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.


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.

 


Opposition to IL 190827 to Pfizer – A request to delete paragraphs from Expert Opinion as Widening Front of Attack

August 8, 2018

In evidence submissions, parties can support contentions made in statements of case, but are not allowed to widen their position by introducing new matter. When evidence relating to allegedly new issues is submitted by an Opposer, the Applicant can be expected to oppose the submission. Opposition proceedings are typically characterized by skirmishes regarding the admissibility of evidence, that are discussed in interim rulings. This is one such ruling.

Opposition to IL 190827 to Pfizer

Lyrica

IL 190827 to Pfizer relates to a pharmaceutical composition prescribed for once a day dosage comprising Pregablin and a matrix forming agent of PVP or PVA and CPVP as a swelling agent.

Teva opposed the patent.

This interim ruling relates to a request by Pfizer to remove paragraphs 13-15, 16, 94, 105 and 130 from the Opposer’s Counter-Evidence in Response of Professor Golomb, acting as an expert witness for Teva.

Pfizer claimed that paragraphs 13-15 of the Opposer’s Counter-Evidence in Response stress gelling agents which are not mentioned on the Opposition or in Professor Golomb’s main Opinion. In paragraph 15 of the Opposer’s Counter-Evidence in Response, Professor Golomb alleges that selective reporting on stability, swelling and hardness is arbitrary and they claim that these paragraphs should be struck as they were not submitted in answer to anything in their response.

Pfizer alleged that Paragraph 16 of Teva’s Counter-Evidence in Response raises issues not previously raised: that there is no comparison between the claimed invention and known formulations and no indication of any advantage thereover.
Pfizer requested that paragraph 94 be struck since it makes allegations not found in the original evidence submission. Similarly, paragraphs 105 of the Opposer’s Counter-Evidence in Response relates to Cmin values in the simulation summarized in table 15, and paragraph 130 thereof, are not by way of response and should be struck from the record.
Teva responded that the request to have these paragraphs in their Opposer’s Counter-Evidence in Response cancelled was submitted for improper reasons. Paragraphs 13 and 15 are supported by the patent application itself and do not raise new subject matter. They come in response to paragraph 9 of Dr. Tomber’s opinion. That mentioned in paragraph 15 regarding swelling, stability and harness comes in direct response to Dr. Tomber’s claim that these characteristics are advantageous. The claim that this is an advantage of the claimed invention was first raised in Dr. Tomber’s opinion as expert witness of the Applicant and so the first opportunity for the Opposer to refute this allegation is in their Counter-Evidence in Response.
Teva further submitted that Section 16, when read in context, is a response to Dr. Tomber’s claim that there is an advantage in the claimed formulation of the application. Professor Golomb considers that without comparison to other formulations, one cannot claim the present invention provides an advantage thereover. Similarly that stated in Section 95 of the opinion; that the application does not provide stability data, comes in response to Dr. Tomber’s claims regarding the efficacy of the formulation. The Opposer adds that the application and the Applicant’s claims in the Statement of Case do not relate to any advantage provided by the swelling or the hardness.
Section 105 deals with the Cmin value in table 15 and comes in response to Dr. Tomber’s claim that tablets having a 6 hour release window are not appropriate for once-a-day dosage. Teva claims that when reading this paragraph in the Opposer’s Counter-Evidence in Response together with the previous paragraphs one can only conclude that they come in response to Dr. Tomber’s claim.

As to paragraph 130, the Opposer claims that the expert opinion cited comes in response to the Applicant’s claim that formulation is resistant to the compaction pressure which is based on experimental evidence first submitted by Dr. Tomber.

The Applicant considers that the Opposer’s Counter-Evidence in Response was not a fair response to their counter statement of case and the Opposer allegations that Dr. Tomber’s statements went further than required to respond to the Opposition, whereas the Applicant claims that Professor Golomb simply expanded on statements made in the original Opposition, that could have been made in the original opposition.

Discussion

The parties are in no disagreement regarding the Law, but only in how it should be applied in this instance. Consequently, the relevant case law regarding the application of Regulation 62 is only summarized briefly.

This regulation orders that evidence in response must fulfill one of the following conditions: They should relate to the issues that are specifically denied by the Applicant in their counter-evidence, or are raised for the first time in their counter-evidence. In the response to the Applicant’s evidence, the Opposer may not submit evidence that should have been part of their main submission of evidence (See Opposition to IL 178141 Unipharm vs. Bristol Myers Squibb Company, 12 January 2015 following the ruling of the then Deputy Commissioner in the opposition to IL 127833 Teva vs. Abbott, 12 February 2007 (Oppositions to IL 177724 and 205606, request to delete sections from the Opposer’s Counter-Evidence in Response DSM IP Assets B.V. vs. Refine Technology LLC, 16 March 2015).  

The Deputy Commissioner, Ms Jacqueline Bracha considers that, on examining the paragraphs in question, Pfizer’s request to have them struck from Teva’s Counter-Evidence in Response should be rejected.

In Paragraphs 13 and 14 of the Opposer’s Counter-Evidence in Response, Professor Golomb relates to Dr. Tomber’s examples. Most of the criticism is directed to Dr. Tomber not relating to the fact that the examples include additional ingredients that are not claimed, and which could affect the release of the active ingredients.

In paragraph 15 of the Opposer’s Counter-Evidence in Response, Professor Golomb alleges that there is nothing in Dr. Tomber’s Opinion to explain why examples 24, 25 and 40 of the Application were chosen to show stability, swelling and hardness of the formulations claimed. Professor Golomb further claims that the Opinion does not relate to the other components of the examples, apart from those that are likely to affect the hardness and swelling of the tablets. The additional components are defined in the specification as gelling agents. From this, Professor Golomb deduces that the chosen examples do not exemplify formulations that only include the elements of claim 1.

In these examples, Professor Golomb relates to things mentioned in Dr. Tomber’s opinion. However, this is not a new issue first raised in the Response Opinion. In fact, a similar statement to that of paragraph 15 of the Response Opinion is found in paragraph 81-83 of Professor Golomb’s first opinion where he explains why, in his opinion, none of the Examples of the patent match that claimed. The difference is the switching of the words “additional assistive materials” in the first Opinion, with the phrase “gelling agents” in the second opinion. Professor Golomb also explains in paragraph 15 of the Opinion that the additional materials are defined as “gelling agents” in the patent application itself.

From that stated, it is clear that paragraphs 13-15 of the Response Opinion do not raise any new issue but rather come in response to that said previously, and so the request to delete these paragraphs is rejected.

In paragraph 16 of the Response Opinion, Professor Golomb relates to the claim in Dr. Tomber’s Opinion, that the claimed invention is advantageous in terms of stability, swelling and hardness of the tablets as compared to those formulated by the standard methods for obtaining delayed release in the stomach that is described in example 29. In the Opinion of the expert, the comparative data provided is insufficient to prove this advantage. The Applicant claims that Dr. Tomber did not make this claim and so this response comes to reject a claim not made.

Examination of Dr. Tomber’s Opinion shows that in part 9.4 of his Opinion, the expert relates to example 29 of the Application as a comparative example. Dr. Tomber explains that the release of the active ingredient in example 29 after 12 hours is 65%, compared to 80% for formulations of the invention, and so some of the active ingredient in the formulation of example 29 is wasted. It appears that paragraph 16 of the Opinion is an attempt to respond to this contention of Dr. Tomber and is thus a response to an issue raised by the Applicant. To the extent that the Applicant considers that Dr. Tomber’s opinion was not properly understood by the Opposer, they can relate to the alleged misunderstanding in cross-examination. In light of this, the request to delete paragraph 16 is rejected.

Paragraph 94 of the Opinion in Response by Professor Golomb raised the issue that Examples 15-23 which look at Lactam formation over time does not indicate the efficiency of the claimed formulation. In this paragraph, Professor Golomb responds to Dr. Tomber’s claim that was raised in paragraph 30 of his opinion, that “the results demonstrate the efficacy of the claimed invention.” Dr. Tomber continues that the examples show the efficacy of the invention under various conditions. In Paragraph 95, Professor Golomb adds that the Application lacks stability data for Example 29 which also does not include all the elements of the invention. According to Professor Golomb, without stability data, Example 29 cannot be used for comparative purposes as Dr. Tomber had suggested in Section 9.4 of his Opinion. The Deputy Commissioner does not think that Paragraph 95 goes beyond the issues under discussion, since it specifically relates to Dr. Tomber’s Opinion which related to Professor Golomb’s original Opinion. In light of this, the request to cancel section 95 is refused.

In paragraph 104 of the Expert Opinion in Response, Professor Golomb summarizes that stated in paragraph 32 of Dr. Tomber’s opinion regarding adapting the formulation for once-a-day dosage, with reference to the release duration and the amount of active ingredient in the blood over the period of release by the tablet. In paragraph 105, Professor Golomb explains why he disagrees with that stated by Dr. Tomber in Paragraph 32 of his opinion, and supports this with reference to publications cited in his original Opinion. This is sufficient to show that Paragraph 105 of the Response Opinion relates to matters raised by the Applicant and is in accordance with Regulation 62 of the Patent Regulations.

In paragraph 104 of the Expert Opinion in Response, Professor Golomb summarizes that stated in paragraph 32 of Dr. Tomber’s opinion regarding adapting the formulation for once-a-day dosage, with reference to the release duration and the amount of active ingredient in the blood over the period of release by the tablet. In paragraph 105, Professor Golomb explains why he disagrees with that stated by Dr. Tomber in Paragraph 32 of his opinion, and supports this with reference to publications cited in his original Opinion. This is sufficient to show that Paragraph 105 of the Response Opinion relates to matters raised by the Applicant and is in accordance with Regulation 62 of the Patent Regulations.

In Section 130 of the Response Opinion, Professor Golomb claims that the Application emphasizes the wear data and hardness of the formulation as ways to optimize the release rate of the active ingredient, but he disagrees that the evidence supports this contention. Here again, the Deputy Commissioner accepts the Opposer’s argument that this paragraph comes in response to Dr. Tomber’s statement in paragraph 26 of his Opinion, that CPVP manufacturing provides a significant advantage. In fact, Dr. Tomber dedicated a number of paragraphs to the stability of the tablets, and so the Deputy Commissioner does not consider that Paragraph 130 goes beyond Regulation 62 of the Patent Regulations.

In Section 130 of the Response Opinion, Professor Golomb claims that the Application emphasizes the wear data and hardness of the formulation as ways to optimize the release rate of the active ingredient, but he disagrees that the evidence supports this contention. Here again, the Deputy Commissioner accepts the Opposer’s argument that this paragraph comes in response to Dr. Tomber’s statement in paragraph 26 of his Opinion, that CPVP manufacturing provides a significant advantage. In fact, Dr. Tomber dedicated a number of paragraphs to the stability of the tablets, and so the Deputy Commissioner does not consider that Paragraph 130 goes beyond Regulation 62 of the Patent Regulations.

In light of this, the request to cancel the various paragraphs is refused.

Since the parties informed the Patent Office a few days ago that they are negotiating a way to end this Opposition procedure, no costs are awarded at this time.

Interim ruling re admissibility of various paragraphs in a Response by Opposer to Applicant’s Opinion concerning IL 190827 to Pfizer, opposed by Teva, ruling by Deputy Commissioner Jacqueline Bracha,  6 June 2018.     


Opposition to IL 201320 to Pfizer & limits to amending the Statement of Case

July 2, 2018

Patent Application IL 201320 to Pfizer is titled “CRYSTALLINE FORMS OF 6-[2- (METHYLCARBAMOYL) PHENYLSULFANYL]-3- E -[2- (PYRIDIN2- YL] ETHENYL] INDAZOLE SUITABLE FOR THE TREATMENT OF ABNORMAL CELL GROWTH IN MAMMALS”.

On allowance, it published for Opposition purposes, and Unipharm submitted an Opposition.

Prior to publication following allowance, Applicants have very wide discretionary powers to amend claims or submit new claims, provided the claimed mater is supported from the specification. After publication, in response to Oppositions, or even after grant, the Applicant/Patentee is only allowed to correct obvious typographical errors or to narrow the scope of protection by cancelling claims or by amendments that clearly narrow the scope of protection. Nothing that protects matter previously not within the ambit of the claims can be allowed.

In this instance, during the Opposition proceeding, Pfizer requested a narrowing amendment to the specification to clearly define the term ‘substantially pure’ that appears in claim 2. Commissioner Alon allowed the amendment in a ruling of 5 March 2018, and gave the parties a window to amend their Statements of Case to take the amendment into account.

Unipharm, who had already submitted their evidence, decided not to amend the statement of claims, but Pfizer submitted an amended Statement of Claims that was wide ranging.  This included background to the development of the invention and eleven appendices.

Unipharm then requested that Pfizer’s amendment be struck from the record, arguing that amendments to the claims following amendments to the specification should be based on those amendments to the specification. Pfizer disagrees. They note that the Law does NOT require that amendments to the counter-statement of claims be related to the earlier amendments to the statement of claims at the start of the Opposition proceedings, or that they be based on the amendments to the specification. Furthermore, the interim ruling allowing amendments to the statement of case did not include such limitations.

The Applicant drew a parallel to civil court proceedings, however the Commissioner does not accept this since in civil court proceedings, when the plaintiff amends his Statement of Case, he can expect the defendant to be allowed to amend their Statement of Case, whether in direct response, or to broaden their position, and this is the risk taken when amending the Statement of Case once the proceeding is underway.

In contrast, in Patent Opposition proceedings, it is the Applicant that has a right to amend the specification, not the Opposer. In this instance, it is the Applicant that causes the Statement of Case to need to be amended, and he can therefore expect that the Opposer will also amend his Statement of Case , and will not restrict himself to amendments resulting from the Applicant’s amendment. If the Opposer does amend their Statement of Claims, the Applicant can make their amendments.

So what is the appropriate Law if the Opposer does NOT amend their Statement of Case? The Commissioner reasons that the Applicant can certainly correct their Statement of Case with respect to anything that needs correcting. Whenever the specification is amended, the main points of disagreement often shift. The Opposer deciding not to amend the Statement of Claims does not prevent the Applicant from relating to new issues raised by the amendment to the Specification, and to redirect his allegations to these issues. This serves the procedure and focuses the Statement of Case on the real issues. The Commissioner considers that the term “issues arising from the amendment” should be interpreted broadly, in light of the relevant case-law.

Nevertheless, where the amendment to the Statement of Case is totally disconnected to the amendment to the specification, it becomes a regular amendment to the Statement of Case which should be subject to the regular criteria. The submission should be accompanied with a statement justifying the amendments and explaining why they could not have been included originally, and why they should be allowable. This is necessary to prevent the amendment to the Specification becoming a technical tool for allowing unlimited amendments to the Statement of Case whenever the Specification is amended.

In this instance, the amendment to the Statement of Case was the addition of background relating to the development of the XLI formulation. From Examination of the amended Statement of Claims, the Applicant did not indicate any connection, even minimal, between the amendments to the specification and the amendments to the Statement of Case. Furthermore, the Applicant did not justify why the amendment was required now, and was not part of the original Statement of Case, or why the Statement of Case was not amended earlier.

In these circumstances, the Commissioner considers that the Opposer is correct, and the amendments as submitted should not be allowed. The Applicant is given 15 days to refile an amended Statement of Case whose claims are related to the amendment to the Specification, or to state that they do not wish to file an amended Statement of Case. Alternatively, the Applicant may submit a request to amend the Statement of Claims justifying the amendments submitted.

The deadlines for submitting evidence that were given in the interim ruling of 5 March 2018 are canceled. New deadlines will be given once the Applicant files his Statement of Case.

Costs for this will be considered when ruling costs for the main ruling.

Interim ruling by Commissioner Ophir Alon Concerning Unipharm’s Opposition to IL 201320 to Pfizer


New Patent Commissioner overturns Patent Term Extension decision by Predecessor

June 28, 2018

Manufacturers_Association_of_Israel.pngThe Manufacturers Association of Israel opposed an ex-partes decision to allow a patent term extension for Dexlansoprazole, and New Commissioner Ofer Alon has disallowed the extension accepted by his predecessor.

Background

Dexlansoprazole.pngDexlansoprazole is used for treating gastro-reflux and for treating or preventing digestive ulcers.

IL 145996 to Takeda is a patent for Dexlansoprazole that claims various crystalline forms of the salt, a pharmaceutical preparation including the forms, and methods of treatment or prevention of digestive ulcers.

After Takeda successfully obtained regulatory approval for Dexilant™. (Dexlansoprazole) which is the R enantiomer of Lansoprazole, they applied for a patent term extension, which was refused by the Deputy Chief Examiner on 30 June 2016 on the grounds that the registration of Dexlansoprazole is not the first approved medical usage of the active ingredient in Israel, as the racemic mixture of the same active ingredient (Lansoprazole) is already registered.

Left and right antiomers in a lattice arrangement.jpg

Racemic Lattice for Shoes

In a response filed on 28 August 2016, the Applicant acknowledged that the racemic mixture Lansoprazole includes the R-enantiomer Dexlansoprazole, but the R-enantiomer cannot be separated from the racemic mixture since the crystals themselves contain both the right and the left enantiomers within the same lattice, creating a new complex that is different from the separate enantiomers.

The Applicant submitted that previously registered Lansoprazole is thus not a racemic mixture but rather a racemic compound and consequently the Dexlansoprazole crystals are substantially different from those of Lansoprazole and should, therefore, be registerable.

The Applicant distinguishes between racemic mixtures and racemic compounds with reference to Mitchell AG, Racemic drugs: Racemic Mixture, Racemic Compound, or Pseudoracemate? J. Pharm Pharmaceut Sci 1(1):8-12, 1998).

Dexasportshoe Lattice Arrangement

Dexasportshoe Crystalline Structure

On 27 October 2016, the Deputy Chief Examiner understood the argument as stressing that the enantiomer is more efficacious than the racemic mixture and rejected the request for the patent term extension citing former Commissioner Meir Noam’s ruling concerning Unipharm’s opposition to IL 90465 to A/S Lundbeck (3 February 2009), which ruled that the higher efficacy of enantiomer with respect to the racemic mixture was patent worthy, but did not provide a new material in the sense required for a basic patent that is eligible for patent term extensions.

On 24 November 2016, the Applicant appealed this decision to the Commissioner of Patents, reiterating the arguments that were rejected. Then Commissioner Asa Kling accepted that the enantiomer was not found in the racemic compound and agreed to a patent term extension of 959 days until 30 January 2023 (see ruling re IL 145996 to Takeda from 12 Feb 2017:

In paragraphs 24 to 26 of his decision, then Commissioner Kling stated:

I have been convinced that Lansoprazole is a compound of the enantiomers and it is not possible to isolate Dexlansoprazole from the racemic compound, in contradistinction to the state of affairs in Unipharm vs. Lundbeck where the racemic mixture could be separated into the enantiomers.

Where the relative efficacy is different, Applicants assertion that Lansoprazole is NOT a racemic mixture but rather that the enantiomers share the crystalline structure, one cannot isolate the R enantiomer.

Opposer’s Argument

On 25 May 2017, the Association of Israeli Industrialists opposed the ex-partes decision to issue a patent term extension, based on Section 64g(a) of the Israel Patent Law 1967 for the following reasons:

  • the registration in the register of medical formulations which was the basis for the patent term extension was not the first registration for the active ingredient, contrary to Section 6d(3) of the Law.
  • The Applicant concealed significant relevant facts from the Patent Office. So the Application for a Patent Term Extension is contaminated with inequitable behaviour and is contrary to Section 64b(1) of the Law.

These claims were supported by an expert opinion from Professor Menachem Kaftori dated 24 May 2017.

The Opposer relies on the Lundbeck ruling (Appeal 223/09 Lundbeck vs. Unipharm ltd from 25 May 2009 which asserted that the various terms for material in Section 64a include enantiomers, and wherever the material is an active ingredient or form of the active ingredient that is found in a prior medical formulation that is listed in the register, it cannot be considered as being a first registration under Section 64d(3) of the Law.

The Opposer further alleged that the applicant had already acknowledged that the active ingredient Dexlanoprazole is included in the racemic Lansoprazole in the pharmacology report for Kapidex in a request to market a formulation including Dexlansoprazole in the US (NDA 22,287) which was appended to the ex-partes submission.

Based on Professor Kaftori’s opinion, the Opposer further alleged that coupling between the different molecules in the crystal were inter-molecular bonds and not intra-molecular bonds, so that on dissolution into water a racemic mixture of the enantiomers results.

DexilantThe active ingredient of Dexilant™ is Dexlanoprazole and not the crystal, and the morphological structure of the crystal has no relevance to the issue of patent term extensions. The racemic compound is no different to a racemic mixture as has as the difference between its components, apart from the crystal structure of the raceme. The inclusivity of the re Lundbeck decision does not relate to the isolation of the material by separating the basic cell of the crystalline structure whilst in a solid state, but to the possibility of any separation.

The Opposer further argues that the efficacy of the enantiomers when considered separately or as part of the racemic mixture is not relevant to the question of whether the application in question relates to the first formulation that allows the material to be used for medical purposes in Israel.

LansopropazoleThe Opposer further claims that the Applicant concealed the fact that the material was previously registered in the Lansoprazole registration, and the experimental evidence used to justify the registration were those using Lansoprazole which the Applicant had asked to be relied upon. Similarly, the Applicant had concealed the fact that Lansoprazole had been defined by themselves as being a racemic mixture and not, as they now claimed, a racemic compound, for example, before the Canadian Federal Court of Appeal.

Applicant’s Argument

Takeda reiterated the arguments submitted in the ex-partes hearing by former Commissioner Kling, his ruling of 12 February 2017, and an Opinion of Professor Avi Bino of 19 September 2017.

Furthermore, Takeda rejected the allegation of inequitable behaviour noting that the racemic material Lansoprazole was disclosed and related to in their submission for a patent term extension, and reiterated that it was a different material.

optically active.jpegFurthermore, in their response of 28 August 2016, they clarified that Lansoprazole is racemic compound that is optically active in a different manner to that of the enantiomer. The XRay diffraction pattern of Dexlansoprazole is different, and it is a different chemical entity. The Applicant further claims that the request for a Patent Term Extension is based on a registered product and not on a material after subsequently undergoing any type of process within the human body [apparently dissolution is intended – MF].

The Applicant alleged that the Opposer did not provide support for the contradiction in Mitchell’s paper, and did not provide scientific textual support, experimental evidence or research to challenge the validity of the evidence submitted by themselves in the ex-partes proceeding.

In the pharmacology submission for Kapidex which includes Dexlansoprazole there was experimental evidence relating to pregnant women which included one test conducted with Dexlansoprazole and one test conducted with Lansoprazole. Thus contrary to Opposer’s assertion Dexlansoprazole was examined, and the testing of Lansoprazole was additional data.

Although the therapeutic results themselves are insufficient to prove that a patent term extension is justified, they do teach that there is a difference between the materials that allows a patent term extension.

raceme.jpgTakeda referred to the definitions of racemic mixture, raceme and racemic compound in the IUPAC gold book which is the definitions used by the International Union of Pure and Applied Chemistry and which they claim accords with Mitchell’s paper.

Finally, Takeda submits that the Commissioner is not able to sit in judgment and rule on a ‘kind of appeal’ of his own decision, or that of his predecessor.

Discussion and Ruling

For sake of clarity, the Commissioner notes that the term raceme relates to racemic mixtures of S and R molecules in equal amounts, or to racemic compounds where there is a repeating arrangement of the two enantiomers in different proportions within a crystal,

The legal authority of the Commissioner to rule on the Opposition

legalCommissioner Alon dismisses the allegation that he cannot hear this case. Section 64f of the Law allows anybody to oppose patent term extensions or their duration. Under section 64g, ANY reason that the Commissioner should not grant a patent term extension is a valid reason for opposing the extension. The right of the Opposer is independent of whether the extension was the result of an ex-partes ruling or otherwise.

The logic is clear. In the ex-partes hearing, one side presents THEIR arguments, evidence and documentation supporting the issuance of the PTE. The opposition is an adversarial proceeding whose purpose is to allow third parties to challenge the granting of the PTE, Once an Opposition is filed, the Commissioner is obliged to consider the issues raised and to reconsider the determination that a PTE is justified in light of the claims and evidence of the parties.

Registration of Lansoprazole allowed usage of Dexlansoprazole

Section 64d of the Law sets out the conditions for obtaining a Patent Term Extension. Inter alia, it states that one can only obtain an extension for a material listed in the pharmaceutical register, and only if that registration is the first registration of the material for medical use.

It does not appear that there is any dispute between the parties regarding the following facts:

  • The crystal of the Lansoprazole raceme is a racemic compound, which is difference from the enantiomer of Dexlansoprazole (Cross-examination of Professor Kaftori page 12 lines 12-18).
  • When the raceme Lansoprazole is in a crystalline form, one cannot separate the enantiomers into Dexlansoprazole and Levolansoprazole.
  • One can separate a solution of Lansoprazole into its enantiomers by known and established procedures for separating enantiomers. (Opinion of Professor Bino, paragraphs 13-14).
  • When Lansoprazole is separated into its enantiomers one obtains the R-enantiomer Dexlansoprazole and the S enantiomer Levolansoprazole.

As to the possibility of separating the enantiomers. Under cross-examination, Opposer’s expert Professor Bino agreed:

Attorney Tal Band:  Take, let’s repeat this, take a crystal of Lansoprazole, dissolve it in water and what do you get? I suppose you will allow me…

Professor Avi Bino: With pleasure

Adv. Band: You will obtain a solution that includes the R-enantiomer

Prof Bino: the R-enantiomer and the S enantiomer

Adv. Band: and the S enantiomer, which is the active ingredient if we now know that the active ingredient is the R enantiomer? It is the R enantiomer, right?  

Prof Bino: the R-enantiomer in solution

Adv. Band: the R enantiomer I solution is the active ingredient?

Prof Bino: Correct.

Protocol of 9 January 2018, page 53 lines 17-26.

In a different stage of the cross-examination, 9 January 2018, page 46 line 6:

Attorney Tal Band:  It can, that means to say, it can dissolve into the solution…

Professor Avi Bino: Yes

Adv. Band: And this change from crystalline to solution is not a chemical change but a physical one, correct?

Prof Bino: True.

Adv. Band: Good. So in the two states the chemical compound maintains its identity, correct?

Prof Bino: Correct.

See also paragraph 60 of the Applicant’s claims from 19 September 2017 and paragraphs 9-15 of Professor Bino’s Opinion.

right hand.pngThus there is no argument that the R-enantiomer included in Dexilant™ is the same R-enantiomer included in Lansoprazole.

In the Lundbeck ruling, the District Court ruled that registration of a raceme would be considered the first registration for the enantiomers.

The Applicant considers that the Lundbeck case is different since there one could separate the enantiomers as the patent covered a racemic mixture. However, in the present instance, one cannot separate the enantiomers whilst solid, but have to dissolve them in water first, and only then can the enantiomers be separated.

To clarify the point, the Applicant submitted the following schematic illustration on 28 August 2016 to the Deputy Chief Examiner:

Lansopropazole imageThe Applicant claims that the law relates to the active ingredient of the medical formulation, which is crystalline and so should be considered in this form.

lefty.jpgIn re Lundbeck, a mixture was considered, and the unit cell of r-enantiomer structure is found in the mixture (right side) and in the enantiomer (center top), whereas in the present case, (illustrated on the left), there is no r-enantiomer unit cell so one has to dissolve the crystal and then separate and recrystallize to obtain the separate enantiomers in crystalline form.

Applicant claims that the Law relates to the active ingredient of the medical formulation. The medical formulation includes the crystalline structure, and so it should be [examined for patent term extension purposes] in this manner.

The Examiner considers that the fact that one cannot separate the R and L enantiomers whilst crystalline is irrelevant. In paragraph 17 of the District Court ruling in re Lundbeck the court differentiates between inter- molecule bonds and intra-molecular bonds.

Even if we were to accept the Applicant’s claim that the Lansoprazole is a racemic molecule, there are no intra-molecular bonds, but only bonds connecting the molecules to each other, and each enantiomer molecule maintains its identity within the crystal. The attractive forces between the S and R molecules creates the crystal by inter molecular bonds (see paragraph 18 of Professor Kaftori’s opinion and Professor Bino’s remarks on page 48 lines 6-12 of the protocol. As Commissioner Alon clarifies below, it is incorrect to consider the material at the crystalline layer, and so the R-enantiomer is NOT to be considered a new material as far as Patent Term Extensions are concerned.

If one were to consider the crystalline form of the pharmaceutical formulation as being a new material as far as Patent Term Extensions are concerned, the consequence would be that one could dissolve Lansoprazole and consider the solution as being a pharmaceutical formulation, the solution contains both enantiomers in solution would be considered as a different formulation and thus subject to a Patent Term Extension, and it is difficult to accept this result.

Furthermore, the definition of material in Section 64a of the Law is:

“Material” – the active ingredient of the medical formulation or its salt, ester, hydrate or other crystalline structures of the same component.

Commissioner Alon considers that one should read Section 64a as all the forms of the active ingredient being considered the same material. This definition implies that the identity of the material is NOT considered in terms of its form in the formulation. The case-law has ruled that the fact that different enantiomers and crystalline structures have different physical properties does not make them considered as being different materials as far as patent term extensions (PTEs) are concerned – see District Court ruling in re Lundbeck, section 20.

This interpretation sits well with the rationale of the Law as stated in the Patent Term Extension ruling concerning IL 124123 to Bayer Healthcare LLC, 16 April 2018:

With regards to active chemical ingredients, one can claim that the legislator defined enantiomers that, although not structurally identical, can be considered as being the same active ingredient, since the experiments on the active ingredient will shorten the way or help develop drugs based on the same active ingredient. So different salts of the same active ingredient are defined as being the same active ingredient with respect to Section 64D(3) of the Law (it is noted that in other jurisdictions, a different conclusion was reached).

Additionally, there is an explicit connection between the breadth of patent protection under Section 64h(d) of the Law and the interpretation of the term ‘material’. Section 64h(d) states:

  1. d) If the Registrar granted an extension order, then the holder of the basic patent may – during the period in which the extension order is in effect – prevent any person from marketing or from producing in order to market without his permission the medical equipment or the medical preparation that incorporates the material, as far as the material, the process of its production, its use or the medical preparation or the process for its production were claimed in the claims for the basic patent.

Recognizing all forms of the active ingredient as being a new material as far as Patent Term Extensions are concerned would result in Patent Term Extensions being granted, not for all forms but only for the form of the active ingredient in the medical formulation. Commissioner Alon considers that proper policy is to provide wide protection for the party developing a new drug, and recognizing the physical form of the material as being different would result in narrowing the breadth of the patent term extension.

The Applicant argues that from the ruling of former Commissioner Noam regarding the Patent Term Extension for IL 97219 Novartis AG (26 December 2005) one can conclude that two active ingredients acting together could be considered as being a new material that is different from the two ingredients considered separately.

Commissioner Kling does not agree. In re Novartis, Commissioner Noam considered the eligibility for a Patent Term Extension for a formulation including two active ingredients that were previously separately recorded in the pharmaceutical register, and concluded that even were there to be a synergetic effect and not merely an additive effect (aggregation), this is only relevant for the question of patentability but not for the question of eligibility of Patent Term Extension, nothing further is stated.

It appears that Commissioner Kling’s ruling of 12 February 2017 was largely based on the conclusion that one cannot separate the enantiomers of the racemic compound. As shown in the Opposition by the statements of case and evidence, is that the compound can be separated into its enantiomers, and that the form is not significant. In other words, the factual basis for Commissioner Kling’s ruling has been eroded and we can thus change the decision.

In light of above, Commissioner Alon rules that the R enantiomer is found in Lansoprazole and the registration of Lansoprazole is the first registration of the R-enantiomer Dexlansoprazole which is the active ingredient of Dexilant™.

The Allegation of Inequitable Behaviour

The Opposer’s allegation that Takeda’s behavior was inequitable, contrary to Section 64b(1) of the Law, is supported by two props. One is the statement appended to the request for a patent term extension that was written by Miyuki Hora which states that Dexlansoprazole is the first registration that allows the use of the product for medical purposes in Israel, without going into details, which comes later.

In addition, the Oppose claims that the Applicant concealed the fact that the examination of the request for registration in the pharmaceutical formulation register relied on tests performed on Lansoprazole, and that the Applicant itself relates to Lansoprazole as being the racemic mixture in a proceeding before the Federal Court of Appeal in Canada, and regarding the date of the claim that Lansoprazole is a racemic compound.

The Applicant’s response to these claims was that the experiments were clearly indicated in the pharmacology report mentioned above, and Commissioner Kling even related to it in his ruling of 12 February 2017. As to the Canada decision, the Applicant acknowledges that they were inaccurate in their terminology regarding mixtures and compounds, but this was due to the fact that case related to a different issue and not to something relevant to the issue of whether the Lansoprazole raceme is a compound or mixture. The same inaccuracy is found in the FDA regulatory approval in the US.

When considering Miyuki Hora’s affidavit, it is true that it relates to the Lansoprazole raceme:

“… Although racemic Lansoprazole was previously approved for medical use, enantiomerically pure Dexlansoprazole has never been approved …”.

Additionally, it seems that the Applicant themselves muddled up the terms in the definition of the raceme, and sometimes referred to it as a mixture and sometimes as a compound, however the Commissioner does not consider that this is indicative of inequitable behaviour. Furthermore, in light of the above ruling, it is irrelevant whether we refer to the raceme as a mixture or a compound, since the question of whether the molecule were previously registered exists in the raceme, which we have established to be the case.

Conclusion

In light of the above, the Commissioner accepts the Opposition and cancels the patent term extension. The Applicant will pay 15000 Shekels costs and 100,000 Shekels legal fees to the Manufacturers Association of Israel.

Opposition by the Manufacturers Association of Israel  to Patent Term Extension for IL 145996 to Takeda, ruling by Commissioner Ofir Alon, 24 May 2018  

COMMENT

I think this decision is completely correct and is also well written and whilst comprehensively addressing the issues raised, is relatively concise.

Since the racemic compound dissolves into the free molecules, the discovery that the R-enantiomer is active may be inventive, but the clam that this is a new material that warrants a patent term extension is ludicrous in light of the previous cases related to by the Commissioner and linked to above.