Israel originating patents filed in the US jumped 21 percent in 2014, according to a study by BdiCoface.
The study found that 3,555 Israel-based patents were filed in the US during 2014,which is nearly 389 patents per million Israeli inhabitants. Only Japan, with 445.6 patents per million, and Taiwan, with 524.4 patents per million, outranked Israel, which was ahead of South Korea, Switzerland, Sweden and Finland.
From 2009 to 2013, the companies filing the most US patents for Israeli inventions were IBM (674 patents), followed by Intel (435), Marvell (281), Sandisk (261) and HP (197). The top educational institutions in Israel filing US patents were Tel Aviv University (161), the Weizmann Institute (158), the Technion (137) and the Hebrew University of Jerusalem (116). These statistics are high compared to other universities abroad and is seems that Israel’s tech transfer policy is working.
Probably due to the relatively high cost, there has been a drop in European Patent Applications for Israeli inventions.
We note that the US is a preferred location for Israel inventors who may not bother filing in Israel. For fast moving industries such as telecommunications, it may make sense only filing in the US. For methods of medical treatments or after the inventor has published or presented his invention in public, there may be no alternatives. Nevertheless, we consider not filing in Israel may be a costly mistake. Often Israel has more than one company in the same technology area. Current employees may become competitors. Enforcing a patent in Israel is much cheaper than enforcement in the US and the costs of also filing and prosecuting in Israel may be minimal. Finally, with the PPH (Patent Prosecution Highway) first filing in Israel may speed up the process of obtaining a patent in the US.
We also note that patents and patent applications are not apples and oranges. The absolute numbers and even numbers per capita are statistics of doubtful value as some patents are worth billions and most aren’t worth the cost of obtaining them. That is true even if they are exceptionally well written, simply because some technologies are implemented and others are obsolete when filed.
I do recommend that my Israel based clients seriously consider filing in Israel. Apart from odd Judaica related inventions and other niche products, most file in the US. China is taking over from Europe as a primary destination, but Europe, Korea and Japan are all popular. Australia and India are also on the patent map.
The correct strategy of where to file and indeed of what to file is very case specific and depends on a number of variables including but not limited to budget, business plan, technology field, the centrality of the patent to the company, the size of potential and actual markets and where competitors are domiciled.
PCZL (Pearl Cohen Zedek Latzer LLP) Appeals Source Vagabond Decision Sanctioning the Law firm for bringing Frivolous Law Suit.January 21, 2015
Source Vagabond is one of a number of companies making personal portable water supplies that are known in Israel as Shlookers – a shlook being slang Hebrew for a sip.
On August 2, 2011, Source Vagabond sued Hydrapak for, inter alia, infringing “at least claim of the US 7,648,276 patent, either literally, or under the doctrine of equivalents.” On September 16, 2011, Hydrapak served a sanctions motion under Rule 11 which provides that, before a motion for sanctions is filed, the party against whom the sanctions will be sought must be notified of the potential Rule 11 violation and given a twenty-one-day period to withdraw the offending claim. Fed. R. Civ. P. 11(c)(2). Source declined to withdraw. On October 6, 2011, Source filed an Amended Complaint, and on October 12, 2011, Hydrapak served an amended Rule 11 motion.
The court of first instance ruled that granted Hydrapak’s motions for summary judgment and Rule 11 sanctions on April 11, 2012.
Regarding claim construction, the court said there was “nothing complicated or technical” about the claim limitation “slot being narrower than the diameter of the rod,” and that none of the words of this limitation “requires definition or interpretation beyond its plain and ordinary meaning.” Accordingly, the court gave “slot being narrower than the diameter of the rod” its“plain and ordinary meaning.”
The district court stated that Source’s proposed claim interpretation “violates all the relevant canons of claim construction” and that even under Source’s own construction, Hydrapak did not infringe. It also found the literal infringement claim “lacked evidentiary support no matter how the claim was construed” and “the difference is apparent to the naked eye, and the tape measure leaves no room for doubt.”
Specifically, the district court determined that in Hydrapak’s products the slot is larger than the diameter of the rod, even under Source’s proposed construction. The original decision ruling that the case was frivolous and fining attorneys PCZL is reported here.
Source Vagabond and Pearl Cohen Zedek Latzer appealed the ruling.
On appeal, judge Cott determined that the sanctions were bases on two grounds:
“Source made frivolous legal claims in its submissions to the Court, in violation of Rule 11(b)(2); and Source failed to conduct an adequate investigation before filing this lawsuit, in violation of Rule 11(b)(3).”. He recommended Source’s counsel (i.e. Pearl Cohen Zedek Latzer pay $187,308.65 in partial attorney’s fees, but that Source not be sanctioned.
The logic, explained by the district court was “Given counsel’s sole responsibility, as a matter of law, for the violations of Rule 11(b)(2), and counsel’s additional responsibility for the failure to investigate under Rule 11(b)(3), I recommend that Yonay and Shuman be held responsible for any monetary sanction. I further recommend Yonay and Shuman’s law firm, Pearl Cohen Zedek Latzer LLP be held jointly and severally liable in accordance with Fed. R. Civ. P. 11(c)(1).
Hydropak successfully argued that it should receive legal fees for defending against te reconsideration motion, and the court concurred, raising the damages to $200,054.
The decision was appealed to the Court of Appeals of the Federal Circuit.
Court of Appeals of the Federal Circuit Ruling
In patent lawsuits, defending against baseless claims of infringement subjects the alleged infringer to undue costs, and this is precisely the scenario that Rule 11 contemplates.
The District Court found that Source had an obligation to demonstrate why they believed they had a reasonable chance of proving infringement, and that Source failed to show either literal infringement or infringement under the doctrine of equivalents. The issue revolved around the meaning of “slot being narrower than the diameter of the rod”. The district court dismissed Source’s construction stating, “an ‘analysis’ that adds words to the claim language [without support in the intrinsic evidence] in order to support a claim of infringement” does not follow “standard canons of claim construction.” Additionally, the surrounding claim language demonstrates that the “the slot,” “the rod, and “the portion of the container . . . folded over the rod” are distinct from each other. The claim language does not compare the size of the slot to the size of the rod together with the folded over container. Source had the ability to draft the claim that way but did not. It cannot correct that failure by adding words to otherwise unambiguous claim language. In other words, there is a limit to what one can argue a claim means.
Finally, Source argues that Hydrapak’s proposed construction “would render the entirety of claim 1 nonsensical.” This is a fascinating admission that not only does the scope of the claim as prosecuted by PCZL not include the product fabricated by Hydrapak, but that the claim is actually meaningless.
On Appeal, the Federal Circuit stated that “The district court properly determined that “claim construction is a function of the words of the claim not the ‘purpose’ of the invention,” and that Source’s construction “violates nearly every tenet of claim construction and amounts to a wholesale judicial rewriting of the claim.” Source was required to “perform an objective evaluation of the claim terms” to satisfy its obligation to conduct a reasonable pre-suit evaluation. Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314, 1329 (Fed. Cir. 2011). By proposing a definition that ignores the canons of claim construction, Source did not meet that standard. The district court did not abuse its discretion in imposing Rule 11(b)(2) sanctions based upon Source’s frivolous claim construction arguments.
Regarding the doctrine of equivalents:
(“[N]either the attorney’s affidavit nor plaintiff’s ‘pre-suit analysis’ . . .[ever] mentioned, let alone analyzed, how Hydrapak’s product infringed Source’s patent under the doctrine of equivalents.”). Counsel was obligated to come forward with a showing of exactly why, prior to filing suit, they believed their claim of infringement under the doctrine of equivalents was reasonable. See View Eng’g, 208 F.3d at 986. Source did not comply with this requirement below. Under these circumstances, the district court did not abuse its discretion in finding a Rule 11 violation. The cost of $200,054 against Guy Yonay and against Pearl Cohen Zedek Latzer was affirmed.
Court of Appeals Federal Circuit, SOURCE VAGABOND SYSTEMS and Pearl Cohen Zedek Latzer LLP v. HYDRAPAK, INC., decided June 5, 2014
I apologize to readers for being tardy in reporting this decision from June 2014. It has only recently come to my attention. Guy Yonay accused me of unfair reporting of the original decision and argued that the judge was clearly wrong, and Zev Pearl accused me of publishing lies. I think this decision, which may be found in full here appeal PCZL vindicates my reporting.
The court is correct that the attorneys are responsible for filing the frivolous law-suit. Why did this happen?
Well, the decision states that “Guy Yonay and Clyde Shuman are partners in the law firm Pearl Cohen Zedek Latzer LLP. Prior to the present action, Mr. Yonay prosecuted the ’276 patent application. In the underlying district court litigation, Mr. Yonay signed the original Complaint on behalf of Source, and Mr. Shuman signed the Amended Complaint.”
I would suggest that the first problem is that Yonay apparently prosecuted the claim before the patent office (and may have drafted the application) and then went on to litigate it. This is never good practice. Before litigating one should seek an independent opinion of the chances of prevailing. Yonay could not objectively review the claims he’d prosecuted. He appears to be confused between the purpose of the product and the claimed structure. With mechanical patents one cannot, by obtaining a patent for a specific device, prevent third parties from competing with devices having different structures that are well beyond the ambit of the claims, by arguing that they achieve the desired aim and are thus functional equivalents.
In general, it is ill-advised for the prosecutor of the patent to litigate it in court. Indeed, it is ill-advised for the prosecutor and litigator to belong to the same firm. At least on Appeal, Pearl Cohen took an external counsel, Jenks.
The managing partner of PCZL, Zev Pearl is not licensed to practice in the US. There is, however, a senior partner, Mark Cohen, who is US licensed. Both these gentlemen could and should have prevented the frivolous case being filed. Their failure to do so explains why the courts find the firm responsible and not just Yonay and Shuman.
In a newspaper article on trolls that originated in PCZL was published in the Jerusalem Post and also appears on the Pearl Cohen website, it is implied that only under new Obama legislation, can non-practicing entities be sued for costs in unsuccessful law suits. The implication is that prior to the proposed legislation trolls had nothing to lose by filing frivolous lawsuits and that practicing entities have nothing to lose as they are not trolls. This decision shows the error in this approach. Any entity, whether practicing or otherwise, must have reasonable grounds of validity and infringement to bring a case against a third-party to court. The courts have the authority to sanction the plaintiff and their legal counsel for filing frivolous cases. Pearl Cohen should have known that the interpretation they were giving to the claim was untenable. It was not infringed. The courts were therefore correct in fining PCZL.
The official fees incurred for filing, prosecuting, registering and renewing patents, designs and trademarks in Israel are linked to the cost of living index. Twice a year, on 1 January and on 1 June, they are adjusted. It seems that living in Israel is ever more expensive, and each adjustment makes each fee a few Shekels more.
WIPO works differently. From time to time their fees for PCT related services are adjusted, but not necessarily upwards.
As of 1 January 2015 the basic international filing fee for a PCT application will drip from $1471 to $1384. Excess page fees will drop from $17 a page to $16 a page.
If one elects the EPO as the international Search and Examination Office, the search will cost $2366 instead of the current $2545.
Using PCT Easy saves $104 per application, and filing electronically as XML or similar saves $208. It is possible to combine these and file electronically using PCT Easy, saving $312.
The following is largely cribbed from the IPKAT.
Chief Judge Randall R Rader of the US Court of Appeals for the Federal Circuit (CAFC) has resigned from his role as the head of the CAFC.
“I have come to realize that I have engaged in conduct that crossed lines established for the purpose of maintaining a judicial process whose integrity must remain beyond question. It is important to emphasize that I did not and would never compromise my impartiality in judging any case before me. But avoiding even the appearance of partiality is a vital interest of our courts, and I compromised that interest by transgressing limits on judges’ interactions with attorneys who appear before the court. I was inexcusably careless, and I sincerely apologize.”
This emphatic language was as a result of an email that, according to the Wall Street Journal, he had sent to Edward Reines at Weil, Gotshal & Manges LLP. In this email Chief Judge Rader had reported a conversation that he had with another member of the court who had “praised the attorney’s performance” and also included the judge’s own praise. Chief Judge Rader had also encouraged the recipient to show the email to others. In retrospect, the judge recognized that the email constituted a beach of the ethical obligation not to lend the prestige of the judicial office to advance the private interests of others.
|Chief Judge Rader|
In his letter the judge also referred to having to recuse himself from previous cases. A few weeks ago, Chief Judge Rader recused himself from two cases in which Edward Reines was appearing– one for Microsoft and another for Medtronic. The case concerning Microsoft brought by DataTern Inc was judged in favour of Microsoft and SAP. Judge Rader wrote a dissenting opinion. A month later, the CAFC reissued its decision, excluding Rader’s dissent and noting he had been recused from the case. Whether these events are the main cause of his resignation can only be speculation.
Chief Judge Rader has been on the court for almost 24 years, having been appointed by President George H. W. Bush way back in 1990. He became Chief Judge in 2010. His resignation will become effective on 30 May 2014, after which he will remain on the court as a circuit judge. Sharon Prost, who is part of the 18-judge court, will replace him as Chief Judge. With a background in labour law, Judge Prost was appointed by Dubya in 2001.
Apart from finding his singing abilities short of his enthusiasm, I have only the best to day about Judge Rader. His decisions are well thought out and well written, and he is a charming fellow.
I’ve noted at IP events in Israel where Marshal Phelps had spoken on a case where Rader had an interest, he was quick to leave the room.
Coming from the UK, I expect a person in authority to resign for misappropriate behaviour that might tarnish the office. Unfortunately, this happens less rarely in Israel, where ministers and others hand on to power until they lose in court. The Israeli courts are also seen as politically aligned and less than impartial. In the past, a head of the Jewish Agency, Simcha Dinitz,was found to have used a Jewish Agency credit card for private purchases. The defense that he’d made a genuine mistake was accepted. Things have got better though. A former president is in prison and a former prime minister has been sentenced for corruption. Corruption always exists and the question is how a society deals with it. Rader’s behaviour is honorable. It is a great shame.