The ‘All for a Dollar’ store in Tel Aviv’s Dizengoff’s Center was sued by Times Warner for selling goods that were decorated with images to which Time Warner owned the rights. The images included Tom & Jerry, Power Rangers, Superman and Looney Tunes. Although statutory damages in lieu of evidence of 100,000 Shekels were sought, the damages awarded were only 30,000 Shekels (about $800 US), based on an attempt to strike a balance between the number of goods, the type of goods and the need to punish the offender and to warn others.
IL 199377 is a patent titled “EXPANDABLE DEVICES FOR DISPLACING THE SCHNEIDERIAN MEMBRANE” it was invented by Ben-Zion Carmon back in 2001 and is a patent of Division of an earlier Application.
When Carmon attempted to enforce the patent against Miambi LTD and Dr Ehraim Kfir, the defendants attempted to cancel the patent and successfully managed to limit its scope.
In Israel Law, a party that successfully manages to oppose a patent, have it cancelled or have its scope narrowed, is entitled to costs. In this case, Miambi LTD requested costs of 1,012,418 Shekels from Ben-Zion Carmon since back in December 2014, they managed to get some of the claims cancelled.
I wrote up the original ruling here.
The main claim was:
A device for displacing the Schneiderian membrane from the floor of the maxillary sinus comprising: a rigid conduit for insertion through the maxillary bone towards said Schneiderian membrane, an expandable inflatable container, a connector, a filling tube, a reservoir having a flowable filling material and injecting mechanism, the distal portion of said connector being connected to said conduit, the proximal portion of said connector being connected to said filling tube, said filling tube being connected to said reservoir, said injecting mechanism being configured for the insertion of said filling material from said reservoir through said filling tube inside said container so at least part of said
container being expanded to protrude distally to the distal end of said conduit inside said maxillary sinus to displace said Schneiderian membrane.
The reason why the patent was severely narrowed was that the claimed structure, an expandable inflatable container, a connector, a filling tube, a reservoir having a flowable filling material and injecting mechanism, simply wasn’t supported.
In my write-up at the time, I noted that the practical joke sold as a plate lifter has the same structure, and so this wasn’t novel.
That as may be, PCZL, representing the patentee, alleged that they would appeal the decision and therefore requested that the costs ruling be stayed, and thereby created a chain of letters and responses that generally procrastinated. The Israel Patent Office noted that the authority for staying a decision is in the hands of the Court of Appeals (The District Court) and not in the hands of the Adjudicator of Intellectual Property, Ms Yaara Shoshani Caspi who heard the original case. The Court never ordered a staying of the costs ruling.
Claims and Evidence of Both Parties
Miambi LTD and Dr Ehraim Kfir alleged that the cancellation proceedings and the associated costs were caused by the legal action brought by Ben-Zion Carmon to enforce the patent against them. They alleged that the action was baseless and was filed in bad faith by Ben-Zion Carmon and caused them to invest substantial resources in defending themselves. Dr Kfir appended an Affidavit relating to consultation fees from Gilat Baraket & Co. as evidence of costs accrued. They alleged that the case dragged on before the Patent Office due to the complicated technology involved. The costs comprised three elements:
- 412,000 Shekels for work by the Attorney of Record, Adv. Rahmani, but no documentation was provided to support this cost
- 350,418 Shekels in consultation fees to Gilat Baraket & Co. , with various invoices to support this claim
- 250,000 Shekels for 250 hours work by Dr Kfir himself in fighting this law-suit.
Pearl Cohen Zedek Latzer raised some creative defenses on behalf of their client:
- Ben-Zion Carmon is a private individual and to award costs against him would be a rare precedent. Indeed, he shouldn’t have to pay costs at all
- There was no scientific complexity here and the cancellation proceedings was an off-shoot of the Infringement Proceeding in the District Court
- The costs request was laconic. No evidence was filed to support Adv. Rachmani’s time or Dr Kfir’s, and the statements from Gilat Bareket & Co, were not sufficiently detailed
- The costs requested were unreasonable and disproportionate
- Gilat Bareket & Co are not consultants, but representatives and it is unreasonable to charge Carmon twice for two sets of lawyers fees
- Ms Pugatsch’s costs of 80,000 Shekels for preparing an Affidavit was ridiculous, since Carmon’s witness, Prof. Ciaco only charged 5920 Shekels.
- Citing previous rulings, the costs for Dr Kfir’s time were unreasonable since his work as CEO of the company requires him to work on such matters
- Since Adv. Rachmani is a minor share-holder in Miambi LTD and provides legal aid on an ongoing basis, he can be considered an employee who is performing his regular work and thus his costs are not refundable
Discussion and Ruling
The guidelines for cost rulings are set out in Bagatz 891/05 (Tnuva) which discusses the work done, legal and factual complexity, stage that proceedings reached, bahaviour of the parties, equitable and inequitable behaviour and the like.
Where actual costs are requested, the onus is on the plaintiff to prove that these costs were indeed incurred and were necessary. As ruled in Opposition 113433 Smithklin beecham Corporation (SKB) vs. Teva (30 May 2005) not all costs are recoverable.
Turning now to the three cost elements:
- Rachmani’s costs of 412000 Shekels were for a detailed list of actions but the time involved and hourly rate were not detailed. Certainly some of the time spent and costs requested, such as those for initiating intermediate proceedings that were unsuccessful. Although a minor share-holder he is not a worker. It is acceptable since he provides on-going legal services that he will be paid from costs award and not per action and so lack of invoices is not critical problem. In general, a fair recompense for his work can be assessed by approximation
- It is not clear what Dr Kfir did in his 250 hours, after all Adv. Rachmani was inside counsel of the firm. Furthermore, Dr Kfir is, himself, a named party. He does not, therefore deserve costs.
- The costs for Gilat Bareket’s work were not detailed. There is no clear correlation between the list of actions detailed in Dr Kfir’s affidavit and the Gilat Bareket’s Some invoices precede their submission to be co-counsel. Adv. Rima Pugatsch’s opinion was blled for in two invoices. The breakdown between these is not clear and the basis for the cost was not detailed. This makes it impossible for the Patent Office to assess whether the costs were fair. Thus a fair price for Gilat Bareket’s work can only be assessed by estimation.
- PCZL’s allegation of double representation is rejected, since the case is factually and legally compex.
More or less by weight, Costs were approximated as follows:
- 90,000 Shekels for Adv. Rachmani’s time
- 45000 Shekels for Gilat Bareket’s consultancy
- 8000 Shekels for the Opinion by Ms Rima Pugatsch
- 3000 Shekels for requesting costs
- 3000 Shekels for having to file additional papers after the main ruling.
Total costs of 149,000 Shekels should be paid within 10 days.
The claimed invention was not supported by the specification and the divisional patent should not have issued. I still maintain that structurally the claim relates to a plate lifter and thus lacks novelty.
Pearl Cohen should have told Dr. Carmon not to attempt to enforce the patent against Mumbai. However, as with the Origin Source case and the Air-Conditioning unit support brackets Pearl Cohen have a history of attempting to enforce patents where there is no infringement and the patents should not have issued. The delaying tactics they’ve employed here are also typical of their modus operandi.
Waze is an Israeli company that developed an Application (App) for helping drivers choose optimal routes and for estimating arrival times. It uses crowd sourcing to detect and help avoid congestion. Google bought Waze in $1.15 billion back in 2013.
Now another Israeli company, Makor Issues And Rights Ltd, is asserting two patents against Google: US 6,480,783 and US 6,615,130 both by David Myr.
Makor Issues And Rights Ltd have filed a patent infringement suit in the Federal Court of Delaware. They claim that Google Maps directly infringes the patents.
When one thinks of fake goods, luxury items such as Rolex watches and perfumes spring to mind. Software and music is also copied and distributed easily, but one doesn’t think that anyone would fake plumbing materials.
Actually, fake light switches, plasterboard, aluminium profiles and plumbing materials are made. Huliot Have now managed to have a large consignment of 88,000 fake plastic plumbing components destined for Gaza destroyed in Ashdod Port at the importer’s cost.
Huliot a long established manufacturer of pipes and plumbing components based at Kibbutz Sde-Nehemiya.
A few months ago, the Customs Office at Ashdod port compounded a large consignment of counterfeit plastic plumbing components imported from China and destined for Gaza. The plastic components had the registered trademarks of Huliot A.C.S. Ltd embossed on each component and were also packaged in packaging bearing Huliot’s name and distinctive green diamond logo.
The Customs Office were suspicious of the large consignment because the goods appeared to be of low quality so IP Factor who is the registered Agent of Huliot trademarks was contacted by the Customs Office. We take this opportunity to complement the Ashdod Customs for their vigilance in this matter.
Adv. Aharon Factor of our firm, IP Factor, filed a petition at the Tel Aviv District Court for a restraining order and for an order for the destruction of the goods. The parties subsequently negotiated an out-of-court settlement further to which the goods were destroyed at the importer’s expense and some legal costs were paid by the importer to Huliot.
Huliot’s CEO Mr. Paul Steiner believes that the large consignment has a retail value of about 400,000 Shekels and would have tarnished Huliot’s reputation for high quality products. Although destined for Gaza, Mr Steiner believes that some of the goods would have found their way back to Israel which would have caused even more damage to Huliot’s reputation.
Mr Steiner is a great believer in IP development and enforcement and engages veteran Israel Patent Attorney Simon Kay as part-time in-house IP Manager. Simon has developed a vigorous strategy to protect the company’s intellectual property and reputation, including patenting developments, registering the designs of new components, marking components and their packaging with Huliot’s logos and trademarks. IP Factor handles the trademark portfolio for Huliot and for some of Simon’s other clients.
In a recent post we noted that suppliers of fake Viagra pills had received prison sentences since the product posed a danger to the public. We noted that most fake Viagra pills are merely ineffective rather than dangerous. Fake building materials can cause tremendous damage. Sewage and grey water piping that cracks can contaminate drinking water supplies. Whilst untreated individual erectile dysfunction can adversely affect reproduction, cholera can kill millions. One of my clients has developed and is launching a child safety device for adjusting car seatbelts to children. The device has undergone very extensive safety testing. Fake devices are now being advertised on Chinese wholesale websites. Quite possibly, these are inferior and unreliable products. Perhaps the courts and police should reconsider what types of fake goods are dangerous and what importers and distributors should be sent incarcerated?
On appeal, the Central Region District Court in Lod ruled a ten month gaol sentence and fine for Roi Peer who had distributed counterfeit Viagra pills. Roi Peer appealed the ruling to the Supreme Court, where Justice Jubrahn ruled as follows:
The crimes that the appellant were convicted of are serious and the weight of evidence required to show a likelihood of rehabilitation is consequently significant. The fine and the gaol sentence are separate punishments that should be considered separately as is the ruling that the convict be detained in an appropriate secure installation.
The Appelant was convicted on the basis of his admission, of selling and marketing pills allegedly for treating impotence, without a Dr’s prescription, not in original packaging, infringing the trademarks and without meeting the patients or gaining medical information about them.
The Court of First Instance ruled six months community service and a 150,000 Shekel fine. The District Court rejected the appeal concerning the size of the fine but accepted the State’s Appeal regarding the rest of the sentence and changed it to 10 months actual prison time. This is the basis of the appeal to the Supreme Court.
Whereas a first Appeal is a matter of right, a second Appeal is granted only in cases having a significant public interest, an important legal question requiring clarification or where there are specific issues concerning the fairness of the punishment. In this instance, there is no such justification for further judicial review. The stiffness of a punishment is only grounds for review if it is significantly disproportionate to other sentences for similar crimes. In this instance, the punishment is reasonable and balances the various considerations.
In this instance, there is insufficient indication that the Appellant will be restored to being a productive member of society to justify not sentencing him to prison. The psychological evaluation was inconclusive. The crimes were serious and the financial greed could have adversely affected the public health. The evidence of likely rehabilitation required in this case is significant and not available.
The argument that the District Court acting as an Appeal Court exceeded its mandate thereby justifying a further appeal is rejected since the sentence was in the same category as that issued by the Court of First Instance and is reasonable in the circumstances. The fact that the District Court did not detail how the punishment was reached is insufficient to justify a further appeal. The Supreme Court does not consider that time equivalent to paying the fine can used to determine the appropriate additional gaol sentence since gaol time for not paying fines is different from a gaol sentence per se and these cannot be combined in ascertaining whether a punishment exceeds that allowed for by law or whether such a punishment is reasonable.
9102/15 Dismissal of Further Appeal of Ruling 3933-09-15, the Dismissal by S Gubrahn, 16 January 2016
We note that there doesn’t seem to be any evidence justifying allegations that the pills were a health risk. Indeed, there doesn’t seem to be any evidence that they don’t work. Erectile dysfunction may be a medical condition that causes stress for the sufferer and his partner but it is not the sort of condition that is life threatening. That is not to say that wilful trademark infringement and passing off fake goods should not deserve serious fines and gaol time. I just don’t see this instance as more serious than other examples of willful trademark infringement and distribution of counterfeit articles.
Diesel S.P.A. own Israel Design No. 51959 and Hoodies LTD filed for cancellation of the design claiming that it was published in Israel prior to registration which is contrary to the current Design Ordinance. Diesel requested that the hearing before the Israel Patent Office be suspended whilst the District Court consider the on-going infringement proceeding and where the issue of validity based on prior disclosure is being considered.
As discussed this in a previous posting, the cancellation action in the Patent and Trademark Office was stayed at Diesel’s request, since Hoodies LTD did not file a response.
Hoodies LTD have now appealed this decision, claiming that they were only served the staying request three weeks after it was filed and did not have the statutory window of opportunity to respond.
In the circumstances, Deputy Commissioner Ms Jacqueline Bracha was prepared to reopen the case and reconsider her ruling, but since it was inefficient for two forums (fora?) to hear the same issue and could result in contrary rulings, she again concluded that the case before the patent office should be suspended, and requested an update regarding the progress of the complaint in the district court in three months time. No costs were awarded.
Yoad Potrimelach owns Israel Trademark Nos. 183243 and 190290 for Onnuri and Sujuk. Zvi Alfisher filed a request to cancel the registrations on the grounds of inequitable conduct under Section 39(1a).
Israel Trademark Nos. 183243 and 190290 for Onnuri was filed on 22 August 2005 in class 16, and were registered in May 2007. On 29 June 2015, the Israel Trademark Department sent a reminder for renewal of Israel Trademark No. 183243 for Onnuri but it wasn’t renewed. The request to cancel the mark was submitted on 9 July 2015.
Israel Trademark No. 190290 for Sujuk was submitted on 18 May 2005 and issued on 9 March 2008 in class 44. The request to cancel the mark was submitted on 18 June 2015.
On 23 August 2015, Yoad Potrimelach requested that the cancellation proceedings be suspended as there was an ongoing court case between the parties before Judge Dr Avnieli (Civil Complaint 25921-02-14 Yagil et al. vs Alfisher. The proceeding was filed against Zvi Alfisher in February 2015 and relates to IP infringement regarding these marks. The plaintiffs claim to have sole Israel rights from the Intenational Sujuk Association and have the sole rights to distribute and teach Sujuk in Israel.
In the hearing before Dr Dafna Avnieli regarding this case, it was ruled that the statement of defense does not undermine the validity of the registrations, and the Court offered the defense the opportunity to correct their statement of defense to raise this issue, however Alfisher declined to claim this and the validity of the marks is not an issue before the District Court.
Alfisher considers the two cases separate and different and does not see a reason to suspend the case before the patent office until the District Court issues its ruling. Alfisher considers that the Patent Office has sole authority to cancel marks and the correct approach is bifurcated attack, challenging the validity in the Israel Patent Office. Support for this understanding is found in 667-01-13 Financial House Y. C. LTD vs. Itzchak Yaakov.
On 28 October 2015, the trademark owner filed his response to the opposition. The mark owner claims that the cancellation request was filed to circumvent the court’s order that the statement of defense be corrected. The court case is at the evidence stage. Although the case before the court is one of infringement, the court may rule on validity of the marks in such cases, and having two courts ruling on the same issues is ineffective and may lead to contrary conclusions.
The Israel Trademark Office has sole discretion whether or not to suspend proceedings when there is a related case in the courts. The purpose of suspending proceedings is to protect parties and the courts from managing parallel proceedings and efficiency. See 3765/01 Pheonix vs. Alexander Kaplan.
The main issue is to prevent identical factual or legal issues being addressed in two courts which is inefficient and could lead to contrary rulings.
In the District Court, the issues are copyright and trademark infringement, and the Alfisher’s defense is based on tardiness in filing suit and on a contractual arrangement between the parties. Alfisher considers that the Court will have to address validity issues but this is not ideal. The fact that a mark was registered is indicative of it being valid and raises a high level of proof on him. The Patent Office is better equipped to address this issue.
Alfisher considers the trademark registration was in bad faith and should be canceled under Section 39(1a). This is a different legal and factual issue from the infringement question which is before the courts. Consequently, there is no reason for the cancellation proceeding not to continue. Since the parties are relating to the two marks together and the issues are identical, the two cases are combined. The mark owners are given three months to submit their response to the cancellation request.
Costs of 1500 Shekels are awarded against the mark owners!