Israel Patent Number 132540 “System and Method for Direct Monetary Transfer Using Magnetic Cards” to Yehuda and Yigal Tsabari issued and then lapsed due to failure to pay the renewals.
Back on 24 July 2014 the Israel Patent Office agreed to the patent being reinstated. Generally, third parties who are utilizing the patented technology in good faith relying on the fact that the patent was abandoned are granted a non-transferable license that allows them to continue their business activities. Nevertheless, the Israel Patent Office Decision to allow a patent to be reinstated is published for opposition purposes, giving third parties three months to oppose the lapsed patent being reinstated.
In the case of IL 132540, on 23 November 2014, Going Dutch LTD filed an opposition to the reinstatement. They claimed that the patent had not lapses unintentionally, but that Tsabari had knowingly abandoned the patent and that this was evident from the way Tsabari tried to enforce his patent.
Tsabari responded to these charges but requested that part of his response be kept confidential by the Patent Office and not made available to the opposer, claiming that the information constituted a Trade Secret. The documents to be kept secret included a document describing an enabling system, a draft contract with a credit card organization, a proposal for developing a system based on the patent, a contract with an investor and a letter from the investor, canceling the contract.
The patentee argued that these documents were confidential and for the parties themselves, and that their publication could compromise the patentee’s ability to compete in the relevant market. They were submitted as evidence that the invention had not been abandoned, but beyond that, their contents were not relevant to the issue in question, and so their contents should remain restricted.
The Opposer noted that the patentee had not provided sufficient evidence to prove that the documents in question were fairly described as trade secrets. This was particularly the case due to the fact that the documents apparently related to a failed business transaction from ten years previously. Furthermore, the patentee was not a side in the agreements in question and therefore could not claim that any trade secrets were his secrets. Substantially, any documents used to support a legal claim should be available for public inspection. In addition, the opposer noted that the documents should have been supplied together with an affidavit and their dates and the parties thereof and the editor thereof should be identified.
Section 23 of the Trade Related Torts Act 1999 give the courts (including the Patent Office) authority to prevent the publication of evidence considered as including trade-secrets and to allow only restricted access.
In recent Supreme Court Decision 2376/12 Rami Levi [a discount supermarket chain] vs. Moshe Dahan, July 8, 2013, Judge Amit ruled that there was a connection between the relevance of a document to a proceeding and the extent it could be kept confidential.
Essentially, where a document is relevant to a proceeding but one side claims a trade secret, the court has to weigh up the opposing rights of the parties and also to be aware of the potential damage to further entities not party to the a proceedings.
As a general rule, in civil proceedings, documents are available to all and confidentiality is the exception – See 7598/14 Theopholus Johnopholus (Theopholus III), the Greek Orthodox Patriarch of Jerusalem vs. Hymnota LTD., albeit the precedent relating to religious confidentiality and not to trade confidentiality.
Firstly, therefore, the court has to assess the relevance of the documents in question, which is a function of the arguments between the parties. In this instance, the argument relates to the restoration of a patent under Section 61 of the Patent Law 1967:
Any person may oppose a patent being restored within three months of the publication of the restoration notice on the grounds that the Commissioner [or deputy in this case] did not have grounds to order the publication of the request [i.e. to oppose the decision to reinstate].
Consequently, the discussion regarding reinstatement should focus on the three grounds for reinstatement:
- failure to pay the fees resulted from reasonable circumstances
- the patentee did not intend the patent to lapse
- the patentee requested reinstatement as soon he realized that the fee was not paid.
The opposer considers that the patentee’s behaviour over the years was unprofessional, surprising and irresponsible. In other words, the patentee either wanted the patent to lapse or at least was unconcerned about his rights.
In response to these claims, the patentee described his attempts to commercialize the invention and submitted the documents about which he requested a secrecy order. The documents in question date to the period 2007 and 2008 and are thus of little relevance to the opposition proceeding.
Due to their lack of relevance to reinstatement, it seems that the right for confidentiality outweighs the right of access. They were prepared for the patentee or for exclusive licensee and were not published after they were not successful. There is no reason why these documents should enter the public record. Based on the statement of cases, the documents are not relevant and should not be published.
As to the lack of an affidavit, i.e. a signed statement testifying to that claimed, in Patent IL 118045 AstraZenca AB from 16 Jan 2005, there was a ruling to the effect that a statement should have been submitted. However, in the Rami Levy case the Supreme Court ruled that the affidavit requesting secrecy was sufficient and there is no need for an additional affidavit accompanying the submissions. In the present case, the documentation as supplied is sufficient since the content is clearly sensitive, rendering superfluous the need for an affidavit supporting this contention.
Furthermore, the Patentee decided to submit these appendices to his statement of case and not to later submit in the evidence stage as he could have done, relying on Section 93 of the Patent Regulations 1968. Consequently, at this stage of the proceedings, the patentee does not have automatic rights to view the documents.
Thus in the meantime, the documents shall remain confidential. Should the Opposer consider these documents relevantat a later date, he is entitled to request their publication. At this time, no costs are awarded.
Opposition to reinstatement of IL 132540 “System and Method for Direct Monetary Transfer Using Magnetic Cards” to Tsabari, opposed by Going Dutch LTD., interim ruling by Jacqueline Bracha, 7 May 2015.
I am a little confused here. The adversarial system requires that evidence brought in a legal proceeding be available to opposing parties to examine and challenge the validity thereof.
In this instance, the Opposer is using his legal right to oppose a patent being reinstated on the grounds that the patent was willfully abandoned. The Patentee has countered that there was no willful abandonment and has substantiated this claim with various evidence that allegedly shows this to be the case. In the circumstances, the evidentiary documents are considered by the patentee to be pertinent. If the patentee does not want the opposer to see the documents, he should retract them and base his case on other evidence.
That said, the 2008 documents are irrelevant as the patent only went abandoned on 24 October 2013, presumably retroactively on 24 April 2014, when the six month grace period past.
This patent was ‘abandoned’ for less than three months. The issue is when Tsabari realized that the patent had gone abandoned and when he tried to have it reinstated. Reinstatement is thus unlikely to be difficult, and one suspects that the patentee would be better served if he had chosen to use professional counsel for the reinstatement.
I had a look at the patent in question. It is a variation of the hoary old wedding present patent for directly transferring money from a credit card to the celebrants at a wedding. This is what a call a hardy perennial as approximately once a year some inventor comes in with this great idea he’s had.
Ironically the patent appears to be eminently voidable due to both lack of novelty and obviousness in light of the prior art and also on the substantive grounds that it is a software implemented business method and the fact that it is hardware implemented is insufficient to change this characteristic.