Lies, Damn Lies and Statistics

April 13, 2014

statistics

Indus TechInnovations sent me the following “informatic” for publication: Patent trends – Israel. It is very gung-ho and positive. The problem is that last year’s statistics have published and are less positive. See my article from February. Since the 2013 statistics have been published, ignoring them does a disservice. Particularly where they buck the trend.

There was anArticle from Idiot Achronot last Friday, by Sever Plotzker (טור ששי) that claimed to provide the true facts behind the propaganda in various areas, one of which was patents and innovation. Dr Esther Luzzatto, managing partner of the Luzzatto Group, one of the big five accountancy firms [sic] specializing in technology and IP was quoted. Now, we can argue whether or not the Luzzatto group is one of the largest patent attorney and law firms in Israel, but it is not a large accountancy firm and I am sure that Drs Kfir and Etty Luzzatto would be the first to acknowledge that.

The article included a number of interesting statistics and theories.

Briefly, the points raised were:

  1. A drop in PCT filings of 30%
  2. Significant drop in investment in start-ups
  3. Privatization of technology incubators
  4. International companies opening R&D facilities in Israel
  5. In 2013, there were 780 start-up companies registered, where the general average is about 650 a year.

The drop in PCT filings was considered a reliable indicator of innovation in general, and patent activity in particular. It was linked to the drop in funding, which was linked to the privatization of incubators and venture capitalists wanting a quick exit and to international companies creaming off talent by opening R&D facilities, where the patents were registered in name of international holding company.

I would not be surprised if the original research by the Luzzatto group resulted in a coherent report. What was clear was that the journalist who extracted the data and summarized it in a column and a half didn’t have much of an idea about the subject matter.

Nevertheless, the article made a few points worth considering. The first one was that there is apparently a drop in PCT filings by Israelis of 30%. This statistic is worrying, but I am not convinced that Dr Luzzatto is correct that this is a representative marker of innovation or even of patenting activity. The underlying assumption that this statistic clearly shows a drop in patenting, but it actually only shows a drop in PCT filings. There is an inherent assumption that patent filing is always reflected by use of the PCT mechanism. I suspect, however, that a lot of activity is going on in telecommunications and software, particularly in developing mobile phone applications. In these fields, many start-up companies have filed PCT applications only to run out of money 18 months later. With the speed at which these fields change, it is a reasonable to file in US only. The calculation of the company’s value may be based on US market only.

Some medical device companies also only file in US. Here it is less easy to justify, but with a limited budget some companies are perhaps more careful where and how widely they file, but are, nevertheless, innovative and may be able to bring a product to market. of course, sometimes the invention is only patentable in the US. I’ve had that with medical methods, for example.

One of my clients makes industrial digital printers. The company’s market is world-wide, but competing products are manufactured by companies based in Israel, the US and recently Italy. The company has traditionally filed in Israel and then in US under the Paris Convention, and recently also files in Europe. There is little justification for them to file PCT applications. One of my client makes game changing computer hardware. The company files in the US and immediately afterwards in the Far East under the Paris Convention since their competitors are all in Asia. It may make sense or them to consider filing a PCT application for the more critical applications to keep their options open, or to file in India and Europe just in case competing factories open up there. Client considers the $100 million required to set up a fab rules out this possibility. So there you have it, start-ups, small Israel manufacturers and a large company all actively patenting, but not using the PCT mechanism.There may indeed be a drop in inventing, but it is less severe than the 30% discussed in the article.

There is a drop in venture capital. However,  in the past there have been bubbles where venture capital invested has been out of all proportion to real worth.  This is a world-wide phenomenon, not one exclusive to Israel. With low-interest on safe investments and now some govt. intervention in the property market, one imagines that venture capital will grow again. Recently investors have been looking to buy existing patents in order to sue infringers. This model is diverting funding from research, but won’t last.

Privatization of technology incubators may result in investors being short-sighted and focused on a quick return for investment. However, it is doubtful that this is related to the drop in PCT filings. One needs a first filing, maybe a provisional application, to solicit funding in the first place since investors want to see that there is something allegedly patentable. The Paris Convention Deadline, or PCT filing date, comes around a year after the provisional is filed. Private investors may want a quick return, but it won’t be that quick that the money’s run out before a PCT application can be filed.  The preference for private vs. govt. funding models are more tied up with political ideology than with anything else. Generally capitalist economics assume that the private market will do a better job than the government in creating new industries. Whether or not this us true, State funding of basic research in universities makes sense, but I am not sure that the tech transfers should be funded by the government.  Certainly some government-funded start-ups should never have received funding since the basic concept was obviously wrong.

As to International companies opening R&D facilities in Israel, this as generally positive. It is preferably for Israelis to work for large corporations such as Intel, Microsoft, Google, GM, etc. in Israel, than that they go to Silicon Valley to work for them.  The large companies offer a reasonable salary and conditions, but the entrepreneur willing and able to try to establish a start-up will forgo the salary and conditions to take the risk of starting up something of his own, if he can obtain funding. It is unlikely that the existence of R&D centers makes obtaining funding for a new venture less likely.

The drop in start-up companies from 960 In 2013, there were 780 start-up companies registered, where one would expect 650 when taking a longer perspective.

Many patent firms are keen on clients filing PCT applications. It generates income. Perhaps the hesitancy by inventors reflects a greater sophistication and realization that funding is difficult to come by, and companies are filing less widely but not necessarily less first filings?

My problem is with the article in Idiot Achronot. It is unclear to what extent it reflects the views of the Luzzatto group in general, or of Etty in particular.


Total Immersion

April 6, 2014

total immersion

Berlitz filed a Israel trademark No. 232819 for “Total Immersion”. The mark, filed in class 41, is for teaching and practicing language, renting and hiring materials for teaching and practicing language, texts, publications, information, and consulting regarding language skills.

On 26 April 2011, an Examiner rejected the mark as lacking distinctiveness, since the term is widely used for language courses. Applicant responded by noting that the mark had been accepted by the Office Harnonization of the Internal Market (OHIM no 000198820) and requested registration under Section 16 based on the OHIM mark.

Maintaining that the mark was totally descriptive and wholly lacking in distinctive features, the Examiner continued to refuse the mark.

Applicant argued that ‘total language immersion’ may be in common use, but total immersion was a phrase coined by applicant and associated with applicant. This position was supported with statements from the Paul Weinstein, president, legal advisor and secretary of Berlitz to the effect that ‘Berlitz Total Immersion’ was a style of language teaching developed by the applicant and that ‘Total Immersion’ was registered in various jurisdictions.

The Examiner remained unswayed, and the Applicant appealed to the Commissioner of Patents and Trademarks.

The Appeal was based on an allegation that the term had acquired distinctiveness in Israel and that customers associated the term with the applicant.

On the scale from made up marks to descriptive ones, the Commissioner considered the mark as between indicative and descriptive. The Examiner considered the mark descriptive and generic, and cited various language schools. The Applicant considered that those attempting to learn the language would not even know what the word immersion meant. In response to this, and quoting the American Apparel decision, the Commissioner argued that the Patent Office cannot generally relate to the level of English of potential customers in Israel, however in this case, clearly the potential customers lack English schools and would not understand the nature of the word immersion and certainly not Total Immersion.

Since the mark can, at best, be considered indicative and not descriptive to the potential customers, Commissioner ruled that it could be registered under Section 8a, and thus whether or not it could be registered under Section 16 was moot.

COMMENT

The phrase Total Immersion is being used here as a metaphor. Berlitz teaches language. It does not provide Mikva services. I suspect that those trying to learn English via Berlitz have very poor skills, but that may not be true of a company representative purchasing the services for other members of staff.

The question is whether Berlitz is the only user of the term in Israel, or whether other language skills use the term. That’s what the opposition period is for…


More lapsed patents allowed for reinstatement

March 19, 2014

approved

Although perhaps not all my avid readers will concur, I do try to blog comprehensively on all Israel Patent Office decisions and court rulings concerning IP. One of the generally less entertaining type of decision that I wade through relates to reinstatement of lapsed patents.

In IL 205893, the patent issued on 1 April 2013 and the renewal payment was timely made on 22 April 2013. It was a case I handle. I must admit, it is more fun writing up cases where other firms missed the deadline or something else went wrong rather than reviewing my mistakes.

Recently, having a couple of quiet days, I went through all my cases comparing my files with the status on the patent office website and realized that this patent was listed as having lapsed. In this case I have proof of timely payment and a copy of the covering letter to the patent office. What I don’t have is proof that the payment and letter were submitted.

In the circumstances, I had to file a request for reinstatement which was promptly accepted.

There have been a number of similar cases in recent times. Sometimes the patentee pays on-line and assumes that he does not need to print out the receipt of payment and hand file it. Perhaps partially due to this blog, the patent office now has a large reminder notice that this is the required procedure. It doesn’t help me as I know that is the procedure. I simply can’t prove that I actually followed the rule.

What did surprise me was that along with the decision to allow the case to publish for opposition purposes, I received a request to pay the first renewal fee. This was odd as I had attached a dated payment slip to show that the renewal was timely paid together with the fee for reinstatement and a covering letter. I queried this and it turns out that since we are in a different calendar year, the paid fee cannot now be processed and I need to pay again (now an additional 15 shekels), and can request a refund for the fee paid. This seems a lot of unnecessary aggravation all round, as it creates work for the patent office as well as for me.

What seems like a useful development would be for the patent office to link the on-line payment with an online reporting mechanism. Maybe this will happen one day. I know that the Israel Patent Office is able to see at a glance which cases each firm handles. If we could see the same interface together with an action list and deadline, i.e. a patent office generated docket, that would be grand. I suspect US attorneys have this in private PAIR. I know that there are plans to allow online filing and we are getting there. It will just take time.

In another decision, re 206874, the renewal fee was not paid despite client’s instructions for it to be paid. Since it was not paid by mistake, and the firm was able to provide evidence of reasonable docketing procedures, just something went wrong due to human error, the case was allowed to be reinstated.


Shape of Hamentaschen Controversy Stirs up Civil Unrest and Threatens Israel Government Stability

March 13, 2014

hamentaschen

The geographical area of Israel has been invaded, settled, occupied and liberated many times. Each invading culture brings its traditional foods.  For some unknown reason, a plain cake with raisins and other dried fruits is known locally as English Cake. I never knew there was such a thing before I emigrated from the UK. Presumably it is an artefact from the British Mandate.

The Ottoman empire left its mark with Burekas, savoury pastries that are filled with cheese, potato, mushroom or spinach.  Each wave of immigrants brings its recipes.  The polish immigrants brought Rugelach. Americans brought Pizza.

Traditional foods have traditional shapes. Recently Angel, Israel’s largest bakery and rumoured to be the largest bakery in the Middle East, have started selling rectangular, machine-made pita bread, instead of the round handmade ones. Other than as a party novelty, they have not caught on. For nearly a century, Mazzot, the cardboard like unleavened Pesach bread (that is not to be passed over by anyone unless they have a particularly sensitive stomach) have been available in rectangular shape, made by machine. However traditionalists still prefer the hand made, round ones, at least for seder night.

In August 2013, the Chief Rabbinate, concerned that people may inadvertently eat Biblically prohibited combinations of milk and meat without appropriate time gaps, have ruled that the triangle shape should be exclusively used for milky baked goods. See http://www.jpost.com/Jewish-World/Jewish-News/Rabbis-rule-on-shape-of-borekas and http://www.timesofisrael.com/rabbinate-regulates-burekas-shapes/ for more details. After intense negotiation, guidelines were drawn up and kosher bakeries undertook that henceforth the triangular shape would be used exclusively for milky  products. Failure to observe these guidelines will automatically result in suspension of Kosher license from offending bakeries and patisseries.

Since then, it has become impossible to find  conventionally shaped hamentashen for Purim, apart from those based on a butter pastry or filled with crème-de-leche.  Traditional hamentaschen, or Oznei Haman, as they are known in Hebrew, are filled with a black filling, typically poppy-seed. Prunes and dates are also sometimes used. In recent times, chocolate has also become a popular filling.  Now many Kashrut observing Jews want triangular shaped non-dairy hamentaschen, that are traditional and may be eaten after a meat meal. There is also a custom of exchanging food gifts with friends, Mishloach Manot, that is mentioned in the book of Esther itself (Chapter 9 verse 22).

The ultra-Orthodox rabbis have ruled that  to avoid putting a stumbling block before a blind man, such food-gifts should be clearly meat, clearly dairy or clearly neither (parev).  Unfortunately, the Rabbinate’s ruling that triangular baked foods are dairy has established a precedence that leads to ambiguity if not followed consistently, and only cheese filled hamentaschen or those with a butter pastry should be made in a triangular shape.

Whilst not following the Israeli rabbinic court, many ultra-Orthodox sects are aware that a new regulation instituted by a rabbinic court can only be overturned by a larger court that is also wiser. Since there is no larger court, they see themselves as stuck with this unpopular stringency. Consequently, in Jerusalem, Bnei Brak and Bet Shemesh, bakeries have refrained from making any hamentashen, not triangular ones or the new square variety.

The dearth of triangular hamentaschen with black filling has caused large demonstrations.

hareidim

The Deputy Minister of Religion, Rabbi Eli Dahan has ruled that one can fulfil one’s obligation with rectangular hamentashen, however the Ultra-Orthodox doesn’t accept his authority.  The Chief Rabbi, Rishon l’Zion Yosef notes that the triangular pastry in question developed in Germany and never took hold in Morrocco, Yemen or Tunisia, and that Sephardic Jews have no tradition to eat these foods. Consequently and due to the possible confusion of mixing meat and milk, hasmentaschen should be avoided over the Purim season.

Not to be outdone, his Askenazi counterpart Rav Lau, who has to be at least as strict so that his authority is accepted, has ruled that even the square hamentaschen should be avoided. Degel HaTorah and Agudah have suggested that in the absence of the traditional pastries, people should, nevertheless, eat cakes and biscuits with black fillings like chocolate or poppy seed yeast cake. This position was dismissed by the LGBT community as being homophobic. Although some bakeries have tried rainbow coloured icing, it has not caught on with the wider public.

The Finance Minister Yair Lapid, alleging religious coercion, has threatened to leave the coalition and bring down the government if traditional triangular hamentaschen are not readily available, and, in a populist move ordered that the price should be regulated to 32 NIS a kilo, so that they are affordable. Naftali Bennett of the Jewish Home party agrees with this principle but condemned the statement as price regulation came under his authority.  John Kerry, visiting in Israel, was asked to comment.  His vision of bakeries serving homentaschen,  hot cross buns and croissants in peaceful coexistence was dismissed as Messianic by, Bugie Yaalon the Minister of Defence, who is considering imposing a state of emergency.

UK Prime Minister David Cameroon, here on a visit, noted that PG-Tips teabags were tetragonal and filled with black tea, and thus could perhaps be a useful substitute. Foreign Minister Avigdor Liberman  was overheard muttering that overseas dignitaries who didn’t understand the complexities of the Middle East shouldn’t get involved.

Meanwhile, abstention from the traditional cakes seems to have triggered excess alcohol excess, with increased wine sales.


Competing marks – co-existence agreement by parties may be insufficient to allow registration

March 6, 2014

biometrix

Biosensors Europe S.A. filed a trademark applications for Biometrix (TM Application Number 239619) as shown above, and and Biomatrix LTD. filed a word mark for Biomatrix Flex (TM Application Number 239622). Both firms make stents, particularly drug eluting stents, and related biomedical equipment.

The Israel Patent Office initiated a competing marks proceeding. The applicants requested coexistence, but the Deputy Commissioner, Ms Jacqueline Bracha ruled that the marks were confusingly similar and coexistence would not be in the public interest.  Assertions by the parties that they coexisted for 5 years without anyone being confused were ignored. The Deputy Commissioner’s reasoning was that the terms Biometrix and Biomatrix were virtually identical. The term flex would be seen as being a qualifier, indicating that the biomatrix in question was flexible. The Deputy Commissioner noted that in the UK, where, if the owners of competing marks are willing to coexist, the patent office has to allow both marks to register. However, in Israel, the public interest is over-riding.


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.


IP Factor wishes Chinese Clients and Colleagues a Happy New Year

February 1, 2014

patent horse

 

It is the New Year. The Year of the Horse.  My patent attorney associates and clients in the Far East seem to be on holiday.

I wish them all a successful year.

 


Pioneer not registerable for electrical devices

January 14, 2014

Asinu Esek LTD. (literally ‘we’ve done a deal’) filed Israel Trademark Application 233073 for “Pioneer”, as shown below.

Pioneer

The mark was filed for machines and machine tools for making, processing and cooking food and beverages,namely, food processors, meat grinders, blenders, juice press, ice-cream makers, vegetable peeling and slicing apparatus, kneading machines, devices for grinding, milling, crushing and chopping food; coffee grinders; electric can openers, electric meat grinders, garbage disposals; vacuum cleaners and parts and accessories for all the above; all included in Class 7. it was also filed for lightning, heating, steaming and cocking devices; devices for cooling, drying, airing, water supplying and sanitary proposes – such as flashlights, lamps, bulbs, chandeliers, neons, Ultra-violets; ovens, cooking stoves, toaster ovens, hotplates, electric grills, electric bread bakers, electric pans, electric frying devices, electric rice pots, bread toasters, microwaves, electric kettles, samovars; coffee machines, coffee roasters; refrigerators, freezers, ice¬boxes; heaters, filaments, heat conductors, air-conditioners, ventilator, ceiling fans; hair fans; watering devices, water purifying and/or filtering devices; water pressure cleaning devices, steam cleaning devices; oven hoods, water filtering and purifying devices and parts and accessories for all the above; all included in Class 11.

Sh. Cohen (2011) LTD uses  the name Pioneer  power tools, and manufacturers, imports, exports, sells and distributes power tools under the mark.

Power tools pioneer

Indeed, in June 2013, Sh. Cohen (2011) LTD managed to register Israel Trademark Number 242261 Pioneer Power Tools in classes 7. 8 , 11 and 12.

Power tools Pioneer 2

Sh Cohen noted that applicant had filed in class 7 where they had a mark. Furthermore, classes 7 and 11 cover similar goods.  In addition to trademark issues such as likelihood of confusion, etc., the opposer argued that the applicant had filed their mark in bad faith since they had filed for expedited examination on the grounds that they were unaware of other parties using the mark, despite the fact that Asinu Esek distributed the opposer’s goods!

Asinu Esek argued that the word Pioneer was generic and therefore no-one could have sole rights to the word. Indeed, they argued that other parties were using the word for branding purposes. They argued that their usage of the mark was for food preparation equipment, whereas the opposer’s was for power tools and these were different goods and therefore there was no likelihood of confusion.

Asinu Esek argued that the font and shading made their logo distinctive. Furthermore, Pioneer Power Tools, by adding the words power tools created a mark with a totally different sound to Pioneer. They also argued that the new mark wasn’t in use. Finally, they argued that they had invested heavily in promoting the brand and therefore accepting the opposition would be costly to them.

Pioneer Power Tools argued that Asinu Esek had signed contracts with them regarding distributing their gods and ownership of the marks.

Both sides made various assertions regarding the amount of goods sold under their marks, amounts spent on advertising, etc. which were submitted as affidavits, but without providing supporting evidence.

In her ruling, Deputy Commissioner Jacqueline Bracha argued that registerability issues and the contractual obligations of the sides could be separated, and she addressed the trademark issues first. However, in practice she related to sight and sound of the mark, the clientele and distribution channels and any other issues. That is, she applied the triple test, and related to contractual obligations under the rubric of other issues of relevance.

In terms of the sight and sound of the mark, for goods purchased off the shelf, the sound is less important. The name Pioneer is dominating and power tools is descriptive. Customers have faulty memories. The brand is therefore seen as being Pioneer in both cases and there is a likelihood of confusion.

Both parties sold tools for use in the home and garden. The goods are different, but the opposer claimed to have plans to widen the scope of their activities into distributing a wider range of electrical goods than only power tools.  The deputy commissioner accepted this argument. As importantly, she found it convincing that the public would associate electrical gods that are not power tools but sold under the brand Pioneer with the distributor of Pioneer Power Tools because this type of horizontal expansion was common in the electrical goods industry. Notably, she found that Pioneer Power Tools was aimed at the domestic market and not at professionals, so the target customers were the same.

Although the word Pioneer is somewhat laudatory, it is not a general laudatory mark such as excellent or superior would be. It is reasonable to grant narrower protection than a unique word, but it was, nevertheless, registerable.

Under the ‘any other issues’ component of the triple test, Ms Bracha examined the contractual obligations.

The problem (as always) is one of interpretation. The contract was headed “Pioneer Power Tools” but then related to the mark of the supplier. Thus whether Asinu Esek had undertaken not to sell power tools under the name  “Pioneer Power Tools”, power tools under the name “Pioneer”, or any electrical goods under  the name Pioneer, remains a question of interpretation. The contract was written generously, and related to “development, manufacture and sales of various goods including electrical tools, electrical equipment for home or garden, and any other electrical device.”  Consequently, Ms Bracha ruled that Asinu Esek had acted in bad faith by filing their mark.

Interestingly, Ms Bracha ruled that bad faith was not grounds for not registering a mark, despite being grounds for cancelling the mark. She noted that this is apparently the Law in Portugal and Spain as well. She noted Former Chief Justice Aharon Barak’s comments to the effect that Equitable Behaviour underpins the Israel legal system, and US and European law on the topic, but felt it more appropriate to rule in terms of confusion and the like, than equitable behavior per se.

Essentially, she noted that there was inequitable behavior and an attempt to free-ride on the reputation of Pioneer Power Tools, but refused the mark on grounds of unfair trade practices and likelihood of confusion, rather than inequitable behavior.

The mark was refused and the applicant ordered to pay NIS 1500 in costs and NIS 16000 legal fees to Pioneer Power Tools.

COMMENT

I think the decision to use unfair trade practices rather than inequitable behavior as grounds for refusing the mark is hair splitting. That said, I think Ms Bracha is correct to use clear grounds anchored in trademark law rather than to import a concept from Contract law, even if Barak considers otherwise. The problem here is that there are contractual issues as well, but it is not the Israel Patent Office that should decide them.   

I note that Simon Kay who is one of Israel’s leading patent attorneys trades under the name Pioneer IP LTD. Maybe he should register the term Pioneer in the filed of IP services. (I assume he can’t register the  IP bit).


Competing Marks 243617 and 243484

January 8, 2014

If two identical or at least substantially similar marks are filed at around the same time by different applicants, such that Examination of the first mark has not started when the second mark is filed, a Competing Marks Procedure is instituted.  The first to file is a consideration in who should be awarded the mark, but the scale of use is more important as is equitable behavior of the parties.

Israel Trademark application 243617 to Ephraim Zelzer shown below is for Dagesh Assistive Technologies. The word dagesh means accent, referring to the dot that makes coverts a soft letter e.g. V into a hard letter B, or a th into a T, and implies emphasis.

Dagesh assistive technologies

Israel Trademark application 243484 to Rivka Zaddick shown below is for Dagesh Center for Treatment, Coaching and Learning.

Dagesh Hadracha

In both of these, the name is Dagesh. They are examples of competing marks.

Counsel of Applicant of the first filed mark requested that this not be considered a competing marks case and Counsel of the second to be filed mark responded by requesting that this be over-ruled. Counsel of first to filed mark answered to the response.

The Deputy Commissioner could not find any reasonable basis for canceling the competing mark procedure in the papers filed, and considered it appropriate to address the issues and cancel one mark. The first Applicant didn’t file an affidavit and the second Applicant filed his application late. The Deputy Commissioner decided that the best way forward was to grant a retroactive extension to second applicant for response already filed but to have him pay the extension fee for late response and to award costs to the first applicant. The second applicant thus had to immediately pay a one month’s extension fee and have 25 days to pay NIS 2000 in costs to the first applicant.


Pharmaceutical Patent Term Extensions – Israel Patent Office Considers Request to Grant Extension for Requesting Extension

January 7, 2014

scar jel

Israel Patent Application Number 217056 to Advanced Biotechnologies LTD. is titled Silicone Scar Treatment Preparation.  The patent application is still pending. According to applicant, the patent covers medical equipment marketed in Israel as Kelo-Cote Jell, Kelo-Cote Spray and Kelo-Cote UV. The products were authorized for sale in Israel from 9 June 2013 and are listed in the medical equipment register of the Ministry of Health. On 26 October 2013, the Applicant requested a three month extension to file a request for patent extension in the event that the patent application is allowed and a patent is granted.

64D. States that:

The Registrar shall not grant an extension order, unless the following conditions have been met:

(1) The material, the process for its production or its use, or the medical preparation that incorporates it or the medical equipment was claimed in the basic patent and the basic patent remains in effect;
(2) in respect of a medical preparation—a medical preparation that incorporates the material is registered in the Register of Medical Preparations under regulation 2 of the Pharmacists Regulations (Medical Preparations) 5746—1986 (hereafter: Pharmacists Regulations);
(3) the registration said in paragraph (2) is the first registration that allows the material to be used in Israel for medical purposes;
(4) no extension order was granted previously in respect of the basic patent or in respect of the material.

Section 64(O)a of the Israel Patent Law grants 60 days for filing a request for a patent term extension and this deadline was missed. HOWEVER, Section 64(O)a relates to ‘medical preparations’.

Despite the contention of the applicant that he was requesting an extension for filing a request for a pharmaceutical preparation, the Commissioner considers that the products in question are not medical preparations but rather ‘medical equipment’, and doesn’t think that the time period of Section 64(O)a of the Israel Patent Law refers to ‘medical equipment’, so there is a lacuna as to what the window for filing the request is.

Medical Equipment is certainly included in Section 64 of the Law:

“medical preparation”—any form of therapeutic drugs that underwent processing, including a preparation for use in veterinary medicine and a preparation of nutritional value intended to be injected intravenously;
“material”—the active component of a medical preparation or salts, esters, hydrates or crystal forms of that component;
“the basic patent”—the patent that protects any material whatsoever, including a process for the production of a material, use of a material, a medical preparation that incorporates a material, a process for the production of a medical preparation that incorporates a material or medical equipment that requires a license in Israel (hereafter: medical equipment).

and it would appear that the requirements to allow a proper period for filing a request for extension are analogous for ‘medical preparations’, see  Re Asta Medica Aktiengesellschaft 101537, 108704, 92904 from 2002.

Consequently, the Commissioner ruled that Applicants have three months in which to submit a request for a patent term extension of the basic patent, from the basic patent No 217056 issuing, if it eventually issues.

COMMENTS

Section 64 A defines a “medical preparation” as any form of therapeutic drugs that underwent processing, including a preparation for use in veterinary medicine and a preparation of nutritional value intended to be injected intravenously. Section 64O. States that an application for the grant of an extension order shall be submitted in the prescribed manner, after the fee has been paid and not later than 60 days from the registration day of the medical preparation under the Pharmacists Regulations.

In this ruling, Commissioner Kling has decided that these materials are medical equipment and not medical preparations, and therefore the 60 day deadline does not apply. There is no deadline for medical equipment, so he is creating one and setting it as ninety days from patent issuing and not sixty days from receiving regulatory approval.

I can see cosmetic preparations being not considered as medical preparations, but in that case they would not be considered as medical equipment either. The title of the application implies that these are preparations, if not necessarily therapeutic. Apart from the hair splitting, I fail to see the logic of granting ninety days from patent issuance for medical equipment but sixty days from regulatory allowance for medical preparations. If there is a lacuna, then the time period for medical equipment should be learned from and be the same as the period for medical preparations.

The preamble of the main claim is “A spreadable preparation for aiding in the healing of wounds”. I think this is a medical preparation and the deadline was missed, not for the first time by the agents of applicant, see here. The time frame is extendible by the commissioner, but the standard should be despite the applicant exercising Due Care. We have no indication what happened and why the application wasn’t made within 60 days.

We note that in the Novartis case then Acting Commissioner Yisrael Axelrod gave a liberal interpretation of the patent term extension rules  in accordance with the 1998 amendment and was subsequently sideways promoted to the Beer Sheva District Court, i.e. literally out into the desert, and the Knesset reworded the law to make his interpretation untenable. The intention of the Knesset was not to grant a reasonable extension under reasonable conditions, but to make it as hard as they could to get patent term extensions. Each amendment to make getting extensions easier was under US political pressure. Each amendment not under US pressure was to make it more difficult.

This is an ex-partes ruling but we suspect that if and when the patent issues, the request for an extension will be opposed and eventually the courts will have their say, if the law concerning patent term extensions is not amended AGAIN in the meantime.  It is probably the numerous amendments to this chapter of the Law under US pressure that has resulted in these “lacunae”.

In the meantime, it appears that RAFA is supplying the product in Israel. See here 


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