademarks he went on to rule that not only did the Heavenly Court have no problem with such marks, but the Terrestial Court didn’t either!

COMMENT

We note that in this ruling Judge Grosskopf is taking a conservative position with regards to trademarks, and is simply looking at likelihood of confusion. There have been various judicial constructions such as dilution that he is ignoring.

The Case: T.A. 9143-11-08 Eliyahu & Sons LTD and Others vs.Night Sleep Center (2000) Plus LTD and Others, before Judge Professor Grushkopf (22 June 2011.)


Ripping Off Rings – Another confused decision by the Israel Court

March 29, 2011

H Stern's ring

H. Stern, a Brazilian jewelry manufacturer with many retail outlets in Israel and an international presence sells a finger ring. The ring is a flat gold band with a diamond encrusted oblong section and the rest of the band being polished to a mirror finish. The band is also decorated with a pentagram or Seal of Solomon on the shiny part on each side of the diamond oblong. 5 pointed stars are also engraved on the inside of the band. The ring is known as the Juliana model.

Aryeh Pozylov, through various companies including Orneal LTD, Nitfaz (a pun on nitfas, i.e. snapped up) and Pozylov Diamonds marketed a somewhat similar but substantially cheaper ring which has Star of David (Magen David, or Hexagram) decorations.  The pentagram is a registered trademark for H. Stern, chosen since Stern means a star.

Stern sued Pozylov invoking a number of causes of action including:

  •  trademark infringement
  • well-known mark infringement
  • passing off
  • copyright infringement
  • unjust enrichment
  • dilution
  •  stealing reputation and confusing the consumer

The Ruling

As to trademark infringement, Judge Pilpel ruled that the pentagram and the hexagram are arguably confusingly similar to look at, but for jewelry, the purchaser is particularly careful. She went on to rule that this is not all that relevant since according to Judge Gronish in the Taam Teva decision, when applying the so-called triple test, the appearance of the mark is of less importance than the sound of the mark when considering the “sight and sound test”, and pentagram sounds different from Magen David, therefore there is no likelihood of confusion(!)

Although the products under consideration are rings in both cases, since H. Stern does not sell via third parties, there is no real likelihood of confusion. Finally, Judge Drora Pilpel applied the fourth part of the triple test, the so-called ‘clear thinking test’, and decided that even though the sound of the mark was different (the ringing of the ring?), since the conceptual idea between Stern’s mark was to imply the maker, using a star (Stern being German for Star) as a maker’s mark, whereas the defendant’s Star of David implies made in Israel, there was no likelihood of confusion.

As to whether the trademark of the pentagram was well-known, Judge Pilpel related to the issue at some length, which is surprising, since she has already decided that there is no trademark infringement. Nevertheless, she decided that it wasn’t, despite the complainants remonstrations to the contrary.

The judge acknowledged that the plaintiff had a reputation for the Juliana design and that it was associated with them to some extent, but did not think that the public would be confused as to the source of the goods since H. Stern only sells rings in their own shops.

The defendant argued that copyright could not be applied since the ring could and should have been protected as a design. The judge dismissed this in a strange line of reasoning that I had difficulty following. Essentially, she argued that this was true of mass-produced machine manufactured objects but not of hand-made goods, and although clothing could and should be protected as designs and were not protected by copyright, jewelry could be.  She went on to rule that the combination of the shiny band, diamond encrusted oblong and stars were protected by copyright(!)

 Having recognized copyright in the combination of the three design elements, the judge went on to rule that the fact that one ring had hexagrams and the other pentagrams were not significant enough to alter the fact that the defendants ring was a blatant copy.

Since she had found copyright infringement, the judge considered the question of unjust enrichment irrelevant.

As to dilution and stealing reputation, the court threw this out for lack of proof of damage to H. Stern.

In conclusion, the judge found statutory damages of NIS 20,000 under the Copyright Ordinance of 1911 that was in force when the case was filed, and in the alternative, found that the plaintiff would be entitled to profits made by the defendant from the infringing rings. The judge also awarded NIS 40,000 costs.

Finally, the judge ordered the unsold stock of rings and the molds to be destroyed and for the defendant to cease advertising or selling these rings.

T.A.  1253/05 H. Stern Brazil and H. Stern Israel vs. Ornil and Pozylov, 13 March 2011 by Judge Drora Pilpel

Comments

Had the plaintiff filed a design registration they could have got an injunction and enforced their rights more simply and quickly.

The honorable judge apparently has little idea of how to apply the so-called triple test. The test of the sound and appearance of a trademark has relevance for a word mark, where goods are chosen by sound. The fact that Pentagram and Magen David sound different is totally irrelevant. The only question is whether the pentagram is recognizable as a trademark when applied to the ring, and whether the hexagram is confusingly similar. If the mark is seen as part of the design or the two marks are considered as distinctive in context, then there is no trademark infringement. If, however, the marks are confusingly similar, then there is trademark infringement. The fact that the word hexagram has two identical syllables as pentagram is totally irrelevant.

I suppose it would be churlish to point out that neither of Stern’s registered trademarks is actually for a single pentagram.

Stern’s Israel trademark registration number 170325 is for a five pointed star, not for a pentagram at all. The stars on the inside of the band are a registered trademark, the pentagram on the outside with a diamond in it, is not.

Does Stern use the pentagram on all their jewelry? Is the symbol widely used by them on the reverse of pendants, bracelets and rings? If so, it may fairly be considered as an unregistered trademark. Otherwise, it would probably be considered a design feature by the purchaser or the receiver of the gift. Only if it can fairly be considered as being a trademark at all, is the issue of whether the hexagram mark is confusingly similar.

In this regard, the hallmark for Britannia grade silver (95.84%) is a leopard head or a lion head erased, or, since 1999, with the number 958. The UK sterling silver hallmark is a lion passant. Sterling silver in Israel is indicated by the number 925, and Russian Silver by the number 880. These numbers and hallmarks are indicative of the relevant degree of similarity for trademarks in this field. I am not a judge. The right honorable Ms Pilpel is. She should, however, apply her judgment to relevant issues.

As to the issue of Stern only selling via their retail outlets, the point has some relevance, but would the receiver of a gift know where it was bought? Is jewelry never sold second-hand? The clear thinking test was anything but.

The judge really meant to say was that the purchaser would consider the Magen David a design element, not an indication of the source fo the goods. Therefore there was no trademark infringement.

No design was registered, and therefore there was no infringement.

As to copyright, in Israel although the design law which dates back to the British Mandate is sorely in need of revising, there are no unregistered design rights. Any mass-produced article is protectable as a registered design and is protectable for up to 15 years. By allowing copyright protection for such goods, presumably for life of the creator + 50 years, why would anyone register designs?

Since H Stern’s ring was designed for mass production, there is no copyright. That said, having wrongly established copyright the judge was correct in seeing it infringed by the defendant’s ring.

I am also unimpressed with the judge seeing copyright in the combination of three design elements, since H. Stern had argued that the pentagram was a trademark and not a design element. This should have estoppeled them from claiming it was part of the design, and with just the polished band and diamond oblong bit, Stern’s ring would not be sufficiently distinctive to attain copyright protection even if copyright applied, which in this case, under Israeli law, should not.  

It is a shame that the judge found it superfluous to rule on unjust enrichment because one assumes that the finding of copyright infringement would not stand up in court. Following the high court ruling in the A.Sh.I.R. case which is good legal precedent (even if arguably a poor decision), there are grounds to apply the Law of Unjust Enrichment where designs were not registered, if there is evidence of bad faith. In this case, I am not sure that there are grounds,  since I see this as an unregistered design in the public domain, nevertheless, think the judge could have been more thorough.


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