Appeal Regarding Infanti Baby Seats Virtually identical to those of Fisher Price (Mattel)

September 19, 2017

fisher price swing seatBaby swing-seats that were made in China and are identical to Fisher Price swing seats, down to the image of a lion on the upholstery, were imported and sold in Israel under the brand Infanti. Fisher Price obtained an Anton Pillar injunction and seized 1830 seats from the Importers’ warehouse. However, the Nazareth District Court rejected all attempts to obtain compensation under copyright infringement of the lion design printed on the seat upholstery and in the instruction manual, trademark infringement for the Fisher Price logo shown in the illustrations of the instruction manual, the trade tort of Passing Off, and the catch-all Law Of Unjust Enrichment following A.Sh.I.R. The case was then referred to the High Court.

This ruling by a panel of Israel High Court judges considers whether copyright subsists for a product design or artwork printed on a product where no design was registered for the product and whether there are grounds for sanctions under the trade-law of Passing Off or under the Law of Unjust Enrichment. The legal advisor to the government filed an amicus brief clarifying the position of the government in such issues.

judge elyakim rubinstenThe main ruling was given by Vice President of the High Court, Judge Elyakim Rubinstein who first considered the basic relationship between design law and copyright. Then, he ruled whether part of something that could have been registered as a design is entitled to copyright protection, and if so, whether the lion character is copyright protected even if the swing chair could have been registered as a design. Are the respondents direct or indirect infringers of the Appellant’s copyright? Do they have the defense of being unaware? Does trademark infringement require intent? And finally is there Passing Off or Unjust Enrichment?

Essentially Judge Rubinstein and Fogelman found copyright infringement due to the lion character on the upholstery, and Judge Meltzer also found that there was passing off, due to the products being virtually identical. Judges Rubinstein and Fogelman rejected the claims of passing off since although Fisher Price clearly had a reputation, they did not necessarily have a reputation for the baby swing seat. Infanti’s copies, though virtually identical to those of Fisher Price, were packaged in different boxes and the boxes were clearly labelled Infanti. The product itself was also labeled with the Infanti brand.

The main ruling is given below, followed by additional comments by Judges Fogelman and Meltzer. Since this is an important ruling, I have translated it in full. At the end are some comments and criticisms.

Background

This is an appeal against ruling 39534-02-15 by Nazareth district Court judge, Ben Chamo which was given on 8 January 2015 and in which Fisher Price lost their claim regarding copyright infringement in a child’s swing seat.

The ruling addresses the relationship between copyright and registered design rights. Judge Rubinstein notes that in the modern consumer society, the design of consumer goods has an increasing importance, and that manufacturers invest heavily  Consequently, many goods are some combination of functionality and artistic expression which makes it difficult to classify such goods in a single IP category and raises difficult legal questions. This appeal relates to a list of such questions of which the relationship between design law and copyright is central.

The Appellant, Mattel Inc. is a US Company that owns Fisher Price which makes baby goods, etc. The Respondent, Dvaron Import-Export Co. Ltd, is a company that imports various baby products into Israel. They and their directors and share holders were sued.

infantiMattel / Fisher-Price learned through Sakal which imports their products into Israel, that the respondents have been distributing a baby swing seat manufactured in China and branded as Infanti, which is a copy of the Fisher-Price swing seat.  Read the rest of this entry »


Israel Passes New Design Law

July 26, 2017

industrial-designDesigns are the aesthetic features of items of mass production.  Design rights started in the United Kingdom in 1787 with the Designing and Printing of Linen Act and have expanded from there.

For the past 70 years, the registration and protection of designs in Israel was governed by laws inherited from the British Mandate. Some of these were obsolete. For example, only local novelty was required, although this has been interpreted by Commissioner Circular to consider Internet publication accessible from Israel as published in Israel.

knessetToday, Israel’s Parliament, the Knesset, approved a proposed Israel Design Law in its second and third reading, that will come into force in one year’s time. The maximum protection for designs will be increased from 15 years to 25 years and Israel will now be able to ratify the Hague Convention, smoothing the process for Israeli designers to obtain international design protection and for foreign products to be protected in Israel.

Absolute world wide novelty is required to register designs. Variant designs may be registered by the same applicant.

A non-registered design right has been introduced, and the new law prohibits damages under the Law of Unjust Enrichment.

The designs that were registered under the old ordinance will now be able to get an extended maximum period of protection of 18 years instead of 15.

This development is welcomed.


Getting a Handle on Israel Design Registration

March 26, 2017

Furnipart

Although there is a proposed Law in the works, in Israel, design registration follows the somewhat archaic Patent and Design Ordinance 1924 inherited from the British Mandate. Formally, only local novelty is required! In a Circular, Previous Commissioner Dr Meir Noam creatively interpreted the Law such that Internet publication in official Patent Office websites that are acceptable in Israel would be considered as published in Israel. As discussed in this blog, that Circular is arguably ultra-vires in that such a determination arguably requires at least Ministry of Justice regulations if not a change in the Law. The present ruling by Outgoing Commissioner Kling relates to this Circular.

This ruling concerns seven design registrations – 55598 to 55604 – all of which were titled ‘Handle’ and were filed on 20 May 2014 in class 08-06 for handles and hinges by Furnipart.

On 22 March 2015, the Applicant received an Office Action that alleged that the design were lacking in the novelty and originality required by Section 30(1) of the Patent and Design Ordinance 1924 since the designs were identical to those registered in the name of the Applicant in Europe which were registered and published prior to submission of the Applications in Israel.

In addition to the 55602 registration that was submitted to the EPO on 18 October 2013 and which published on 15 November 2014, all the applications were submitted on 21 February 2014 and published on 26 March 2014.

The Applicant failed to respond to the Office Actions in the period specified in Regulation 28 of the Design Regulations, and on 23 June 2015, a reminder was sent warning the Applicant that failure to respond within 30 days with a request for a retroactive extension would lead to the applications being considered abandoned.

On 10 August 2015, the Applicant sent a response in which he claimed that the designs were, indeed registered in Europe, but apart from the publication on the EPO website, there was no publication in Israel. The Applicant claimed that the Israel Application was filed within the six month time frame of the European filings which is within the grace period from the first filing (Denmark) given in Section 52a(1) of the Ordinance.  Consequently, the European filing date should be considered the effective filing date in Israel.

On 13 August 2005, the Applicant was sent a notice that stated that further examination required payment of the extension fee, and which referenced Circular M.N. 69 from 25 December 2008 and to Section 53(2) of the Ordinance, noting that the Applications did not, claim priority.

On 9 September 2015, the Applicant was sent a second Office Action clarifying that under Circular M.N. 69, an Internet publication is considered as a publication that is published in Israel and so the Applications are contrary to Section 30(1) of the Ordinance. Similarly, it was noted that priority was not requested within two months of submission as required by Section 52(2) and so the effective filing date was the actual filing date in Israel.

On 15 December 2015 in light of the rejection of 9 September, the Applicant requested a hearing and this was geld on 18 April 2016.

Prior to the hearing, the Applicant submitted his main pleadings on 11 April 2016., during which he reiterated the above claims. He also alleged that Circular M.N. 69 differentiates between official and commercial publications and the European Patent Office publication was not meant to be published in Israel, even if it is accessible on line from Israel since the Israel design is not in force. Based on this ‘logic’, the Applicant claims that he is within the requirements of Section 52(a)1 of the Ordinance since there is a six month’s grace period.

 The Ruling

Section 30(1) of the Ordinance states:

The registrar may, on the application made in the prescribed form and manner of any person claiming to be the proprietor of any new or original design not previously published in Israel register the design under this Part.

So registration is contingent on no prior publication in Israel.

In Section 6 of Circular M.N. 69 from 24 December 2008, the previous Commissioner ruled that :

One can cite designs that have published on the Internet before the filing date in Israel, since there is evidence of their publication date.

To cite something against novelty of a design, section 7 of M.N. 69 relates explicitly to publications in patent offices abroad.

Use of Internet publications shall be done with the required care and only where the Examiner considers that he can rely on it indeed having published prior to the Israel filing date. For example, publication in databases in the official European patent office website OHIM, the USPTO and WIPO, etc. which publish the publication date of each design.

As far as relying on Internet publication, Examiners have been warned to cite these with due care – see the 51593 and 51594 Tequila Cuervo ruling from 9 June 2013, particularly paragraphs 44 and 45, and the ruling concerning various designs to Naot Shoes (1994) ltd published on 1 June 2016 

The same required care regarding the publication date, content and likelihood of Israel based surfers seeing the publication was considered in paragraph 10 of the 45452 Sejec Vanja ruling published on 28 February 2012: 

The language of Section 30(1) of the Ordinance states ‘… not having published earlier in Israel. This does not require that anyone has actually seen the publication…such was always the interpretation, even prior to the Internet age. The question is whether the publication was accessible. See for example the Appeal 430/67 Sharnoa ltd. et al. vs. Tnuva et al. (1968):

“The law regarding prior publication in a book of this type is based on the book being found in a place accessible to the public, such as a public library is considered sufficient publication, since one can assume that in this manner, the design reaches the public knowledge”.

In light of the above, one cannot accept the Applicant’s allegation that the previous publications are not novelty destroying, since reason that Patent Office Internet accessible databases are considered publications is the ease with which one can verify the publication date. This is certainly the case where the applicant does not deny the trustworthiness of the site and of the listed publication date, only whether Israelis would have access to inspect there.

Priority Date

The Applicant claims that despite the earlier publications that are novelty destroying for the applied for designs, the effective filing date in Israel should be considered as being the actual filing date in Europe.

Section 52(a) states:

If a design owner submits a request to register a design that has previously been filed by himself or by  his predecessors in title, a request to file in one or more friendly states (henceforth priority), he may request that as far as sections 30(a) and 36 are concerned, that the earliest priority date will be considered the filing date in Israel if all the following conditions are met:
(1) The Israel Application is submitted within six months of the earliest priority; and
(2) A priority request is submitted within two months of filing.

Firstly, it is stressed that contrary to the Applicant’s claims, Section 52 that the priority date is determined with reference to Sections 30(1) and 36, i.e. with respect to novelty and earlier publication. This does not mean that where a priority claim is made, that the Israel application automatically is awarded the priority date.

In this instance, the previous applications were filed on 21 February 2014 and then in Israel on 20 May 2014, i.e. within the six months grace period for which I priority request can be made. However, filing within six months of the prior application is insufficient since the second clause requires that the Applicant makes a priority claim within two months of the Israel filing date.

On 21 October 2014, this two month period for requesting priority in Israel passed, the period for which the application can rely on the filing date of earlier applications with respect to Sections 30(1) and 36 passed without Applicant requesting priority.

The Commissioner does not agree with the Applicant that the mere filing of an Application in the period provided for in clause 1 is sufficient since Section 52 requires both conditions to be fulfilled: filing within six months and making a timely request for recognition of the priority date. These conditions are complimentary – section 52(a) states explicitly that it applies if all the following conditions are met. One condition being fulfilled does not waive the other. So there is consensus that merely filing within six months does not result in priority being recognized.

Since the full requirements were only met a year after the two month deadline, the Applicant is not entitled to the priority date.

In the hearing, the Applicant’s representative noted that section 54 gives the Commissioner the discretionary powers to extend deadlines in the regulations even retroactively. The Commissioner considers that this regulation does not give him the power to extend deadlines in the Ordinance itself, including extending the priority claim.

The Application is rejected and the designs will not register.

Ruling concerning Design Numbers 55598 to 55604 “Handles” by Asa Kling, 21 February 2017.

COMMENT

four candles  The classic 1976 Fork Handles sketch may be found here.


Israeli Designer Successfully Sues Fashion Chain for Copying Dress

December 26, 2016

necklines

Israel fashion designer Gadi Elemelech sued Renuar, a chain of selling women’s clothing for selling clothing that was confusingly similar to his haute couture dress. The dress in question appeared in Elemelech’s 2013 collection, and in Renuar’s 2014 range. The legal grounds for the action were the Israel Trade Related Torts Act 1999.

A unique design feature that was copied is in the neck shown above. The one on the right is Elimelech’s and that on the left is Renuar’s.

Elimelech sent a Cease and Desist but Renaur denied the allegations.

Section 1a of the Israel Trade Related Torts Act 1999 states:

No business should create the impression that a product they sell or a service they provide was provided by a third party of in connection with a third party.

Citing Judge David Cheshin in 8981/04 Avi Malka Avazi Restaurant vs. Avazi Hatikveh Neighbourhood (1997) from 2006 to the effect that the creation of a new tort simply reclassified the old one and was not substantially different. Professor Miguel Deutch concurred in his book Trade Related Torts and Trade Secrets 2002 came ot a similar conclusion, referring back to an academic paper by Judge Gidon Gilat to the effect that passing off does not only relate to fraudulent use of trademarks.

Renuar argued that there was no likelihood of confusion among Elimilelech’s clientele who know whether they are purchasing from designer or from the high street chain.

Elimelech argued that his dresses were ripped off  copied and sold in the chain and that this made them less desirable and limited his sales and profits.

Judge Gidon Gilat of the Tel Aviv District Court ruled that the sale was actionable under the Trade Related Torts act as ‘passing off’ since the designer dress was well known and associated with the designer, and the fashion chain’s dress was confusingly similar to the designer dress, which they were aware of.   The court awarded damages of 55,000 Shekels and a further 35,000 Shekels legal costs.

Civil Tort 5366-12-14 Elimelech vs. Renuar Ruling by Gidon Ginat, 22 December 2016

 


Online Design Filing in Israel

December 22, 2016

ilpo

The Israel Patent Office held a seminar today to introduce their new online design submission interface. Over the past five years the Israel Patent Office has gradually introduced online trademark, PCT and patent filing and prosecution and has published guidelines for examiners, which help applicants and their representatives.

The Design Department is the last department to become fully computerized, and, if all goes well, the interface will become ‘live’ on 29 December 2016.

alferd_teeThere were some 50 participants at the seminar. These included veteran Patent Attorney and Rabbi, Alfred Thee, known generally as Mr T, who, though rather less muscular and black than the character from the A Team, is, nevertheless, a very sprightly and highly experienced 85 year-old practitioner that I had the benefit of training and qualifying under. Mr T told me that he was finally leaving his long-term employment at Seligsohn & Gabrieli at the end of the year, but would carry on working as a self-employed consultant. I anticipate retiring before he does!

In addition to various friends, colleagues and competitors, I noted the presence of Zvi Teff who qualified under my tutelage, and who has recently opened his own firm. We wish him luck with this endeavour.

aippiThe seminar ran from 11:00 AM to 1:00 PM. Those that could be bothered rushed over to Tel Aviv for a General Meeting of the AIPPI that started at 2:30 PM. Holding the two events on the same day seemed to be both rather silly and also discriminatory against those practitioners that file design applications.  Had the AIPPI held their event at the Israel Patent Office at 2:30, many more people would have attended both events. There are only a few hundred IP practitioners in Israel, including lawyers, examiners and patent attorneys, that could join the Israel Branch of the AIPPI. Doing a General Meeting on the same day as an IP seminar at the Patent Office is like holding a general meeting during INTA. It is plain stupid.

Commissioner Kling opened the event and spoke about the pending Israel Design Law which is due to replace the hopelessly outdated Design Ordinance from 1922 that is currently in force. Amongst other ramifications of the pending legislation, it will pave the way for Israel to join the Hague International trademark registration system.

After the Commissioner finished, the Head of the Design Department, Alice Mahlis-Abramovich took the podium. However, the actual instruction on the new interface was given by someone from a software instruction agency who bore a slight resemblance to Israeli singer Roni Dalumi. Having someone who was used to explaining how to use software explaining how to use the software was a strategy with mixed results. Since she didn’t practice design law, she could relate to what the software did, but not how to do various things that practitioners might want it to do. Also, she referred to something submitted as being a design, whereas practitioners would call these design applications, and only refer to the examined and registered product as a ‘design.’

Those now familiar with filing and prosecuting patent applications via the online interface will experience little difficulty using design interface. The seminar wasn’t very exciting, but some of the questions were rather interesting. Apparently one of my colleagues submits patent applications, listing a-company-in-the-process-of-being-set-up as the applicant to avoid a tax incident occurring. That as may be, a not yet formed company is not a real person or a legal person (entity). If the company is not formed or if the name changes, who can assign rights to the application? How can one obtain a date without an applicant that actually exists?


Bifurcation in the Interest of Efficiency

November 1, 2016

bifurcatedIn Germany, the courts that rule on patent infringement are not authorized to rule on validity. This makes Germany a preferred litigation jurisdiction for bringing European IP cases. Israeli courts can and do rule on validity of patents and designs in infringement cases. Usually having one court review everything is more efficient, however, this is not always the case.

52245Israel Design Application Number 52245 to My Bondi Ltd. was filed on 23 February 2012 and issued on 23 July 2014. The design is for a multipurpose holder as shown.

In May 2015, My Bondi sued Urban Cofix Ltd and Tabor Publicity Ltd in the Rishon le Zion Magistrates Court claiming infringement of the design. The case is 42290-05-16.

In response, Tabor Publicity Ltd filed a cancellation proceeding against the allegedly infringed design, claiming that it had published prior to the design registration application being filed.

My Bondi have asked for the cancellation proceeding to be stayed until the Rishon le Zion court rules on infringement. They claim that the court will consider additional claims including that of validity, so staying that proceeding will cause a miscarriage in justice.

Tabor Publicity Ltd object to staying the cancellation proceeding. They claim to have already asked the court to stay the infringement ruling until the patent office determines validity of the design registration. They note that in the statement of defence submitted to the court they noted that they would be challenging the validity of the design registration and that the magistrate’s court lacked juridical competence to rule on validity issues. They do not consider that having the Israel Patent Office consider validity will result in a miscarriage of justice since the validity of the allegedly infringed design is a preliminary issue that should be dealt with first.

In the meantime, on 16 August 2015, the Rishon le Zion magistrate’s court transferred the case to the Central District Court as the correct court for ruling on design infringement, but this happened without considering the staying request.

RULING

The bone of contention in the proceeding before the Commissioner of Patents, Designs and Trademarks relates to advertising the product on the Facebook page of the Applicant prior to the registration application being filed. The alleged infringer claims that this advertisement shows the point of novelty thereby destroying the novelty at the time of filing which is a necessary condition for registration.

From their Counter Statement requesting suspension pending the court ruling, the design owner does not deny the publication but claims that the publication was a genuine mistake.

The purpose of suspending a proceeding is “to prevent overly burdening the opposing party and to prevent unnecessary problems for the courts”. See Appeal 8/78 El Okvi vs. Israel Lands Authority, p.d. 29 (2) 477. 483.

In this instance the parties agree that the question of the validity of the mark in the light of the prior publication is the legal issue common to the two proceedings. Clearly the District Court has additional issues to consider, such as unjust enrichment and passing off, etc. which are beyond the legal competence of the Commissioner of Patents to address.

The range of issues before the District Court is wide, and will take longer than merely ruling on the validity of the design registration. The second defendant is a registered third-party to the validity issue. However, the issue before the Patent Office is a focussed one that relates only to the validity issue in light of prior art that all parties acknowledge the publication of.

The main case was transferred to the District Court which has not considered the case at all. Furthermore, in their statement for the defence, Tabor Publicity raised the validity issue and noted that it would approach the Patent Office for a ruling on that issue. Consequently, the Deputy Commissioner rules that it is more efficient for him to rule on the validity issue as per the 1925 Design Regulations which gives the Requester for Cancellation a number of weeks to provide evidence and the design owner a further month.

In conclusion, the cancellation request is allowed to continue and the parties are forewarned that attempts to extend the proceedings before the Patent Office will be considered in light of the progress of the case before the District Court to prevent unnecessary delays.

Cancellation Request Re Israel Design No. 52245 Interim Ruling by Ms Jacqueline Bracha, 11 September 2016

COMMENT

Design litigation does indeed go directly to the District Court, and is appealed to the Supreme Court. The patent office has vastly more experience than any District Court judge in ruling on whether internet publications are prior art. Whether the publication was intentional or not is irrelevant.

 

 

 


Israel Patent Office Rules Costs for ‘Unnecessary’ Design Cancellation Proceeding

September 11, 2016

costs-awardThere are very few Israel Patent Office rulings or Israel court rulings relating to designs. However, they do occur.

Israel Design No. 53151 to SHL Alubin ltd relates to a profile. It was submitted for registration on 6 September 2012, and issued on 19 December 2013. On 31 December 2015, it was canceled following a Court Order obtained by Silver Hong Kong Israel, who then requested real and actual costs to be awarded.

Silver Hong Kong Israel filed for cancellation on 10 August 2014. SHL Alubin ltd denied all charges. In parallel to the cancellation procedure, a complaint was filed with the Haifa District Court – Civil Matter 21470-03-14 SHL Alubin LTD vs. Exstel LTD.  Before the Israel Patent Office could hear the case, the District Court issued a ruling on 29 December 2015, canceling the mark.

To complete the picture, the design owner SHL Alubin LTD filed a request to hold the court’s ruling, but on 27 January 2015, that request was rejected and the design cancellation was published in the Israel Patent Office journal.

At that stage, a request for costs was filed, for the work done until that time, including filing statements of case, submitting evidence and counter-evidence. To support the request for costs, the Applicant submitted an affidavit from the CEO of Silver Hong Kong Israel ltd., with receipts for official fees and a breakdown of hours per month spent on the project. The breakdown was created for this request for costs, but was not detailed.

Silver Hong Kong Israel ltd. rather oddly claimed to have invoices that they were not submitting for secrecy reasons unless asked to.  On 10 May 2016, Applicant submitted invoices together with a statement from the CEO. The invoices were for consultation from the agent of record for each stage of the proceedings and totaled $35,567.5 (approx. 140,670 Shekels) for 42.5 hours of senior attorney time and 187.5 hours of junior attorney time, and a further 832 Shekels for official fees and 1500 Shekels for incidental expenses, not previously claimed.

Silver Hong Kong Israel ltd. considered the costs appropriate for the stage reached. They claimed that the court filing was forced on them as Alubin threatened to sue them for registered design infringement. However, since Alubin’s claims and designs were indefensible, their behaviour should be sanctioned, and this should be reflected in the costs ruled.

Silver Hong Kong Israel claimed that Alubin had hidden the functional nature of their design when filing the application, and this was what resulted in the design eventually being canceled. Silver Hong Kong Israel further alleged that Alubin hid the court proceedings from them and made it difficult for them to obtain details of the proceedings before the courts.

Alubin countered that the invoices were made out to a different company, VeMetal ltd., and there was no indication of a connection between that company and the plaintiff here.

There are very few Israel Patent Office rulings or Israel court rulings relating to designs. However, they do occur.

Israel Design No. 53151 to SHL Alubin ltd relates to a profile. It was submitted for registration on 6 September 2012, and issued on 19 December 2013. On 31 December 2015, it was canceled following a Court Order obtained by Silver Hong Kong Israel, who then requested real and actual costs to be awarded.

Silver Hong Kong Israel filed for cancellation on 10 August 2014. SHL Alubin ltd denied all charges. In parallel to the cancellation procedure, a complaint was filed with the Haifa District Court – Civil Matter 21470-03-14 SHL Alubin LTD vs. Exstel LTD.  Before the Israel Patent Office could hear the case, the District Court issued a ruling on 29 December 2015, canceling the mark.

To complete the picture, the design owner SHL Alubin LTD filed a request to hold the court’s ruling, but on 27 January 2015, that request was rejected and the design cancellation was published in the Israel Patent Office journal.

At that stage, a request for costs was filed, for the work done until that time, including filing statements of case, submitting evidence and counter-evidence. To support the request for costs, the Applicant submitted an affidavit from the CEO of Silver Hong Kong Israel ltd., with receipts for official fees and a breakdown of hours per month spent on the project. The breakdown was created for this request for costs, but was not detailed.

Silver Hong Kong Israel ltd. rather oddly claimed to have invoices that they were not submitting for secrecy reasons unless asked to.  On 10 May 2016, Applicant submitted invoices together with a statement from the CEO. The invoices were for consultation from the agent of record for each stage of the proceedings and totaled $35,567.5 (approx. 140,670 Shekels) for 42.5 hours of senior attorney time and 187.5 hours of junior attorney time, and a further 832 Shekels for official fees and 1500 Shekels for incidental expenses, not previously claimed.

Silver Hong Kong Israel ltd. considered the costs appropriate for the stage reached. They claimed that the court filing was forced on them as Alubin threatened to sue them for registered design infringement. However, since Alubin’s claims and designs were indefensible, their behaviour should be sanctioned, and this should be reflected in the costs ruled.

Silver Hong Kong Israel claimed that Alubin had hidden the functional nature of their design when filing the application, and this was what resulted in the design eventually being canceled.

Alubin countered that Silver Hong Kong Israel based their case on the District Court case that they were not a party to. Silver Hong Kong Israel were granted access by the judge and this enabled them to file and prosecute the cancellation proceedings with minimal additional work.  Since the case never went to a hearing, this should be reflected in the costs awarded.  The cost request was a random list of hours and persons without details of the work allegedly done on behalf of Silver Hong Kong Israel, and the total amount of hours claimed was grossly inflated.  The invoices were made out in the name of V Metal ltd., not Silver Hong Kong Israel, and there was no link between the invoices and the work done.

Silver Hong Kong Israel countered this by explaining that V Metal ltd. was a sister company with common owners.

Commissioner Asa Kling noted that Section 46 of the Patent & Design Ordinance 1926 provides that:

In any legal proceeding before the Commissioner under this Ordinance, the Commissioner may rule what he considers to be reasonable costs, can decide which party should pay the costs and how they should be paid.

 [MF – there is an Israel Design Law pending legislation, but until it enters into force, design law is covered by this rather archaic ordinance].

The case-law establishes that the losing party should pay real costs. However, the courts can decide if the actual costs were reasonable, proportional and necessarily incurred in fighting the case, in the specific circumstances. The costs must be proportional to the issue being considered, so that the successful litigant recovers his costs but doesn’t punish the loser. See Bagatz 891/05 Tnuva Cooperative for Marketing Israel Produce vs. the Body Authorized to Grant Import Licenses of the Ministry of Trade & industry, 30 June 2005 paragraph 19.  The various considerations have been weighed up in a long list of patent and trademark rulings by the Israel Patent Office, and are appropriate for design litigation as well.

 

To be awarded real and actual costs, the successful litigator must show that the proof, a breakdown of hours and an agreement for compensating counsel.  Once the successful party provides a detailed costs analysis, the onus is on the losing party to pick holes in the costs request. This is stated in Paragraph 225 of the Tnuva ruling:

Once the detailed request for costs is substantiated – the burden of proof switches and the onus is on the loser to show why the costs are exorbitant, based on their being unreasonable, unnecessary and / or disproportional. 

The claim that Silver Hong Kong Israel could have based their case on the District Court filings was a general allegation and was substantiated in any way. Examination of the submissions to the Israel Patent Office dies imply that a significant amount of real work was performed on behalf of Silver Hong Kong Israel.  The case before the Israel Patent Office has a different statement of case, and evidence to support that statement of case. The court proceeding is not a substitute that can be cut & pasted.  Alubin claims that the costs incurred were unnecessary but there are no concrete examples and the company does not back this claim with evidence.

Alubin considers the whole submission was unnecessary since the case was never heard by the Israel Patent Office. Commisioner Kling rejects this position as  something that Silver Hong Kong Israel could not have predicted and the fact that the case before the Israel Patent Office was never ruled on its merits does not render the filing of the case frivolous or unnecessary.

In light of the above analysis, Silver Hong Kong Israel are entitled to real costs. However, Silver Hong Kong Israel did not originally submit details of the actual costs incurred. There is a difference between the identity of the party to the cancellation proceeding and the entity to which invoices were issued and due to the invoices not being submitted in a timely manner, this was not fully explained. This and the fact that the original request for costs was not detailed, can fairly be taken into account in a costs ruling under Regulation 512b of the Civil Regulations 1984, which allows the courts to consider the parties’ behaviour.

 Taking the above into account, costs of 832 Shekels and legal fees of 80,000 Shekels are awarded to Silver Hong Kong Israel , to be paid within 30 days or the sum will be index linked and interest will be incurred.

Costs re cancellation proceeding for Israel Design No. 53151, Ruling by Asa Kling, 3 August 2016.