Statute of Limitation for Compensation for an Employee Invention

January 28, 2018

This ruling considers when the seven year Statute of Limitations starts for an employee to turn to the tribunal for service inventions for a ruling regarding appropriate compensation.

Background

10-american-idol-judges

Section 134 of the Israel Patent Law establishes a tribunal comprising a judge, the Patent Commissioner and an academic, whose job it is to determine an appropriate level of compensation for an employee inventor if asked to do so.

The Law is clear that such inventions are the property of the employer. If there is a contractual arrangement regarding compensation it is usually upheld. Nevertheless, the committee has the authority to hear cases and make rulings, and several such rulings have published in recent years.  See re Barzani.

azilect

In this instance, on 20 April 2015 Dr Ruth Levy who was previously employed by Teva Pharmaceuticals, requested that the committee rule compensation for her employee invention of rasagiline which because the active ingredient of AZILECT™.

teva

Teva opposed based on her tardiness in bringing the claims and the Statute of Limitations for such actions. They also requested that the tribunal set out a timetable for discussing the issues, and that they firstly address whether the case should simply be dismissed out of hand due to the time passed.

The witnesses concerned were aged, and Dr Levy opposed the timetable. Eventually it was decided to collect testimony first and then to establish a time-table for everything else.

After the usual preliminary skirmishes, on 30 June 2016 the tribunal ruled that Professor Cohen should be cross-examined at his home on 12 July 2016 and the other witnesses (including Dr Levy) would be cross-examined on 28-30 August 2016 at the Israel Patent Office.

Professor Cohen was cross-examined as scheduled, and the testimony of the other witnesses was postponed unto December 2016 at request and consent of both parties.

On 29 September 2019, the tribunal set a date for discussing initial questions, and delayed the hearing on the stature of limitations and aging of charges until later on.

On 25 October 2019, Dr Levy submitted her response to the initial requests together with affidavits and appendices and submitted that the affidavit of Professor Eldad Melamed which was part of her original submission, be included in the evidence, despite his having passed away in the meantime, making his cross-examination impossible.

swamped

Being swamped with material, the tribunal cancelled the scheduled cross-examinations and decided to relate to whether the case should be thrown out due to the statute of limitations first, so that if they concluded that the application for compensation was filed too late, it would not need to be addressed substantively.

The Main Claims of the Parties

claimsDr Levy has a PhD in microbiology and was employed by TEVA in various capacities relating to the Research and development of drugs from 1986 until retiring in 2013. She claimed that she was an active participant in a number of significant inventions, the most prominent being the active ingredient rasagiline which is used in the treatment of Parkinson’s Disease in the drug AZILECT™ which was marketed in Israel and Europe since 2005 and in the US since 2006.

compensation

TEVA responded that Dr Levy received full compensation for her inventions. I addition to her salary, she received a special grant of _______________ for her contribution to the development of AZILECT™. Teva considers that this grant was beyond that required by law and its acceptance created an implicit agreement between Dr Levy and the company regarding compensation for her inventive contribution. TEVA further claims that all the inventions that Dr Levy requests compensation for were invented over seven years before filing her request for compensation. Even if one counts the time period from when a patent application was filed, this is still seven years previous, and so the statute of limitations applies and she is not entitled to anything else.

Furthermore, Teva contends that by her behavior prior to suing, Dr Levy apparently gave up on any rights to additional compensation by not making any claims beyond her salary and grants, and so the case should be thrown out due to laches.

give up

Dr Levy disagrees. She considers that the special payment or grant that she received from TEVA was an admission that she had inventor rights. Furthermore, she only became aware of the right in 2012, and citing section 9 of the Statute of Limitations argued that the clock only starts ticking from her becoming aware of her rights.

It should be noted that Dr Levy denies that the payments made were compensation for her inventions. However, she claims that the fact that she denies this does not alter the fact that Section 9 of the Statute of Limitations starts with her becoming aware.

Alternatively, Dr Levy claims that if one does not accept the 2012 date, one should consider the period as starting with TEVA acknowledging her rights  which occurs in Paragraph 2.2 of the draft retirement agreement that TEVA drafted and sent her in 2013, and which was not included in the final version that was signed by the parties.

The paragraph remains confidential.

giving-up

Dr Levy claims that had she signed the agreement including paragraph 2.2, this could be considered as being a waiver of her rights. She further alleges that raising the issue of Statute of Limitations is itself an act of bad faith since TEVA failed in their obligation to inform her about her right to compensation and to turn to the tribunal. Furthermore, as long as the parties consider that they have not reached an agreement by not being silent on the compensation issue, and have not performed an action that makes it clear that there remains disagreement between the parties, Section 134 has not been fulfilled and the employee has not yet got the right to claim compensation. So the period for making a concrete claim only starts with her retiring in 2013 when she made her final request for compensation.

Dr Levy considers that section 135(4) of the Patent Law regarding actual exploitation of the invention, is not a necessary condition for the committee under Section 134 to establish grounds for suing. However, it does reset the Statute of Limitations. She considers that there is reciprocity between the exploitation by the employer and the employees right to compensation.

The Applicant bases this assertion on the law under which the statute of limitations for suing for infringement of a patent can only occur from when the infringement first occurs, without any relevance being given to any previous infringements. She considers that every product that exploits a service invention recreates the employee’s grounds for suing. She considers that this is clear from the fact that the tribunal can reconsider its rulings as circumstances change.   Thus there is time limit to when one can approach the tribunal under section 136. Any change in circumstances, such as exploitation of the patent in practice, reestablishes grounds for the employee suing.

window

Were the tribunal to rule differently, pharmaceutical inventions would have two windows, the first within seven years of inventing and the second within seven years of a change of circumstances under section 136. This is inefficient.

Dr Levy further alleges that only after seeking legal advice did she become aware of the her right for compensation under the Israel  Patent Law. She considers that the employer is obliged to explain all rights to employees and should have made a formal approach to her to settle the issue.

Dr Levy further alleges that a narrow window would force the employee to fight the employer during the period of employment and risk dismissal, and would force the negotiation to be from a position of weakness. Furthermore, a narrow seven year period would require her to have fought for each invention separately. This would have required her to approach the tribunal several times sometimes widely spaced, regarding a single pharmaceutical. Finally, she does not acknowledge being a side to any agreement with TEVA regarding employee inventions during her period of employment.

DISCUSSION

The Statute of Limitations does apply to rulings of the Committee for Compensation to Employee Inventors since it is a judicial body, see Appeal 402/77 Goldman vs. Herman, p.d. 32(2) 421 page 428:

When the legislative defined “court” in the Statute of Limitations it bothered to clarify in the definitions section that the term court did not only refer to the law courts or Rabbinic courts but also to any judicial authority, and even to an arbitrator who is not an Authority in that he is not an Institution that generally exists, but is rather an ad hoc authority. This means to say that the legislation specifically opined tat any play where the Law provides judicial authority to any entity, the Statute of Limitations applies.

Section 2 of the Statute of Liberties states that:

A claim for any right is subject to become aged, and if a legal submission is made for an aged right and the one sued claims the defense of the Statute of Limitations, the court need not address the issue, however the Statute of Limitations per say does not cancel the abrogated right.

Section 5 of the Statute of Liberties states that apart from real estate issues, the Statute of Limitations is seven years.

Section 6 of the Statute of Liberties states that:

The period from which seven years is counted starts with the incident that created the grounds for filing the complaint.

conception

In Appeal 10192/07 Pisgat Ashdod Civil Engineering LTD vs. Chen Gal Investments and Trading ltd. (24 May 2010) paragraph 17 of the ruling establishes that the time when a claim is conceived for the purposes of starting the Statute of Limitations clock is when the significant facts that are the basis of the requested claim come together. See Uri Goren “Issues in Civil Law” p. 118, 10th edition, 2009, Appeal 242/66 Jacobson vs. Gez p.d. 21(1) 85, 92 (1967). Estate of Williams p. 271, Appeal 244/81 Patent vs. Histadrut Health Fund p.d. 38(3) 673, 678-679 (1984). However, this definition does not fully cover the concept of when a claim is born. As far as the Statute of Limitations clock is concerned, it is insufficient for the claimant to have grounds for suing; he needs a concrete incident that can be proven in court for him to be able to file his claims and win the sanction he applies for. See 1650/00 Zisser vs. Ministry of Housing, p.d. 57(5) 166, 175 (2003).

monkey tribunal

Section 134 of the Israel Patent Law states that the tribunal has the authority to determine that an employee has the right to compensation for Service Inventions in cases where there is no agreement between the employer and employee:

If there is no agreement that prescribes whether, to what extent and on what conditions the employee is entitled to remuneration for a service invention, then the matter shall be decided by the compensation and royalties committee established under Chapter Six.

The Applicant claims that her rights as an employee come into play when the employee invention is made and she is entitled to compensation for inventing. However, she claims that her concrete right to file her complaint under Section 134 come into play only when there is no agreement between the parties regarding the employees rights. So long as it is not clear that there is no agreement, there is no concrete grounds for suing and thus the clock does not start to tick.

The tribunal rejects this claim. Section 134 states that where there is no agreement that regulates the employee’s right, the employee has the right to turn to the tribunal to determine if the employee is entitled to compensation and if so, how much? The requirement for a lack of agreement is a factual one objective one and is not subjective, as claimed by the complainant. As to when the concrete claim from which the clock starts to tick, this will be addressed below.

working together

Unlike other legal systems, the Israel Patent Law does not require that employer and employee will actively work towards forging an agreement as a preliminary action for Section 134 of the Law to come into effect. There is also no need for the parties to have a disagreement regarding compensation. So in accordance with the conditions laid out in re Ashdod Engineering (above), the plaintiff could have turned to the tribunal before negotiating on retirement, and the tribunal could have ruled that the plaintiff is entitled to compensation. In light of this legal situation, there is no basis for the claim that the employer is obliged to approach the employee and offer compensation. However, it is good for the employer to do so. Similarly, it is fitting for the legislation to consider including an obligation of this nature in light of the respective power of the parties, in light of Judge Rubinstein’s comments in re Barzani which are related to below.

concrete

The time when a concrete obligation was born

It is pertinent to discuss when an employee invention as defined in the Israel Patent Law comes into being for the purposes of the Statute of Limitation. One possibility is that the employee invention comes into being at the moment that the employee informs his employer that he has come up with an invention due to his employment or during his employment, as per Section 131 of the Law and the employer decides to monopolize the Invention under Section 132(a). There is an assumption that the parties do not disagree that this is a service invention. The logic behind this choice is that from the moment that the employee and employer fulfill their obligations under Sections 131 and 132 of the law, the parties are aware that there is a service inventions and have declared their interest regarding ownership, and this is the first opportunity to relate to the question of compensation. It is noted that by this approach the conceptual right and the concrete right.

A second possibility for when the right to compensation starts, is either when a patent application is filed or when a patent issues. These periods are periods when the employer shows interest in the invention. However, these dates are problematic since there are cases when an employee invents something that the employer does not apply for a patent for.

A third possibility for the concrete right is when the employer exploits the patent as per section 135(4) of the law. On the face of it, it seems that until the patent is utilized, it is not clear that the parties can really evaluate the worth of the patent. However, this approach is also problematic: exploitation does not occur in a single unequivocal event but is rather an ongoing process  during which various variables can affect the profitability of the invention. Similarly, it raises the question of whether the worker is entitled to a share in the profits if the employer sells the patent and does not exploit it directly.

That said, both the second option, and particularly the third one raise a further problem which it whether a concrete ground for suing as opposed to a conceptual ground for suing is cause to turn to the tribunal? Perhaps there is a difference from when the clock starts to tick, and the time period when the tribunal has the authority to relate to the employee’s claim for compensation. This means to say that it may be sufficient for there to be a conceptual claim for the tribunal to have authority, but a concrete right is required for the Statute of Limitations clock to start ticking. In the regard one should note that in Actelis Networks vs. Yishai Ilani (3 Feb 2010) discussed below, the tribunal concluded that one can request compensation prior to actual exploitation occurring.

In this instance, the tribunal sees no reason to rule on the issue of when the seven years Statute of Limitations period starts since the Complainant’s case was filed more than seven years after all the candidate dates.  Below claims by complainant to prevent the Statute of Limitations applying are discussed.

The Statute of Limitations as per re Schechter

Seven_year_itch.jpg

The Applicant relates to the decision ruled in217/86 Mordechai Schechter vs. Abmatz LTD, p.d. 44(2) 846, following which Section 73b of the Israel Paten Law was amended to state that the Statute of Limitations does not apply to patent cancellation requests. Dr Levy considers that the Schechter right to request a patent cancellation comes into effect when the Applicant for Cancellation has an interest in the patent being cancelled. So there is no single Statute of Limitations of seven years from when a patent issues, as stated in paragraph 5 of the decision:

When is the point at which the right to sue becomes grounds to sue? If we use a metaphor, what is the point at which a grain of sand in an oyster becomes a pearl? When translating this picture to the issue before us and to answer the question, when does the right to challenge the validity of a patent become grounds for filing a cancellation proceeding that starts the Statute of Limitation clock? In this instance, the cancellation period for filing a cancellation proceeding only starts when the Applicant for cancellation has a personal right to have a patent thrown out of the register.  (which also serves the public interest).  

In re Schechter, Judge Netanyahu explains that the rationale behind the establishment of the time frame in this manner is to enable the public to challenge the validity of the patent. The rationale for this is the purity of the register:

To block the possibility of attacking a patent on grounds of the Statute of Limitations or laches would lead to the result that after the period has passed, the patent would become an absolute right which contradicts the spirit behind The Patent Law. There is no policy or logic to justify a patent becoming inviolate from direct attack by cancellation proceedings after seven  years when the same reasoning allows a patent to be enforced for 27 years or more. What logic is there to make things difficult for a responsible person who wars that applicant to check the status of a patent in advance and to make is easier for someone to defend himself during infringement proceedings for an ‘at risk’ product launch? The logical conclusion from the perspective of Patent Law is that Patent Law is incompatible with laches and Statute of Limitations and does not coexist with it.

Judge Netanyahu explains that the conceptual right is a public right to have patents cancelled. However, only if someone is interested in cancelling the patent is there a concrete right to request for cancellation. The period for so doing starts with the day that the concrete right comes into effect:

This way, that differentiates between the conceptual right and the concrete grounds for an action lead to the following conclusion: The right to cancel a patent is a ‘right open to every person’, it is a fundamental concrete right that remains simple until it aggregates into a concrete right and an issue develops for the Applicant for Cancellation. Only then does the clock start running. So where the cancellation request is filed by a third party, and not the patentee who is owns the invention, the public is drawn in by virtue of their conceptual right to the concrete private claim. However, this is not the claim of the appellant. The claim is made on behalf of the public –that the invention is not patentable. Until there is a private concrete claim to use the patented invention, the clock does not start ticking.

The present case is different. The right to submit for a patent to be cancelled is a right that the Patent Law gives the public; that means to say that anyone can submit a cancellation request. The claims for compensation for inventing is conceptually limited to the employee inventor as a personal right that he has by virtue of inventing. The employer’s obligation is, to the extent that the tribunal decides that it exists, is an in personam contractual right to the specific employee and not a general in rem public right. Thus the conceptual right, i.e. that of compensation and the concrete right, which is that which initiates the seven year period of the statute of limitations- both are private rights that exist between employee and employer and do not extend beyond this relationship.

The reciprocity of the relationship between the Exploiting the Invention and Claims for Compensation

reciprocity

The supplicant Dr Levy claims that there is a reciprocity between the Exploiting the invention by the employer and the ability of the inventor to claim compensation. She claims that as long as the employer exploits the inventions, the worker’s right to compensation is continuously regenerating.

The tribunal rejects the supplicant’s claim in this regard. Such reciprocity does not accord with the wording of the Patent Law and does not accord with the underlying logic.

In re Schechter, Judge Netanyahu stood firm in her belief that the rationale was to allow the public to attack registered patents, and stated that:

As stated previously that the perspective at the base of the patent law and the public aspect is to ensure the ‘purity of the register’. I also explained that since the commissioner has limited tools to test that patents have correctly issued, the system relies on the public and encourages them to submit challenges. However, the most effective challenge is by persons with a personal interest, whether claiming that he is the true inventor, or claiming that he is exploiting the invention and considers that it does not deserve patent protection, and whether he attacks it directly [by cancellation proceedings] or indirectly by at risk product launch, allowing the patentee to sue him, and him being able to use invalidity defense], no one will exert the effort or costs for a thorough inquiry into the questions raised, which may be complicated and require expert testimony, as well as someone with a personal interest.

In parallel with the public right to challenge the validity of a patent, the patentee has the right to claim damages for patent infringement. This right mirrors the right to attack the patent. The patentee has a monopolistic right to the invention but only if it is held to be protected by a valid patent.  Thus he can protect his invention  from infringement, but only as long as there is a valid patent.

In cases of expensive infringement, the infringer infringers the patentee’s rights each time that he uses the patented invention without permission. So each act of infringement is free standing.  However, individual acts of exploitation by the patentee are not individual grounds for the employer inventor to claim compensation that each reset the clock. Section 132 of the Patent Law fixes that a service invention “shall become the property of the employer”.  Due to his contribution, the employee inventor has a right to compensation. So the action creating rights for the inventor is a single event.

Nevertheless, the patent law does not ignore the complicated employer-employee relationship, and the conditions that can develop during the life of an invention.  The inventor can return to the tribunal if it can proven that “the conditions existed at the time of the ruling have changed”.  As stated in Section 136 of the Law, there has to have been an earlier ruling for the worker to be entitled to return to the tribunal. Thus section 136 is a special arrangement that that Law provides the worker, so as not to leave him unprovided for. But one should not assume asymmetry between the employers utilization of a patent and the right of the employee inventor to compensation such that each utilization restarts the Statute of Limitations period.

(The arrangement of Section 136 is similar to the entitlement of the estranged wife to support by the husband pending divorce. The financial support is not final and can be revisited if circumstances change, as, for example in Appeal 442/83 Moshe Pam vs. Deborah Kam, p.s. 38(1) 767 on page 771).

However, this is not really relevant to the issue of finality in the employer-employee case. The issue is when the employee can first request compensation? In marital support, personal law applies and there is a tendency to consider a woman that is tardy regarding claiming support, as giving up on it. In cases where the general law applies, the period of aging is very short in the amendment to Section 11 of the Family Law (Support) 1959. Nevertheless, if there is a submission for support prior to the period of the appropriate Statute of Limitations, the parties can claim for changes due to changes in circumstances.

It is noted that the significance of Section 135 of the Law is not the aggregation of circumstances that makes it possible to sue for compensation for making an employee invention. The purposes is established in the heading “Guidelines for Establishing Compensation”, and these are only the guidelines for the tribune to use when considering compensation:

  1. In making a decision under section 134, the compensation and royalties committee shall also take into account the following factors:
  • the capacity in which the employee was employed;
  • the nature of the connection between the invention and the employee’s work;
  • the employee’s initiative in making the invention;
  • the possibilities of exploiting the invention and its actual exploitation
  • (expenses reasonable under the circumstances incurred by the employee in order to secure protection for the invention in Israel.

One could argue that clause (4) regarding actual exploitation of the invention is forward looking and does not require a certain knowledge that this will be the case. This was why the Legislative also included Section 136 which enables the tribunal to revisit and reconsider cases rule don under section 134 if they consider that the circumstances have changed. From here it can be seen that if a first request was filed during the seven year period, the conditions underpinning the Statute of Limitations apply and both the employee and his employer have certainty that the issue can be reconsidered. This is whilst the tribunal can request possibilities of the invention being utilized at all times, and even early on, before there is practical usage.

As the tribunal ruled in re Actelis Networks vs. Yishai Ilani (3 Feb 2010) in Section 9 of the ruling, that actual usage is not required to give the employee the right of standing before the tribunal:

The claim that the request is theoretical and premature since there is no actual exploitation in practice is rejected. Section 135 states that one of the conditions for determining the amount of compensation is the possibility of implementation if the invention. So there is no need for actual implementation and the request for compensation is not premature.

In the Actiles case it is noted that the previous tribunal considered it had authority to hear the case despite no actual exploitation. The content of the ruling is based on tests in law, and it is possible that the tribunal will postpone ruling until a later date, such as when there is actual exploitation, if this circumstances require this, as per section 136 of the Law.

Not knowing the Law

ignorance.jpg

Contrary to her assertion, the question of whether or not the Applicant had knowledge of her right to turn to the tribunal is not relevant to the concrete basis of her claims under Section 134. Section 8 of the Statute of Liberty states as follows:

If the claimant is not aware of the main grounds for claiming due to reasons beyond claimant’s control, and which with reasonable care, would still have been unable to prevent, the period for calculating the claim aging is calculated from when the claimant was first aware.

However, Appeal 1960/11 Almog vs. General Medical Services, 6 May 2013, page 7 states that Section 8 of the Statute of Limitations includes the objective test regarding when the period starts, but the burden of proof of its existence was only leaned later falls on plaintiff:

This claim is incompatible with the Guy Lipel, Donenfeld and Ganaim rule. It is difficult to argue that the period for reckoning the Statute of Limitations will start with receiving a professional medical opinion or when the law or a precedent becomes known. Otherwise, the clock for the Statute of Limitations is in the plaintiff’s control, which contradicts the rationale underlying the concept of claims aging. Section 8 of the Statute of Limitations gives both objective and subjective tests:

I will also note that since Section 8 of the law is an exception to the general rule of cases becoming aged, the burden of proof regarding retroactive awareness lies with the party claiming it (See Guy Lipel paragraph 41 and appendages.

It is true that not knowing the Law is not comparable to not knowing facts that would could have caused the plaintiff to file their suit; see Appeal 2919/07 State of Israel – Committee for Atomic Energy vs. Edna Guy Lipel, p.d. 64(2) 82, and paragraph 42 of the ruling:

The extent of the revelation: the law contains four conditions:

  • the existence of facts that were concealed from the plaintiff
  • the facts are significant and central to the claim
  • The plaintiff was unaware of these facts for reasons beyond his control
  • The plaintiff could not have prevented these reasons by taking due case

See Yehudai, page 204 and 1164/04 Herzliya vs. Yitzhaki, 5 Dec 2006. And note, the ruling states facts and not law, and so lately becoming aware of one’s legal rights is not considered retroactively becoming aware.

Furthermore, the facts required for the plaintiff to turn to the tribunal were known to her in fact long before the argument broke out on her retirement in 2013. The plaintiff claims a right to compensation for a number of inventions that she invented during her employment, the last being in 2006 at the latest. Dr Levy was aware of her contribution back then, and also was aware that TEVA had filed patent applications for these inventions.

In light of the above, the tribunal concludes that whichever date one considers as the period at which Dr Levy could have sought compensation, over seven years has passed and the complaint is thus aged.

Application of Section 9 of the Statute of Limitations

The Applicant added and claimed that even if the complaint has aged under section 6 of the Statute of Limitations, the defendant has admitted her right in section 2.2 of the agreement, and that some of the right___________________________________. Consequently, the Statute of Limitation should be calculated from when the defendant acknowledged her right.

Section 9 of the Statute of Limitations states that:

If the defendant admits in writing or before a court, whether during the seven year period or subsequently, that the plaintiff has rights, the period for the Statute of Limitations starts with that admission; and an action that pays out some of the rights is considered as such an admission.

In this section, the term ‘admit’ excludes an admission that accompanies the Statute of Limitations.  

expiredThe defendant denies the allegation that the conditions of Section 9 should be implemented. TEVA argues that to reset the clock, they have to admit that the complainant has the right to turn to the tribunal, and has to admit that there is both an employee invention and a lack of agreement regarding appropriate compensation. TEVA considers that these have to be clearly and explicitly stated, both formally and in terms of content. They argue that this remains the case even if some compensation is paid by the defendant.

time out

Under Section 9 of the Statute of Limitations, the new period starts notice. Since the Complainant submitted her case for compensation for her worker invention on 20 April 2015, the notification restarting the clock has to have been submitted in the previous seven years. So the question is whether there was such a notification within the relevant period, such that the seven years have not passed.

Section 2 of the Statute of Limitations states that aging alone does not cancel the right. The question is whether the respondent’s behavior can be considered an admission, in the sense of Section 9 of the Law, that revives the plaintiff’s claim? The tribunal does not consider this to be the case. One should remember that the applicant’s right to sue depends on the fact that there is no agreement between the parties regarding compensation. Thus any time that the defendant claims that there is an agreement, he does not accept the right of the Applicant to turn to the tribunal, and this cancels the authority of the tribunal. The result is that not only does he not agree with the right to file a complaint with the tribunal but he denies the right of the tribunal. Paragraph 3.3 of the draft retirement agreement  that was offered in the negotiations is not an admission of the right to file a complaint to the committee. The draft agreement states “and will not have further monetary demands beyond that paid by TEVA. This means that the claim for compensation is a claim that cancels the committee’s authority.

The Relative Strengths of the Employee and Employer

tug of war.jpg

The Applicant claims that the Statute of Limitations requires that the understanding that the worker should request compensation for the employee invention close to when the invention was conceived forces the worker to enter into a fight with the employer. Such a fight could risk the future employment and this means that the employee is in a weakened position with respect to the employer.

In general, the employer-employee relationship favors the employer, as Head of the Supreme Court Aharon Barak stated in Appeal 6601/96 AES Systems  vs. Saar, p.d. 44(2) 850, paragraph 12:

Not only this. In the contractual relationship, the employer and the employee are not equals The Employer generally has the upper hand, and can dictate the terms of the employment. Judge Berenson discusses “the Employees weakness with respect to the employer who dictates employment terms”  (Appeal 4/75 Berman vs. The Office for Lorry Transport Pardes Chana –Carcur “Amal”” ltd [12] on page 722. The national Labor Court of Appeal stressed that “labor law assumes a basic condition that there is a fundamental lack of equality between employer and employee (re Checkpoint [29] page 312. It will be appreciated that this inequality changes over time. It is affected by the market and the workers’ unions. Nevertheless, as a principle one can state that the worker’s and the public  interest is to protect the employee’s creativity and work.

As to the assumption of inequality between employee and employer in the workplace, see. The words of the Head of Labor Court Steve Adler in Case 164/99 Dan Fromer s. Red-guard ltd. pd”a 34 294 (1999) paragraph 14:

Labor law takes it as granted that there is an inequality between the employer and employee and so certain clauses in the work contract are not upheld by the court, if one can assume that a reasonable worker would not have agreed to them without this coercion. This is similar to the worker signing a waiver of rights he is entitled to under labor law. It is stressed that as a rule, the worker signs such clauses out of lack of choice; since the worker wishes to be accepted to the workplace, since it is reasonable to assume that failure to sign would result in him not be employed.

However, alongside the determination that the worker is in a position of weakness, and the binding nature of the relevant legislation the case-law does recognize a legitimate employer interest, see Red-Guard paragraph 16:

 True, the Employer has his interests, and the worker, his interest. These interests are different from the public interest. However, we are not concerned in the interests of the parties. We are concerned with the legitimate interests of the parties. The legitimacy is determined by general considerations, principles and assumptions of the legal system. The legitimate public interest and the legitimateinterests of the parties are the same. Although one refers to thelegitimate interests of the parties, the intention is the public order in which some of the parties interests are defended and others are not.

It seems that an arrangement based on an assumption that the employee is always in a position of weakness vis a vis the employer will create undesirable results. The purpose of the Patent Law is to incentivize the parties – both employee and employer, to create employee inventions, whilst regulating the property rights of the employer and the monetary rights of the employee. The employee’s rights are protected by a contractual agreement that arranges them or by the Tribunal for Compensation. Section 131 of the Law obliges the worker to inform the employer of the service invention as close to the time of inventing as possible. Section 132(a) of the Law obliges the employer to inform the employee of whether or not they intend to take ownership of the invention within six month of the notification under Section 131.

The arrangement of the Patent Law chooses to incentivize the parties to reach an agreement as early as possible. Neither the language of the law nor the context imply a separation between the period for informing the employer and the time frame for compensation.

One should remember that the employer has a real interest in knowing the employee’s intention to seek compensation for the service invention. This may be significant and can affect the management of the company and should be reflected in the balance sheet. So there is an importance for the employer that there is a Statute of Limitations to prevent the issue of compensation first being raised many years later, which could surprise the employer and cause significant financial difficulties.

It should be noted that the section 134 rights are not cognitive and do not provide social rights requiring special protection see the Application for Compensation (preliminary requests) Gideon Barzani vs. Isscar LTD, 4 May 2015 paragraph 30:

 We consider that section 134 which provides compensation,  are not cognitive. These are not social rights requiring special protection. In this light, but in a different context, the District Court ruled in Appeal 1843/-1 S.G.D. Engineering vs. Baruch Sharon, 25 January 1993, that  the question of employee inventions is not a social right, but a right in the invention under the Patent law. The conclusion that the right is dispositive concurs with the general cognitive nature of the write in re Shocker as ruled by judge Heishin.

In Barzani paragraph 32 it is stated:

Since conceptually the right is not a social right that requires protecting, as testified by Section 135, the legislation did not decide a cognitive right to compensation similar to the right to be named as an inventor under Section 42 of the Law. In these circumstances, the lack of such a condition in the law forces the understanding that the tribunal gives way to any agreement. It is noted that Dr Shlomit Yanivski-Ravid who champions the cause that the employees rights should be cognitive, establishes in her book IP and Innovention at Work, Theory, Practice and Comparative Law 2013, that the law as it is, is dispositive and if there is a contractual agreement, the tribunal does not have the right to intervene (see pages 305, 311).

The Supreme Court decided not to intervene in our ruling on re Barzani See Bagatz 4353/`4 Barzani vs. Isscar ltd. 8 July 2015.

The legislative body chose to apply the regular Statute of Limitations to employee invention compensation. Had it intended something else, it would have written this into the Patent Law, as indeed, some other legal systems have done. Dr Levy has related to special laws in Germany and the UK.  There is also reference to the law in France, Switzerland and Austria. It is accepted that there is interest in the balances found in these laws but it is the job of the legislative body to consider this, and we can only advise the Knesset to consider these arrangements and to adopt them if it finds it appropriate to do so.

We conclude that the request for compensation was submitted too late and the request for a ruling is rejected.

Bearing in mind the conclusion and the relative resources of the parties, each party will bear their own costs.

As a final comment we note that the arguments put forwards by the parties were of great help to the committee in addressing the issues raised which were considered for the first time and the legal counsel of the parties (Richard Luthi for Dr Levy, and Shin Horowitz for Teva) were of great help in understanding and ruling this complicated case.

The decision is of interest and will be published with the names of the parties, but the sides will have seven days to request that certain details remain confidential.

Ruling in Tribunal for Employee Compensation Levy vs. Teva, 25 May 2017 ruling by Prof. Engelhard, (then Commissioner) Asa Kling and Professor Doron Urbach.

COMMENT

I accept that there should be a Statute of Limitations for claiming an employee right but I do not find this ruling particularly convincing in its analysis regarding cancellation of a patent. I think the correct perspective is that an issued patent has a rebuttable assumption of validity but it may be challenged at any time by bringing evidence of lack of novelty or inventiveness, and doing so does not so much as cancel a patent in the way that a trademark is cancelled, but rather it shows that the patent should never have been granted it demonstrates that it is invalid rather than invalidates.


A Ruling Concerning Service Invention Compensation by a Worker of a Unionized Industry

August 10, 2017

This is the third decision on employee compensation that issued this month.

In this case, the employee inventor requested that the committee for discussing employee compensation for service inventions rule compensation under Section 134 of the Israel Patent Law. On 22 July 2014, the Company responded by requested three interim rulings:

  1. That the case be thrown out due to the Statute of Limitations.
  2. That the case be thrown out due to tardiness or the employee having given up on receiving compensation
  3. (in absence of above) that the committee set a timetable for the proceeding.

The parties filed responses and further submissions and attended a hearing on 24 December 2015, and the committee decided that the parties should concentrate on the issue of whether or not the committee had standing in this instance.

The Applicant (inventor) submitted his summation on 12 April 2016 and the respondent (company) submitted their summation on 13 December 2016, and a counter response was submitted on 1 March 2017.

The Applicant submitted an affidavit as did Mrs. XXXX (job description not given) and Mr. YYYYY, the head of the patent committee of the respondent.

The facts (censored)

The Applicant started working for the company in 1993 and was employed to_________. In the scope of his duties, he suggested some efficiency improvements and inventions as detailed below.

The company is_____________________.

The applicant detailed eight suggestions that he submitted: Read the rest of this entry »


Employee Inventions – the first of three decisions

August 7, 2017

worker's compensationThere is a procedure by which an inventor can request that a tribunal consisting of a judge, the Commissioner and an academic can consider the appropriate compensation to the inventor for an invention made in the course of his employment.

The most recent and important ruling of this nature concerned the contribution of an inventor working for Isscar. That committee ruling was appealed through the courts. For details of that ruling, see here.

There have been two more rulings that have just published. Presumably they were decided now, as Commissioner Kling came to the end of his term of office. As the identities of the inventors and the companies have been withheld, the rulings lack the juicy details. Nevertheless, I have summarized the two rulings below as they give guidelines regarding how the committee considers the issue following the Supreme Court discussion and the various conferences, etc. that related to the issue, including one that I organized.

In the first ruling Ploni (this is the Biblical term for an unidentified character taken from Ruth 4:1) – i.e. Anon vs. Company.

Ploni requested that the committee rule on appropriate compensation for a service invention under Section 134 of the Israel Law. On 20 November 2014 the company requested that the submission be thrown out, and, following a request from the committee that he do so, Ploni responded on 20 September 2015.

A hearing was held on 11 July 2016, which was attended by the Company, their CEO Mr XXXX, and their attorney Daniel Bostonai. Ploni was not represented.

The Main Facts (censored)

The company was founded in 1999 as a start up company that never got beyond the development stage. The field of activity is withheld.

contractPloni is a mechanical engineer that was employed as an external consultant in July 2002, and became an in-house general manager of the company in December of that year. On 16 December 2012, an employment contract was signed between the company and Ploni. This was intended to formalize the Company’s rights in developments and inventions and Ploni’s compensation for his work. The contract stated that Ploni would have no claims for additional compensation or remuneration. Ploni was also signed onto an options deal under which we would be entitled to some shares immediately, to additional shares after a period of time, and to a third batch of shares that depended on company income from sales. The original options agreement was renegotiated on 31 December 2003, to one that allowed Ploni to purchase 7.5% of the company.

From 2005 onwards, the company made several rounds of investment. In 2006, the company and Ploni exchanged various draft contracts to better define Ploni’s terms of engagement. After four drafts were exchanged and the parties failed to reach agreement, Ploni decided that he was NOT interested in continuing with the company and tendered his resignation on 4 February 2007. This came into effect on 4 March 2007.

Ploni’s Section 134 submission was related to Patent Application Numbers XXXXX and YYY from Date 1 and Date 2. These were both abandoned by the company; one was actively abandoned by applicant deciding not to pay the renewal fee allegedly due to lack of application of the patent, and the other was abandoned prior to it ever issuing.

Prior to requesting that the committee calculate a value for the service inventions, Ploni started a proceeding against the Company in the Labour Court. Essentially Ploni requested that the court order the company to allocate 7.5% of all the shares issued by the company to Ploni. The Labour Court ruled the agreements and draft agreements as relating to 7.5% of the company prior to dilution as a result of fund raising. This was appealed to the Supreme Labour Court, and returned to the Labour Court. More details follow below.

The Company’s Claims

  1. The company claims that since the parties had signed a work agreement that ruled out any additional compensation, the committee has no authority to rule compensation and the case should be dismissed. This claim was strengthened by the practice of the company and Ploni over the years.
  2. Since Ploni had signed agreements with investors that stated that the company had no other obligations, he was estopelled from claiming that the company owed him anything.
  3. The allegations that Ploni was owed something for a service invention should be considered moot in light of the statute of limitations, since the latest date by which any right could be considered was the filing date of the respective patent application.
  4. Thus the request for compensation was filed after a significant delay which indicates that Ploni had given up on any and all claims for compensation. \

Ploni’s Claims

  1. Ploni counter claimed that the signed work contract did not relate to compensation for patentable inventions and the parties did not reach agreement on compensation for these.
  2. The statute of limitations had not passed since the relevant date is Ploni’s final date of employment by the company.
  3. The Company were tardy in requesting that the case be thrown out.

RULING

The legal basis of the committee is defined in Section 134 of the Law as follows:

In the absence of an agreement that determines whether the inventor is entitled to compensation and what the compensation should be, appropriate compensation will be determined by the Committee for Compensation established under Section VI.

In the Committee ruling concerning Barzani vs. Isscar Ltd from 4 May 2014, which withstood an Appeal to the Supreme Court 4353/14 Barzani vs. Isscar Ltd, from 8 July 2015, it was determined that Section 134 is non-cogent in that the parties can come to some other arrangement.

“The committee came to the conclusion that Section 134 is not a cogent right and is not employment law that, as socialist rights has special protection. On the face of things, and in line with the wording of the Law, it appears that the committee was correct (the Article states ‘where there is no agreement that sets employee compensation’). That as may be, with the limited right to meddle with committee decisions, the court does not see fit to interfere in this instance.

In this instance, the respondent (Ploni) had the opportunity to purchase company shares. As states in the share option agreement of 16 December 2002, the respondent received his share options as a general manager of the company. As agreed in agreement of 31 December 2002, this was dependent on performance as manager:

“… In the event that vesting of all or any of the Awards is contingent upon fulfillment of certain conditions (“Vesting Conditions”), such as the achievement of certain targets by the Company or Grantee, the details thereof will be set forth in a separate Appendix that will be attached to this Award Agreement as Appendix B.

Appendix B was not submitted. Nevertheless, the respondent agrees that the share allocation was to closely follow the development of the invention by the company. In a hearing on 11 July 2016 the respondent stated that the options were for the profit of the patent.

As stated in the Isscar ruling, the purpose of the arrangement between the parties is understood from the parties’ actions. It is clear that the respondent saw the options as compensation for the service inventions in question. The directives regarding the distribution of options that were signed on 31 December 2003 are understood as being a giving up of any and all other compensation. The court deliberations of the Labour Court may be understood as being the day in court that Ploni was entitled to with respect to options that were not actualized. These ended in a settlement under which Ploni was awarded 40,000 Shekels for options that were not actualized and Ploni himself saw these as the basis for this complaint.

This conclusion renders moot further discussion regarding statute of limitation and estoppels.

The committee accepts that the case should be thrown out. However, as Ploni was unrepresented, they did not award costs against him.


Reinstatement of IL 122846 to Tyco Fire and Security rejected

January 11, 2017

The fourth renewal of Israel Patent No. 122846 to Tyco Fire & Security was not paid by the deadline of 4 January 2012. A request for reinstatement together with an affidavit was submitted on 9 November 2016, following an earlier request without an appropriate Affidavit that was filed on 1 August 2016 which was rejected in a ruling of 4 August 2016, that without an affidavit such a request could not be considered and that the date of resubmission with an Affidavit would be considered the date of submission. The submission of 1 August included an update that the renewal fee had been paid and a request for reinstatement without any reasons.

On 9 November 2016, an affidavit by Michael Lahat, an employee of Visonic, was submitted. Mr Lahat claimed that Visonic had transferred the rights of the subject patent to the present owners back in July 2013. He further claimed that he was a member of the IP committee of TYCO and consequently, could testify on behalf of the company.

When the renewal fee was due, an employee of Visonic informed the Israel Representative that the company intended to renew the patent themselves, without assistance. In practice the renewal was not accomplished and no explanation was provided. The employee in question left the company hack in November 2013, but prior to her leaving, the rensponsibility for paying renewals was transferred to CPI. In July 2013, this and other Visionic patents were transferred to Tyco. The transfer of ownership was recorded in the Patent register on 31 December 2014, but by this time, the patent in question had already lapsed over a year earlier.

Close to what would have been the fifth renewal date had the patent not lapsed (years 18-20), on 4 January 2016, CPI [MF- Probably CPA – Computer Patent Annuities] tried to perform the renewal, but, since the patent had lapsed, were unsuccessful in this attempt. In March 2016 the renewal company informed the patentee that the mark had lapsed. The attempt to  revive was submitted eight months later.

Section 60 of the Patent Law 1967 states that there are  three conditions for restoring a patent subject to public opposition:

  1. that the payment was not made due to reasonable causes
  2. That the Patentee had not wanted the patent to lapse
  3. That the  request to reinstate was filed as soon as the patent lapsing was known to the applicant or to his representative

The Deputy Commissioner Ms Jacqueline Bracha was not convinced that these conditions were met since it was not clear why the fee was not originally paid in a timely manner since the instructions given to the former employee were not made of record.

The fact that details of the patent were provided to the renewal company does make it clear that the patentee did not want the patent to lapse, so the second requirement is fulfilled, although the after a delay.

No suitable explanation was provided for months passing from when it was discovered that the patent had lapsed until the affidavit was filed.  In this regard it is noted that the patentee was an Israel company that was not difficult to communicate with. That said, even if the patentee was a foreign entity there is no justification for eight months passing in the modern age with modern communication channels.

Since two out of three of the essential conditions were not met, the request for reinstatement is refused.

 

 


Wet-wipes, The Issue of Inventorship and the Responsibilities of the Patent Attorney

September 22, 2016

wetnap-were-ready-for-any-messThis ruling concerns a product that resulting from the contributions of two people who were formerly friends. A patent application was filed that named both people as both inventors and applicants. Later, after powers-of-attorney signed by each of the named inventor – applicants had been filed, there was an attempt to ‘correct an office error’, to list one of them as an inventor only. The corresponding PCT application and the national phase entry applications, including two issued patents in the United States only bore the name of one inventor and applicant. In an Opposition ruling the Israel Patent Office has now accepted that the second named inventor is indeed an inventor and also an owner.

Apart from emphasizing the need to determine who is the inventor and who is the owner of an invention when the patent is filed, the need to put everything into writing, and the dangers of working with friends, the case raises interesting questions regarding what contribution to reducing a patent to practice entitles someone to recognition as an inventor and whether this standard is the same in all jurisdictions. It also raises interesting questions regarding the duties and responsibilities of the patent attorney to ascertain the facts, or at least to avoid signing on contradictory statements regarding ownership and invention in different jurisdictions.

BACKGROUND

IL 152867 titled “Tissue Container With Auxiliary Compartment”is a patent application for a package of wet-wipes
rc-chairswith an adjacent container for nappy cream. The Application was filed back in November 2002 and listed Boaz Krystal and Liat De-Vries as inventors and owners. The patent application was allowed at the end of June 2010.

Subsequently, an Opposition was filed by WET-NAPS LTD and Liat De-Vries on 4 October 2010 under Section 31(3) of the Israel Patent Law 1967 on the grounds that Boaz Krystal was not in fact an owner, and that the patent was exclusively owned by Ms Liat De-Vries.
affidavitsMr Boaz Krystal and his wife Mrs Dorit Krystal each submitted affidavits. Mrs Liat De-Vries submitted a primary affidavit and a supplementary one in response to Mr Boaz Krystal’s affidavit. Wet-Naps Ltd. is owned by Mr Ilan De-Vries, who is Mrs Liat De-Vries’ husband. He also submitted an affidavit on behalf of the company.  Mr David De-Vries, a patent attorney at Reinhold Cohn & Partners who drafted and filed the application and is a cousin of Mr Ilan De-Vries, Ms Ronit Tal who is an acquaintance of Liat De-Vries and Mr Yoram Hadar who is an industrial designer, also submitted affidavits. A hearing was held and the parties submitted their summaries.

wetnapWet-Nap Ltd manufactures, exports and markets wet-wipes. The company had a business relationship with Packtop Ltd., a company directed by Mr Boaz Krystal that distributes wet-wipes amongst other things.   At the time of filing, both the Krystals and the De-Vries couple were good friends.

roobarbs-shedThere is no argument that Mr Boaz Krystal and Mrs Liat De-Vries met at the Wet-Nap Ltd factory, where Mr Boaz Krystal heard the idea of including baby ointment together with a package of wet-wipes from Mrs Liat De-Vries. There is also no argument that Mr Boaz Krystal and Mrs Liat De-Vries had some kind of collaboration, to develop and improve this invention and to file a patent application for it. Eventually a joint application was filed in both Mr Boaz Krystal and Mrs Liat De-Vries names. However, the parties disagree regarding Mr Krystal’s contribution to the development of the invention and consequently disagree regarding whether he is to be considered an inventor and owner of the patent.

The Main Documents in the Prosecution File Wrapper

roobard-and-custard-friendsThe Application was filed in November 2002 by Reinhold Cohn Patent Attorneys. The Application form lists both Mr Boaz Krystal and Mrs Liat De-Vries as joint owners due to them being inventions. Both parties filed Powers of Attorney, and the Filing Certificate gives both names.

On 10 December 2002, Adv. David De-Vries of Reinhold Cohn Patent Attorneys submitted a notice stating:

office-error“Due to an office error, the name of the inventor, Mr Boaz Krystal was inserted as an Applicant. With our apologies for this, we are submitting a new cover sheet and application form in duplicate, listing Mr Boaz Krystal and Mrs Liat De-Vries as joint inventors, but Mrs Liat De-Vries as the sole owner.”

On 10 December 2002, Adv. Edna Haruti, now Mr Krystal’s representative, submitted a letter in which it was stated that Mr Krystal was a joint owner together with Mrs Liat De-Vries as he had invented the tissue container with auxiliary compartment together with her.  Adv. Edna Haruti also noted that registration of the patent in the name of Mrs Liat De-Vries only was contrary to the agreement between the parties.

shimon-shalitOn 2 February 2003 Patent Attorney Shimon Shalit, then Senior Examiner in charge of formalities at the Israel Patent Office, responded to both Reinhold Cohn and to Mr Krystal that Mr Krystal could not be removed as an owner in the application as filed, since there was no indication that he had assigned his invention to Mrs Liat De-Vries prior to the application being filed. In absence of such proof, since Mr Krystal was not an employee of Mrs De-Vries, by virtue of being a co-inventor, he was also a co-owner.

(As an aside – On 12 March 2006 Mrs De-Vries submitted a divisional application of IL 152867 for certain applications of the invention. This divisional application (IL 174309) was examined, allowed and issued as a patent. On 1 December 2010 IL 174309 lapsed due to failure to pay the renewal fees. That patent is not directly relevant to this Opposition, but Wet-Naps Ltd and Liat De-Vries related to it in their claims).

procrastinateIn the protocol of a hearing held on 5 February 2007 before then Deputy Commissioner Noah Smulevezh it was decided to defer the issue of ownership until the examination of the application was completed. It was further ruled that Reinhold Cohn would be address of record, but would update Mr Krystal or his representative regarding actions taken to get his input before responding to office actions. The patent application was eventually allowed and published for opposition purposes, resulting in this opposition proceeding.

The Opposers’ (Wet-Naps Ltd and Mrs Liat De-Vries) Main Claims
wetnap

Mrs De-Vries and Wet-Naps Ltd claimed to have thought of the idea and developed the invention whereas Mr Krystal had merely provided technical drawings and a business plan for commercializing the product. They alleged that during the period in question, Mr Krystal provided technical and consultancy services to the company as almost an in-house service provider and as such, was exposed to the invention. They further claimed that Mr Yoram Hadar (industrial designer) and Patent Attorney David De-Vries provided sketches for the product that eventually evolved into the patent application. They further alleged that Mr Krystal had suggested a specific implementation (embodiment?) – storing the cream in a blister pack or sachets, which developed into  Read the rest of this entry »


Missed Opportunity to Prevent Abuse of Trainee Patent Attorneys

March 23, 2016

articled clerk

In Israel, in addition to written and oral exams, trainee patent attorneys have to work for two years full-time or the equivalent number of hours part-time doing at least half a job training under a licensed patent attorney with at least three years of post-qualification experience him or herself.

The Israel Commissioner of Patents Asa Kling has issued an updated Circular rregulating the training of such trainee patent attorneys. Those attempting to qualify should familiarize themselves with the requirement.

There are a number of licensed professionals that take on trainees, give them work on an ad-hoc basis and provide little training. Some of these pay the employees on the basis of a percentage of the collected billing but first deduct training costs in the form of the hours of those higher up in the pecking order. The would-be patent attorneys are not explained the system before they start. I suspect that the system is illegal anyway. The trainees are university graduates that often have higher degrees. Those that fail to thrive in the system often join the ranks of non-licensed practitioners, often quick and dirty sub-standard patent services in an attempt to earn a living.

Although, strictly speaking, this is an employment issue, I think it is a shame that the commissioner has not taken the opportunity to regulate payment of trainees to ensure that they are guaranteed a minimal number of hours of work and are paid minimally a salary equivalent at least to the minimum wage. Beyond this, so long as it is not abused and that both sides understand the deal, I suppose that the percentage-of-billing model is not inherently unfair. if employers can’t commit to paying a minimal salary and providing training, they shouldn’t be allowed to take on trainees.

The payment should be as salary NOT as subcontractor. People are entitled to work conditions that meet minimal legal standards. The work of trainees should be in the office so that the trainees see all aspects of the business, rather than working from home drafting applications, only.

Furthermore, I believe there should be a complaints mechanism so that mentors that abuse their position can lose the right to have trainees.

As usual, feedback and comments are welcomed.


Inventor Compensation Under Section 134 of the Patent Law

January 13, 2016

compensation       employment-agreement (1)

Section 134 of the Israel Patent Law allows for a committee including the Commissioner of Patents, a judge and one other to decide whether an employee is entitled to compensation for a service invention, and how much this should be.

In Barzani vs. Iscar, the Supreme Court through out Barzani’s appeal of the committee ruling and denied his request for compensation.

The Israel Supreme Court (Appeal 3564/12 Dr Nimrod Bayer vs Florality LTD) overturned a District Court decision that upheld a waiver signed by Dr Bayer and Dr Nimrod Bayer requested that the committee decide on appropriate compensation. The committee chaired by Judge Professor Itzhak Engelard and including the Commissioner of Patents Asa Kling and Professor Shmuel Peleg. issued a ruling on 24 December 2015.

It seems that in this instance, the parties came to an agreement. Consequently the request for compensation submitted to the committee was refused. The ruling clarifies that this decision does not affect Dr Beyer’s moral rights to be considered the technological driver of the company or affect third party rights. It puts an end to the issue and no costs are awarded but the decision is published with the names of the parties at their request.

COMMENT

We suspect that the anonymous suspension procedure we reported in 2014 related to this case. Not much can be learned from this ruling except that the committee does meet. At least occasionally.