Arab Lorry with Fake Sports Shoes Stopped At Border Crossing

October 22, 2014

fakes

An East Jerusalem Arab lorry driver carrying 5000 pairs of Nike and Adidas sports shoes was stopped at the Al Zaim border crossing (near Maaleh Adumim, East of Jerusalem) yesterday. The shoes and the paperwork were fake. See here and here. It transpires that the fakes were manufactured in Hebron and the attempt to enter Jerusalem from Maaleh Adumim was to give the impression that the shoes were made in the industrial park at Mishor Adumim.

The lorry driver was stopped as the result of information obtained by Customs and Excise.

Hebron is a hub of fake goods manufacturing. In the past, fakes originating there have included electrical fittings, sunscreen, baby food and CDs and DVDs. Another popular scam is to steal new Israeli cars, drive them to Hebron, dismantle them and then feed the parts into car repair garages. Aparently parts are sometimes stolen to order.


Astrologist Successfully Sued for Copyright Infringement of New Card Designs – She didn’t see it coming

October 20, 2014

Astrological cards

Zur-Klein is  an astrologist. Tal Rinkov is an artist who created 37 cards for the Astrologist in accordance with an agreement between them which, inter alia, related to the copyright ownership.  (Ms Rinkov was also the kindergarten teacher of Ms Zur Klein’s daughter, which is how they met (some would say it was fate).

Ms Zur-Klein ordered 40 card designs for a payment  of 5000 Shekels.  The cards were to be mass-produced and distributed with an instruction manual and a teaching movie. The parties entered an agreement on 5 September 2014 that established several principles:

  1. The original artwork and the copyright of the artwork was to remain that of the artist.
  2. The artist would not be entitled to royalties for packs of cards and other goods itemized in the agreement
  3. The Astrologist would only be entitled to use the images on specific listed items
  4. All internet images  would be reproduced at a low resolution only
  5. All pictures would carry Ms Rinkov,’s signature, her name, website and contact details

Ms Rinkov was hospitalized in November of that year and only delivered 37 designs, and the last three were completed by another artist. (For reasons not apparent, the medium missed this eventuality). The images were transferred to a graphic artist who made various graphical changes to make the images more suitable for printing.

After various commercial entities expressed interest in the images, Ms Zur-Klein contacted Ms Rinkov to try to negotiate a transfer of copyright but due to a difference of opinion, no agreement to transfer the copyright issued.

Ms Zur-Klein  publicized the images in various internet sites including her own and other people’s, in her blog, Facebook page and elsewhere.  In all reproductions of the cards on the Internet, the artist’s signature appeared, but her name and contact details were not given. Indeed, on some websites, Ms Zur-Klein presented herself as the creator of the card (the term יוצרת הקלפים is used, which is both creator and manufacturer so the term is somewhat ambiguous). Furthermore, Ms Zur-Klein allowed other astrologists to use the designs without giving any credit to Ms Rinkov. There was also a newspaper article featuringMs Zur-Klein that was illustrated with one of the card designs that was also not credited.

On 6 June 2012, Ms Rinkov sent Ms Zur Klein a Cease & Desist letter.

The basis of the ensuing court case was the agreement signed by the parties. It is translated below:

Tal prepares for Carni 39 pictures, which together with the picture already executed, provides a set of 40 pictures for cards and other purposes – payment 5000 Shekels.

Apart from the payment for the work, there will be no other royalties for selling packs of cards, books, CDs and other astrological items depicting the images of Tal Rinkov.

The astrological products that Karni is allowed to use the pictures on are: packs of cards, books, audio CDs, video for watching, a banner for a website, business cards and other articles on authorization from the creator. Karni may not manufacture or distribute artistic works such as pictures, mugs, key-rings and the like.

All material displayed on the Internet are at low pixel count.

The name, website and contact details of Tal Rinkov will appear on all products, including future products.

The pictures on the cards and elsewhere will include the artist’s signature.

The original artwork and copyright remains the exclusive property of Tal Rinkov.

Pictures and associated artistic products (that are not astrological) will be produced and distributed exclusively by Tal Rinkov.

Any deal that Karni creates for Tal will generate a 20% commission for Karni.

When Tal sells a product (book, CD, cards and the like) she will profit 20%. Tal will receive a present of a pack of cards.

 According to the plaintiff, the defendant wrote the contract after the negotiations. The defendant claims, however, that the contract was the plaintiff’s idea, and that the plaintiff had written most of the clauses to the detriment of the defendant, such as her not getting benefit from sale of the cards. However, the defendant agreed that she had printed out the agreement.

The defendant claimed that she was entitled to the status of co-creator in the cards as although Ms Rinkov executed the artwork, it was to her, Ms Zur Klein’s specification regarding the symbolism, colors and charms. The plaintiff considered this a change of direction in the defence and objected to it on principle.  The judge ruled that the claim that the defendant hand guided the artist appears in clause 31 of the defence, but is more a factual than a legal defence and so she was willing to contemplate it. The plaintiff countered that Carni Zur-Klein had not, in fact, instructed her, but that she herself had researched the elements and colours.  Both sides supported their contentions with emails and other evidence. It does seem that the astrologer gave guidelines for the design, but these are by way of astrological knowledge rather than artistic input.

RULING

In this instance, Judge Lemelstrich  did not consider that under section 1 of the Copyright Law 2007, the two parties could be considered co-owners of a joint creation. Section 64 creates a rebuttable assumption that the artist is the creator and each card design was signed by Ms Ronkov as the artist.

Section 5 of the Copyright Law notes that the idea, way to implement and facts are not copyright protected, only the  artwork itself is. According to Section 35a of the Copyright Law, a work for hire is the property of the artist in the first instance, unless otherwise agreed implicitly or explicitly. In this instance, both the Copyright Law and the contract  support the artist as owner of the copyright.

In the packs of cards, Ms Rinkov is acknowledged as the artist and Ms Zur-Klein is credited as an astrologer.

The parties agree that Ms Zur-Klein conceived the project, but the copyright in the images remain the property of Ms Rinkov.

Ms Zur-Klein apparently sold some 80 packs at 190 Shekels a pack.

the main issue sees to be the internet reproductions which do not provide the details of Ms Zur-Klein.

The ruling now relates to various astrological websites. Since I find this subject matter morally, ethically and religiously abhorrent, I am refraining from reproducing the links.

The important thing is that Judge Lemelstrich considers that the artist’s moral and financial rights were compromised in numerous infringements in various websites and internet campaigns. That said, the pictures on the Internet were not reproduced at a quality to enable them to be printed and used as playing quality cards.

The changes to the designs for subsequent printing by a graphic artist under the direction of Ms Zur-Klein were minor. These were considered insufficient to create a change to the copyright, in that the original work could not be considered defaced or the artist’s moral rights compromised. Nor did the amendments constitute a copyright protectable creation.

Ms Rinkov claimed 100,000 Shekels in statutory damages for copyright infringement and a further 100,000 Shekels for moral rights infringement, particularly noting the long and arduous legal proceedings and the multiple infringements.

Judge Lemelstrich noted that despite entering a clear contractual relationship to the contrary, Ms Zur-Klein acted as if the creations were hers to do what she liked with. She ruled 35,000 Shekels damages for infringing the moral rights, 15000 Shekels for infringing the material rights and a further 5000 Shekels for an article published after the Cease and Desist letter.

Judge Lemelstrich of the Haifa District Court ruled a permanent injunction against Ms Zur-Klein, her delegates, substitutes and others from performing any action that violates the September 2011 agreement or other rights as per the statement of case.

Ms Zur Klein will compensate Ms Rinkov 55,000 Shekels for copyright infringement, an also will pay 15000 Shekels legal fees. The money will be paid within 30 days.

Civil Ruling 15824-10-12 Tal Rinkov vs. Carni Zur-Klein, Haifa Court before Judge R. Lemelstrich, Ruling 13 October 2014

 

 


Israel Patent revived over seven years after it lapsed

October 16, 2014

carry on screaming   living dead

Israel Patent Number 139892 “INNER WORKINGS FOR A WATER TREATMENT UNIT” to Yigal Tsabri was allowed on 11 July 2006, but the first renewal was never paid. Consequently as of 11 April 2007, the end of the six month grace period, it was considered as having lapsed as of 11 October 2006, and in the May 2007 a notice of the patent having lapsed published.

A mere seven years later on 21 May 2015, Yigal Tsabri, the patentee requested the patent be restored. In the request he detailed that around the time the patent issued his financial situation deteriorated and the connection between him and his agent of record was broken. The agent of record did not inform him of the requirement to pay the renewal fee and instead, opened a file with the government collection agency (Hozlap). On 19 December 2011 a bankruptcy order issued but the receiver had agreed to allow attempts to restore the patent.

On 25 May 2014 the Deputy Commissioner noted the long time that had passed and expressed concern that the case could not be considered reasonable. Although the applicant had described difficult circumstances he had not presented any evidence of having done anything to keep the patent alive. The applicant for restoration had not detailed when he learned that the patent had lapsed and why he’d needed a District Court authorization to file a request for restoration.

In the circumstances the Deputy Commissioner gave the Applicant an opportunity to appear before her on 22 June 2014. During this hearing it transpired that the lapsed patent was a source of income as it was being licensed! – this despite the fact the license was not registered with the Patent Office, the patent had lapsed as of October 2006 and apparently the licensee was unaware that the patent had lapsed! The income from the patent license was being used to pay off the bankruptcy debts.

The patentee declared that he’d learned about the patent lapsing about eight months prior to the request for restoration being filed. As soon as he’d learned of it lapsing he’d turned to the manager of the bankrupt estate (presumably the receiver – MF) and had got District Court Authorization to file the request for restoration as the fee for so doing came out of the bankruptcy estate.

The Applicant provided reasons from May 2006 until today, for not having been able to clarify the status of the patent which provides grounds for leniency, despite the patent being to some extent abandoned. These reasons were not published in the decision as they are of a personal nature.

The Court had apparently provided a public defender to represent the patentee, but he had failed to show up for the hearing so the patentee had represented himself.

The Deputy Commissioner ruled that the patent could be restored on payment of the various fees, but this decision publishes for opposition purposes. As the patentee is not represented, the decision is sent to him directly and also to the public attorney’s office.

Decision re restoration of 139892 to Yigal Tsabri. Ruling by Deputy Commissioner Ms Jacqueline Bracha, 9 September 2014.

COMMENTS

It does seem nice that a week and a half before Rosh Hashana, the Deputy Commissioner is showing clemency לפני משורת הדין.

However, 6 years is indeed a long time. It appears from the decision that the receiver had authorized the reinstatement back in 19 December 2011. From a first reading I assumed that this is one of the things that Ms Bracha wanted clarifying and is not actually the case. It also appears as if the patent attorneys had instituted the bankruptcy proceedings. Whilst this is certainly their right, I would be surprised if this is indeed the case. I also find it difficult to imagine that the agent of record didn’t forward the certificate. It seems more likely that they would warn regarding the first renewal and request all bills settled first.

The requirement for clarifying whether or not a patent is in force is to enter the Israel Patent Office website. The details are on line. The staff at the patent office are also fairly helpful over the phone. Indeed, if someone had come in to my office off the street wanting to know if a patent was in force, I would have told them , and suspect that this is true of many other patent offices.

The licensee has been paying money without minimal due diligence to check if there is a patent that is in force. This is surprising but not unbelievable.

Clients are odd things. I had a client who drafted his own application by copying someone else’s issued patent which he cited in the background. The basis of his claim to a patent was that he’d made the device smaller. Not surprisingly, the prior art was cited against him and that was when he came to me. I actually managed to make fairly drastic rewrites based on the figures and to obtain a patent. That inventor made the conscious decision to not to bother paying the first renewal fee since he was licensing the patent anyway!

I also had a Russian inventor who came to me with a portfolio of six patent applications, three of which had lapsed. He’d drafted the applications himself, and I suspect he’d written them in Russian and used a computer to translate the specification. I am always happy to take on a challenge, and managed to restore two of the cases that had lapsed within less than 12 months. I extensively rewrote the specifications without adding new material and got five of the six cases to issue. The earliest application had lapsed over three years earlier and I was unable to revive it, despite the applicant providing some evidence of periodic hospitalization and problems with a previous agent of record. He was unable to adequately demonstrate to the satisfaction of the Deputy Commissioner that he’d taken action promptly on first learning that the patent had lapsed, since I was taken on over a year later. It was a shame, since the patent was for a significant invention. The client wanted to appeal to the Courts, but did not instruct me on time. The Deputy Commissioner’s main concern was that third parties could have learned of the first application from a corresponding US case (published and allowed, however the issue fees were never paid). The rights of such third parties practicing the invention would have been compromised if the patent application was reinstated. I had actually tried to preempt this by offering an unconditional free license to any such third parties in the request for reinstatement itself. In the ruling refusing to all reinstatement, the issue of prejudicing unknown third parties and the need to strike a balance between the applicant’s rights and theirs was extensively discussed. My suggestion of an unconditional license wasn’t. Thisraised grounds for an Appeal to the Court, but the client didn’t instruct me on time and didn’t pay the fees. The main difference between that case and this is (a) that the Russian case was a lapsed application and this is a lapsed patent, and (b) specific health issues of each inventor, where the details of this case have not published. I jumped through all the legal hoops and related to every precedent to no avail. Presumably the patentee in this case did not, as he was unrepresented. What is interesting however, is that in the present case there is clearly a third-party who has not needed to pay licensing fees and was being defrauded, albeit possibly unintentionally. Now, by reinstating the patent, this actual and real licensee will have to continue paying fees hereinafter, possibly until November 2000. Go figure.

This ruling will publish for appeal purposes. The law granting the patent office discretion to revive long dead patents is clear. The question is whether the discretion was used wisely and whether the serious of events described by the patentee to justify the revival were true. We do not know what they are. The decision as published is heavily censored to protect the patentee’s privacy. Unless third parties can access the details, how can they challenge them? Can the former agents of record produce evidence against their ex-client who apparently did not settle his bills, to show that he did receive details of the deadline for renewal? Would this be a considered unethical? What about the hapless licensee who has being paying royalties to use a lapsed patent? It is unlikely that someone not involved would oppose a case with virtually no chance of recovering costs as the patentee is apparently bankrupt.


Arcos and Arcosteel Cross Kitchen Knives Again

October 6, 2014
Arcos knife

Arcos knife

Arcosteel knife

Arcosteel knife

Millenium Marketing Intertrade (1999) LTD. filed Israel Trademark No. 239054 for the word mark  “Arcosteel”.

Not surprising, considering their earlier opposition for a stylized mark, Arcos Hermano S.A. filed an opposition to this mark.

The Opposers requested that a hearing be delayed since there were four parallel proceedings which should be amalgamated and heard in one go. They claimed that their witness, a Mr Rosenfeld could not be able for the hearing as scheduled due to prior commitments.

The other three cases concern TM 241329 “Arcos” in class 21 and 247988 “Arcos” in classes 8, 21 and 35, opposed in class 21, and TM 248994 for Arcosteel in classes 7 and 11.

The present word mark for Arcosteel was filed in classes 8, 21 and 35, but after cutlery in class 8 was amended to recite cutlery excluding Chef’s knives and professional knives, the opposition to class 8 was dropped.

Since Opposer has no longer objections re classes 8 and 35, the Deputy Commissioner, Ms Jacqueline Bracha has ruled that the mark be allowed to register in those classes.

As to combining the cases, since there are a further two applications – 252214 and 256226 that have not been opposed yet, she did not see fit to combine those cases.

Regulation 520 authorizes the courts to combine similar actions so long as there are similar legal questions. Since the oppositions concerning TMs 239054 and 241329 relate to similar questions of interpretation of the trademark agreement between the parties, she ruled that these should be combined.

TM 247988 also relates to the interpretation of the agreement but additionally relates to likelihood of confusion. Nevertheless, she saw fit to combine that case as well.   However, TM 248994 concerns classes 7 and 11 and is beyond the scope of the agreement, so she did not see fit to combine that case in the current proceedings.

As the request to combine the cases was filed late and the opposing party had consequently incurred expenses, she ruled costs of 600 Shekels + 6000 Shekels legal fees against Arcos Hermanos.


Of patents and prejudice: IP and innovation at work

October 5, 2014

Yanitzky Ravid book  jiplp

My peer-reviewed book review of Intellectual Property at the Workplace: Theoretical and Comparative Perspectives by Dr Shlomit Yanisky-Ravid has now published in the Journal of Intellectual Property Law and Practice.

In the review I have tried to give a fair and comprehensive overview of the contents and of the author’s prescription for improving the system. I then have commented somewhat extensively on her thesis.

As I have discovered over the years since I studied Labour Law under Shlomit, I have a very different philosophy of life and political orientation than she does.  Nevertheless, I note that she is motivated by Tickun Olam and is trying to right what she sees as wrong. I applaud this.

Although I disagree with most of her conclusions, I consider the book an enjoyable and thought provoking read and a worthwhile addition to any Israeli practitioner’s bookshelf.

The paper can be found in text form here and as a PDF in the format it will shortly appear in the Journal here.

Intellectual Property at the Workplace: Theoretical and Comparative Perspectives Shlomit Yanisky-Ravid Nevo and Ono, 2013, 549 pp. Price: ILS 480 (approx. £ 82)

I am reproducing the report (with permission in full below. I am interested in any comments from readers and am sure Dr Shlomit Yanisky-Ravid will be as well.

Of patents and prejudice: IP and innovation at work
Intellectual Property at the Workplace: Theoretical and Comparative Perspectives Shlomit Yanisky-Ravid Nevo and Ono, 2013, 549 pp. Price: ILS 480 (approx. £ 82)

The book explains the current state of IP law in Israel with respect to employer–employee rights, and compares it primarily to other regimes that use the Anglo-American common law system, but also to the Continental civil law systems as practised in Germany and France.

The book opens with an overview of different rationales for IP law, including:

  1. the law and economics argument (Heller—the tragedy of the commons);

  2. the benefit of labour approach (Locke and Marx);

  3. the personhood theory (Radin and Marx);

  4. the wealth distribution model (Rawls).

The book analyses the fact that employee-invented patents are owned by the employer, and not the employee. The author reasons that patents for inventions should be owned by the employee as the one who labours and whose personhood is reflected in the invention, since this leads to a more equitable distribution of wealth. Thus all the models, apart from the law and economics approach, lead to the conclusion that the employee should own the rights to a patent on an invention based on his labour.

The author sees the employer–employee relationship as stacked against the employee. She eloquently makes a case for changing the law through legislation, but also attempts to show how the law, as currently formulated, could be creatively interpreted to assign rights to the employee. She would like cogent legislation to prevent employees signing away their rights to future IP they create. Such assignments should only be made after creation. Companies are expected to be compensated for their investment.

There is an interesting chapter on women inventors, or rather their scarcity, and the underlying causes. This is not totally tangential to the discussion, since it indicates a similar flaw in the current legal system and the resultant division of ownership. The author posits that, as with IP law, the inherent bias causes an inequitable division of resources that further entrenches inequalities. She notes that over the five-year period from 2000 to 2005, only 1.9 per cent of patentees receiving Israel patents were women, 30 per cent were men and the rest were companies. With regard to employee inventions, 13 per cent of named inventors were women and 87 per cent were men. This is understood to imply that women more often invent as part of teams, but are rarely at the narrow apex of the pyramid. The author cheerfully notes that her analysis does not directly prove the source of the discrimination. Nevertheless, a feminist approach to IP rights is presented, the book purporting to address the legal and other structures that exclude women from owning IP rights.

The author considers that property rights per se have been under-analysed from a gender perspective, and that the traditional patriarchal society has defined property in a way that favours men. The situation in IP rights, in general, and patents in particular, is seen as an extreme example of this built-in discrimination. Citing McKinnon (Catharine A. MacKinnon, Feminism Unmodified, Discourses on Life and Law, 1987 and Towards a Femist theory of the State, 1989), Gilligan (K. Gilligan, In a different voice, the theory, psychology and development of the woman, Hebrew Translation, 1995) and Fisk (Catherine L. Fisk, Removing the ‘Fuel of Interest’ from the ‘Fire of Genius’: Law and the Employee-Inventor, 1830–1930 65 University of Chicago Law Review 1127 (1998)), the author reaches the radical conclusion that the fact that women are not often named as inventors is proof that the legal system, the definition of patentable subject matter and the concept of ownership inherent in the concept of intellectual property as property all discriminate against women. The biases in patent law that result in this discrimination are not apparent, but they would not be expected to be discernible since they are so deeply entrenched. Bias is not, however, purely a masculine aspect of IP law. Other sectors of society are under-represented amongst inventors and owners of intellectual property and these similarly show that the system is biased. Affirmative action is proposed. Specifically, there should be a minimum quota of female examiners in the Israel Patent Office and in government entities. Forcing commercial companies to employ women in R&D is also suggested, but not stressed. The author toys with the idea of widening the definition of inventor to include research assistants, lab workers and junior staff.

The book notes that academics own the copyright in their papers and books, despite being employed by universities, and also notes that university inventors are often awarded 30–50 per cent of the royalties: universities seem to thrive under this relationship. This is seen as a model to be emulated by the medical and industrial sectors.

Returning to general service inventions, the author proposes that the names of employee-inventors of service inventions should be disclosed by law and that this should be done immediately. Their moral right to be named should be cogent. Other moral rights may be weaker. She suggests that where employees assign their rights to companies, it should be ex ante, and that clauses in service contracts that call for assigning any and all future inventions to the company should be illegal.

Apart from cases where employees are employed to invent or where a company has invested capital, employees should be under no obligation to assign their rights. Where they do, they are entitled to proper compensation, thereby increasing the size of the cake. The standard tests of who is an employer and who is to be considered an employee, as far as service inventions is concerned, should take into account the developments in labour law but it will be noted that, in labour law, these provide rights to the employee, whereas in IP law these take rights away.

The author promotes a model that attempts to find a golden mean among the different theoretical models justifying IP, noting that the current model is almost exclusively economy-based, apart from some moral rights in continental countries. In her view, the first owner should always be the inventor or creator. The right to be acknowledged as such is cogent and cannot be waived. Where a work product is assigned to the company, the name of the employee inventor must remain a matter of record. The consideration for so doing is only to be negotiated at the time that an invention is transferred to the employer, and may even be subsequently negotiated if conditions change. The consideration is to be a percentage royalty minus costs, similar to that adopted by academia (except Germany).

The reason why such a model is not adopted anywhere is that IP laws are always uni-dimensional, being based on a single model, the economic one. In Israel, there has been no deep conversation on the subject, and the current model is uni-dimensional, reflecting economic considerations only. The model suggests new legislation, and in the meantime, creative interpretation, to address this issue.

The author argues that the current Israel law can be interpreted as indicating that any medical invention by a medical doctor is owned by the employer. She argues that medical doctors, excluding lab workers, for example, are not employed to invent, but rather to heal. According to the model, their inventions are not generally connected to the hospital or health fund, and the doctor should be able to develop his or her idea independently and not be under obligation to assign it to his or her employer. Similarly, technicians and other employees of hi-tech firms, excluding R&D personnel, are not employed to invent, and any inventions should be theirs to license or assign to the company only if sufficiently compensated for doing so.

The author then lists the principle of her model for interpreting the current Israeli law, and preferably for amending it through legislation. Not to be accused of unjust modesty, she further proposes that it be used as the basis for a new international convention to regulate the field.

  1. Employee creations and inventions are the employees’. Any assignment to the employer will be ex ante and case-specific, and not in an employment contract apart from exceptional cases where part of the job description is to invent or create. There will be no obligation to assign where: (a) the employer’s contribution is not significant, such as where the use of the employer’s resources is incidental; (b) the employee’s contribution to the product is significant; or (c) the creation is worthless. The guiding principle is that the employee’s inventions will belong to the employee.

  2. Assignments to the employer are to be made only after the product is developed and where the employer has a genuine interest due to having initiated the product, supervised it, invested in it, contributed to it and used the employer’s own resources. The assignment will be in accordance with cogent law and in writing. If non-economic considerations (theory of person, product of labour and wealth distribution) outweigh economic ones, the assignment will be void. Certain categories of workers, such as researchers, may be considered employed to invent: in such cases, products will be assigned to the employer. Such assignments will anyway require due consideration. Only a priori obligations to assign in the employment or other contract that relate to employees in a narrow closed list, such as those employed to invent, should be upheld. These should be specific exceptions to the general rule that ownership belongs to the employee.

  3. Consideration for assigning service inventions to employer should be real and concrete, possibly a percentage such as that adopted by universities (40 per cent). If either party is unhappy with the percentage, they should have access to courts. There should be a minimal compensation to the employee that is cogent, which cannot be overridden by contact law.

  4. The inventor or creator has the right to be acknowledged as such. Authorship is not transferable. Other moral rights are considered less relevant. To the extent that they are developed from time to time, they may be transferred, but the employee can always rescind the transfer. As far as patents are concerned, the inventor has to sign forms to the effect that he is the inventor and the inventors and their details should be noted in the official record. Failure to do so may invalidate the patent.

  5. After the end of the employer–employee relationship, the employee can develop the invention. However, the previous employer is entitled to claim a reimbursement for the use of resources during the employment period.

  6. No transfers or other arrangements prior to the creation or invention will be upheld.

  7. The law is to be cogent and cannot be changed to the detriment of the employee.

The original intent was to transfer all rights to the employee but, after further deliberation and discussion, a more moderate model is proposed, as outlined above, for consideration by employers, employees, legal representatives and the judiciary in Israel and elsewhere.

I hope that the fact that the ‘Introduction and Overview’ is also in English implies that the book will eventually be republished in English, perhaps in a more universal rather than Israel-focused form. This will open the discussion to a wider audience.

The book is a thick hardback that looks impressive on the bookshelf. As the subject matter covered comes up fairly frequently in consultations with inventors and employers, and since the law is different in different jurisdictions, I suspect I will be consulting it frequently. In Israel, it seems that it is fast becoming a core reference in this key area.

The Paris Convention of 20 March 1883, last amended on 28 September 1979, seems to have been missed by the author. Article 4ter of this Convention states categorically: ‘The inventor shall have the right to be mentioned as such in the patent.’

I don’t know why the application form used by the Israel Patent Office does not require mentioning the name of the inventor of patent applications by companies that are not Patent Cooperation Treaty National Phase entries, but I don’t believe that forcing it to will make much difference to anyone, since virtually all employee inventions filed in Israel are also filed in the USA, where the names of the inventors are always mentioned. The information is easily accessible.

As the percentage of women inventors of company inventions is more than double the number of women inventors on applications filed by the inventors themselves, the argument that companies discriminate against women inventors is untenable. The author proposes affirmative action in appointing female examiners, whilst noting that, in 2005, 18 out of 32 Israel examiners, ie 56 per cent were women. I do not see any correlation between the gender ratio of examiners and the gender ratio of inventors. I suggest that women are more attracted to becoming civil servants, such as examiners and to working for Tech Transfer Companies of Universities rather than in private IP practice, since such work has more regular hours, better job security and better social conditions, albeit lower salaries. I think this is also an attraction of university tenure. Inventing is very different from providing IP services, whether as an examiner or in private practice.

The data on Israel patents which are presented in this book are nearly a decade out-of-date, but there is no attempt to see if the percentage of women inventors has changed in the interim. Nor has the author sought to determine whether the male–female divide in applications by Israelis and Israeli companies differs significantly from that in applications filed from abroad, but the country of applicant is on the form. The names of inventors in US applications are always given and readily available. This data were not examined. The theory that forcing companies to name inventors will somehow solve a problem could have been tested but wasn’t. The author does not to try to collect evidence, since it is not needed to show what she considers to be self-evident.

There is no attempt to compare the percentages of women inventors in different market sectors, or to correlate this with other countries. This is a shame, as the information is readily available on the Internet, and this is essential to drawing meaningful conclusions. There are companies such as Intel Israel, with women in senior management. It might be worth looking into whether such companies show different statistics than companies managed by men.

Salaries in hi-tech companies are generally higher than in other industries. Workers are regularly issued with stock options and sometimes offered 13th month salaries and other large bonuses. This can be seen as sharing the pie. In general, the raison d’être for companies is to create profit for their owners. Patent law serves an economic purpose. Companies provide inventors with bonuses and incentives to encourage creativity. They generally acknowledge the inventors unless there is a reason not to. The author has made no attempt to understand why some companies do not list the inventors’ names. If it made economic sense for companies to reward inventors more generously, then one suggests that, generally, companies would do so of their own volition. If this does not happen, there should be an attempt to analyse the underlying reasons.

Publicly traded companies allow anyone with capital to invest and share the profits and risks taken by the company. The model is an economic one. IP law is an economic development. The other justifications were not significant in the historic development of IP.

There is an implicit assumption that the model developed by Israeli universities would work in industry. This is not the case. Universities are non-profit organizations that are supported by public funding and academic researchers are employed to create knowledge. University employees are poorly paid compared to their industrial counterparts. However, they enjoy the benefit of tenure; they have the freedom to do what they like with their time. Promotion requires publishing papers, as per the old adage ‘publish or perish’. I consider that such papers should be owned by the educational establishment. The author has the moral right to have his name mentioned, but no more than that. I don’t think academic papers generally generate income for anyone other than publishers. Many non-scientific researchers do not have skills that are marketable outside the ivory tower. Applied scientists and engineers do. The academic model of royalty division is designed to keep highly employable scientists in academia and not industry. Industrial companies are profit-centred. They take risk in developing ideas, and will only do so if they can profit from doing so. If the inventor can take his or her invention elsewhere, and the company will simply be compensated for expenses incurred, it will not invest in research. Israel is the home of R&D facilities for many large international companies. If the local rules were different from those elsewhere in the world, these R&D facilities would fold.

Without cheaper energy, materials or labour, Israeli manufacturing can only compete with products from abroad if they have first-mover advantage and patent protection. The primary reason why I advise Israeli corporate clients to file patent applications in Israel is to prevent disgruntled employees from competing with them. One invests in patent applications long before one knows if a patent will be issued and if it will have commercial value. Companies consider taking this risk as long as the patent will be theirs. Applying Dr Shlomit-Yanisky Ravid’s model would probably wipe out Israeli industry.

For years, the USA considered international standardization that the rest of the world should adopt US practices. In the America Invents Act (AIA) the USA recently conformed its laws to those of the rest of the world, and now allows companies to apply for patents. The USA was big and powerful enough to do things differently for over 200 years, but one no longer has to file in the name of the inventor and then assign the application. Why should Israel adopt a system that even the USA has abandoned?

Israeli economist and Nobel Prize Laureate Professor Oman recently stated that he finds socialism attractive. His only problem with it is that it doesn’t work. Half the population of the world lived under Marxist regimes. The experiment was tried and failed in Russia, and has been evolved by the Chinese into a highly capitalistic system. Israelis wanting a fairer and more equitable division of resources are invited to join one of the few remaining non-privatized kibbutzim.

Dr Yanisky-Ravid’s assumption that a fairer distribution of profits between the employer and employee will increase the size of the pie is not based on any coherent logic. The current corporate patent system may not be perfect, but technology is advancing. Companies invest in new products and quality of life increases for all.


Israel Patent Office to Offer International Search Reports For US filed PCT Applications

October 5, 2014

offshoring

This is the English language version of a press release by the USPTO and the ILPO.

IL and USA Implement Patent Cooperation Arrangement

The Israel Patent Office (ILPO) and the United States Patent and Trademark Office (USPTO) have entered into an arrangement in which ILPO will act as an available International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA) under the Patent Cooperation Treaty (PCT) for certain international applications filed with the USPTO as a Receiving Office provided that the applications are submitted in the English language and the ILPO is chosen as a competent authority by the applicants of said applications.

The following restrictions apply:  The ILPO will not act as an ISA for: (1) more than 75 applications per fiscal quarter; and (2) applications with one or more claims directed to the field of business methods as determined through classification in G06Q of the International Patent Classification. 

For cited documents in the International Search Report, the ILPO intends to furnish the applicants with copies of the documents upon request and on payment. The arrangement goes into effect on October 1, 2014.

This arrangement will allow US PCT applicants additional flexibility to choose a given international authority based on the technology disclosed in the international application, speed of services provided and cost of obtaining searches and examination of international applications.

By entering this arrangement, the USPTO validates the quality of search provided by the ILPO and enables applicants using the ILPO as their ISA with services as are available when selecting other ISAs.

Using the ILPO as the ISA/IPEA will also allow applicants to avail themselves of procedural advantages available under the Patent Prosecution Highway (PPH) program. Under the PPH agreement between the ILPO and the USPTO, a favorable opinion from the ILPO acting as an ISA/IPEA on novelty, inventive step, and industrial applicability of a PCT application will permit an applicant to expedite prosecution of a corresponding U.S. or IL application.

Asa Kling Director of the Israel Patent Office: “This is a significant stepping-stone for the ILPO. We look forward to implementing this arrangement and see it as an important enhancement in the long-standing bilateral cooperation between our offices. I am sure US applicants will appreciate the value in having another quality and time efficient option for designation of PCT ISA/IPEA operations” said, in his remarks.

Michelle K. Lee, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO: “The collaboration between the USPTO and ILPO will benefit US patent applicants under the Patent Cooperation Treaty as it will provide additional search and preliminary examination options at a competitive cost.”

MIchael Factor, opinionated Blogger: Israeli applicants have long been able to have their PCT applications examined by the USPTO. Now that the ILPO is an authorized International Search Authority, this development seems sensible and fair. In order to become an International Search Authority, the ILPO had to employ at least 100 examiners. There is not enough work for them to do as evidenced by the shrinking workload and shorter pendencies in the 2013 Report, and we are now receiving Notices Prior to Examination for cases first filed in Israel within 9 or 10 months of filing, before the Paris Deadline. Searching and possibly examining some 300 applications for PCTs filed in the US seems a useful way to keep some Israeli Examiners gainfully employed. It will help the USPTO with its commitment to examine PCT applications within 16 months of priority, and in the past we have elected the USPTO as a search authority and not received the goods.

This pilot could develop in a number of directions. The USPTO has an enormous backlog and dropping examination standards. With US Examiners increasingly working from home, one can envisage Israel based examiners examining US applications – either US citizens living in Israel working remote, or the USPTO outsourcing to the Israel Patent Office. Salaries in Israel are low compared to the US, and the standard of education is high. Such a system could work out very well. Time will tell.


Sowing and Reaping, An insightful Look at the IP World by Professor Jeremy Phillips

October 3, 2014

sewing kats   grim reaper cat

I was very honoured that Professor Jeremy Phillips agreed to give a keynote lecture at my PCTea Party earlier this week. Jeremy is not just arguably the foremost trademark expert in the world and certainly the foremost IP blogmeister, but is also an excellent speaker. Having a panoramic perspective of the industry, his talks are not merely entertaining, but thought-provoking as well. Jeremy teased me somewhat, but then again, I teased him when introducing him. It was light-hearted banter that the audience appreciated, and neither of us were offensive or offended.

Taking his theme from the book of Koheleth (Ecclesiastes), Professor Jeremy Phillips looked at sowing and reaping in the IP world.  Jeremy noted that Koheleth (Ecclesiastes 1:4-11announced that there was nothing new under the Sun. In Diamond v. Chakrabarty :: 447 U.S. 303 (1980), MR. Chief Justice Burger ruled that patentable subject matter should “include anything under the sun that is made by man”. By combining these axioms he concluded that nothing was patentable!

More seriously, Jeremy’s main message seemed to be that most patents are an expensive waste of resources, as are most trademarks. Most copyright material has no commercial value either. He calculated that the likelihood of a UK company being struck by lightening was far larger than it was that they would be sued for patent infringement, and so he considered infringement liability insurance as a bit of a scam.

 Whilst well aware that less than 1o% of patents generate sufficient income to cover the filing and prosecution costs, he noted that the very small number of valuable patents generated sufficient wealth to justify the system.

Whilst owners of valueless Intellectual Property have a high level of protection, once patents, trademarks or designs are of commercial interest, there were various fair use, research and personal use exceptions and successful patents could be subjected to compulsory licenses and their owners could be threatened with fair trade and anti-monopoly litigation, so it seemed that worthless IP rights are over-protected, but the valuable ones are under-protected.

The main issue that Professor Phillips raised was whether anyone was educating the clients that they are essentially playing a type of roulette? He looked into who made money from IP and, noted that the patent office didn’t, courts didn’t, the owners didn’t and nor generally did pets! Whilst avoiding the big elephant in the room, I think there was implied criticism of the profession for making money by selling pipe dreams to gullible inventors. In the spirit of the Days of Repentance, it seems to me that it was more than appropriate to have the various IP professionals present contemplate their actions and to what extent we were really furthering innovation and to what extent we were feathering our nests at the expense of delusional wannabee entrepreneurs.

In Defense

My regular spiel at initial meetings with entrepreneurs is to the effect that I can help the prey client obtain protection for his invention/design/brand which is my specialty. Being a physicist and engineer I may even comment a little on the feasibility of an invention, but I do emphasize that I am totally unqualified to comment on the commercial viability of product based on a new idea and whether it will succeed in the market-place. Essentially I tell the client that I can help him (almost always a male)  predict the costs of IP protection, but have no idea of the income it will generate. I do warn him that statistically 80-90% of inventions I do a preliminary search for are knocked out as unpatentable, or as likely to receive only a very narrow patent in a crowded field and consequently to have little value in stopping competitors by generating a monopoly. I charge separately for searching and ask the client if her is interested in a preliminary search. I will file an application based on novelty to the best of our knowledge if I can make a case for non-obviousness and if the subject matter is arguably patentable – I do get 101 type rejections occasionally, but can generally deal with them. The boundaries keep changing and the goal-posts keep moving, so I am prepared to accept border-line cases and to fight for them. I do warn the clients that patenting is rarely profitable and is o easy money. I usually ask the entrepreneur if he has discussed the idea with his significant other and if he shouldn’t take care of mortgages, his pension, etc. first. I regularly suggest that I send him a written quotation and that he thinks about it and lets me know the following week. Thankfully enough of such inventors don’t listen that I have a steady stream of income from writing up patent applications of this nature.

I don’t think I am a rarity in showing this altruism. I suspect that very many colleagues and competitors are equally candid. I know that my ex-partner Jeremy Ben-David is speaking at an event later this month on the title of the wrong reasons for filing patent applications. Sending away potential clients with some good advice often has a pay back when the same client comes back, perhaps years later, with a better invention or recommends one to his associates.  The clients looking for a quick route to easy money are more likely to be the ones that leave one with unpaid bills.

I enjoy meeting the inventors and so long as meetings don’t go on for more than an hour, am generally happy to do so without charging. Surprisingly often they offer to pay me anyway, realizing that they’ve received valuable advice. In the past I’ve charged for first meetings but offset the fee against future work. It discourages wannabee inventors from doing the mail round and wasting the time of several patent attorneys. If I get the impression on the phone that the inventor is a time-waster or if he tells me that he’s been to see a few other firms and wants a further opinion, I generally charge for the first meeting. It is a good selection mechanism.

We may think that we should be educating the client and can charge for so doing, but clients often don’t want advice. They want a patent application. They don’t pay for advice. Free advice is something you can’t earn a living from giving but can still be sued for.

The interesting thing is that occasionally gimmicky patents do fly. Some kitchen gadgety things that I’ve patented that seemed quite superfluous to mankind have been successfully licensed to my surprise and astonishment. I was confident about the likelihood of the patent issuing but was quite open about my skepticism as to the commercial value of the invention.

Some corporate technologies I’ve patented have been licensed for 8 and 9 figure sums. It does happen. Just not very often.

I have corporate clients that are well aware that some patent applications I draft for then are unlikely to issue but if there is novelty and I can make a case for inventive step., i.e. some sort of argument against obviousness, I am prepared to do so, so long as the client understands the issues.  There are companies that file applications knowing that the resultant patent will be difficult to enforce but who have sound commercial reasons to file the applications anyway. Some companies need to show new features at each annual trade convention and want patent applications for these features. Often we are able to successfully prosecute the applications and patents issue. That said, with corporate clients, I may meet with and interact with the inventor of the head of R&D. Sometimes I meet the CEO or the CTO. I rarely meet the shareholders or investors and these sometimes include international R&D funds, etc. Am I aiding and abetting the managers of a company to defraud the investors or the share-holders if we file something because it helps the manager’s status within the company? Who are we responsible to? What are responsible for.

I think that contemplating these issues is valuable for patent attorneys as we approach Yom Kippur, the Day of Judgement.

The party celebrated 10 years of this blog. The packed auditorium was mostly filled by patent professionals and I received a lot of positive feedback about the event which consisted of an hour’s mingling with free beer, wine, tea and coffee, ice-cream, soft drinks and both savoury and sweet party foods, followed by Jeremy’s talk. I suspect that the professionals who like my blog came along and those that are less enamoured by my reporting style stayed away. It is a shame as I am happy to receive feedback and generally post comments submitted to this blog, unless they are clearly spam.

Most of the attendees came from smaller firms. It could be that the larger firms do enough internal events and have educational programs so that their staff feel less of a need to socialize with their contemporaries and to attend thought provoking presentations. Those that did attend seemed to enjoy themselves and there seems to be interest in doing this type of thing more regularly.
We wish aךl our Jewish readers a spiritually uplifting Yom Kippur, and םור Moslem readers a spiritually uplifted Day of Sacrifice – יום הקורבן.

 


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