State of Israel Sues Omrix for half a Billion, claiming that their IP is based on service inventions, belonging to the State

In a major development, the State of Israel has filed a law suit in the Tel Aviv District court against Omrix, a company that has commercialized medical adhesives for use by hemophiliacs, for 500 Million NIS, claiming that the company had defrauded the State and stolen Intellectual Property belonging to the State.

Omrix sold their IP to Johnson & Johnson last year. The case is interesting as the State is basing their claims on both testimony and documents submitted by a Professor Martinowitz, who they claim is the real inventor, as a state witness.

The charges are based on the following:

  1. Martinowitz was the true inventor
  2. Under Israel Law, the invention can fairly be considered as being a Service Invention since Professor Martinowitz was an employee of the army and then of Sheba Hospital, making him a civil servant
  3. Martinowitz could and should have reported the invention to his employer (govt. agencies)
  4. The employer would have taken the appropriate measures and could have come to a fair and equitable arrangement with Dr Martinowitz and with Omrix
  5.  The legal opinions re ownership that Omrix obtained from their IP counsel were tailored to order and therefore worthless
  6. Fraud was committed when Omrix removed Martinowitz’ name from one of the earliest patents of the US patents, to not acknowledge him as an inventor in an attempt to intentionally defraud the government

I have a number of reservations regarding this suit, which is the first time that the State of Israel has addressed the issue.

In September this year, the University of Western Australia v Gray, the Australian Full Federal Court upheld a decision that a medical doctor affiliated to the university and to a hospital behaved reasonably when he filed patent applications in his own name. The ruling was based on academic researchers not being employed to invent. Israel has similar common law origins to Australia. Furthermore, since 1980, arguably the Basic Laws may provide an additional basis for defense.

Friend and colleague, Dr. Shlomit Yanisky Ravid was awarded a Ph.D. from the Hebrew University for her thesis on employee rights and she believes that the Israel Law can be creatively read to show that employees do have rights.

I will be publishing a fuller article shortly.

Categories: Academia, Intellectual Property, Israel, Israel Related, News, Patents

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