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.

 


The three month Trademark Opposition period is calculated from the day it starts

July 31, 2018

288045

The three month Trademark Opposition period is calculated from the day it starts

On 3rd June 2018, Israel Trademark Number 288045 to R & S Food Import Export published as issued. The mark is shown alongside.

Barilla Ger Fratelli requested that their trademark opposition submitted on 30 May 2018 be considered.

deadlineThe Israel Trademark Department considered that the final date for opposing the mark was 28 May 2018, three months after the mark published for opposition purposes on 28 February 2018. Furthermore, the Commissioner of Patents and Trademarks does not have the authority to extend the deadline for filing oppositions. So the Opposition submitted on 30 May 2018 was not considered as being timely filed and was ignored.

BarillaBarilla Ger Fratelli, represented by Dr. Shlomo Cohen Law Offices argued that the deadline for filing the opposition was the end of May, and they had until 31 May 2018, so the opposition was timely filed. To support their contention, Barilla’s representatives referred to Section 10b of the Law of Legal Interpretation 5641 and argued that Patent Office Circular M.G. 46 titled “Calculating Deadlines provided in Months or Years” contradicts the law and adversely affects Barilla’s rights. Barilla’s legal representatives claimed that the Opposition was filed after they had consulted with the trademark department and appended an Affidavit of Adv. Talia Punchick, a former employee of Dr. Shlomo Cohen Law Offices.

Section 24a of the Trademark Ordinance 1972 states:

Within three months of the date of publication, anybody can submit an Opposition to a trademark issuing.

Section 23 states that:

If a trademark application is accepted, whether as filed or with limitations, the Commissioner will publicize in the determined manner, that the mark was accepted and any limitations applied.

The date that the mark published under Section 23 for opposition purposes, was 28 February 2018. Since the period for submitting an Opposition is three months from 28 February 2018, and under the Section reproduced above, the final date for submitting Oppositions is 28 May 2018. This is the date required by Section 10b of the Law of Legal Interpretation which states:

A period provided as a number of months or years after a specific event will end on the final month on the day having the same date as the event, and if that month does not have that day, on the last day of the month.

Barilla’s representative’s claim is surprising, as if this law reduces the period given in the law, since the months provided for the opposition (March, April and May) that were at Barilla’s disposal, are all full months. Barilla chose not to take advantage of this time period.

Beyond that required, it is noted that the final date for submitting the opposition, i.e. 28 May 2018, was noted in the publication of the notice of allowance in the journal and also on the second page of the journal itself.

To remove any doubt, it is noted that Section 10(a) of the Law of Legal Interpretation which states that where a period is provided in days or weeks, the day that the period starts is not included in the calculation is not relevant to the present case, since it relates to days and weeks and not to a number of months, unlike Section 24(a) of the [Trademark] Ordinance. Thus the claim that the number of months starts from the 1 March 2018 (and should therefore finish on 1 June 2018), rather than starting on 28 February and finishing on 28 May is groundless.

This conclusion would be changed if, for example, an allowance was published on 30 November of some year, and thus the final day does not exist since February has only 28 (or 29 days). In such a case, the deadline would be 1 March.

In light of the above, the example given in Circular M.G. 46 is correct, and the final date for publishing an opposition to something that publishes on 28 February is 28 May.

There is no request to extend the Opposition period, which in any event is not within something that the Commissioner of Patents has the authority to do as is evidenced in a long list of Patent Office decisions. Commissioner Ofir Alon’s ruling in the request for extending the Opposition period in re Israel TM Application number 283942 Mindspace ltd vs Merkspace Europe BV from 28 June 2017:

As explained in the Decision of then adjudicator of IP concerning the Opposition to Israel Trademark Application Numbers 182779 and 182780 for stylized marks to Baltika Breweries vs. S & G Intertrade ltd from 5 November 2006:

Retroactive extensions of opposition periods is what Section 7 of the fifth amendment to the Ordinance was designed to prevent, as can be learned from the words of explanation of the Proposed Law 34 from 16 June 2003, on page 492:

It is proposed to cancel the Commissioner’s authority to extend the Opposition period. This step is intended to increase the efficiency of the consideration of the registerability of trademarks.  

Similarly, see for example, the decision regarding the Request to extend the Opposition for Israel Trademark Application Number 245038 Dynasoi Elastomeros, SA de CV bs. SK Global Chemical Co. Ltd, from3 October 2013.

From examination of the Opposition file, it transpires that a notice of the untimely filing of the trademark Opposition was sent to Barilla’s representatives on 30 May 2018, immediately after the opposition was filed. The Adjudicator does not accept that the opposition was submitted after consulting with the Trademark Department. The Affidavit by the attorney states that the matter was told to her to the best of her knowledge. No details of when and how the alleged conversation was supposed to have taken place are provided, the identity of the Examiner who allegedly gave the wrong advice is not provided. Nor are the exact contents of the alleged conversation. Due to this lack of clarity, the Adjudicator is unable to rely on this affidavit to support Barilla’s contention. Anyway, the Law itself over-rides any other guidance. Any attorney, and particularly one with trademark expertise, is expected to refer to and rely on the Law and not on vague guidance to the extent that such existed.

It is noted that Barilla still has legal options, and can request that the mark be cancelled under Sections 38 or 29 of the Ordinance. In such a cancellation proceedings, all their arguments and contentions will be fully considered.

The request for accepting the Opposition as timely filed is refused.

Decision by Ms Yaara Shoshani Caspi re Barilla’s Opposition to Israel Trademark No. 288045 to  to R & S Food Import Export.   

COMMENT

This is not the first time that the Patent Office has ruled that the three month trademark opposition period is not extendible. See here for another example.


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


Panama Jack Cancellation Proceeding – Proving Something Did not Happen

July 1, 2018

Panama JackOn 30 November 2016 Panama Jack International Inc  filed a request to cancel Israel TM No. 79829 for Panama Jack in class 25. The registered trademark, then owned by Grupp Internacional S.A.,  is shown alongside.

Back in March 2017, the Adjudicator of Intellectual Property Ms Yaara Shoshani Caspi issued an interim ruling  that since Grupp Internacional S.A., though represented by an Israel Law firm, did not file a response to the cancellation proceedings instituted by Panama Jack International Inc., Panama Jack can supply their evidence and she would rule on the cancellation proceeding if the arguments were persuasive.

On 2 April 2017, Panama Jack International submitted an Affidavit from Mr Erez Drucker, director of Access (Xes? Axes? Excess?) Private Investigators, to support their allegation that the mark was not in use by Grupp. Again Grupp failed to respond, despite having legal representation back then.

On 21 August 2017, Panama Jack International requested a decision despite the lack of response.  On 28 March 2018 they requested to add a further Affidavit, this time from Mr Ronen Menashe, director of “”Information Services of Israel”.  Again, the owner failed to respond.

(On 2 October 2017, Grupp’s attorneys requested to cease representing their client for various reasons that Ms Shoshani Caspi considers justified. On 10 October 2017 they submitted an affidavit to the effect that the client’s local attorney in Spain knew about the hearing. On 23 October 2017, Ms Shoshani Caspi assented to the request).

Now, on 23 May 2018, a hearing was held before Ms Shoshani Caspi, which Grupp and their representatives did not bother attending, despite knowing about the date thereof. Panama Jack International requested to withdraw the Affidavit by Mr Erez Drucker and to replace it with that of Mr Ronen Menashe who was available for questioning at the hearing. This request was granted. During the hearing, a recording of conversations between Mr Menashe and the Spanish office that was referred to in the Affidavit was also listened to.

Discussion and Ruling

The question in this instance is whether there is justification to cancel the issued mark. Section 41(a) of the Trademark Ordinance states:

  1. [a] Without prejudice to the generality of the provision of indicate sections 38 to 40, application for the cancellation of the Registration Madrid of a trade mark regarding some or all of the goods or classes of amendments goods in respect of which a trade mark is registered (hereinafter – goods regarding which the cancellation is requested) may be made by any person interested on the ground that there was no bona fide intention to use the trade mark in connection with the goods for which it is registered in connection with the goods regarding which there is a request to cancel the registration and that there has in fact been no bona fide use of the trade mark in connection with those goods in connection with the goods regarding which there is a request to cancel the registration, or that there had not been any such use during the three years preceding the application for cancellation. [b] The provisions of subsection (a) shall not apply where it is proved

Thus the relevant period regarding usage of the mark by Grupp is from 30 November 2013 to 30 November 2016 when the cancellation request was submitted.

In this instance, as stated above, the mark owner failed to respond to the cancellation request, and did not even request extensions. Panama Jack International, did however, submit their evidence.

During the hearing, Mr Menashe’s integrity was examined and from his evidence and responses, Ms Shoshani Caspi was assured that he was trustworthy. Mr Menashe’s opinion included a survey and investigation of the relevant markets in Israel (i.e. clothing and footwear) in an attempt to find stores that sold goods bearing the Panana Jack man in the relevant time-period. In addition, his office searched the Internet for evidence that goods bearing  the mark were available in Israel at the relevant time. He determined who owned the mark and the identities of the leading employees of the company to contact them directly to determine usage of the mark in Israel. Within the framework of Mr Menashe’s investigation, neither he nor his investigators found any indication of sale of goods under the Panama Jack trademark in the relevant time period.

It is established case-law that a registered trademark is a property right for all intents and purposes, that cannot be whittled away without cause. The burden of proof that a mark was not used lies with the challenger of the mark. See for example, Bagatz 476/82 Orlogd ltd vs. the Commissioner of Patents p.d. 39 (2) 148. During a proceeding, the burden of proof passes back and forth. Thus the requester for cancellation of a mark has to bring evidence that a mark is not in use. If this is proven, the burden of proof then falls on the mark owner to attack the challenger’s evidence and to establish that the mark is indeed in use.

The challenger has more than met the initial level of proof required to establish a prima facie case that the mark is not in use, and the mark owner failed to even attempt to rebut this position, and thus the apparent lack of use remains unchallenged.   The Adjudicator considers the evidence that the mark has not been in use for three years prior to filing the cancellation submission and thus it is fitting to cancel the mark.

In light of the above and in like of claims made at the hearing, it is clear that the mark owner has intentionally ignored the challenge to the mark and the cancellation proceedings submitted to the Israel Patent and Trademark Office.  In addition to concluding a lack of usage, one can only conclude that the mark owner is simply holding the mark for no purpose. One would expect the mark owner to acknowledge and respond to the cancellation proceedings by abandoning the mark, thereby rendering this proceeding unnecessary.

The mark is therefore cancelled. Using her authority under Section 69 of the Ordinance, Ms Shoshani Caspi has also issued relevant costs in the proceeding, based on the work done by the challenger, and rules 9000 Shekels costs, which the mark owner is informed of via the address in the register.