Revival of IL 132540 Opposed

September 18, 2016

chequeBack in June 2015 we reported that an attempt by the patentee Yehuda Tsabari to revive Israel Patent Number IL 132540 titled “A method and System for Direct Transfer of Funds via Magnetic Cards” and covers using credit / debit cards to gift money into the account of celebrants. It is designed for use by guests at weddings and Bar Mitzvas, and is a variation of what a refer to as a hardy perennial – it is the sort of invention that seems to be reinvented every few months, and I have provided consultations to several would be entrepreneurs, and have even drafted and successfully prosecuted patent applications for variations of the invention in the past.

paymentTsabari’s patent was abandoned due to failure to pay the fourth renewal for years 14 to 18. The Patent Office agreed to allow the revival subject to their decision publishing for opposition purposes. On publication, Going Dutch Ltd opposed the revival claiming that the patent was knowingly and intentionally abandoned, and the present decision is a substantial ruling on their opposition.

Tsabari’s application was filed on 24 October 1999 and the patent was allowed on 13 April 2004. The fourth renewal was due on 24 October 2013 but was not paid, and six months later, the patent lapsed as per Sections 56 and 57 of the Israel Patent Law 1967.

reinstatementOn 7 July 2014, Mr Tsabari filed a request for reinstatement together with an affidavit, arguing that the reminder was sent to the wrong address as the Israel Patent Office has failed to update its records with his new address, despite his updating them. According to the Affidavit, in 2005, on receiving the patent, Mr Tsabari requested that a change of address from the address of the Attorney-of-Record to his own address be entered into the Patent Office records. Despite his request, the Israel Patent Office sent a reminder for the renewals to the offices of Dr Mark Friedman, the Agent of Record. According to Tsabari, it was this mistake by the Patent Office that caused the patent to become abandoned. In support of his contention, Mr Tsabari produced a receipt for 272 Shekels which was the fee for updating the patent office register. Tsabari further claimed to have wanted the patent to remain in effect and had attempted to enforce it both in the District Court and in the Patent Office. Furthermore, he’d taken immediate action for reinstatement as soon as he’d learned that the patent had become abandoned.

reinstatement2In light of the circumstances described in the request for reinstatement, Deputy Commissioner Jacqueline Bracha was convinced that conditions for reinstatement under Section 60 of the Israel Patent Law 1967 were met, and, in her ruling of 24 July 2014, she ordered the notice of intent to reinstate published in the patent office journal for opposition purposes.

On 23 November 2014, Going Dutch Ltd opposed the reinstatement. Going Dutch Ltd brands itself Easy2give and was active in an initiative to provide a credit card based gift service at functions and events.

oppositionIn their Opposition, Going Dutch Ltd claimed that the reinstatement was contrary to Section 60 and should not have published. As a fall-back position, they argued that if the revival be upheld, they should be considered as having relied on the patent lapsing and should be indemnified from being sued for infringement, and could continue to utilize the patent under Section 63 of the Law.

In their counter statement of case, the Applicant contended that they did NOT want the patent to lapse. In support of this contention, the Applicant described attempts to commercialize the invention, and included a few appendices to support the claims. However, the Applicant requested that the appendices remain confidential, claiming that they were trade-secrets under the 1999 trade-secret act, and, in her decision of 7 May 2015, The Deputy Commissioner agreed to these remaining confidential.

The patentee also described attempts to enforce the patent against Check-Out Ltd in the District Court, and Check-Out Ltd.’s attempts to have the patent cancelled in a proceeding before the Israel Patent Office. Also, attempts at collaboration with Check-Out Ltd. that were aborted for financial reasons were described.

The Opposer’s Claims and Evidence

The Opposer, Going Dutch Ltd claimed that the reinstatement was contrary to Section 60. They contended that no reasonable excuse was given for the renewal not being timely paid and they argued that the request for reinstatement was inequitable. The 272 Shekels receipt shown by Tsabari was not for a change of address at all. Rather, it was the second renewal paid in 2005 and so the Applicant did not show evidence that the patent lapsed unintentionally. It was evident that the payment in 2005 had nothing to do with the patent lapsing since five years later, in 2010, despite the change of address, one of the owners managed to renew the patent.

The Opposer alleged that Tsabari wanted the patent to lapse. The Opposer learned this from Tsabari’s lack of activity in this area from when the patent was filed until the date of the Opposer’s submission, which indicates that the business had failed and the applicant had lost interest. The business failure of Check Out Ltd. which was a potential partner, further supports the allegation that Tsabari had abandoned the patent.

In cross-examination in February 2013, it transpired that Tsabari was aware of the Opposer’s activities back in 2013, and this supports the opposer’s contention that reinstatement was not sought immediately on learning that the patent had been abandoned.

As supporting evidence to their claims, the Opposer, Going Dutch Ltd, submitted an affidavit of Mr Guy Giyor, who was a founder and former CEO of the Opposer. Mt Giyor testified that the Opposer was established as a company offering various event related services including credit based presents at events. Mr Giyor testified that the Opposer had relied on Tsabari’s patent lapsing and Tsabari’s lack of  business activity  in developing their own initiative. Furthermore, Mr Giyor testified that Going Dutch Ltd started marketing in June 2014, after the patent had lapsed.

 Applicant’s Claims and Evidence

The Applicant detailed his attempts to monetize the patent, and repeated his claims from the application to revive, that the patent had lapsed due to a technical error of the Israel Patent Office, which continued to send reminders to the wrong address, despite a request to change the address of record submitted in 2005.

The Applicant also claimed that the Opposer was acting inequitably and in bad faith since the opposer had started commercializing their invention before the patent had lapsed, and had, in fact, infringed the patent. The Applicant for revival substantiated his claim by submitting newspaper articles that showed that Mt Guy Giyor had taken actions in 2012 and had set up a company in 2012 with the intention as stated in its constitution, of enabling wedding presents to be made at events via credit cards. The Applicant backed his claims with an affidavit.

On 3 February 2016 a discussion was held before the Deputy Commissioner, Ms Jacqueline Bracha, during which both the Applicant and the CEO of the opposer were cross-examined on their affidavits.

Discussion

The legal basis for opposing reinstatement of a lapsed patent is Section 61 of the Law, as follows:

Anyone may oppose a request to reinstate a patent within three months of the decision to allow reinstatement publishing, based on a claim that the Commissioner should not have authorized reinstatement.

The Commissioner’s authority to publicize the decision to reinstate a patent is based on Section 60 of the Law, which defines three conditions for reinstatement that are all required to be fulfilled:

  1. The renewal fee was not paid for reasonable reasons
  2. The patentee did not intend to abandon the patent
  3. The request for reinstatement was filed soon after realizing that the patent had lapsed.

When ruling on an Opposition to reinstatement, the Commissioner has to reconsider whether the conditions are fulfilled in light of the evidence brought during the opposition.

There is a difference in evidentiary requirements for authorizing reinstatement subject to publication of the decisions for opposition purposes as per Section 60 of the Law, and the evidentiary requirements to affirm that decision under Section 61 of the Law. During an opposition, the Opposer challenges the Commissioner’s determination that there are grounds for reinstatement and has to provide a strong case that the Commissioner erred in the assessment.  For more details, see the discussion on reinstatement of IL 15211 which lapsed due to failure to pay the fee; Gershon Eckstein et al. vs. Mezer Peles, Limited Paretnership of Kibbutz Mezer, published 1 April 1984.

After consideration of the claims and evidence of the parties, the Deputy Commissioner concluded that the non-payment of the renewal fee was not actually due to reasonable circumstances.

In the request for reinstatement, the Applicant claimed that the non-payment was due to a mistake of the Israel Patent Office, which, despite his request to the contrary, did not change the address of record. consequently, reminders sent  from the Patent Office did not reach their destination. As evidence of the request to change the address of record, the Applicant produced a receipt for payment of a Patent Office fee of 272 Shekels.

Here it is noted that in the past, as ruled in the Gershon decision, lack of payment of Renewal fees due to the Patentee forgetting has been recognized as a scenario where reinstatement is possible under Section 60 of the Law. See the Eckstein ruling and also the Opposition to reinstate IL 14548 Reuven Margulies vs. Exra Darrel et al. , 12 January 1972. However nowadays, in a slew of decisions on this matter, it has been ruled that failure of the Israel Patent Office to send reminders does NOT constitute reasonable grounds for revival, since tracking these deadlines is the responsibility of the patentee. See, for example, the decision re IL 185526 Chaled A’quad et al. from 24 October 2012, since we are now in an age where the patentee can easily track renewal dates, the onus is on him to show that a patent lapse wasn’t due to negligence or abandonment.

In the decision to allow reinstatement, the Deputy Commissioner had noted applicant’s attempt to update their address and their apparent relying on the Israel Patent Office to remind them of the renewal and the Patent Office’s apparent failure to do so. However, in the hearing on the Opposition to that decision it transpired that back in 2005, a payment was made to renew the patent and not to request updating of the patentee’s address. In a more rigorous examination of the patent office records it transpires that there is no evidence of any request to update the patent office record as to the address of the patentee and no evidence that any fee for this was paid. Back then, the fee for renewals was 272 Shekels and for amending the register was 204 Shekels, so it clear that the payment receipt was for the renewal and not for amending the register.

On presentation of the evidence that the fee paid was for the renewal, the Applicant for Reinstatement (Patentee) was unable to provide further evidence for requesting a change of address and, since he’d kept a copy of the renewal fee, one assumes that he would have kept a copy of the fee for change of address had it been paid. The Applicant neither provided evidence for the alleged request to change address nor any other reasons or evidence justifying the renewal not being timely paid.

The patentee who was not represented, requested to understand why he was being cross-examined, and this was explained to him as follows:

The relevant questions as far as this hearing is concerned are whether you wanted to abandon the patent, and, if you did not intend abandoning the patent, was the failure to pay the renewal fee due to a reasonable reason, and so the question as to whether you were informed of the renewal and whether you are still in contact with Dr Friedman (the agent of record) or not, are the the most relevant questions to this discussion. (Protocol Page 26 line 12).

In addition, the Deputy Commissioner was somewhat surprised that the patentee did not call Dr Mark Friedman to testify that he had not sent a reminder regarding the fourth renewal. Dr  Friedman’s testimony would have shed light on whether actions were taken after issuance to keep the patent alive and what instructions were given to Dr Friedman regarding renewal of the Patent.

The failure to provide testimony from Dr Friedman has negative evidentiary weight. Without a reasonable explanation, one can assume that Dr Friedman’s testimony would not have helped the patentee – See Civil Appeal 548/78 Ms. Anonymous vs. Mr Anonymous, p.d. 35(1)736, 760 (1980):

The Courts have always considered that a party to a decision will not fail to provide evidence that is in his favour. Failure to bring such evidence without clear explanation indicates that such evidence would act against his interests. This assumption is well rooted in both civil and criminal rulings, and the more important the evidence, the more clearly is it not being brought indicative that were it to be brought, it would act against the party bringing it. See Civil Appeal Naftali Schwartz vs. Raminoff Company for Trading and Building Equipment LTD. (Nevo 27 July 2008).

The lack of a connection between the change of address of the patentee and the non-payment of the renewal is evidenced by the fact that eight years later, in 2013, the patentee did pay the third renewal. This was clarified after the hearing when the Patent Office checked their records. This fact was reported to both sides in the 22 February decision, but the patentee did not relate to this in his summation.

The above is sufficient for the opposition to reinstatement to be successful.

Although not necessary to do so, the Deputy Commissioner added that the evidence shows that the patentee was tardy in monetizing his intellectual property. The Applicant showed that four years passed between the patent issuing and the first draft of an agreement with a credit company, and that agreement was never signed. Nearly 5 years passed from the patent issuing until the patentee had a detailed specification for a system based on the invention. The various cases between the patentee’s company Shai For You (Shai means gift) and Checkpoint seemed to have lapsed with Checkpoint going bankrupt in 2014 (see 8870-10-09 Shai For You vs. Check Out LTD 7 January 2014) and Checkpoint’s challenge of the validity of this patent was also abandoned in November 2012.

It is noted that patentee alleged that Check Point abandoned their case due to them collaborating with the patentee. However, since Check Point had requested an extension of time, doubt is cast on the patentee’s version of events.

The Applicant testified that he’d known about the Opposer’s actions back in 2013, which he alleged, infringed the patent.However, the Applicant failed to take any action, and did not even send a Cease and Desist Letter. This also indicates that the Applicant had lost interest in the patent.

CONCLUSION

Instead of justifying his request for reinstatement, the Applicant chose to attach the Opposer, accusing him of tardiness and inequitable behaviour and of attempting to commercialize the patent before it was abandoned.

Mr Giyor even testified that he knew about the patent and undertook various examinations via a private detective t ensure that the sole licensee, Shai Four You LTD> was no longer active. This indicates that he thought that Shai Four All’s patents could be enforced against him. Since Giyor’s company was established in 2012, it does not seem that Giyor had relied on the patent lapsing, and had launched his competing service in May 2013, as is clear from one of his publicity films on the Internet.

Anyone can oppose the reinstatement of a patent. The incentives for so doing are usually economical, typically the desire to utilize the patented invention. In this instance it appears that the Opposer started using the patent prior to it lapsing and waited for the patent to lapse rather than cooperating with the patentee.

equitableIt will be appreciated that the Duty of Equitable Behaviour applies to all fields of law (see Sections 39 and 61 of the Law of Contracts 1973), and the rights to a hearing are not exceptions to this rule see Bagatz 566/81 Eliyahu Amrani vs. The Supreme Rabbinical Court p.d. 37(2) 1 (7 August 1982).  Although this cannot be taken into account in the Opposition itself,  and the Opposer has proven that the patentee had not shown that the abandonment was unintentional as required by Section 60 of the Law, this can be taken into account when ruling on costs. Consequently, due to the Opposer utilizing the patent knowingly prior to it lapsing, no costs are awarded.

Opposition to IL 132450 to Yehuda Tsabari (Shai Four You) by Going Dutch Ltd, ruling by Ms Jacqueline Bracha, 31 August 2016.

 


Applicant Successfully Has Allowance of Patent Application Cancelled, Following Initiation of Opposition Proceedings

September 12, 2016

reexaminationUsually an Opposition results in an allowed patent being either cancelled, upheld or having its claim-set narrowed. Apparently, not always!

Israel Patent Application No. 240684 titled “GLYCOPYRROLATE SALTS” was filed by Dermira Inc on 19 August 2015. It is the national phase entry of PCT/US2014/19552 and so the effective filing date is 28 February 2014. It claims priority from two provisional applications and from two regular US applications, but the earliest priority claimed was 28 February 2013.

On 18 October 2015, the Applicants petitioned to make special under Section 19(a)(a)(2) of the Patent Law 1967 and requested allowance under Section 17c based on US 9,004,462.

After the application was allowed and published for Opposition purposes, S0l-gel Technologies ltd. opposed the patent issuing. They noted that the case had been allowed under Section 17c, but this was incorrect since the two regular US applications from which priority was claimed were continuations-in-part of US 13/781,390 which published on 15 August 2013.

In the US, the earlier patent application to which material is added in a Continuation-in-Part cannot be cited against the Continuation-in-Part. It is a little like a Patent-of-Addition in Israel.

Since priority is NOT claimed from US 13/781,390 which published 15 August 2013, it is prior art to IL 240684 since its publication precedes the filing of PCT/US2014/19552 on 28 February 2014. Consequently, as far as Israel is concerned, US 13/781,390 could be cited as prior art against IL 240684 and so allowance under Section 17c was wrong, as there is presumption of validity since US 13/781,390 (now US 8,558,008) was not prior art in the US, but is prior art against the Israel application.

Here’s the odd thing. US 13/781,390 was itself filed on 28 February 2013, so the PCT could have claimed priority from it!

In their statement fo case, the Opposer requested that the allowance be cancelled and the case returned to the Examiner for examination on its merits in light of the prior art (including US 13/781,390). The Applicant (represented by Pearl Cohen) agreed with this suggestion.

In his ruling, the Commissioner, Asa Kling, noted that only rarely can an allowed patent be returned to the Examiner. Patent prosecution is a one way street, and after allowance, the Examiner is no longer part of the process. Generally, opposed patents are either invalidated as lacking novelty and inventiveness, or the scope of their claims is narrowed, or, the opposition is overcome or withdrawn and the patent as allowed, is granted.

In this instance, both sides agree to the allowance being withdrawn and to the claims being (re)considered on their merits by the examiner in light of the prior art, including  US 13/781,390, thereby avoiding costly opposition proceedings.

The commissioner noted that agreement of the parties is not generally enough for odd solutions, due to their being a public interest. Generally one does not return an allowed patent application to the Examiners since the public is always third-party to such proceedings. See the ruling on request to cancel allowance of IL 219586 Fritz Collischan GMBH vs. Data Detection Technologies Inc., 9 March 2015, paragraphs 9 and 10 of the ruling.

However, it is clear that the Section 17c assumptions detailed in the Albermarle ruling do not apply here as inventiveness over US 13/781,390 was not considered by the US Examiner as it was not an issue in the States, and so the IPO cannot rely on the US Examiner’s ability, professionalism and integrity in this instance. In the circumstances, for the sake of efficiency, it was deemed appropriate to reexamine rather than to conduct an opposition. The Commissioner allowed the Section 17c allowance to be withdrawn and the case to be returned to the examiners for substantive examination on the merits.

The cancellation of the allowance now publishes for opposition purposes. Costs of 2500 Shekels are awarded to the Opposers; the low sum reflecting the early stage reached.

COMMENT

In this instance, the PCT application could and should have claimed priority from US 13/781,390. The  Opposers could have claimed both invalidity over US 13/781,390 and / or inequitable behaviour in requesting allowance under Section 17c from a continuation in part. There is a public interest in technologies remaining in the public domain. Thus I think this decision could be challenged in an opposition. Still, doing so takes resources and would incur costs. For the same reason that S0l-gel Technologies ltd seem happy with reexamination, I suspect that noone else will file an opposition to this ruling.


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.

 


All for a $ Store Fined 30,000 Shekels for IP Infringement

June 22, 2016

dollar_redThe ‘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 tom and jerryRangers, 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.


Unsupported Claims for Dental Plate Lifter Cost Patentee 149,000 Shekels in Costs

March 8, 2016

plate lifter

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:

  1. 412,000 Shekels for work by the Attorney of Record, Adv. Rahmani, but no documentation was provided to support this cost
  2. 350,418 Shekels in consultation fees to Gilat Baraket & Co. , with various invoices to support this claim
  3. 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:

  1. 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
  2. There was no scientific complexity here and the cancellation proceedings was an off-shoot of the Infringement Proceeding in the District Court
  3. 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
  4. The costs requested were unreasonable and disproportionate
  5. Gilat Bareket & Co are not consultants, but representatives and it is unreasonable to charge Carmon twice for two sets of lawyers fees
  6. Ms Pugatsch’s costs of 80,000 Shekels for preparing an Affidavit was ridiculous, since Carmon’s witness, Prof. Ciaco only charged 5920 Shekels.
  7. 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
  8. 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:

  1. 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
  2. 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.
  3. 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.
  4. PCZL’s allegation of double representation is rejected, since the case is factually and legally compex.

Ruling

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.

COMMENT

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.


Google and Waze Sued By Israeli Inventor

February 25, 2016

Waze

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.


Large Consignment of Fake Plumbing Components Destroyed at Importer’s Cost

February 10, 2016

huliot

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.

COMMENT

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?