OurCrowd at 5 Years: $750 Million Raised, 160 Companies & 21 Exits

August 16, 2018
OurCrowd, a leading global investment crowdfunding platform, has shared an infographic highlighting the past five years of operation. OurCrowd is unique in the fact that every single offering listed on the site receives backing from the platform – thus interests are aligned as OurCrowd has skin in the game. This is a best in class practice as early stage investing is a risky endeavor and you know OurCrowd is dedicated to the success of the issuer. And where else can a smaller investor participate in a funding round alongside some of the biggest VCs and private investors in the world?

According to OurCrowd’s numbers:

  • OurCrowd has raised over $750 million and invested in 160 portfolio companies and funds
  • During the past five years they have racked up 21 different exits
  • Today, they offer 12 different funds to enable ease of diversification
  • Over 25,000 accredited investors participate on the site from 120 different countries
  • In 2017 50% + of capital raised came from Asia
  • They currently have 10 different global offices and 150 + employees

OurCrowd is on track to top $1 billion in crowdfunding this year making it the largest investment crowdfunding platform in the world. This growth is being fueled, in part, to interest from institutional investors. OurCrowd has partnered with a good number of family offices, banks, corporates and more.

Our-Crowd-at-5-years-2018-600x1705


Appeal to Supreme Court, Should a Judge who points out the weakness of a Case at Pretrial, Recluse Herself for Having Preconceptions?

August 15, 2018

Yehoshua Fishler is suing G.A. Ehrlich LTD (Ehrlich & Fenster) in the Tel Aviv – Jaffa District Court.

He requested that Judge M Amit Anisman withdraw from the case.

The case concerns allegations and counter allegations of breach of contract concerning G.A. Ehrlich (1995) ltd obligating themselves to register Fishler’s patent in various jurisdictions. In his Statement of Case, the complainant alleges that the defendant did not timely pay issue fees and as a result the case was not registered.

In a pre-trial hearing held on 7 February 2018, the parties stated their cases and Judge Judge M Amit Anisman asked various questions and then ruled that “after the court explained to the complainant the likelihood and risks of the case and the difficulty in managing it, the complainant will have 14 days to reconsider the case and if they decide to continue, the defendant will be allowed to request that the complainant deposit a bond to cover defendant’s costs should the defendant prevail.”  

Fischler informed the court that he intended continuing with the case and so J A Ehrlich (1995) ltd (henceforth Ehrlich) requested that Fischler be obliged to deposit a bond to cover costs should he lose. The court acquiesced to this request, ruling that such a bond was appropriate in this instance, inter alia because of the chances of the complainant prevailing. Regarding this, the judge stated that “I am doubtful if the case can be considered as ‘a complete waste of time’. Nevertheless, one cannot be blind to the chances of the complainant prevailing that were shown by the defendant (requesting the bond) in light of the fact that the plaintiff is not relying on a point of law that obliges the agent acting as a service provider, to pay fees on behalf of the client.” Following this, Fischler appealed to the Supreme Court to have the Judge removed from hearing the case due to having adverse preconceptions as evidenced from the decisions of 7 February 2018 and 23 May 2018.

On 18 July 2018, the judge presiding over the Court of First Instance refused the request for her to recluse herself. The court argued that their referring the Complainant’s attention to issues that adversely affected their chances of prevailing, does not provide grounds to a real claim that the court had interests or that the judge should recluse herself. The Court had not reached a conclusion regarding the substance of the case, and the statements have to be understood in the context of the early stage then reached. The complainant’s allegation that the court invited the defendant to request that the complainant post a bond is incompatible with the sequence of events, since the defendant made it clear at the pre-trial hearing, that they intended making such a request. The court emphasized that the fact that the defendant was given an opportunity to request the deposition of  a bond does not indicate that the court has reached any conclusion regarding the outcome of the trial, nor does it imply an assessment of the complainant or a ‘threat’ in any shape or form.  This is true regarding the 23 May 2018 ruling. The court explained that requiring the complainant to post a bond does not imply that the court had closed its mind. The additional claims of the complainant were a kind of appeal, and were improper in a request for a judge to recluse herself.

This resulted in an Appeal to the Supreme Court, which was heard by Chief Judge Judge Hayot. In a hearing before Judge Hayot, the Complainant reiterated his allegations that the pretrial hearings demonstrated that the judge had already made up her mind. He reiterated his statement that the Court had invited the defendant to request a bond be set and that this was an “implied threat”. Fischler claimed that the decision to require a bond itself testified to the Court of First Instance having already made up its mind.

After considering the Statement of Appeal and its appendices, Judge Hayot ruled that it should be rejected. The protocol of the pre-trial hearing has nothing that provides a real indication that the Judge had a conflict or had made up his mind, and this is true of the interim ruling regarding deposition of a bond. The District Court did not ‘invite’ the defendant to request that a bond be placed. The defendant themselves announced that they would make such a request. Similarly, and without going into the issues themselves, the mere fact that the court indicated problems with the charges brought is not a reason for the court to disbar itself. The contrary is true. An effective management of the case is likely to result in the presiding judge expressing an opinion – tentatively and with care, regarding the contended issues, and there is no reason for the court to refrain from pointing out the weaknesses in the case of one of the parties, and even to suggest that a plaintiff consider withdrawing the case (Appeal 8893/17 Nasrallah vs. Aladin, paragraph 5 (22 November 2017).

Chief Judge Hayot considers that the court has acted in an analogous manner in the current case by allowing the defendant to require that the complainant posts a bond should they decide to continue with the case. Finally, after reviewing the plaintiff’s allegations regarding the posting of the bond, it appears that they relate to the matters under dispute and it is not superfluous to note that when considering whether or not it is appropriate to require a party to post a bond, the courts should consider the likelihood of the parties prevailing. Consequently, requests for a judge to recluse herself and appeals regarding these decisions are not the correct forums to raise these issues, and the correct way to appeal is via a formal appeal (see Appeal 2004/18 Plonit vs. Plonit, paragraph 4 (18 July 2018).

The Appeal is rejected. Since no response was required, no cost ruling is made.

Interim Ruling on Appeal by Judge Hayot in Appeal 5685/18 Fischler vs. G.A. Ehrlich (1995) ltd, 12 August 2018. 

COMMENT

Whether or not a judge has preconceptions, unsuccessfully requesting her to recluse herself and then unsuccessfully appealing to the Supreme Court that the judge be considered unfit to hear the case is unlikely to enamour the plaintiff with the judge in question.


Fischler vs. Ehrlich – Should the Judge Recluse Herself for Expressing a Negative Opinion on Plaintiff’s Likelihood of Prevailing in Pre-trial Hearing?

August 15, 2018

This is an interim ruling concerning a financial dispute between Joshua Fischler and G.A. Ehrlich (1995) ltd. In response to a preliminary assessment that the case was weak, and plaintiff (Fischler) should post a bond to cover Ehrlich’s costs, should he lose,  In this instance, Joshua Fischler, Complainant in the case, has requested that Judge Michal Amit Anisman rules herself unable to hear the case due to preconceptions and that she should transfer the case to a colleague.

The bond decision is given here.

The judge’s ruling about reclusing herself follows.

Joshua Fischler has sued G.A. Ehrlich (1995) ltd (Ehrlich & Fenster Patent Attorneys) for failing to pay the issue fee of an Australian Patent, thereby allegedly causing them damage of 21,000,000 Shekels. For the sake of the court fee, Fischler sued for 5,000,000 Shekels.

In a pre-trial hearing, the presiding judge, Michal Amit Amisman, indicated that in her opinion, it would be very difficult for the plaintiff to prove his case. It was also decided that the plaintiff would have to post a bond to cover costs to defendant in case he lost.

The plaintiff has now requested that the judge disqualify herself from hearing the case due to having made up her mind in advance. He also alleged that the judge had suggested that a bond would be appropriate which the Judge denies, claiming that the defendant raised the issue of the bond.

The factual background

On 6 July 2017, Joshua Fischler sued G.A. Ehrlich (1995) ltd (Ehrlich & Fenster, henceforth Ehrlich) alleging breach of contract, for not registering his patents in various jurisdictions and thereby causing Fischler damage that he should be compensated for. Specifically, Fischler claims that Ehrlich did not pay the issue fees for a patent that subsequently lapsed.

On 1 November 2017, Ehrlich responded by denying Fischler’s allegations and alleging that Fischler was himself in breach of contract for failing to pay Ehrlich’s fees. Ehrlich claimed that Fischler had failed to pay the fee despite being warned of the consequences, and so could not come along with claims against Ehrlich.

On 7 February 2018, there was a preliminary pre-trial hearing, where the parties stated their cases. During that hearing, Ehrlich’s attorneys stated that they intended to request that the plaintiff deposit a bond (see page 6 lines 14-16 of the protocol).  After the parties stated their allegations, and after the court raised issues regarding the parties’ allegations, in a preliminary ruling, the court stated that “After the court explained the chances and risks in prosecuting the case and the problems anticipated in managing it, the court gave the plaintiff 14 days to consider and decide on whether to continue. Should the plaintiff decide to continue, the defendant would be entitled to request that a bond be posted”.

On 22 February 2018, the Plaintiff stated that they intended to continue with the proceeding. Consequently, on 22 February 2018, Judge Amit Amisman ruled that the defendant could request that Plaintiff posts a bond, and can make this request within 30 days.

On 21 March 2018, the Defendant requested that the judge oblige the plaintiff to post a bond. After reviewing the case and hearing from both parties, on 23 May 2018, the judge ruled that a bond of 50,000 NIS should be posted by the plaintiff to guarantee the defendant’s expenses should the defendant prevail. In her ruling, the judge stated that the claims could not be considered as totally groundless, but one could not, nevertheless, ignore the real problems that the defendant’s counsel had pointed out, since the plaintiff had not based his case on a legal obligation that showed that the service provider should have paid the fee on behalf of his client.

On 20 June 2018, the applicant submitted a further request in which he claimed that in the circumstances, there is a real danger that the court is partisan, since according to his allegations, in a string of statements, the court has indicated that it has already made up its mind. The applicant alleged that in the decision of 7 February 2018, the court threatened him by stating that if he continues with the suit, the court would give the defendant the opportunity to request that a bond be deposited. The Applicant also raised issues against the decision to require a bond itself. He alleged that this decision is a statement by the court concerning the likelihood of him prevailing, which indicates that the judge had made up her mind regarding the case, and so should disqualify herself.

The defendant claimed that the Applicant had not indicated real grounds for suspicion that the court had prejudged the issue, and had not concluded that the defendant was innocent to the extent necessary for the court to recluse itself. The defendant claimed that the job of the court is to review the statements of case and to get a general feeling for the case at this early stage, from the papers submitted, and this is what it did. The defendant also claimed that the court had not invited the defendant to request a bond as a threat to the applicant, but rather, in the hearing of 7 February 2018, the defendant themselves had stated that they intended making such a request and the court simply agreed to this request.

Discussion and Ruling

Section 77a(a) of the Law of the Courts states that:

(a) A Judge will not sit in judgment if one of the parties or the judge himself considers that there are circumstances that indicates a real suspicion of bias in managing the case.

In this regard, Bagatz 2148/94 Gilbert et al. vs. President of the Supreme  Court, p.d. 48(3), 763, 605 (1994) establishes a test for a real suspicion as follows:

The judge has reached a (final) conclusion regarding the matter under dispute, such  that there is no point in conducting the trial. The point is that there is no expectation that the judge will be impartial. The conclusion could be the result of knowing one of the parties in advance, or prior knowledge of the issue under consideration, such that there is no real likelihood that rational persuasion will result in a change of mind. Note: it is not enough that the judge should have an opinion. For a judge to be disqualified from judging a case one has to show a prior opinion, but that he has closed his mind and  is not open to reconsideration during the trial.

Similar things were stated in Appeal 7858/06 Walhorn vs. Narkis,. 31 July 2007:

It is not uncommon for a judge to express an opinion regarding the likely outcome of a case before him. If this opinion is merely  a presumption and the judge is open to accepting a different position, the mere expressing an opinion is insufficient for the judge to recluse himself from the case. It is not sufficient that the judge has an opinion in the matter in question. To be disqualified that judge has to have a preconception that is not open to change during the trial.

In this instance, the Applicant claims that there is a real likelihood of bias that disqualifies this judge, but the judge do not accept this claim.

The Civil Court Regulations 1984 give the court wide discretion at the pretrial stage. Amongst other rights, the regulations allow the court to order that claims be cancelled where the statement of case does not provide legal grounds for prevailing (regulation 100 of the Regulations) or to reject the charges for any other reason that provides a basis for throwing the case out (regulation 101(3). Consequently the court is allowed and is even expected to relate in a pretrial hearing to the apparent legal and factual problems inherent in a case as they appear from the Statements of Case. The Supreme Court ruled this in Appeal 10353/09 Shindleman vs. Bank HaPoalim ltd, 14 February 2012:

As known, the pretrial hearing is intended to clarity the point of contention and the way the proceeding should be conducted to make it as efficient as possible, to simply, shorten or deny the case, or to find a point of compromise between the parties, In the framework of the pre-trail hearing, the court can point out problems in a parties’ statement of case, and even ask leading questions if necessary. In this context, one must understand the court’s statements , which are in writing, where it states an opinion regarding the apparent likelihood of the charges and the defense working, with regards to the stage reached. (Appeal 1150/09 Zvi Zickler vs. The Week in Ashdod 22 March 2009 (not published). Here we are talking about an early stage of the proceeding, and the opinion stated by the court does not indicate that the court has locked its opinion and the final verdict is known in advance.  

In light of that stated above, there is no reason why an opinion expressed by the judge in a pre-trial hearing should bar the judge from trying the case. As stated previously, the job of the court in the pretrial hearing is to act to make the trail more efficient, and in so-doing, may point out flaws in their positions to the parties. This is how the judge acted in this instance. One cannot state that in this instance, the court has closed its mind and is not open to persuasion  by evidence to be brought by the parties. That stated by the court is only based on the statements of case and on the legal submissions at this stage of the trial, and cannot be understood as indicating that the court had reached a final conclusion

The allegation that the court had invited the defendant to request a bond is rejected since it is incompatible with the way the hearing was held. It was the defendant who in the pretrial hearing,  stated that they intended to request a bond be posted – see page 2 lines 31 of the protocol of 7 February 2018.  The court only gave their permission for this once the plaintiff made it clear that he wished to continue. In so doing, the court has not taken a position against the plaintiff and is not threatening him.

Contrary to the plaintiff’s claim, the court has NOT reached a conclusion regarding the likelihood fo the plaintiff prevailing in ordering that a bond be deposited “because the likelihood of prevailing are small”, but rather the court stated that the charges are not baseless, but one cannot ignore the problems that the defense indicated. These statements do not imply that the court has made up its mind regarding the merits of the case.

The remaining claims of the plaintiff regarding the 23 May 2018 ruling, are really an appeal of this ruling and should not be considered a ruling on whether the court should recluse itself.

Judge Michal Amit Anisman, in interim ruling re Complaint 13934-07-17 Fischler vs. G.A. Erhlich (1995) ltd and Complaint 38720-10-15 G.A. Erhlich (1995) vs. Fischler, Fischler , 9 July 2018

COMMENT

This ruling, and that to require a bond was appealed to the Supreme Court.


District Court Judge Requires Plaintiff Suing Patent Attorney for Failing to Pay Issue Fees on his Behalf, to Post Bond of 50,000 NIS to Cover Defendant’s Costs

August 15, 2018

Joshua Fischler has sued G.A. Ehrlich ltd (Ehrlich & Fenster Patent Attorneys – henceforth Ehrlich) for failing to pay the issue fee of an Australian Patent, thereby allegedly causing them damage of 21,000,000 Shekels.

For the sake of the court fee, Fischler sued for 5,000,000 Shekels.

Judge Michal Amit Amisman of the Tel Aviv District Court was asked by Ehrlich to order that Yehushua Fischler deposit a bond under Regulation 529 of the Civil Court Regulations 1984.

The plaintiff (Fischler) has sued the defendant (Ehrlich) claiming damages of 5,000,000 Shekels that were caused by breach of contract.

In 2010, Fischler, as owner of 99% of the shares in Koron Industries ltd, approached G.A. Ehrlich  to manage the registration of a patent in a number of jurisdictions, including Australia.

Erhlich could only make a very approximate estimation of the costs for this service since they could not tell in advance how many actions would be required in each of the various jurisdictions, and Fischler was also informed that the estimate did not include the various official fees. Consequently, from time to time, Fischler made various additional payments at Ehrlich’s request.

Fischler claimed that at the end of 2013, he suspected that he was paying additional sums that were not required, and so requested a breakdown of what had been paid for which application, and what additional charges could be expected. However, he did not receive the requested breakdown. Fischler claimed that this led to an agreement between the parties, that he would pay 8962 Shekels in cash, and the balance of the claimed debt of 41,109 Shekels would be checked. He gave a security cheque for this sum, that was post-dated six months.

Fischler claimed that this security cheque was not intended to be banked, but was banked anyway, was not honoured, and a district court proceedings was initiated (38702-10-15 that was subsequently combined with this case.

The present case was submitted after the case regarding the security cheque was filed, and it relates to failure to register the patent in Australia.

According to Ehrlich, on 7 August 2014, they informed Fischler that the Australian patent had been allowed and that they had to pay 2100 Shekels + VAT + 635 Australian dollars in official fees and local agent’s fees by 7 November 2014.

Fischler alleges that Ehrlich made their acceptance of the Australian issue fees conditional on Fischler settling the open debt, including that relating to the registration in other jurisdictions that he’d asked them to check.

In consequence of this, the fee was not paid to the Australian Patent Office and the period for registration lapsed. Fischler claims that Ehrlich broke the contract between the parties, and should have allowed the client to pay the issue fees directly or via his credit card (whose number Ehrlich had) and not allowed the patent to be canceled.

Fischler is relying on two opinions. The first states that the patent was relevant and economical for use in Australia, and the second opinion, that failure to register the patent in Australia had resulted in losses of 21 million shekels. However, for the sake of limiting the court fee, he was only claiming damages of 5 million Shekels.

Ehrlich counter-claimed that the effect of this lawsuit was that the plaintiff was asking the court to establish an absurd norm under which a client could make it absolutely clear, after warnings, that he had no intention of paying the requested service charges and official fees, and the service provider would have to bear the burden of paying the costs, instead of the client, to save him from the trouble he’d brought upon himself.

Ehrlich claimed that there was no disagreement that he’d informed the client regarding allowance of the patent in Australia, and to ensure that the patent would issue, he had to pay both local and Australian agent fees and the official issue fees. Similarly, there was no disagreement that Ehrlich had reminded him of the timeline and the fees, and that if the client failed to pay the fee, the application would lapse. It was explained to the client that unless he transferred the money by 7 November 2014, the application would lapse. In their final correspondence, he had informed the client that failure to transfer funds would result in him taking no further action and the application would lapse.

Nevertheless, the client, despite knowing the deadline and the result of not paying, chose not to transfer the required payment and so the issue fees were not paid and the patent lapsed.

Ehrlich claimed that there is no legal obligation for him to pay fees on behalf of a client, and at the time in question, the client owed tens of thousands of shekels, and a cheque that was supposed to cover the debt had not been honoured by the bank. Ehrlich claimed, and considered that the client concurred, that there was no agreement that he would provide  services for free and to pay fees on client’s behalf from his own pocket. He noted that the agreement with the client was that all actions required advanced payment and he was acting in accordance with this agreement.

Ehrlich further noted that the client in this instance was actually Koron and not Fischler himself. Thus even if there was some basis for the charges (which Ehrlich denies), then Fischler has no legal standing but Koron does. Ehrlich has no disagreement with Fischler and this alone is sufficient justification to throw the case out.

Finally, Ehrlich denies making payment of the Australian issue fee conditional on settling the accumulated debt for other legal services. Had Fischler paid for the issuance in Australia, he would have paid the issue fees, regardless of the open debt.

The claims of the parties

The Defendant (Ehrlich) claimed that there is room to require the Plaintiff (Fischler) to deposit a bond to ensure that should he lose, that Ehrlich’s costs be met, since the allegations are ridiculous (in Ehrlich’s opinion) and lack a legal foundation, and so should be simply thrown out.

Ehrlich considers it would be wrong to establish a legal norm wherein when a client makes it clear to a service provided that he will not pay fees and service charges and is warned of the consequences, that the service provider (in this instance, a patent attorney) should be obliged to cover costs himself, and there is no normative source that can serve as a basis for the charges brought.

Ehrlich further claims that the post-dated cheque given to him was not a conditional cheque that should not have been deposited, and it bounced due to insufficient funds in the account, and not because the client had given an order not to honour it. This is indicative of economic difficulties of the client.

Fisachler claims to own two real estate properties; one in Shoham and one in Givatayim, owned together with his wife, and failure to cover the cheque was due to a legitimate business disagreement between the parties.

Fischler counter-claims in an affidavit, that the registration of the patents was supposed to be done in his name, and so he himself filed the suit. Fischler further claims that Ehrlich could have used Fischler’s credit-card to pay the official fee, and failure to pay the fee was negligence on the part of Ehrlich.

Ehrlich pointed out that Fischler did not provide documentary evidence for the real-estate that he claimed to own, and reiterated that he was under no legal obligation to pay the fee on behalf of the client, he did not have the client’s credit card details and was anyway forbidden by law to use the client’s credit card without permission.

The Normative Framework

Ehrlich is relying on regulation 519 that requires the plaintiff to post a bond to guarantee funds to cover the defendant’s expenses.

A bond to cover costs

(a) The court or the registrar, can, if deemed appropriate to do so, order the plaintiff to post a bond to cover the costs of the defendant.

The rationale of Regulation 519(a) is to prevent frivolous lawsuits and to ensure that the defendant’s costs will be covered in cases where the likelihood of the defendant prevailing are deemed weak. The case-law establishes that the judge should seek a balance between the rights of the defendant to have his costs covered, and the right of the plaintiff to have access to the courts, such that the bond should not be set too high to cause a difficulty for the plaintiff to sue.See Appeal 5488/16 Netanel vs. Rishan Buiding and Investments ltd, 17 July 2016, Appeal 8575 Hamad vs. Elvatin ltd., 30 December 2015, Appeal 2142/13 Naamat vs. Kramin, 13 November 2013, Appeal 5738/13 Amu Saluk vs. The General Health Service 14 November 2014, and 2142/13 Abraham vs. Jaegerman, 16 January 2013:

We are dealing with a regulation that invites a meeting and clash between important values. On one hand, the request to post a bond can block access to the courts before a plaintiff with few resources, and can seal his fate before he has his day in court. This conceals a real damage to the right to a trial to someone, merely because of poverty. On the other hand, the purpose of the bond is to prevent baseless charges being brought, and to ensure that if they are brought, the defendant can recuperate his costs should he prevail.

In setting this balance, the Case-Law establishes that posting a bond under Section 519 is a rare occurrence and is done only in extreme circumstances, since one should not require the plaintiff to post a bond merely as an aggressive strategy, and it is noted that there is a ‘balance of powers’ between his chance of winning in the proceeding, between the plaintiff’s ability and the right to use the courts, as a normative activity. (see Plony vs. Plony, paragraph 9, 18 February 2016).

When the court comes to rule on whether a bond is appropriate, it has to consider four issues, which the Supreme Court has divided into two groups: The first is where the plaintiff is a foreign entity and where there is no update address of record, and the second is where there is only a slight chance of the plaintiff prevailing, and where the plaintiff is in financial straits.

The two issues relevant in this instance are that the chances of prevailing and financial state of the plaintiff.

As to the chance of prevailing being slight, in re Naamat it was established that “in light of this request, the court has to consider the a priori likelihood of prevailing at a relatively early stage of the proceeding, but is not expected to make a detailed analysis. It is also stated that this consideration alone is insufficient to require a bond to be posted unless the case looks to be totally baseless.  In such cases, it is ruled that “The defendant’s interest not to be distracted by the proceeding and the public interest that the court’s time is not wasted prevails. However, it is also important to ensure that the right of access to the courts is not limited, except in exceptional cases.”

As to the financial condition of the plaintiff, in re Naamat it was established that this consideration is problematic. Particularly as the sole consideration, and even as one of the considerations. Where we are dealing with a plaintiff who is in a poor financial state, one is particularly worried that he may not be able to compensate the defendant for his expenses at the end of the proceeding. Despite this, the court has ruled more than once, that one doesn’t require the plaintiff to deposite a bond merely as a deterrent (see Appeal 544/89 Oykel Industries (1985) ltd vs. Nili Metal Works ltd, p.d. 650, and the Jaegerman case mentioned above). Furthermore, where we are dealing with a party who is resident in Israel, his financial condition does not have to be considered when weighing up whether he should hae to post a bond. The approach is that where a plaintiff is domesticiled in Israel, even where the financial state is poor, he is considered an economically viable entity that can be collected from over time (see Abu Keva above). In Judge Amit’s opinion, this approach requires the court to be very careful before ordering a bond be posted. The gates of the court should be open to all litigators, poor or rich, destitute or financially solid, and we cannot allow a situation where it appears that justice is the inheritance of the financially well off.

From the case-law taken together, it appears that requirement for a bond to be posted should reflect the balance between the right of access to the courts of the plaintiff and the property right of the defendant to be protected from baseless law-suits.

Applying the principles to the case in question

Having expressed her preliminary opinion regarding the merits of the case, the defendant’s comments and the plaintiff’s response, and to the law and case-law, Judge Amit doesn’t think that the plaintiff will prevail.

As to the likelihood of the plaintiff winning, Judge Amit Amisman first notes that case-law establishes an interest to avoid frivolous law-suits, and this is not only an interest of the defendant (which should not be sneezed at) but also of the public in that court resources are limited and expensive and should be available for handling significant issues. This itself is part of the importance of ensuring access to the courts (see re Halid, above).

In this instance, the court is not sure that the complaint can fairly be labeled a “completely groundless proceeding”. However, one cannot ignore the defendant’s points regarding the chances of the plaintiff prevailing, notably the lack of legal grounds for claiming that a service provider is obliged to pay fees on behalf of the client. Furthermore, there is no disagreement that the parties had agreed that the fees should be borne by the client, and the plaintiff had received warnings from the defendant that failure to pay the fee would result in the application becoming abandoned (see emails from 20 October and 3 November 2014).

As to the financial standing of the plaintiff, it seems to the judge that lack of cover for the cheque is sufficient grounds to establish a doubt that the plaintiff will pay defendant’s costs if he loses. True, the defendant provided documentation that claimed that he owned real estate, but there were no land registry certificates that proved that the properties were indeed his; are these properties co-owned with his spouse, or are they being used as securities or is there a lien on them? The plaintiff did not submit a valuation of the properties or any indication of his personal wealth.

The defendant has only asked for 53,807 Shekels in the parallel law suit regarding unpaid bills, and this also supports the judge’s decision to accept the request for a bond to be posted.

In this instance, the defendant has stated that should he be required to pay costs, he will do so without trying to wriggle out of them. If so, the defendant has the financial wherewithal to post a bond or to pay the defendant’s costs, and so access to the court will not be denied.

In light of the above, Judge Amit Amisman comes to the conclusion that in this instance, the balance of interests leads to requiring a bond to be placed.

Size of the Bond

When balancing all the interests and those pertinent to the case in question; plaintiff’s right of access to the court, the judge’s preliminary assessment of the case and the right of the defendant to be compensated if the case fails, with a rough estimate of the cost of mounting a defense, the size of the outstanding debt due to the bounced cheque, Judge Amit saw fit for the plaintiff to post a bond of 50,000 NIS, to cover at least part of the defendant’s anticipated costs.

Conclusion

The plaintiff will deposit a bond of 50,000 NIS (cash or index-linked bank guarantee) as guarantee to pay costs should he lose.

IF the bond is not timely paid, the case will be dismissed under regulation 519b.

As an afterword to this decision, but not to the case, the judge considers that the parties should try arbitration to try to bridge the gap between them, outside the court. The parties will respond to this suggestion by 7th July 2018.

Interim ruling by Judge Michal Amit Amisman regarding posting of a bond in Civil Case 13934-07-17 Fishler vs. G.A. Ehrlich (1995) ltd, and Civil Case 38720-10-15 G.A.Ehrlich vs. Fischler, 23 May 2018.

COMMENT

Following this ruling, Fischler requested that Judge Amit Amisman recluse herself as having preconceptions that made it impossible for her to judge the case fairly, and then appealed both the size of the bond and the request that she recluse herself to the Supreme Court.

I will translate and post the appeals. As it is ongoing, I will not comment on the merits of the case at this stage.


Suspending a Patent Opposition Pending Examination of Divisional Application

August 12, 2018

janssen pharma.jpgApplication for patent IL 253468 to Janssen Pharmaceuticals is a divisional application of IL 206448, filed under Section 24 of the Law. The parent application is being opposed by TEVA.

TEVA has asked that the Opposition against the parent application be frozen for 18 months from when the Opposition was submitted, in accordance with Circular 020/2012 which regulates oppositions to allowed patents where there is a pending divisional application.

The Opposer claims that there is an overlap between the invention claimed in the parent and that claimed in the divisional.  Thus it is reasonable to assume that if an Opposition is filed against the Divisional application, similar factual and legal issues will arise, and the expert witnesses will likely be identical. Consequently, freezing the opposition to the parent application until the examination of the divisional application is completed will contribute to the efficiency of both the current proceeding and the expected future proceeding.

TEVA further claims that if the current opposition is not frozen, the Applicant will obtain an advantage since he can manipulate the prosecution process of the divisional application in response to issues revealed in the Opposition process of the parent.

The Applicant does not consider it appropriate to freeze the procedure. Nevertheless, they agree that conclusions reached in the Opposition to the allowed parent application will apply to the divisional application if the Opposer should file an opposition against it. The Applicant considers that this agreement makes freezing the Opposition unnecessary, since if an opposition is filed against the divisional, the findings of the present opposition will apply to it, and this makes the process efficient.

Discussion

The Commissioner thinks that on the grounds of efficiency, the request to freeze the Opposition proceedings should be accepted. As explained in the ruling concerning the Opposition to IL 195030 Teva Pharmaceuticals ltd vs. Boehringer Ingelheim International GMBH, 28 January 2002, paragraph 3 of the ruling:

The authority of the courts to delay a proceeding whilst a different proceeding occurs, raises similar issues that are not contentious. These issues are authority to do so, and discretion, which are applied to ensure efficiency of the proceeding, efficiency of the legal system, saving time and resources, preventing conflicting decisions from issuing, convenience for the parties, fast resolution, balance of convenience and the like. These are true, not only when the parties in the two proceedings are identical, but also when there are different parties but similar issues, similar legal considerations, and the interests to be considered are identical.

In this instance, the parties concur that there is a similarity between the inventions in question. In this case, if an opposition would eventually be filed against the divisional application, it is indeed likely that the similar issues will be raised, similar witnesses will be required to testify and the prior art will be the same in the two proceedings.

The Applicant’s consent that findings in the parent opposition be applied to the divisional, does not adequately address these issues. From a practical perspective, it is unreasonable to make a determination concerning the parent opposition before an opposition is filed in the divisional.

Such a situation would create a state of affairs wherein it is necessary to manage two proceedings with similar witnesses and experts, and similar issues will be considered, or that either the opposition in the divisional case be suspended until the issues are determined in the parent case, or the opposition in the parent case be suspended until the issues are determined in the divisional case or the cases are combined.

Furthermore, even if even various determinations are made in the parent case, it will be appreciated that the parent and the divisional will not have identical claims, and so uncertainty will arise as to whether conclusions from the parent case can be applied to the divisional, and what is the decision in similar but not identical matters to those raised in the parent case.

The commissioner rejects the Opposer’s claim that freezing the opposition is essential to prevent the applicant from applying lessons from the Opposition to the prosecution of the divisional application. Whilst there is some truth in this, it is insufficient, in and of itself, to justify freezing an opposition proceeding. It will be remembered that the Opposer can oppose the divisional application and in that framework, issues relating to the patentability of the divisional application will be considered.

In light of the above, the Commissioner rules that the Opposition proceeding to the parent application be suspended for 18 months from when it was filed, i.e. until 29 September 2019.

The Secretariat of the Patent Office will ensure that the Examiner of the divisional application is aware that there is an opposition against the parent case, and that the divisional application should ,therefore, be examined in accordance with Circular 020/2012.

No costs are awarded at this stage.

Interim ruling regarding suspension of an Opposition to a parent application pending examination of a divisional application, in re IL 206448 to Jenssen, opposed by Teva, ruling by Commsioner Ofer Alon, 19 June 2018.


Amending the Statement of Case to Hone Arguments

August 8, 2018

This interim ruling addresses the issue of amending the Statement of Case in Opposition proceedings before the Israel Patent Office.

IL 209734 to G Patel titled “A monitoring system based on etching of metals” was allowed and published for Opposition purposes.

Freshpoint Quality Assurance Inc. opposed the patent, and after the Applicant submitted their counter statement, Freshpoint requested permission to amend their statement of case.  They justified this request on the basis of the Applicant adding new details. They further argued that some of the amendments were necessary due to admissions of the Applicant in the counter-statement of case, and some were required to focus issues after the specification was twice amended following submission of the Opposition.

The Applicant considers that allowing Freshpoint to amend their statement of case would allow them to improve their position, and this would be financially difficult for him, as a private individual.  Patel further alleged that the amendment did not result from the additional details that he submitted, which should be considered as part of the proceeding and could be addressed in the evidence stage.

The Opposer related to the case-law and alleged that amendments to the Statement-of-case should be generously and liberally allowed.

In general, the Application relates to a system of control based on etching away metal of a two layer system, to provide an indication of time, temperature, humidity and so on.

The Application is a national phase entry into Israel of a PCT application that claims priority from a number of US provisional applications submitted between 3 June 2008 and 2 May 2009. The Israel application was allowed on published for opposition purposes on 31 May 2016 and the opposition was submitted on 30 August 2016.

After the Opposer submitted their statement of case, the Applicant requested permission to amend the specification. The parties agreed that the amendments should follow Regulation 102vi of the Patent Regulations 1968.

Following this agreement, the Opposer submitted an amended statement of case and the applicant again requested to amend the specification, but this time only amended the dependent claims. The Opposer considered that this amendment was not sufficiently justified and contravened Regulation 95 and should be struck. In a ruling of 28 September 2017, the Deputy Commissioner Ms Jacqueline Bracha rejected the request for the amendment to be canceled and when the Opposer stated that they would not be amending their statement-of-case, she ordered the Applicant to file his counter-statement. The second amendment followed the procedure set out in Regulation 102vi of the regulations.

One the Applicant submitted his statement of case, the Opposer requested that additional details regarding the denial in paragraph 25 of the Applicant’s statement of case. These paragraph related to the Applicant’s response to the  Opposer’s contention that the phrase “destructible barrier layer” that appears in the claims is not supported in the priority applications. The Applicant responded, but the Opposer requested interim costs, and that a schedule be set for submission of the evidence. In an interim ruling of 10 April 2018,  costs were awarded and a date for the Opposer to submit their evidence was set.

Instead of submitting their evidence, the Opposer has requested to amend their statement of case.

Discussion

The guiding principle for amending the statement of case before the Patent Office is that unless there are reasons to refuse the request, amending the statement of Case will be allowed, so long as it focuses the discussion on the issues that the parties disagree on. The reasons for not allowing amendments to the Statement of Case are also given:

This court has the authority to allow amendments to the Statement of Case in cases that the amendments relate to the issues that are really disputed by the parties, and where there is no reason NOT to allow the amendment. Such reasons (for not allowing amendments) include inequitable behavior on behalf of the party requesting the amendment, adversely affecting the rights of the opposing party in a manner that cannot be compensated for by a cost ruling, and tardiness in requesting the amendment (see the Request to cancel patent no. IL 154398 (request to correct the statement of case and evidence) Logo Engineering Development ltd vs. State of Israel, 29 April 2012. Furthermore, when exercising the authority, the court should consider the stage that the proceeding has reached, since the Opposition proceeding itself is a barrier to the Applicant obtaining the patent.

(Opposition to Patent 187923 (request to amend the statement of case) Pimi Aggro Clinic ltd vs. Xeda International, 19 May 2013).

In contradistinction to most of the cases  where amendments to the Statement of Case have been requested, here the Opposer does not wish to rely on additional publications that were missed in the search for prior art prior to filing the original statement of case.

As the Opposer claims, in this instance, the amendments are by way of honing the claims. The Deputy Commissioner, Ms  Jacqueline Bracha does not consider that these sharpening of arguments are necessary at this stage of the proceedings, since the honing and polishing of arguments that are not new arguments, may be done at the evidence stage.

Furthermore, the Deputy Commissioner accepts the Applicant’s arguments that many of the requested amendments are actually a “Response”, as they relate to the Applicant’s statement of case. This is evidenced by the many references in the amended Statement of Case of the Opposer to the Applicant’s Statement of Case. The Statement of Response that the Opposer is entitled to submit under Regulation 61 of the Civil Procedure Regulations 1984 is not the Statement of case that the Opposer is allowed to submit in an Opposition before the Commissioner of Patents. Furthermore, it is clear that there is no place for these amendments, since if the amendment to the Statement of Case is authorized, the  Applicant will have the right to File an Amended Statement of Case in response and previously submitted statement of case will no longer represent the points of contention.

In this instance, the parties concur that the amended Statement of Case does raise issues not previously raised or widens the claims raised in the following instances:

  • The invention does not deserve priority since the element in claim 1 that is “capable of providing an induction period which is measured by a delay in a visual indication of the destruction of the metal or metal alloy indicator” only appears in this format for the first time in the seventh application from 12 May 2009.
  • The claimed invention is directed to a new property of a known product (chapter 7 of the new Statement of Claims.
  • The invention has no utility (chapter 8 of the new statement of claims.

The claim that the invention is not entitled to an earlier priority date was in the previous Statement of Case, but based on a different reason. The current basis is, according to the Opposer, a result of the Statement of Case in Response by the Applicant, which added new subject matter. The Deputy Commissioner accepts the Applicant’s contention that the Opposer forwent his right to amend his Statement of Case following the second amendment to the specification, and so the request to now amend the Statement of Case is tardy. Furthermore, the element that allegedly is not entitled to the priority date, was already part of the claims when the Statement of Case was first amended, and so the Opposer had an earlier opportunity to challenge it.

As to the claim that the invention lacks utility,  this is based on Fig. 39 of the Application which measures the induction period which was found in the Application prior to the amendment. However, according to the Opposer, were the so called “barrier layer” that is shown in Fig. 3 of the first priority document, which the Applicant relates to in their Response to the request for more details, then that period cannot be measured, and so the invention lacks utility. In other words, from the Applicant referring to Fig. 3, the Opposer concludes both that the Application relates to a new property of a known substance, and that it lacks utility.  From here, it appears that there is a connection between the addition of chapters 7 and 8 to the Statement of Case that relates to the utility of the invention, and the determination of the new property of the known material, and the Applicant’s response to the request for additional information.

 

In light of the above, the Deputy Commissioner accepts the Opposer’s contention that these issues could not have reasonably been submitted earlier.

 

In conclusion, parts 7 and 8 of the Statement of Claims result from the response to the request for more information, do focus the discussion on the contended issues and their submission is allowed.

 

The other requests to amend the Specification are refused. The references to “agreement by the Applicant” in the Statement of Case is really a Statement in Response, and so cannot be considered as amendments to the Statement of Case designed to emphasize the points of dispute between the parties. Amendments that are honing of arguments that relate to prior art previously referenced in the Opposer’s Statement of Case, are not necessary to establish the points of contention, and their place is in the evidence and summations. Amendments due to changes in numbering and deletion of claims can help to understand the Statement of Claims and could be submitted, but it should have been done after the second amendment to the specification. Incorporating them at this stage would require the Applicant to amend his Statement of Case and would result in unnecessary expense.

 

In light of the above

 

The Opposer will submit their Statement of Case amended as per above, i.e. with the addition of chapters  7 and 8 only. The amended Statement of Case will be submitted within 7 days.

 

The Applicant will be allowed to amend his Statement of Case by relating to the new Chapters 7 and 8. It is stressed that further amendments to the Statements of Case will only be allowed with explicit authorization, after submitting a detailed requested to amend the Statement of Case. In light of the limited amendment that the Opposer is allowed to make at this time, the Applicant will have 7 days to file their Amended Statement of Case from the submission of the Opposer’s amended Statement of Case.

Any request for extensions that result from Office pressures, festivals, bank holidays, vacations in Israel or abroad or from the need to the coordinate between the various entities, will not be allowed.

 

Since some of the amendments have been allowed and some have been rejected, no costs are awarded at this stage.
Interim ruling re Request to amend the Opposer’s Statement of Case in Israel Patent Application IL 209734 , by Deputy Commissioner Bracha, 11 June 2018.  

 

 


When a patent application goes abandoned due to a misunderstanding between Attorney and Applicant

August 8, 2018

This case relates to a request to revive an abandoned Application, where the Agent of Record was under the impression that he was instructed to abandon, and thus failed to respond to the office action and to the Notice of Imminent Abandonment and the Notice of Abandonment (which gives a 12 month window to reopen the case as of right). He also failed to report the issuance of these notices to the client. The client denies instructing the Agent to abandon the case.

Israel Patent Application Number 191364 to Pro Natura Gesellschadt for Gresunde Ernahdrung MBH is titled “Agent for Reducing the Usable Calorie Content of Food and for Therapeutic Reduction of Weight in particular in the case of Adiposity (Obesity)”.

The Application was filed on 16 September 2015, and when an Office Action was not responded to, a notice of Imminent Abandonment was sent to the Applicant’s Agent on 2 November 2016, and a Notice of Abandonment was sent on 8 February 2017.

(This wasn’t the first time that this application was considered abandoned due to a lack of response being filed. On 20 August 2015, the case was abandoned, but shortly afterwards, on 16 September 2015, it was reopened by the Chief Examiner under Circular 026/2014 ”Returning Closed or Abandoned Applications to Examination).

On 14 March 2018, i.e. over 12 months after the case was closed a second time, the Applicant petitioned for it to be reopened under Section 164 of the Law.

Applicant’s Claims

Daniel Feigelson, the Agent of Record, claimed that Mr. Virovnik, the Applicant’s representative, only learned that the case had been abandoned in January 2018. The request for reinstatement was submitted two months later because he had to submit affidavits in support of the Application to reinstate the case, together with a detailed response to the Office Action.

Mr Feigelson also claims that in a meeting with Mr. Vorovnik in December 2015, the Applicant requested to delay the Examination in Israel for as long as possible, pending a decision on patentability of the corresponding Application before the European Patent Office. In a phone call of August 2016, Mr. Feigelson understood that he should not do anything to further the allowance of the Israel Application.

The request to revive the case was supported by two Affidavits; one from Mr. Vorovnik and the other from Daniel Feigelson, the legal representative. Mr. Vorovnik’s Affidavit stated that contrary to Daniel Feigelston’s understanding, he never ordered him to let the Israeli Application lapse. Contrary to that stated in Mr. Vorovnik’s Affidavit, Patent Attorney Feigelston stated that he’d understood from the August 2016 conversation, that Mr. Vorovnik was not interested in pursuing allowance of the Israel Application. However, unlike his usual practice, Mr. Faigelston did not document the conversation or send a written notice stating that he would abandon the case as instructed, for Mr. Vorovnik to confirm.

In a hearing on 25 April 2018, Mr. Feigelston clarified that following the conversation of August 2016, he did not update Mr. Vorovnik regarding correspondence from the Israel Patent Office, thus Mr. Vorovnik did not know that the case had become abandoned. At that hearing, the Deputy Commissioner Ms Jacqueline Bracha ordered that Mr. Faigelston obtain a further Affidavit from Mr. Vorovnik expanding on what he did remember from the August 2016 conversation.

In accordance with this order, a further Affidavit from Mr. Vorovnik was submitted on 27 May 2017. However, this Affidavit does not clarify that there was a conversation in August 2018, as Mr. Vorovnik neither confirms nor denies that this conversation took place. It merely states that Mr. Vorovnik does not remember instructing that the case be abandoned. It is noted, however, that in the original Affidavit, Mr. Vorovnik was unequivocal that he did not give such an instruction.

Hearing

Section 21a of the Law defines the time period for requesting reinstatement of an abandoned patent as follows:

Where the Commissioner refuses a patent under Section 21a, he can reconsider the refusal if requested to do so within 12 months.

Section 164a of the Law allows the Commissioner to extend this period on reasonable grounds:

The Commissioner has the discretion, if he sees fit to do so, to extend any deadline of the Patent Office or proceedings before the Commissioner….

Considerations for extending a time period should be based on context and the interests in question. This was clarified by Judge Naor in Appeal 2826/04 Commissioner of Patents vs. Recordati Ireland Ltd, 26 September 2004:

The policy for ruling on the various requests before the Patent Office will change with the context, and depend on the deadline under consideration.

In a ruling concerning extending the 12 month period for reconsideration of a decision to close a file concerning IL 221116 Yaakov Dichtenberg et al. from 7 September 2016, the Deputy Commissioner stated that such requests should consider the interest of the Applicant on one hand, and that of the public interest for certainty on the other.

The relevant considerations are whether reasonable grounds for granting the extension were provided, the size of the delay and the reasons for the delay. See Opposition to IL 110548 Shmuel Sadovsky vs. Hugla Kimberly Marketing ltd, 122 August 2010, and the ruling concerning IL 157563 to Icos Corporation from 21 October 2013.

As to the first consideration, the period of the extension is only a little more than one month over the 12 month period set out in Section 21a, which makes it relatively easy to allow such a short extension.

On the other hand, the case went abandoned due to an apparent misunderstanding between client and attorney that could have been avoided by sending a written summary of the conversation or similar documentation. Furthermore, it was not even properly clarified what instructions the Applicant understood he’d given his attorney during that conversation which he doesn’t remember.

Ms Bracha notes that relying solely on a telephone conversation as grounds for abandoning an application does not seem to her to be reasonable or appropriate behavior. This should be clear since this isn’t even the first case that this application was closed due to not responding to an office action, and consequently one could expect the Agent for Applicant to be more careful.

Furthermore, on discovering that the case had become abandoned, the Applicant could have acted immediately, within the 12 month window under Section 21a. However, she accepts that he preferred to submit a full response to the office action, as was finally submitted.

When weighing up the relatively short delay on one side, and the nature of the mistake on the other, which is far from being reasonable, Ms Bracha applies her discretionary authority under Section 164 to allow the case to be reopened, but on condition that there will be no further extensions whatsoever, for any reason.

Ruling re reopening abandoned application IL 191364, 18 June 2018.

COMMENT

Apart from the stated desirability to confirm instructions of this sort in writing, I would add that even when having received instructions to abandon a case, it is good practice for the Agent of Record to report the Notice of Imminent Abandonment and/or the Notice of Abandonment as a courtesy, since even if there was no misunderstanding and the Applicant does request abandonment, applicants have been known to change their minds.

In cases where a client’s desire to reinstate a mark becomes known to the Agent of Record within 12 months, the request should be made before the 12 month window closes, even if an extension is requested to obtain affidavits and to prepare a response to the outstanding Office Action.  It makes sense to obtain reinstatement as a matter of legal right under the law rather than to attempt to reinstate based on the Commissioner’s discretion. This is particularly the case where there is a contradiction between the testimonies of the Applicant and that of the Agent of Record regarding the chain of events leading to the case becoming abandoned. In this instance, the Deputy Commissioner was amenable. Had she not been, the client could sue the Attorney for malpractice, and his defence would be that he was acting on verbal instruction that he did not bother confirming. Not the best situation to be in.