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.


Kerem

June 10, 2018

CEREMKerem Natural Foods Industry A. L. ltd applied for Israel Trademark Application Number 266067 for Jellies, jams, dried fruit, coconut oil, , black cumin oil, sesame oil, almond oil and other edible oils; Coconut milk, cream and butter; spreads, soup powders produced by cooking and preparing extracts of meat and vegetables, and soup powders for seasoning; all included in class 29, Date syrup, molasses; Coconut sugar and flour, molasses, honey, date syrup, crisp cakes, crackers, spreads and sauces; sweeteners made of stevia or other plants extraction; coconut flour and coconut flour baked products; all included in class 30 and for Fresh and unprocessed Coconut and other tropic Fruits and its products; all included in class 31.

Kerem is Hebrew for vineyards.

On 28 February 2017, HaKerem – Alcoholic Beverages ltd  opposed the registration. On 8 June 2017, Kerem Natural Foods submitted their counter-statement. HaKerem – Alcoholic Beverages ltd had until 11 August 2017 to submit their evidence, but this deadline was extended twice, to 12 November 2017, but the evidence was not forthcoming and instead HaKerem – Alcoholic Beverages ltd withdrew their opposition.

Kerem Natural Foods Industry then submitted a request for costs of 62,450 Shekels accompanied by an agreement with their attorneys regarding their hourly rate and various receipts evidencing payment in practice.

HaKerem – Alcoholic Beverages objected to the costs requested. They prevailed in the Opposition proceeding and are entitled to costs under section 69 of the Ordinance which states that

In any hearing before him, the Commissioner is entitled to award reasonable costs.

The right of the prevailing party to receive actual costs incurred depends on the amount requested, that it is properly documented, and that it is reasonable, necessary and proportional. See for example, Bagatz 891/05 Tnuva vs. Ministry of Trade and Industry p.d. (1) 600, 615 (30 June 2005). However, the arbitrators are required to consider the case specifics and legal policy, and are not obliged to award full costs – see Appeal 6793/08 Loar ltd. vs. Meshulam Lewinstein Engineering and contractors LTD. 28 June 2009, at paragraph 19.

The case specific considerations do not form a closed list and each case should be considered on its merits. These include the behaviour of the parties. The way the case was handled, the complexity of the case, the time invested in the case, whether the case requires specific expertise, the importance to the parties, whether the case has public interest ramifications, and the like.

As to judicial policy considerations, as previously ruled in Patent cancellation procedures against Israel Patent numbers 179379  and 142896 Alkermes Pharma Ireland Limited Novartis Pharma Services vs. MEDICE Arzneimittel GmbH & Co.KG from 28 March 2018, the patent office has an obligation to serve the greater public interest. In this framework, when addressing cost requests, the patent office has to find the right balance between the encouraging trademark submissions – both to protect property rights in brands and to prevent misleading the public regarding sources of goods, and not to discourage the submission of oppositions against unreasonable trademark applications. Awarding high costs to applicant or opposer could create an obstacle to filing that shifts from this balance.

In the present case, the request for costs did not provide sufficient details to substantiate their claim, and did not explain the basis of the costs, the number of hours spent by their attorneys, etc.  Consequently there is a real difficulty to determine whether the costs requested fulfill the considerations laid out in re Tnuva.

The Adjudicator of Intellectual Property, Ms Yaara Shoshani Caspi does not accept the claim of the enormous amount of work preparing evidence immediately on the filing of the Opposition, prior to the opposing counsel submitting their evidence. The Applicant did not explain why the Opposer should have to bear the burden of the Applicant’s obliging himself to pay global legal fees regardless of the work required, and also to provide a ‘bonus’ if the case is dismissed. The Adjudicator does not find this type of arrangement fulfills the ‘reasonable and necessary expenses’ requirement.

In this instance, the Opposition was abandoned at an early stage, after the filing of the counter-statement of case.  The Applicant did not need to file evidence, there was no hearing and no summations were required. In such a case there is no justification to award costs of 62,450 Shekels as requested. Compare for example, the cost request for Cancellation of Israel Trademark No. 140219 BASF Poyurethanes GmbH vs. Pazker ltd, 12 September 2015.

Conclusion, by way of estimation, costs of 7000 Shekels including VAT are awarded, to be paid within 14 days, or interest will be accrued.


A Balanced Temporary Injunction Against Rami Levy

April 19, 2018

This case concerns ‘minute steaks’ supplied by Rami Levy – a supermarket chain in own-brand packaging that has some similarity to that of Baladi, a brand that had introduced the product to the frozen meat freezers in Israel. Baladi sued Rami Levy for passing off, copyright infringement and unjust enrichment and tried to obtain a temporary injunction against Rami Levy at what is the start of the Israel barbecue season.

steaks

This case concerns ‘minute steaks’ supplied by Rami Levy – a supermarket chain in own-brand packaging that has some similarity to that of Baladi, a brand that had introduced the product to the frozen meat freezers in Israel. Baladi sued Rami Levy for passing off, copyright infringement and unjust enrichment and tried to obtain a temporary injunction against Rami Levy at what is the start of the Israel barbecue season.

baladi minute steak

The claims of passing off and copyright infringement were considered unlikely to prevail and thus not grounds for a temporary injunction. However, Judge Avrahami saw fit to grant a temporary injunction on the grounds of unjust enrichment. Rather than have Rami Levy’s product removed from the shelves and repackaged which could result in the meat being lost, she ruled that a sticker in a contrasting colour should be attached to the packages indicating that Maadaniya was Rami Levy’s own brand. Rami Levy was also advised to work towards introducing a more different package. The parties were invited to try to settle their differences without the court having to hear the case in its

Baladi makes meat products including minute steak which are thinly sliced steak that can be roasted in a frying pan in one minute. Baladi claims to have designed the packaging that they use for minute steaks.

Rami Levi is a public company that runs supermarkets across Israel. The company stocks known brands and also sells popular products packaged for them under their own label.

Rami Levi sells Baladi products. It also sells minute steaks under their only  own label “Rami Levi’s Sycamore Marketing Delicatessen”. Rami Levi’s own label minute steaks are packaged by TBone Veal.

In a preliminary ruling, Baladi claimed that minute steaks were not sold in supermarkets until they launched this product in November 2017 with a massive and expensive sales campaign. From the launch until 19 March 2018, the product sold well due to the marketing campaign. On 19 March 2018, suddenly, without notice, Rami Levi forbade Baladi to replenish supplies and blocked the product, and instead supplied minute steaks under their own label.

baladi logo

Baladi claims that the own-label brand is packaged in a copycat package of that of their product, and that this was a calculated, organized action of Rami Levi in bad faith, to ride on Baladi’s advertising campaign and product launch, benefiting from their investment. Baladi’s campaign has drawn customers to want to purchase their product. The customers go to the meat refrigerators and find the infringing product that is a copy of their package and are misled into believing that they are purchasing Baladi’s product.

Baladi considers that the case is particularly serious since Rami Levi is a retailer that can block their product whilst offering the competing own-label product. This is particularly problematic since Rami Levi’s product launch was just before Pesach and close to Independence Day which is the start of the Israel barbecue season when sales go up significantly.

In light of the above, on 22 March 2018, Baladi sued for passing off, unfair trade practices, copyright infringement in the product package and unjust enrichment. They filed their case in the Tel Aviv and Jaffa District Court. Baladi requested a permanent injunction, compensation and production of sales data. For the purpose of assessing the court fees, Baladi assess the damages at 2,750,000 Shekels.

Baladi also requested a temporary injunction on Rami Levi to prevent them using the product sold under their private label or at least to prevent them selling the product in the packaging used at the time of filing, and to cease from blocking Baladi’s products, and to enable their products to be sold on an equal basis with other frozen meat products. The Request was supported by an affidavit from Ms Irene Feldman, the VCFO of Baladi, and was filed as an ex-partes action for immediate attention since any delay will cause irreparable damage.

El gaucho minute steak

In response, Yossi Sabato, the VCEO of Rami Levy submitted an Affidavit claiming that Baladi was acting in extreme bad faith by not telling the court that they were conducting a parallel action against El Gaucho which is a label of TBone Veal in the Central District Court as 4347-01-18. In that instance, they made similar accusations which were rejected. This action, in a different court, against a different label, was a type of forum shopping that was indicative of bad faith and should be sufficient for the case to be thrown out. This was simply an attempt to corner the market and to prevent competition. The Ex-partes actions in both the El Gaucho case and in the present instance are cynical exploitations of the legal system designed to get free publicity, and the plaintiff was suing for extreme damages without having first contacted the supermarket chain, which is itself inequitable behavior for which the case should be thrown out.

monopoly

With regards to the complaint itself, Rami Levy claims that Baladi is trying to obtain a monopoly on minute steaks, which is a term known in Israel and abroad and which they did not coin. Baladi also tried to obtain a trademark for this generic term. Minute steaks have been advertised in Israel in the past and are available in restaurants and from butchers, and even from supermarkets. Baladi has not been in the market long enough for minute steaks to be identified with them to the extent that they deserve a monopoly on the term (acquired distinctiveness), and a reputation that is protectable, and even Baladi does not claim to have rights to minute steaks but only to the sound of the name.

Rami Levy

Rami Levy claims that their product package is completely different from Baladi’s, including writing and visual elements, and there is no likelihood of confusion. Baladi advertises their product with their trade-name Baladi clearly written thereon and, in the absence of this term, there is no likelihood of confusion. Rami Levy’s private label HaMaadaniya (literally the delicatessen) is well-known to Rami Levy’s customers as a low price brand, and there is no likelihood of confusion.

“Rami Levy” is written clearly on the front and back of the packaging, and is a super brand that does not need to ride on the reputation of Baladi or anyone else. The difference in price also prevents confusion, and all Rami Levy’s own branded products are clearly sold as such in their stores, and there are loads of examples of private labels being sold alongside branded goods and the public are not misled in any way that they are purchasing something other than the own label.

boycott

As to the issue of marketing Baladi’s products in Rami Levy’s stores, Rami Levy contends that they are under no obligation by general law (in rem) or by contract (in personam) with Baladi, to purchase any of Baladi’s products, including their meat products. Baladi’s goods are available in other chains. At present, Rami Levy stores DO stock Baladi’s minute steaks but, in view of the high price that Baladi dictates for their product, Rami Levy is under no obligation to replenish stocks of something much more

In answer to Rami Levy’s response, Baladi reiterated that their issue is NOT the name ‘minute steak’, but the packaging and the product blocking. On 26 March 2018. a long hearing was held. There were many attempts to bring the parties into an understanding, and the affidavits were reviewed and the parties summarized their arguments. After the hearing the parties still refused to come to an understanding, and so there is no alternative but to reach a verdict in this instance.

Relevant Considerations Regarding Temporary Injunctions

Principles-Governing-Issuance-of-Temporary-Injunction

It is known that the party requesting a temporary injunction has to convince the Court, on the basis of apparently convincing evidence, that there is grounds for the complaint and the Court then has to balance the ease of implementing the different actions, i.e. the damage to the complainant if a temporary restriction order is not issued, vs. the damage to defendant if a temporary restriction order is issued but if it later transpires should not have been. The Court has to ascertain whether the temporary injunction was requested in good faith, and if the injunction is just and fitting in the circumstances and does not unduly damage the defendant – See Regulation 363 of the Civil Procedures Regulation 1984.

interests

The main considerations for requesting a temporary injunction are the likelihood of prevailing and the balance of interests of the two parties, but where the Court considers that the likelihood of prevailing is greater, they will be less concerned about the balance of interests, and the opposite is also true.

When deciding on a temporary injunction, the court also has Read the rest of this entry »


Passed Off Pasta?

February 8, 2018

barilla pasta

Barilla is an Italian pasta brand that is on sale in Israel.

Oddly enough, pasta is made of durum wheat (Triticum durum or Triticum turgidum subsp. durum), which is a tetraploid species of wheat which is hard to mill due to the starchy endosperm. Dough made from its flour is weak or “soft”. This makes durum favorable for couscous (semolina) and pasta, and less practical for flour. It is actually grown in Israel and exported to Italy!

Rami Levy

Rami Levy (Shivuk HaShikma) is an Israel chain of supermarkets that, as well as selling commercial brands, negotiates with manufacturers and packages its own-brand labels which are usually cheaper.

 

Recently, Rami Levy started stocking its own-label dried pasta.

Rami Levy pasta

As you can see, Rami Levy’s pasta, like Barilla, uses a blue box, albeit a slightly different shade, and has the type of pasta contained viewable through a cellophane window. The type of pasta (penne, spaghetti, cannelloni, etc.) is written in white, although on Barilla’s product, the name is in English letters and on Rami Levy’s own brand, it is in Hebrew. Rami Levy Shivuk Hashikma is written across the top and on the side of the box. The name of the brand, written in yellow, seems to be a face with a hat on and wide mouth, but is actually a stylized O followed by lla in italics giving Olla. However, Barilla also ends with an lla.

Barilla sued Rami Levy in the Tel Aviv District Court for a million shekels (about $300,000 US, 250,000 Euros) and obtained an injunction ordering Rami Levy to take their own-brand pasta and sauces off the shelves. Rami Levy filed a counter-suit and the cases are pending.

Rami Levy claims that Barilla waited for over 14 months since Rami Levy introduced their own-label and so the case should be thrown out. He claims that his competition is fair and Barilla should respond by advertising, discounts and special offers. He dismisses allegations of passing off, and argues that there is an overwhelming weight of precedent from the District and Supreme Court that indicates that the similarity is not excessive and that the case is baseless. The name Rami Levy, the Italian series is clearly written in white on blue in large letters.

Barilla has a trademark on their brand name and not on the design of the package or on the blue colour. Rami Levy accuses Barilla of ignoring their own branding and trying to monopolize the blue colour. However the case-law does not support claims of passing off where packages are similar but the trade name is clearly written and there is no likelihood of confusion in such cases. The courts do not recognize rights in a packaging colour. Rami Levy further claims that with over half a billion shekels in sales of “the private brand” in 2017, his sales outstrip those of Barilla. His prices are much lower and this also distinguishes them, and there are a number of accumulative differences.

COMMENT

taaman 1taaman 2

We note that Taaman (pun on taam which means both taste and reason) is an Israeli importer and distributer of staples such as flour, pasta, chocolate, etc. that also has a red logo with white text in an oval. Their name, in Hebrew, is written in a backwards leaning italic font, however as Hebrew is written from right to left, the sloping is the same as that of Barilla. Their pasta is packaged in blue cellophane with a window showing the content. Thus Barilla’s packaging is perhaps less unique than they claim, although Taaman uses cellophane bags and not boxes.

In a recent decision the Deputy Commissioner refused to register a black box with silver trim as a trademark. Back in 2014, Judge Ginat refused to recognize a trade-dress in blue energy drink cans. Judge Binyamini threw out a claim that one ice-cream manufacturer was entitled to a monopoly on gold ice-cream tubs. Then again, Abu Shukra were unable to register their application for a trademark for a coffee package that is similar to Elite’s Turkish coffee.

 

 

 


Copyright in Numerology

December 12, 2017

numerologyNumerology is any belief in the divine, mystical relationship between a number and one or more coinciding events. It is also the study of the numerical value of the letters in words, names and ideas. It is often associated with the paranormal, alongside astrology and similar divinatory arts.

gamatriya chartIn gamatriya, each letter of the Hebrew Alphabet is assigned a corresponding number. the first nine letters are numbered 1 to 9, and the next nine are assigned the numbers 10, 20, 30, etc. The final four letters are assigned the values 100, 200, 300, 400.

The word alphabet comes from the Greek Alpha Beta, and the word gamatriya comes from Gamma – t(h)reeya. That said, the Greek alphabet was based on the Hebrew and Phoenician precedents. The Latin letters were derived from the Greek ones.

The issue in question here, is whether copying sections of verbal lectures and publishing them in writing is considered copyright infringement.

In coming to their verdict, the Supreme Court has reviewed the differences between the onld and new, law, what fixation is required and in what circumstnaes a publisher or distributor can be considered as innocently infringing.

The Case

Sharon Ron is a numerology lecturer. In 2002 Ela Shonia attended his numerology course at the Association for Promoting Awareness in Haifa. At the lectures, handouts and exercises were distributed by Ron. In 2003, Shonia and a fellow student called Sarah Vakhnin attended private lessons given by Ron at his home in Kfar Sava.

Numerology 3rd milleniumIn 2004, Shonia published a book titled “Numerology for the third millenium” which went to three editions, the last one in 2010. In 2010 Shonia published a second book titled Combined Numerology. Both books were published by Astrologue Publishing LTD.

Mishkal Publishing & Distribution LTD received the rights for both books in 2010, in a deal between Shonia, Astrologue and Mishkal dated 03/02/2010 [I am writing the date in numeric form as it may portend something – MF]. Ron sued Shonia, Astrologue and Mishkal in the Tel Aviv District Court in Appeal 8822/15, and counter Appeal 8822/15. [No doubt these file numbers have some mystical significance-MF].

On 20 March 2004 and on 3 February 2010, Shonia signed declarations Read the rest of this entry »