CORRECTION Re – Third International Conference on the Economics of Innovation

February 13, 2018

mistakesI try to be factually accurate and helpful to my readership. However, occasionally mistakes happen. A couple of days ago I posted about the Third International Conference on the Economics of Innovation to be held in Israel under the auspices of the AIPPI in Israel between 30 April and 1 May 2018.

I received a press-release from the Israel Patent Office with a link to the website of the conference, so took details from there. I noted that the opening speakers were two Israel Nobel Laureates:

  • Prof. Ada Yonat, The Martin S. and Helen Kimmel Professor of Structural Biology.
  •  Prof. Aaron Ciechanover, Technion

I commented that both were certainly eminent scientists in their fields, but if the conference organizers want Nobel Laureates to talk about the Economics of Innovation, one or both of Israel’s Nobel Laureates in Economics would be a better choice.

mistake EinsteinI’d like to think that the conference organizers follow my advice, and I do note that some of my criticisms of the first and second International Conferences have been addressed this time around, but I doubt that within a couple of days of my posting my criticism, the organizers would disinvite two such distinguished speakers. Nevertheless, they are not coming.

francis gurryInstead the current program as advertised has a video greeting from Mr. Francis Guri [sic], WIPO president – a gimmick I enjoyed at a premiere cercle IP conference last year. Watching a VIP on-screen is not that exciting as in the flesh, and to be honest, I don’t think there is a major demand for autographs from WIPO presidents. (Indeed, when I was Guest of Honour at the AIPPI International Conference in Paris a few years back, I don’t recall anyone asking me for my autograph). Nevertheless, we assume that Francis Gurry (which is the correct spelling and should be corrected in the program) is perfectly competent to give an informed lecture on various aspects of IP. We suspect however, that his words of welcome will be more platitudes than substance.

ASHER_D._GRUNISThe opening session is instead being given by Judge (retired) Asher Grunis, President of the Supreme Court of Israel 2012 – 2015 on “Judge made law in the field of intellectual property”. Judge Gronis gave several IP decisions over his long and illustrious career, such as Toffiffee, Adidas, Dior, Shemesh restaurantsBalugan – Spinmaster, etc.

aharon aharonJudge Grunis’ talk is being followed by one by Mr. Aharon Aharon, CEO, Israel Innovation Authority. The title of Mr. Aharon Aharon’s talk is not published in the program, but it is clear that he has some influence over Israel govt. policy regarding promoting innovation.

I view the change of opening speakers favorably, as both should have something to say that is relevant to IP issues which may well not be the case with Nobel laureates in science, despite their eminence in their fields.

For reviews of the first Israel AIPPI conference From IP to NP (net profit) see here and here. For a review of the Second Israel AIPPI conference here.

The second mistake in Sunday’s post, noted by both IP KAT and leading Israel Trademark Attorney, Neil Wilkof, and by Patent Attorney David Silver, was that I put the price for Israelis which is 1600 Shekels down as $1600 by mistake. I have corrected that typo is Sunday’s post.


Third International Conference on the Economics of Innovation

February 11, 2018

aippiThe Israel Chapter of the AIPPI is hosting their third Conference on the Ecomomics of Innovention between 30 April and 1 May 2018, which is a few weeks after the 6th Best Practices in Intellectual Property Conference organized by Kim Lindy and the In-House Forum, and three weeks before the 140th INTA conference in Seattle (which coincides with Shavuot.

I am posting this to give those interested in attending advanced notice of the event. However, as the program at the link is labeled not for distribution, it may be premature to comment on the topics covered and the speaker list.

NobelWhat is impressive, however, is that the opening addresses include two Israel Nobel Laureates:

  • Prof. Ada Yonat, The Martin S. and Helen Kimmel Professor of Structural Biology.
  •  Prof. Aaron Ciechanover, Technion

what-is-economicsNobel Prizes are not given out like sweets, and being able to hear presentations by two Nobel Laureates without having to go to the Swedish Academy of Sciences is no-doubt an impressive draw. It occurred to me, however, that if this conference was really about the economics of innovation, It would make more sense to invite Professor Daniel Kahaneman or Professor Robert Aumann. It seems to me that these laureates, being economists, would have more of value to say about the subject of the conference.

I have read Professor Kahaneman and watched interviews of him on television. I have also heard Professor Aumann lecture (and been bird watching with him in the Golan – but that’s a different story). Both are accomplished speakers and apart from their subjects actually being economics, their fields of expertise are less specialized and more accessible to a wider audience than those of the keynote speakers.  Except the Conference on the Economics of Invention is not about the economics of invention. The title is simply a form of branding that enables the organizers to bill it as the third conference.  That said, the sessions as currently advertised do look interesting and varied, and one expects that participants will not be disappointed.

Like any two-day conference that is held every couple of years, the subject matter of the tentative program is a reasonable attempt to cover a wide range of topics and to try to ensure that there is something for everyone. As there appears to be parallel sessions, one assumes that most people will be find something of interest most of the time, and one can’t really ask for more.

The conference costs 1600 Shekels for two days ($480) which seems good value for money when compared to similar conferences overseas. For Israelis there is both less traveling and Kosher food. For overseas visitors, Israel is a great place to come for a conference and to tag on a pilgrimage to the holy sites and/or trips to the various Roman archaeological remains that are as impressive as those in Italy or elsewhere. it is also a great destination for ornithologists or simply for those looking for a beach holiday and good restaurants.


Passed Off Pasta?

February 8, 2018

barilla pastaBarilla is an Italian pasta brand that is on sale in Israel.

Oddly enough, pasta is made of duram wheat (Triticum durum or Triticum turgidum subsp. durum), which is a tetraploid species of wheat which is hard to milling due to the starchy endosperm.Dough made from its flour is weak or “soft”. This makes durum favorable for couscous (semolina) and pasta, and less practical for flour. It is actually grown in Israel and exported to Italy!

Rami LevyRami Levy (Shivuk HaShikma) is an Israel chain of supermarkets that, as well as selling commercial brands, negotiates with manufacturers and packages its own brand labels which are usually cheaper.

 

Recently, Rami Levy started stocking their own label dried pasta.

Rami Levy pastaAs you can see, Rami Levy’s pasta, like Barilla, uses a blue box, albeit a slightly different shade, and has the type of pasta contained viewable through a cellophane window. The make of the type of pasta (penne, spaghetti, canaloni, etc.) is written in white, albeit on Barilla, the name is in English letters and on Rabbi Levy’s own brand, it is in Hebrew. Rami Levy Shivuk Hashikma us written across the top and on the side of the box. The name of the brand, written in yellow seems to be a face with a hat on and wide mouth, but is actually a stylized O followed by lla in italics giving Olla. However, Barilla also ends with an lla.

Barilla sued Rami Levy in the Tel Aviv District Court for a million shekels (about $300,000 US, 250,000 Euros) and obtained an injunction ordering Rami Levy to take their own brand pasta and sauces off the shelves. Rami Levy filed a counter-suit and the cases are pending.

Rami Levy claims that Barilla waited for over 14 months since Rami Levy introduced their own-label and so the case should be thrown out. He claims that his competition is fair and Barilla should respond by advertising, discounts and special offers. He dismisses allegations of passing off, and argues that there is an overwelming weight of precedent from the District and Supreme Court that indicates that the similarity is not excessive and that the case is baseless. The name Rami Levy, the Italian series is clearly written in white on blue in large letters.

Barilla has a trademark on their brand name and not on the design of the package or on the blue colour. Rami Levy accuses Barilla of ignoring their own branding and trying to monopolize the blue colour. However the case-law does not support claims of passing off where packages are similar but the trade name is clearly written and there is no likelihood of confusion in such cases. The courts do not recognize rights in a packaging colour. Rami Levy further claims that with over half a billion shekels in sales of “the private brand” in 2017, his sales outstrip those of Barilla. His prices are much lower and this also distinguishes them, and there are a number of accumulative differences.

COMMENT

taaman 1taaman 2We note that Taaman (pun on taam which means both taste and reason) is an Israeli importer and distributer of staples such as flour, pasta, chocolate, etc. that also has a red logo with white text in an oval. Their name, in Hebrew, is written in a backwards leaning italic font, however as Hebrew is written from right to left, the sloping is the same as that of Barilla. Their pasta is packaged in blue cellophane with  window showing the content. Thus Barilla’s packaging is perhaps less unique than they claim, although Taaman uses cellophane bags and not boxes.

In a recent decision the Deputy Commissioner refused to register a black box with silver trim as a trademark. Back in 2014, Judge Ginat refused to recognize a trade-dress in blue energy drink cans. Judge Binyamini threw out a claim that one ice-cream manufacturer was entitled to a monopoly on gold ice-cream tubs. Then again, Abu Shukra were unable to register their application for a trademark for a coffee package that is similar to Elite’s turkish coffee.

 

 

 


Palestinian Autonomy Adopts Nice Classification

January 30, 2018

70px-Coat_of_arms_of_Palestine_(alternative).svg.pngRAMALLAH – The Ministry of National Economy of the Palestinian Autonomy has adopted the 10th Edition of the International Classification of Goods and Services for the Purposes of the Registration of Marks under the Nice Agreement (Nice Classification).

From 1 January 2018 applicants may submit trademark applications for registration designating items from this edition.

 


A ballsy trademark ruling

January 30, 2018

SodKGaA & Henkel AG filed a series of Israel trademark applications (Nos.  258658, 258797, 258798 and 259500 as shown alongside.258658

The marks cover Bleaching preparations and other substances for laundry use, rinsing agents for laundry and tableware, stain removing preparations; cleaning, polishing, scouring and abrasive preparations, chemical agents for cleaning metal, enameled sheet metal, wood, cork, porcelain, ceramic, glass, plastic, leather and textiles; spot remover; soaps not for personal use, perfumery, essential oils in class 3, “Disinfectants and deodorants other than for humans and animals”. In class 5, and Sponges, brushes, cleaning cloths, cleaning purposes, hand-operated cleaning appliances, devices for dispensing sanitary cleaning and fragrance products, partially with the addition of disinfectant, included in class 21.

The Israel Trademark Department refused to register the marks on the grounds that they lacked inherent distinctiveness as indication of source, since they were the shape of the products themselves. The marks were also refused under Section 8(b) of the Ordinance 1972, as not having acquired distinctiveness through use.

The Applicant claimed that the marks are registerable since they serve in practice as a trademark, have acquired distinctiveness through use, and the choice of shape is not a result of real aesthetic or practical considerations. The Applicant requested a hearing, and submitted the following evidence:

  • An opinion by Mr Oshik Roshnik, marketing consultant, who held a public survey regarding how well known the marks were. Mr Roshnik attended the hearing and the survey and his conclusions are detailed below.
  • An affidavit from Ms Danielle Rabinowitz who is the product manager for Henkel Sod ltd, which is fully owned by the Applicant. Her testimony affirmed the sales in Israel and abroad and the investment in advertising and promotional activity. Ms Rabinowitz also attended at the hearing.
  • An Affidavit of Ms Cecile Leroi the International Marketing Manager of the Applicant, who testified regarding sales.

A large quantity of marketing material was appended to the affidavits.

sod balls.jpg

From the evidence it appears that the products are sold in Israel in blister packs that have transparent fronts. The mark Sod appears clearly on the packaging, which is the brand for these and other products of the Applicant in Israel. The Sod mark is recognized as being a leading brand in Israel.

juggling four balls

The Applicant claimed that since January 2014 they have invested 15 million shekels in advertising and marketing in various telecommunication channels, including point-of-sale. As a result of this intense marketing, some 6 million units have been sold, which is 30% of the market. These statistics support the Applicant’s contention that the marks have acquired distinctiveness.

The Applicant’s legal counsel emphasized that the marks were registered in a number of countries, including the EUIPO. The Applicant is also prepared for the mark to be registered under Section 16.

Discussion

toffiffee

The tests for validity of a trademark registration for the shape of an article was given in the Supreme Court ruling 11487/03 August Storck KG vs. Alfa Inuit Food Products LTD, of 23 March 2003. These tests are summarized in Circular 033/2016 Trademarks: Emphasis on Examining trademarks from 15 December 2016 as follows:

  1. The requested shape has to serve as a trademark in practice
  2. The requested shape cannot be significantly aesthetic or practical.
  3. The shape has acquired distinctiveness through use

This topic has been widely discussed in the case-law and literature in Israel and abroad. The tests have been largely adopted due to comparative law, and so we can use foreign rulings to aid us in coming to a conclusion.

Nevertheless, the Deputy Commissioner does not consider that the applied for mark fulfils the Supreme Court’s criteria.

The Mark Does Not Serve As a Trademark in Practice

The question asked in this context is whether the public and the applicant see the shape of the mark separately from other marks that are applied to the product to indicate the source, thereby serving as trademarks. As clarified in Berkeley “Kerly’s Law of Trade Marks and Trade Names“, 15th ed. (2011) p. 197, from a UK decision regarding the registerability of the shape of a container:

The relevant question is not whether the container would be recognised on being seen a second time, that is to say, whether it is of memorable appearance, but whether by itself its appearance would convey trade mark significance to the average customer.”

The things are stated regarding containers, but this is also true regarding the shape of the products themselves, since these are not generally considered as being trademarks by the public, and the packaging includes the well known word mark Sod as a trademark indicating the source of the goods. It is true that sometimes a single object will have more than one trademark on it, each being independently registerable. However, in such cases it is difficult for the manufacturer to demonstrate that the public afford each element weight as a trademark: See J. Thomas McCarthey in McCarthey on Trademarks and Unfair Competition (2011), pages 7-12:

“When a label or advertisement contains a cluttered morass of claimed marks in many words, slogans and designs, no one of these things is likely to make a significant trademark impression on customers. If a given designation is a trademark, that should be immediately evident to the ordinary buyer. If it takes extended analysis and legalistic argument to attempt to prove that a designation has been used in a trademark sense, then it has not.”

kitkatThe need for the public and the manufacturer to rely on the shape of the product as an indication of the source of the product is required for it to be registerable has been discussed recently in the UK decision [2017] EWCA Civ 358 Société des Produits Nestlé SA  v. Cadbury UK Ltd. (Kit Kat). In this ruling, the court affirmed the ruling of two lower courts that the shape of the KitKat snack bar is not registerable. In that case, the issue of the burden of proof for registering a product shape was referred to the CJEU:

The judge thought that the answer to this question was not clear and depended upon what was meant by “use of the mark as a trade mark”. As he put it: does it require the applicant to show that, as a result of the use of the mark, consumers rely on the mark as a trade mark, or is it sufficient that consumers recognise the mark and associate it with the applicant’s goods?”

The UK court considered that the European Court’s position was that the public have to rely on the product shape as a source of origin, and not merely to recognize the product shape:

“Accordingly, I agree with the judge that it is legitimate for a tribunal, when assessing whether the applicant has proved that a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking because of the sign in question, to consider whether such person would rely upon the sign as denoting the origin of the goods or services if it were used on its own. Further, if in any case it is shown that consumers have come to rely upon the mark as an indication of origin then this will establish that the mark has acquired distinctiveness”

Deputy Commissioner Jacqueline Bracha does not consider that the survey and publicity material in the present case proves the Applicant’s contention.

In all cases, the word mark Sod clearly appears in the publicity material, and the advertisements all include the word Sod a large number of times. So it does not appear that the applicant is relying on the visual appearance of the product to indicate the origin thereof.

The extent in which the shape of the package is capable of serving as a trademark depends on the degree that they are different from that typical in the field. See for example, Israel Trademark Application No. 174402 Diageo North America, Inc. from 13 April 2011. The Applicant notes that they chose the mark to distinguish themselves from their competitors. The Applicant submitted a lot of material that shows that cleaning materials intended to be hung in the toilet bowl come in different shapes, however all of these include a hook and a perforated plastic case so that they can serve their function of hanging over the rim and allowing water to reach the cleaning material on flushing. The product in question is not sufficiently distinctive that it is recognized by the public as being a trademark. From the material submitted and from a personal search of the Internet it appears that such products come in various shapes and sizes including five flowers, three crescents three rectangles and so one. Most of the products are coloured and two colours are combined in a single product… Many are sold in transparent packages that have the manufacturer’s logo on the upper part.

The mark has not attained distinguishing character through use

There is a connection between the question of whether a mark serves as a trademark in practice and whether it has acquired distinctiveness. The Applicant has to demonstrate that through sales, etc., there is public awareness of the mark.

First and foremost, the Applicant has to show that the goods have a reputation, meaning that the public identifies the goods with the applicant or at least with a specific source, even if not identifying the applicant by name.
….
Continuous significant usage is not what is important, but rather the type of use:  if it is a use that identifies the product with the Applicant, see Appeal 18/86 Israel Venetian Glass Factory vs. Les Verries de Saint Gobain p.d. 45(3) 224, 238.

To prove a relationship between the product and supplier, the Applicant submitted Mr Roshinak’s survey. The questions were directed to respondents who admitted to being the purchasers of domestic hygiene goods for their homes. The respondents were first asked if they were familiar with the products for which the trademarks were sought (specifically the product having Israel TM Application No. 258658). It is noted that the respondents were not asked if they had purchased the product and so those who had seen the advertisements also responded positively and some 67% were familiar with the product. Mr Roshnak explained at the hearing that this is significant. In this regard, it is noted that the publicity campaign was conducted close to the survey and may well have affected the results. See Complaint 31706-01-12 Dan Design Center ltd vs. B.R.A.P. Projects ltd 19 June 2012.

survey3.JPGThose respondents  that responded positively to the first question were asked if the product was known in Israel. The Deputy Commissioner considers this is less relevant since it surveys what the respondents thought and not how well known the product was. In the next stage, the respondents were asked if they were familiar with other products of the same manufacturer and 65% were unaware of any other products or were not sure in their response.

The Deputy Commissioner considers this the most significant part of the survey. The purpose of a trademark is to link a product with other products of the same supplier. See Seligsohn Trademark Law and Similar Law 1973 page 1. If this connection does not exist, the shape of the mark does not serve as a trademark in practice.

In this instance, the majority of the public does not consider the product as associated with a particular supplier and this is clear from the fact that they did not know if the supplier sold other goods. In other words, the public surveyed were unaware of the source of the goods and did not connect the balls with other products marketed under the Sod mark. Since the Applicant acknowledges that Sod is a well known mark associated with a wide range of hygiene products, had they associated the product with Sod, they would have made a connection and mentioned other products.

The Applicant claimed that the acquired distinctiveness exists where the public associate a product with some supplier and not necessarily with a supplier by name. This is true. The principle was established in Appeal 18/86 Israel Venetian Glass Factory vs. Les Verries de Saint Gobain p.d. 45(3) 224, 238. However, in this instance, it is claimed that Sod is a ‘quality brand’ and so it is not reasonable to claim that the majority of the public do not know the brand. Furthermore, from the response to this question, it appears that the majority of the respondents do not relate the product with ANY supplier and for this reason cannot answer whether the supplier supplies additional products.

survey.jpgIn the final survey, the respondents were asked who manufactures or markets the product. This was a multiple choice question with the options Henke, Sod, some other supplier SPECIFY and do not know/not sure. This is a closed-ended leading question similar to that discussed in Opposition 112645 Mei Zach (Clear Water) Shlomo Zach vs. Teneh Industries 1991 ltd from 12 July 2007. Two of the four answers were correct. The others required the respondents to admit to not knowing or to suggest an alternative themselves. It is hardly surprising, therefore, that most respondents answered correctly. Furthermore, the respondents who answered correctly were not even required to remember the manufacturer/supplier’s name themselves….

leading questionMr Rohnak was asked about this during the hearing and responded that respondents are not ashamed to answer that they do not know, and so their choosing a correct answer is significant and indicates knowledge. Mr Roshnak did not think that wording the question differently and giving names of other manufacturers of hygiene products would have led to a different result. This response is speculative and is beyond his competence since it does not relate to making surveys and drawing results but rather to anticipating responses to questions not asked. The fact that most respondents elected “Sod” and not “Do not know” certainly raises the suspicion that the respondents answered that way as the question led them to do so, or because the way the survey was constructed led them to believe that this was the desired response.

Deputy Commissioner Bracha concludes that the survey does not prove that the public identifies the product with the source. Furthermore, it really indicates a lack of identification with any source.

By way of comparison, in the KitKat ruling, most respondents recognized KitKat as being an image of the snack without the name being suggested to them. Nevertheless, the court held that the manufacture does not rely on this recognition and the shape is not eligible for registration. In this instance, the public could not identify the source without leading questions that posed the correct response.

In evidence of acquired distinctiveness, the Applicant submitted an affidavit of the product manager. It is not denied that the Applicant invested large sums in promoting the product to the result that they captured a significant 30% of the market. However, this does not show that the public identifies the product with the supplier without the Sod mark clearly shown.

In light of the above, having concluded that the mark does not have distinguishing characteristics, it cannot be registered under Section 16 either.

The mark is therefore refused.

Ruling by Ms Jacqueline Bracha re 4 Balls Shape Mark to KGaA & Henkel AG 258658, 258797, 258798 and 259500, 18 December 2018.


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.


Transcendental Meditation

January 11, 2018

meditationThe Maharishi Vedic University Ltd. submitted Israel TM Application No. 249554 for מדיטציה טרנסנדנטלית which is Transcendental Meditation transliterated into Hebrew. The mark was submitted on 21 September 2012 and covers:

Education services relating to health; conducting of courses relating to business management; production of video tapes for corporate use in management educational training; providing training courses on business management; provision of instruction courses in general management; conducting workshops and seminars in personal awareness educational services, namely, providing motivational and educational speakers in the field of self and personal improvement; personal development courses; personal development training; provision of training courses in personal development; meditation training; teaching of meditation practices; all included in class 41.

The mark is a simple word mark without stylistic or graphic elements.

Background

Maharashi

Transcendental Meditation is a technique for avoiding distracting thoughts and promoting a state of relaxed awareness. The Maharishi Mahesh Yogi (1918–2008) derived Transcendental Meditation from the ancient Vedic tradition of India. He brought the technique to the U.S. in the 1960s. The technique is a specific form of silent mantra meditation that is often referred to as TM. Since TM also stands for trademark I considered relating to TMTM for the Transcendental Meditation Trade Mark, TMTMA for the Transcendental Meditation Trade Mark Application, but have decided not to use the abbreviation altogether.

In an Office Action dated 9 February 2015, the trademark examiner ruled that the mark could not be registered as, with respect to the services covered, it lacked a distinguishing character as required by Section 8(a) of the Trademark Ordinance 1972.  The Examiner also considers that the requested mark is not registerable since it is descriptive and directly relates to the type or quality of the services provided which are transcendental meditation exercises and the training of transcendental meditation counselors contrary to Section 10(11).

maharishi book

In the Office Action, the Examiner noted that the organization teaching the Transcendental Meditation is called the International Meditation Association, and that hundreds of schools around the world use the technique. Consequently, one cannot allow the Applicant to monopolize the words making up the mark and thereby prevent other service providers from passing on and teaching the Maharishi’s teachings.

In response to these objections, on 30 December 2015 the Applicant responded by submitting an Affidavit of Adv. Macraman Oleh Oyser who is the general manager of the Maharishi Vedic University Ltd., a teacher of Transcendental Meditation and the head of the Legal Department of the Global Transcendental Meditation Organization, and the worldwide IP manager of the Applicant.

In their response, the Applicant claimed that the mark was not descriptive of the services provided and maximally may be considered as hinting at the services. Similarly, they claimed that the phrase Transcendental Meditation was a combination of words that is identified with the Applicant and only with them, since the combination was coined by the Maharishi who established the Maharishi Vedic University Ltd.

The Applicant further asserted that the Global Transcendental Meditation Organization and all its branches was established by the followers of the Maharishi which the Applicant is associated with and is part of the same organizational structure as the Applicant. To support this assertion, the Applicant referred to exhibition 2 of Adv. Oyser’s Affidavit, where the definition of Transcendental Meditation taken from the Oxford Dictionary Online was reproduced.

In addition, the Applicant claimed that the mark was in use in Israel since 1973 and had acquired distinction by virtue of extensive usage, advertising and marketing in Israel and abroad. The Applicant considers that the mark has become a well known mark that is identified with them alone. Similarly, in the years 2009 to 2014 since the application was filed, the Applicant has earned $874,000 from its activities in Israel. These assertions were supported by Adv. Oyser’s Affidavit.

The Applicant failed to convince the Examiner that the mark was registerable and the Trademark Office rejected the mark on 28 January 2016.

yogic fliers

On 2 May 2016, a hearing was held before the then Commissioner of Patents and Trademarks Asa Kling at the Applicant’s request. During the Hearing, the Applicant’s representative argued that the mark was unique and was a compound mark consisting of the combination of two opposites: meditation which is inward looking, and transcendental which is outward looking into the distance. During the hearing, the Applicant also claimed that the registration was requested to avoid misleading the relevant public interested in studying Transcendental Meditation, noting that the Applicant was one of the bodies authorized to train Transcendental Meditation counselors and this would enable quality control which is an underlying justification of the trademark system.

In that hearing, the Commissioner requested that the transfer of rights from the Maharishi himself to the Applicant be fully documented and substantiated by the 14 August 2016.

On 14 August 2016 the Applicant submitted supplementary evidence including an affidavit of Neal Peterson who was the manager of the Maharishi Vedic University Ltd. the following is the transfer of rights as detailed in the Affidavit.

Maharishi started to teach meditation in 1954 in Southern India, and on 1 January 1958 he established the Spiritual Regeneration Movement SRM in one of India’s capitals. In time, the Maharishi opened 1000s of SRM centers across India where he taught Transcendental Meditation.

meditation profitAfter conducting travels to disseminate his teachings across Asia, in 1959 the Maharashi taught in New York and London and set up the International Meditation Society whilst in London. As he visited more countries, the Maharashi established more local organizations to spread the teachings and to collect tuition fees.

As stated, the first organizations were established under the names SRM or IMS and subsequently these names were less widely used and the movement became better known as GTMO or the Maharishi Movement.

In the early Sixties, Maharishi opened a program for training teachers of the Meditation method under the name Transcendental Meditation. The program is offered by organizations licensed by the GTMO leadership.

To ensure the exclusive connection between the name Transcendental Meditation and the Maharishi Movement and to ensure quality, prior to being accepted to the Transcendental Meditation Counselor Course, the students are required to sign a number of papers in the presence of the Applicant. These include Non-Disclosure and Non-Compete Agreements.

To explain how the rights were transferred from the GTMO to the Applicant, the Deputy Commissioner Ms Jacqueline Bracha referred to the ruling concerning Israel Trademark Applications 29619 and 253899 to the Maharishi Vedic University Ltd. published on 30 October 2017. In that ruling the mark MAHARISHI in English and Hebrew was considered. There, in an ex partes decision, Ms Bracha ruled that the marks could be registered after the Applicant proved that they were the only party using the name MAHARISHI as a trademark to indicate their services.

RULING

Section 8 of the Ordinance states that the basic condition for trademarks to be registerable is that they have a distinguishing nature, as follows:

Marks Eligible for Registration

8.—(a) No mark is eligible for registration as a trade mark unless it is adapted to distinguish the goods of the proprietor of the mark from those of other persons (a mark so adapted being hereinafter referred to as a “distinctive mark”).

(b) In determining whether a trade mark is distinctive, the Registrar or the Court may, in the case of a trade mark in actual use, take into consideration the extent to which such use has rendered such trade mark in fact distinctive for goods in respect of which it is registered or intended to be registered.

Section 11(10) of the Ordinance describes one of the categories of marks that is not considered as having a distinguishing nature.

(10) a mark consisting of numerals, letters or words which are in common use in trade to distinguish or describe goods or classes of goods or which bear direct reference to their character or quality, unless the mark has a distinctive character within the meaning of section 8(b) or 9;

The evidence appended to the Application indicates that the term Meditation relates to an ancient tradition that is in element of many religions.

“Meditation has been practiced since antiquity as a component of numerous religious traditions.”

In paragraph 13 of Adv. Oyser relates to Transcendental Meditation as Mantra Meditation that indicates holy sounds or the names of God. In Hinduism and Buddhism the practitioner of Mantra Meditation attempts to unify himself with the God.

Similarly, in the same section of definitions, the Applicant explains that the source of Transcendental Meditation is the Guru Dev and that according to Maharishi this is a development of Vedic writings and old books that are adapted for the modern world.

Furthermore, as part of their evidence submitted for registering 29619 and 253899 for the mark MAHARISHI in English and Hebrew, the Applicant submitted an Affidavit by Alexander Oded Kotai who is the Israel Director of the International Meditation Association Israel, of the Maharashi International School and of the Israel Institute of the Science of Creative Intelligence. In the framework of his Affidavit, he also explains what Transcendental Meditation is, and in paragraph 21 states that:

Thus Transcendental Meditation is the name chosen by Maharishi to indicate and mark the meditation technique that he learned from Guru Dev and developed in India in the fifties. Maharishi developed the technique and adapted it for the modern world, and attributed it to his spiritual mentor, Guru Dev. Maharishi explained that the technique is a revelation of the principles found in Vedic writings, which is a collection of religious texts considered the oldest in Hinduism. According to Maharishi the Vedic writings have been misunderstood in the past hundreds of years. Maharishi teaches that Vede is knowledge of the science of awareness and, according to this science, there is an awareness of the formation of the material of the universe.

Atharva-Veda_samhita_page_471_illustration-56a483c15f9b58b7d0d75d06

From this it appears that the basis of Transcendental Meditation is found in the Buddhist religion and Transcendental Meditation is the Maharishi’s interpretation of Vedic literature. Nevertheless, the requested mark does not appear in the ancient Vedic literature. We are dealing with a phrase that the Maharishi coined for the technique he developed.  Adv. Oyser states this explicitly. Neal Peterson states that when he started out in Southern India in 1954, Maharishi called this Transcendental Deep Meditation and shortened this to Transcendental Meditation as the years went by.

This raises the question of whether this is enough for the Applicant to be granted a trademark or whether it should be left open to the public for reasons of public interest.

Section 11(5) of the Trademark Ordinance excludes from registration:

(5) a mark which is or may be injurious to public policy or morality;

In this regard, see paragraph 46 of the Ruling concerning Israel Trademark Applications IL 232770 and 232271 for Lubavitch (English letters) and for Chabad (in Hebrew and English) from 2 May 2016:

The purpose of the Ordinance is not to limit freedom of speech or freedom of religion – Section 11(5) of the Ordinance does not allow registration of marks that adversely affect the public order.

The conclusion that Maharishi (who transferred his rights to the Applicant as described above), coined the term Transcendental Meditation which is the applied-for mark, but this does not give the Applicant the right to register the mark. In this regard one may compare copyright with trademark law as per Neil Wilkof and Shamnad Basheer in their book “Overlapping Intellectual Property Rights”  2012) page 148, which relates to R Griggs Group Ltd and others v. Ross Evans and others ECDR 15,para 20 [2004]:

“…copyright is intended to protect creative skill and labour whereas the function of trademarks is to distinguish the goods or services of one provider from those of another. Trade mark law he said ‘has nothing to do with protecting any creative skill and labour in coming up with a trade mark‘, rather it is meant to prevent potential confusion among members of public.”

The Applicant claims that the purpose of the trademark registration is to protect the public from unregulated teaching of the technique since the technique relates to the mental health of the patient and there is thus a danger that it being applied by someone not qualified will damage the patient’s wellbeing. This is clear from the protocol of the discussion.

Freud

It is noted however, that the list of services for which the trademark is applied for does NOT include mental health, presumably since treatment of mental issues requires an appropriate education and license from the Israel Ministry of Health. It is noted that the services defined as ‘educational services relating to health’ are related to the psychology profession and is regulated by the Law for Psychologists 1977 which defines Psychology as

Working in Psychology is a profession related to diagnosing and quantifying issues and problems of mental health education and behavior of people and the treatment, rehabilitation, consultancy and training related to these issues and problems is generally to be performed by psychologists.

Since it is unreasonable to register the mark, Ms Bracha did not see fit to rule on whether this service should be allowed. It is brought merely to discredit the claim that the mark should be registerable since it relates to mental health and is in the public interest that its counselors are licensed by Maharishi Vedic University Ltd.

Transcendental Meditation is a process that anyone can learn and teach and this does not require the agreement of the inventor or creator of the technique. Consequently, the technique must remain available for anyone to learn and teach. It is not fitting to prevent the public from expounding a meditation technique. Even if there is a contractual arrangement that prevents a person from spreading the technique he has learned, it is not clear that the limitation would be enforced by the relevant legal authorities.

In this regard, the words of then Deputy Commissioner Noach Shalev Shmulovich in paragraphs 29and 30, of the Trademark Ruling concerning Israel Application No. 178707 Ori King vs. Adi Shanan I.P.E.C.

I am not certain that one can protect a method of treatment, even temporarily when those that developed it are teaching and disseminating it, since there is no trade secret here. One cannot register a patent for a method of treatment. Although there may be copyright on educational materials, this does not extend to the technique itself or and the right to provide treatments or to teach others. That as may be, one cannot register a trademark to provide protection for a method of treatment by virtue of the registration.

Furthermore, the claim made before me that the application does not deal with the trademark protecting the method, but only its teaching and dissemination, lacks substance. Where the technique is available to the public its teaching should be available to the public, unless the law provides some limitation, however, the way to provide a monopoly on the technique is not via the trademark register, since registration cannot be used to protect the technique.

Albert_Einstein_Head.jpg

In a similar manner, it appears that if the Hebrew University had tried to register a trademark for “Relativity”, it would be rejected. [MF – The Hebrew University holds the Einstein Archives and owns the name Einstein as a trademark which they license as a source of income.] One also cannot register Transcendental Idealism as a trademark for an institute teaching Kantean Philosophy. Teaching that doctrine also requires some sort of agreement since one cannot say that everyone is capable of understanding this and teaching others.

The question that arises is whether a coined phrase for a philosophical or religious teaching, such as the application in question which combines transcendental and meditation, that arguably can obtain copyright protection, should be protected under trade laws.

anne frank

The beginning of an answer to this question is found in decisions that relate to names of creations. In a decision given by the court of appeal of the OHIM as it was known, and is now known as the EUIPO, relating to a trademark for “Le Journal d’Anne Frank”, inter alia, for books and newspapers, theatre productions, video tapes and fims on electronic media. See Re 2401/2014-4  Anne Frank Fonds (31.08.2015).

The Court of Appeals considered that the mark does not lack a distinguishing nature with regards to the goods and that the public can use the mark to differentiate between goods and services originating with the mark holder and those originating elsewhere. Furthermore, the European tribunal considered that the wide publicity of the mark as the name of the book was insufficient to prevent it being registered.

As noted in the decision regarding the Opposition to Israel Trademark Application No. 247693 for DEMART PRO ARTE B.V and Fundacio Gala-Salvador Dali vs. V.S. Marketing (Israel 2005) ltd. (31 May 2016) it appears that the European ruling does not sit well with the US Law, nor with the Israel Law regarding registering the names of creative works as trademarks. Seligsohn related to this in his magnum opus Trademark Laws and Related Legislation, Shocken 1973, page 7:

“Regarding Goods”… a trademark cannot exist where a symbol relates substantively or technically with trade. The title of a book cannot be a trademark where there is a link between the title and the content of the book such that the title indicates its content and character.

In a similar matter, the US Supreme Court refused to accept a tort of Passing Off or misleading regarding the origins of a product where a television series was based on a book whose copyright had terminated after ruling that passing off under the Lanham Act was not intended to protect original creations and this was different from copyright. See re Dastar v. Twentieth Century Fox Film 539 US at 37 (2003).

Basheer and Wilcoff relate to this on page 155 of their book:

“…in its decision, the Supreme Court went further, holding that the US trademark laws ‘were not designed to protect originality and creativity and that to hold otherwise would be akin to finding that§43(a) [of the Lanham Act] created a species of perpetual patent and copyright, which congress may not do‘”.

Similar to the US Law, in Israel the protection granted by Copyright Law is given for a limited period, whereas trademarks may be renewed indefinitely. Consequently, prior to allowing a trademark to be registered, one has to balance between the rights of the author and the public good. See page 144 of Basheer and Wilcoff:

“Copyright subsists for a finite period, after which the work falls into the public domain where it can be used by anyone without attribution of authorship, whereas trademark rights can endure for as long as the indicia are used and associated with the owner’s offerings- potentially hundreds of years or more.”

As stated in her decision of 30 October 2017 regarding the registration of the name Maharashi in Israel, Ms Bracha noted that the Maharishi Foundation Limited had splintered from the Applicant’s organization and had given up on registering “Maharishi” in Hebrew or English but still taught the Transcendental Meditation discipline in various territories around the world. She did not think that it was correct to limit the teaching to one organization or another by trademark registration.

Furthermore, one cannot ignore the fact that a registration for Transcendental Meditation Programs exists in Israel TM No. 47738 that was submitted on 17 April 1979 by the Applicant. Without relating to whether this mark should have been registered back then, it is noted that the evidence submitted by the Applicant indicates that the International Association for Transcendental Meditation Israel, which is the local representative in Israel, markets and publicizes their services under a stylized mark that includes the registered trademark “Transcendental Meditation Programs”. It seems therefore that the mark cannot be registered in Israel without appropriate regulation.

Israel Trademark Application No. 249554 is thus refused.

Ruling by Ms Bracha re Israel Trademark Application Number 249554 for “Transcendental Meditation”, 20 December 2017.

COMMENT

The former Chief Rabbi of the United Synagogue and Peer of the Realm Dr Jonathan Sacks has a joke that appears in Not in Heaven:

Beatles and Maharishi

When I was a student at university in the late 1960s – the era of student protests, psychedelic drugs, and the Beatles meditating with the Maharishi Mahesh Yogi – a story went the rounds. An American Jewish woman in her sixties travelled to north India to see a celebrated guru. There were huge crowds waiting to see the holy man, but she pushed through, saying that she needed to see him urgently. Eventually, after weaving through the swaying throng, she entered the tent and stood in the presence of the master himself. What she said that day has entered the realm of legend. She said, “Marvin, listen to your mother. Enough already. Come home.”