Can Non-Israelis be Subpoenaed to testify in Opposition Proceedings?

June 10, 2018

novartis

Israel Patent Application No. 176831 to Novartis is titled “COMPRESSED PHARMACEUTICAL TABLETS OR DIRECT COMPRESSION PHARMACEUTICAL TABLETS COMPRISING DPP-IV INHIBITOR CONTAINING PARTICLES AND PROCESSES FOR THEIR PREPARATION”. It is the national phase entry of PCT/EP2005/000400.

Unipharm

On allowance, Unipharm filed an Opposition to the patent application being granted.  Within the Opposition proceeding, Unipharm, who for this case, have dispensed with the services of Adv. Adi Levit, their legal counsel and have been handling the Opposition unaided by attorneys, have requested that the Israel Patent Office subpoena  John Hutchinson and Mr Kowalski, workers at Novartis to give testimony.

This request follows an earlier request to reveal documentation regarding testing that was appended to the Expert Witness testimony of Professor Davies, Novartis’ expert witness, which was ordered in an earlier interim ruling of 3 January 2018.

Discovery

In response to the discovery request, Novartis submitted an Affidavit with various appended papers. In light of this, Unipharm now alleges that the Affidavit implies that Novartis has not revealed all documents it should have. Unipharm further indicates that the explanation proffered by Hutchinson, who is signed on the Affidavit, “appears to be odd”. Therefore, Unipharm wish to Subpoena him to cross-examine him on this.

lab bookUnipharm further claims that a document titled “Certificate of Authenticity” was included with respect to the laboratory notebook, parts of which were included in the appendices attached to the affidavit. According to Unipharm, Mr Kowalski, who was one of the named inventors, is signed on this document. Consequently, Unipharm requested to cross-examine him as well.

Novartis requests that Unipharm’s request be rejected. They claim that the Commissioner does not have the authority to subpoena witnesses not within the judicial territory of the State of Israel, who are not direct parties in a proceeding. Novartis also notes that Mr Hutchinson’s signature on the Affidavit accompanying the discovery documents was done in the framework of his employment as a patent attorney in the Legal Department of Novartis. Novartis claims that ALL information regarding the management of the proceeding is subject to legal confidentiality and may also be considered as being a trade-secret.

As to Mr Kowalski, he never signed an Affidavit of Evidence in the process and is not a party to it. Similarly Novartis claims that Unipharm has not stated why they need to cross-examine that inventor who was one of three named inventors.

Discussion

The witnesses that the Opposer wished to interrogate are beyond the territorial jurisdiction of Israel and are not parties in the case. Thus the Applicant is correct that Section 163b of the Patent Law 1967 that Unipharm referred to is not a legal basis for their being subpoenaed. The references that Unipharm related to in their request, dealt with witnesses that gave Affidavits or expert witness testimony, and thus could be subpoenaed for cross-examination purposes.

A party that wishes to subpoena a citizen or foreign resident to testify must do so under the International Inter-State Legal Assistance Law 1998. See Appeal 3810/06 Dori and Zacovsky Building and Investments Ltd vs. Shamai Goldstein, paragraph 17, 24 September 2007.

Section 47 of the Legal Assistance Law states:

The Authority is allowed to request from another country, that testimony be collected, including that physical evidence be transferred for display in Israel, if the court allows that the evidence is required to hold the trial in Israel; regarding this law, and where the case is pending, the term court refers to the tribunal that is hearing the case.

From the wording of this Section, it transpires that the court will open a proceeding to summon foreign witnesses to a hearing only if it is convinced that their testimony is necessary to conduct the proceeding. In this instance, the Commissioner considers that there is significant doubt as to whether the presence of the witnesses for cross-examination purposes is really required.

Unipharm has requested to cross-examination Mr Kowalski regarding an Affidavit for discovery that he is signed on. The purpose of the discovery process is to enable the main proceeding to be handled efficiently; legal proceedings with face-up cards where each party knows what documents the other parties hold to prevent surprises at the hearing. By this means, unexpected delays are prevented, allowing the court to reveal the truth. Appeal 4235/05 Bank Mizrachi United vs. Ronit Peletz, 14 August 2015.

Opposite the principle of discovery, there are other interests such as efficiency of the court proceeding, defense of the legitimate interests of the party revealing documents, and preventing damage to the interests of third parties – See Appeal 2534/02 Yehuda Shimshon vs. Bank HaPoalim ltd. p.d. 56(5) 193. So the case-law has ruled more than once that it will not allow cross-examination of affidavits of this kind, if they are properly presented (see Appeal 2376/13 Rami Levy Shikma Marketing Ltd vs. Moshe Dagan 8 July 2014, and Zusman Civil Procedures 7th Edition, page 436.

This general rule has two exceptions: The first is that where reading of the Affidavit alone or with reference to its citations, that the Affidavit is defective, the court can order the party revealing documents to file a further Affidavit. Second, where the issue of confidentiality is used, the court can examine the document and decide if this claim is reasonable (see for example, Appeal 240/73 Baruch Vilker vs. Dov Tishler, 205, 2 December 1971 and Appeal 6823/05 Abraham Roimi vs. Bank Leumi of Israel, 12 January 2016.

In this instance, Unipharm did not append an Affidavit, detail or justify why they considered that the current case is one of these exceptions. Thus the Commissioner cannot rule that this is the case, and so the request is rejected.

As to the evidence of Mr Kowalski, Unipharm did not claim that there was any connection between the documents appended to the Affidavit of the Discovery and to the experiments that were appended to Novartis’ evidence, which was the basis of the original discovery request. Note, Mr Kowalski’s signature is only on the Certificate of Authenticity taken from the lab-book that was appended to some pages therefrom that were submitted in the discovery documents. In these circumstances, it is not clear what value Mr Kowalski’s testimony has, even were he to be subpoenaed.

In light of this, the Commissioner does not consider that the requirements of Section 47 of the Law of Legal Assistance are fulfilled with regard to Mr Hutchinson or Mr Kowalski.

The Request is refused. Unipharm will cover Novartis’ costs and their legal expenses to the tune of 2000 Shekels + VAT. These costs will be paid within 30 days.

Interim Ruling in Opposition to IL 175831 Ofer Alon, 30 April 2018.

Comment

It is possible that Mr Tomer has indeed bitten off more than he can chew by handling legal issues procedural issues such as requesting subpoenaing witnesses without legal counsel. However, the costs ruled against him are trivial when considering the issue in question. The Unipharm’s Expert Witness cannot testify to things that he does not know such as what else was in the lab-book, and in Opposition proceedings there is no assumption of validity of the patent. Thus it would be premature to write this request off as a strategic or even a tactical error.

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Posted by Dr Michael Factor

Bayer – Part II – Are Patents for Bio-Similars Elligible for Patent Term Extensions???

June 5, 2018

This is the second part of a ruling concerning Patent Term Extensions (PTEs) for Kovaltry. The first part related to when the ninety day period from registration commences and is discussed here.

This second part of the ruling is a precedential decision that rules whether a patent for a bio-pharmaceutical material such as a protein can be can be considered as being a basic patent if there is a previously registered bio-similar molecule; it being appreciated that the amino acid sequence may be the same, but the spatial structure, activity and efficacy may still be different. In view of its legal and financial significance, the decision is fully translated below. We apologize for any incorrect technology. 

After the request for a patent term extension for Kovaltry was received from Bayer, the Patent Office issued an Office Action as follows:

Paragraph 6 of the Affidavit appended to the letter of 22 August 2017 notes that there is no other formulation that includes Recombination Human Coagulation Factor VIII, fabricated by the defined cell culture and the defined conditions under which KOVATLRY is manufactured. It is possible that the Blood Coagulation factor claimed in the Application is different from the Blood Coagulation Factors that have been registered, but the Active Ingredient of the Recombination Human Coagulation Factor VIII formulation is registered in the registry of pharmaceutical formulations in various formulations mentioned hereinabove.

The other medical formulations mentioned as including Factor VIII were Novoeight, Octanate 1000, Koate and Kogenate.

Kovaltry

On 11 December 2017, the Applicant responded to the Office Action and claimed that the active ingredient, the Recombinant Human Coagulation Factor VIII, is a new material derived from a new genetic engineering process that is protected in the present application, and that Kovaltry is the first formulation that allows its medical usage in Israel, as required for a patent term extension in Section 64D(3) of the Law.

The Applicant explained that Factor VIII is intended for treating Hemophilia A which is characterized by a problem with blood clotting due to a fault in or a lack of Factor VIII. In the new process covered by the Application, the heat shock protein 70 (HSP70) is introduced into the gene of the host cell and additional actions are taken to produce the active ingredient, which creates a new protein Factor VIII, which has a different structure from other proteins that relate to a lack of endogens in the Factor VIII coagulant. The structure of the protein, as applied for in the Application is as follows:

Bayer

The Applicant further explained that the folding structure of the protein is different due to the manufacturing route, and it attracts a lot of sugar groups (glycans), which allow the protein to automatically fold and provides a pharmokinetic advantage to the protein when compared to other formulations. In this regard, the Applicant notes that most properties, such as the glycan group appended, which have been glycosylated, are relevant to the half-life of the protein in the blood.

The Applicant claims that the registration file of the Kovaltry formulation indicates that the Ministry of Health considered the formulation to have a new active ingredient, and so it had to undergo the specific regulatory requirements of the Ministry of Health. The Applicant relies on the Procedure of the Ministry of Health for registering products of this type; Changes and Innovation in Medical Formulations from 1 February 2015, which differentiates between six different categories for registration.

According to the Applicant, when the Israel Ministry of Health relates to the Recombination Human Coagulation Factor VIII as being a new active ingredient as far as registration in the drug register is concerned, one has to apply a similar rationale when considering the drug for a patent term extension in order to fulfill the purpose of the legislation which is the underlining logic of the patent term extension, which is to compensate the patentee for the period when he cannot market the formulation containing the patented product due to regulatory requirements. The Applicant argues that one should differentiate between medical formulations that have active chemical ingredients that are small molecules, and biological formulations that are differentiated by proteins manufactured in different ways. They argue that the different proteins are typically different from each other in both their structure and their physical properties.

From the claims it transpires that the difference results from the way that the protein is manufactured. The applicant explained and supported their explanation with various appendices, the manufacture of a biological pharmaceutical formulation that includes proteins is very difficult due to the size of the protein, the way it folds, the general structure, changes in translating the chain of amino acids to create the protein, the cell culture used to manufacture the proteins, and so on. All changes lead to changes in the protein itself, in its. glycosylation and medical effect.

Due to these differences, the Applicant alleges that Health Ministries around the world have created different regulatory procedures for biological pharmaceutical formulations. They claim that even though there may be several medical formulations for addressing a lack of a particular enogen, such as Factor VIII, due to the issues raised above, they will be different from each other in practice. Furthermore, their active elements which cause blood clotting will be different and have different international classification.

In their response, the Applicant further explained that there are other formulations that treat Hemophilia A, which are fabricated in different ways such as by separating active ingredients from human plasma, formulations obtained by genetic engineering of part or a full gene, formulations that include healed proteins and formulations that include Factor VIII with additional proteins.  The Applicant claims that these formulations are completely different from Kovaltry, despite their purpose being to overcome the endogenic lack of the blood clotting Factor VIII as described above.

The Applicant focused on the differences between the active ingredients of the medical formulations cited by the Examiner and the active ingredient of Kovaltry. As to Kogenate, the Applicant claimed that its active ingredient was different to Factor VIII, even though the sequence of amino acids was the same, since the proteins of the structure are different at the gene level and the protein level. The Applicant appended journal articles that related to the differences between the formulations as an example of improved pharmakinetics.

In light of the above, the Applicant considers that one cannot apply Section 64D(3) of the Law in the same way for biopharmaceuticals when comparing active ingredients with prior art as is done for chemical pharmaceuticals.

In response to these claims, the Deputy Chief Examiner responded in a letter of 31 December 2017, that obtaining the strict regulatory approval required for pharmaceuticals is no indication that a patent term extension is also appropriate. To support this differentiation, the Deputy Chief Examiner referred to 223/09 H. Lundbeck A/S vs. Unipharm ltd et al (22 May 2009).

The letter also notes that the journal papers appended to the response explain that the process for obtaining Factor VIII in the patent in question creates a new protein with a different structure, with glycosylation and different pharmakinetic properties which affect the half-life of the protein in the blood, but do not influence the formulation, and the protein that is the active ingredient of Kovaltry is Factor VIII which exists in Kogenate and other pharmaceutical preparations.

Furthermore, the Deputy Chief Examiner considered that the improved glycosylation or the addition of the HPS70 may affect the folding and could be a new process, but the registration of a medical preparation is given for a formulation and not for the process of manufacture, and differences in the Factor VIII are simply a bi-product of the processing route.

The Deputy Chief Examiner added that though the process of manufacturing the proteins in Kovaltry and Kogenate are different with a difference that expresses itself in yield, better cells and other repeatability differences, the sequence of amino acids is the same, despite the amount of glycans that underwent glycosylation on the proteins So compared to preparations that were registered earlier than Kovaltry, the Deputy Chief Examiner rejected the Applicant’s claims with respect to each of the formulations.

On 7 February 2018, the Applicant submitted a request for a hearing regarding the rejection, and submitted a further statement of claims on 20 February 2018. O 25 February 2018 an ex-partes hearing was held before the Commissioner during which the Applicant reiterated their claims and added the following claims:

Factor VIII is a complex protein and changes in the process result in significant changes to the structure thereof and to the medical affect thereof. Consequently, when comparing twoproteins to ascertain whether or not they are the same material, one has to consider the structure and not merely the sequence of amino acids which is the first stage of characterization, but also the three dimensional form and the intracellular activity.

After the hearing, the Applicant submitted a summary on 1 March 2018 that proposed an appropriate test for considering the novelty of biopharmaceuticals. The proposed test has three levels. Firstly one should consider if the material is a biological medicine. Then one should consider if the protein has a new structure, and finally various tests for determining whether a protein is new or not, such as whether it is a specific protein, whether the regulatory approval was Read the rest of this entry »

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Posted by Dr Michael Factor

When does the ninety day period for requesting a patent term extension commence?

May 29, 2018

Extension for IL 124123 to Bayer. When does the ninety day period for requesting a patent term extension commence?

In this ruling, the Commissioner accepts that the 90 day period for requesting a patent term extension should be calculated from the date at which the Ministry of Health informs the Applicant of the issuance of the decision to grant a patent term extension, and NOT from the date on the certificate. We now wait for someone to request that all sorts of cases be reopened, and extension fees refunded.

There is a second part to this ruling, in which the Commissioner rules on whether this is indeed the first registration of the drug. For blogging purposes, I am relating to the issues separately.

Kovaltry

The Application for the Extension for IL 124123 to Bayer was filed on 7 August 2016 and relates to the KOVALTRY formulation in the medical products registry from 8 May 2016, and which contains Recombinant Human Coagulation Factor VIII (no relation).

The Deputy Chief Examiner sent an Office Action on 13 September 2017 in which she raised the following objections:

  • The Application does not fulfill Section 64xv(a) of the Patent Law 1967 since it was received 9 days after the formulation was registered in the pharmaceutical registry.
  • The Application does not fulfill section 64d(3) of the Patent Law 1967, since it is not the first registration of Recombinant Human Coagulation Factor VIII in the pharmaceutical register.

The Applicant was also required to provide additional details regarding extension orders in the US and in recognized European countries.

On 11 December 2017, the Applicant responded to the Office Action. Following the Request for Patent term extension being rejected on 3 December 2017, the Applicant challenged the grounds for rejection. In their response, they submitted a detailed list of allegations on 7 February 2018 and a summary on 20 February 2018. The Applicant also attended a hearing on 25 February 2018. After the hearing on 1 March 2018 the Applicant submitted a completion of their case.

Bayer raised two main claims. The first was the way of calculating the timing of the request for the extension conducted by the Deputy Senior Examiner in accordance with Section 64xv(a) of the Law. The second related to the previous registration of bioactive ingredients for medical purposes in accordance with Section 64iv(3) of the Law.

Timeline for Submitting the Request for Patent Term Extension

When the Application was submitted on 7 August 2017, the Application wrote that “This Application based on the Kovaltry formulation that was registered on 8 May 2016, and so the Application is submitted within 90 days of registration.”

Ms Assem Mehta Deputy President, Head of the Department of Patents and Licenses, and Assistant to the Secretary, affirmed in an Affidavit supporting the request for patent term extension, dated 22 August 2016, noted in Section 4 of the Affidavit, that the medical device was registered on 8 May 2017.

However, from the Office Action, the Registration Date that appears on the Certificate of Registration is indeed 8 May 2017, but the request for the Patent Term Extension was only filed on 7 August 2017 which is 91 days from the registration date. Based on this data, the Deputy Chief Examiner ruled that the request does not conform to Section 64xv(a) of the Law which requires that:

Section 64xv(a)A request for a patent term extension should be submitted in the appropriate manner, after paying the fee, and not more than 90 days from registration in the Pharmaceutical Registry.

In the response to the Office Action from 11 December 2017, the Applicant claimed that although 8 May 2017 is the date at which the registration for marketing Kovaltry appears in the register, the Authorization only issued on 10 May 2017, and this was the date at which the Manager of the Register for Pharmaceutical Formulations informed the Patentees of the Approval. The Applicant appended a further Affidavit dated 14 January 2017, from Mr Gal Friedman, the Head of Regulation of Bayer Israel, which markets the Applicant’s products in Israel. In the Affidavit, Gal Friedman asserted that regulatory approval was only received on 10 May 2017. An email notification from the Head of Registration of Pharmaceutical Formulations, Dr Einbinder was appended. The email address was given as the formal electronic mailing address of Bayer Israel.

The Applicant claims that from their attempts to clarify the matter, that in the past, the date on the certificate was the only date available for calculating the 91 day period. However, nowadays, one can use the date of informing the Applicant as the starting period of the 90 days.

The Applicant claims that neither the Patent Law nor the Pharmacists Ordinance 1981 define the registration date that appears on the registration certificate. They thus allege that there is no basis to explaining that the 90 day period stated with this date is the correct date for calculating the 90 day period for requesting a patent term extension from a the Deputy Commissioner ruled, rather than the date at which the Applicant was informed (i.e. 10 May 2017).

The Applicant went on to claim that time periods for calculating things that depend on the Authority are generally to be calculated from when the citizen is made aware of the action of the Authority or when the notice is sent.

The Applicant wishes to draw a parallel to the C-471/14 Seattle Genetics from 6 October 2015, where it was ruled that the period for giving marketing approval under the European regulations, is from the day that the Applicant is informed, i.e. the date of notification. The Applicant claims that the basis for this determination is that the marketing approval does NOT enter into effect from the day that the decision is taken, but rather from the date that the Applicant is informed of the decision. Consequently, certificates of registration have two dates and the Applicant believes that one should prefer the later of the two, which fulfills the intention of the legislation, which is to provide a sufficient window for Applicants who have a basic patent, to request a patent term extension – something that they cannot do before knowing that a marketing approval has issued.

The Applicant alleges that this position is supported by the District Court ruling in 32321-10-16 Bristol Myers Squibb Holdings Ireland vs. Commissioner of Patents and Trademarks 26 December 2017, where Section 64x(2) of the Law was interpreted to mean that the period of marketing approval commences with the informing of the decision to the Applicant and not with the date that the Approval was made. The Applicant considers that this should apply to Section 64xv(a) of the Law as well.

The Applicant also considers that the explanation of the Law made by the Deputy Chief Examiner could result in many cases where the patent term extension period was determined by the date appearing on the certificate and the number of days would need to be recalculated.

DISCUSSION AND RULING

The issue in question is the correct explanation of the term “Day of Registration of the Medical Formulation” as mentioned in Section 64xv(a) of the Law.

In legislating that the Applicant should submit their request for a patent term extension within 90 days from registration in the Pharmacist’s Register, the legislators attempted to achieve two purposes:

  1. To give the Applicant sufficient time to prepare their application
  2. To allow the public to know with certainty whether a patent term extension was being sought for a particular product, thereby providing market certainty.

Section 64xv(a) has been amended. In the earlier version under the third amendment to the Law, the period for applying for a patent term extension was 60 days from registration of the formulation under the Pharmacist Regulations (formulations) 1986.

In the seventh amendment from 2006, 3 January 2006, Book of Laws 2048, page 195-197, the Section was amended to extend this period to 90 days. The Pharmacist’s Regulations were similarly amended and now state “from the day of recordal under the Pharmacist’s Ordinance. In the 11th amendment the Authority of the Commissioner to extend the period was taken away, so the period is non-extendible (Amendment 11, 2014, Law book 2430, 27 January 2014, pages 274, 278.

From the Applicant’s claims it transpires that there are four periods that could be considered the period of registration from which the 90 days are calculated:

  1. That given as the date of registration
  2. The day that the approval is printed on the certificate
  3. The date when the Pharmaceutical Division informs the owners of the registration – the sending date. and
  4. The date of knowledge – the day on which the owners of the registration receive notification of the registration.

The date of registration is that appearing on the certificate from which the ninety day period has traditionally been calculated when calculating the deadline for requesting a patent term extension (considering the certificate as it stands today).

The date of printing is presumably the date when the Ministry of Health produces the certificate. This is the date on page 3 of the Kovaltry certificate which states printed on 10 May 2017.

The claims and evidence before me do not support the contention that the date of printing of the certificate is necessarily the date on which the Ministry of Health informed the Applicant that their request for registration was successful. Indeed, one can assume that the date of printing will actually change each time that the same document is sent to the printer and so the same certificate could exist with different printing dates. Consequently, the Commissioner does not think that this date can be relied upon as the date for registration with regard to the correct explanation of Section 64xv(a) of the Law.

As to the period of sending or the period of becoming aware, the Commissioner accepts the Applicant’s allegation that calculating the deadline from the Official Date is problematic where the Applicant only becomes aware of the date retroactively, since it is difficult to require someone to take an action within a time period from an event occurring that he does not know about.

The issuance of a marketing authorization is an administrative action as defined in Section 3 of the Law of Interpretation:

An administrative action is an order or an appointment, notice, license, approval and the like, that is given in writing under Law and is not a legislative action.

In his book Administrative Authority, Y Zamir states that (Zamir, Administrative Authority Vol. 2 Second Edition, 201 on page 1320):

Common sense tells us that there are things where not being informed of an administrative decision that adversely affects a person’s rights, should not be in effect at all, or in certain circumstances, if the person was not informed of the decision. For example, let’s consider that an Administrative Authority cancels the work permit of a person but does not inform him of this, is it conceivable that the person will be tried under criminal law for running a business without a license? If an Authority applies a tax and does not tell him, can he be held liable for not paying that tax? Where a Law states that a person is allowed to Appeal or to critique an administrative ruling in some other way within a specific period from that decision issuing, and the person is not informed, should he be prohibited from criticizing the ruling? In summary, it appears that the present situation requires a legislative solution or case-law, that relates to publication of civil rulings. The underlining is by Commissioner.

Logic obliges that giving notification to someone regarding an administrative action relating to him cannot be applied without the person being aware of the administrative action. This is also stated in regulation 4 of the Patent Regulations 1968:

The calculation of the time period for doing an action the Law or regulations require or allow, following actions of the Commissioner or subsequent thereto, should enter into effect from the date when the requirement is given to the postal service and addressed to the client or agent-of-record at the official address, or sent by electronic mail, as per Regulation 16(b). This period starts with the sending of the electronic mail, unless it is established to the Commissioner’s satisfaction, that the message was not delivered.

True, in this instance, we are NOT talking about an action that the Patentee is required to take following an action of the Commissioner of Patents, but due to the action of a different Authority, the Ministry of Health, however the underlying logic is appropriate. It is noted that where the Pharmacists’ Regulations themselves give a time period for an action, the time period is from when the action of the Authority is made known to the person concerned, see, for example, Regulation 9(3) of the Pharmaceutical Ordinance:

 (b) If the director considers that the registration of the formulation in the register should not be renewed, he should inform the registered owner before the registration lapses, the notification should be by registered mail to the official address of the registered owner.  

(b1) If the manager informs that he does not intend renewing the registration, he should extend the registration by no more than six months.

(c) The owner of the registration is allowed to appeal the decision not to renew the registration within six months from receipt of the notification under Regulation (b).

So the patent regulations specifically state that where someone has to respond to an action of the Authority, the period for responding will be calculated from the day of sending or from the day of receipt of the notification if it is proven that the notification did not reach its destination. The pharmaceutical regulations state that the period is calculated from notification.

In the ruling of re Bristol, Judge Magen Altovia related to the “submission approach”.

 It is noted that the serving of papers approach sits well with the administrative law that stresses that the period of serving of papers is more important than the reaching of the administrative decision by the deciding party with respect to setting into practice that allowed.

As Judge Magen Altovia stated in re Bristol, the purpose of the civil law procedures is to fulfill real rights. See Appeal 6708/00 Aharon vs. Aharon p.d. 54(4) 702:

At the end of the day, the civil procedures are there to serve substantive rights, and they are there for a purpose. The wider substantive approach, of which good faith is the wellspring, cannot be accompanied by overly strict civil procedures. The legal culture is not only judged by protected rights, but also sometimes by the ways of approaching situations and the status of those being judged.

Consequently, Commissioner Ofir Alon considers that the 90 day period for requesting a patent term extension be calculated in a similar fashion to other deadlines in the Patent Law, i.e. in accordance with Regulation 4 of the regulations, that the date is to be calculated from when the notification is sent to the applicant / patentee, unless the Applicant can prove that the notice was never received, and in such cases, the period is to be calculated from when the consumer learned about the decision.

The Commissioner does not consider that calculating the period from the day that the Notice was given to the Applicant undermines the second purpose of the legislators; the need for certainty. This interest is not damaged if the date is calculated from the day of sending, since this is usually close to the day that the decision was taken by the Ministry of Health. It should be noted that Section 64 of the Patent Law has to be very carefully interpreted, to reflect the balances intended by the legislators.

In this instance, in the request for registration and in the affidavit, the Applicant noted the date of registration as 8 May 2018, even though Mr Friedman did not note that the notification was first sent to the Applicant on 10 May 2017, which the Commissioner is willing to assume was his intention in light of the Applicant’s claim, and noting the date of the printing appears on the certificate. In light of all of the above, the Commissioner rules that the response was timely filed under Section 64xv(a) of the Law.

COMMENT

This ruling seems to indicate that the Current Commissioner is less formulistic than his predecessors. I was rather taken aback by this ruling since I think that the 90 day period is ample to cover regular postage delays and his deadline should be no different from all the others that are calculated from the date on the certificate.

The Patent Office has very many deadlines triggered by an action they take, including the deadline for responding to Office Actions (typically 3 or 4 months, and extendible), the final deadline for responding to all Office Actions for registering a design (one year from the date of the first office action), the deadline for paying the first renewal (three months from issuance of the patent certificate), the deadline for filing oppositions, the deadline for filing abroad under Paris, etc. ALL of these calculate the deadline from the official date, despite the fact that, in practice, the Applicant will only be aware of the date once he/she receives notification which may be some time later.

The 90 day period is sufficient to cover delays of days in the authority informing the Applicant and the time for the Applicant to inform his client. If it can be shown that there were extraordinary delays involved, then there is due cause to argue that the delays were unavoidable and the Commissioner could reasonably give a discretionary extension. If the Law limits the grounds for discretionary extensions, it does so for good reason. In light of this ruling, ALL the deadlines triggered by Patent Office actions are now suspect.

There is no need for this. The 90 day period is sufficient to cover minor delays and, in this instance, the delay was three days. Sixty days used to be considered enough for filing a request. This period has been extended to ninety days. Ninety days is ample.

The 90 day period should not be extendible. The Law requires unavoidable delays and there was nothing unavoidable in this instance. However, although I think the ruling was horrible, there is a precedent for extending the 90 day period based on errors by agent of record being unavoidable. In XXXX, Reinhold Cohn missed the date due to docketing errors. If Pearl Cohen had claimed that they made a docketing error and calculated the date from receipt of notification, it is difficult to see how the present Commissioner could avoid giving the extension given to Reinhold Cohn. Of course, to do this requires knowledge of the previous decision which requires reading the decisions or following this blog.

Even without this, if the Commissioner simply ruled that the delay was unavoidable, he could simply have granted an extension based on payment of an extension fee. Instead, he has ruled that all deadlines are to be calculated from date of sending, or if not received, from date of notification. We predict that this will open a hornets’ nest.

Actually, there is a second issue here, which is whether this was the first publication. On that ground, discussed in the next blog posting, the extension was rejected. The Commissioner could, therefore, have ruled on that case and left the present issue open.

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Posted by Dr Michael Factor

Speedo vs. Brooks A Non-Sporting Trademark Opposition

May 29, 2018

Brooks logoBrooks Sport submitted TM Application No. 238375 back in June 2011, for clothing, shoes and headgear in class 25.

speedo-logo

Speedo Holdings BV filed an Opposition the mark under Sections 11(6), 11(9), 11(13), 11(14), 11(5) and Section 39(a1) of the Trademark Ordinance 1972.

The Opposition was based on the alleged similarity to three Speedo marks, registered on July 1993 and shown below.

Opposer’s (Speedo’s) Statement of Case

speedo

The Opposer claims to have been established nearly 100 years ago, and to being one of the leading sports clothing manufacturers, particularly for sea and pool wear. Since the Seventies, the company has used their logo on swimwear, goggles, swimming caps, pool footwear (flip-flops?) and the like, but also for clothing for wearing in fitness centers and during aerobic activities.

The Opposer claims that due to their wide advertising and marketing activities and the quality and reliability of their products and the Speedo image, their logo has received wide acclaim worldwide, including in Israel. Their sports goods all sport their logo which is thus well-known.

Speedo has registered trademarks in classes 25 (clothing) 28 (games and exercise devices) 12, 14, 18 and 5.

In this regard, the three logos depicted above, Israel Trademarks 76627, 76632 and 76637 are cited.  76627 is just for the graphic logo. 76632 and 76637 include the graphic logo with the word SPEEDO. All three logos cover all goods in class 25.

The Opposer alleges that these marks are to be considered well-known marks as defined by Law due to their wide usage worldwide in general and in Israel in particular, and due to the publicity and advertising. The Opposer alleges that their logo is identical or at least very similar to Israel TM application no. 76627 to Brooks Sport, which also covers goods in class 25.

The Opposer further alleges that composite marks including the logo of Israel TM application no. 76627 and wording are also confusingly similar to Speedo’s marks, since the graphic element is dominant. The Opposer considers that allowing Israel TM application no. 76627 to register would cause the mark to be confused with their marks and would thus mislead the public regarding the source of the goods.

Since their mark is a well-known mark, it provides protection for similar but not identical goods, and so the fact that Speedo specializes in swimwear and Brooks in sports shoes, is of no consequence, and the bar for widening the protection is low and Speedo easily overcomes it.

Applicants’ (Brooks) Statement of Case

Brooks claims to be a long established, large and well-known manufacturer of shoes and sports goods, established back in 1914.

brooks earlier markBrooks considers that the pending mark is only minimally different from their registered Israel TM No. 82353 shown alongside.

Brooks submits that, by analogy, the new mark can also coexist with Speedo’s marks.

Brooks also considers that their graphic mark and Speedo’s mark are significantly different and there is no likelihood of consumers being misled. They note that Speedo have not documented any instances of actual confusion due to the alleged similarity and there are thus no grounds for concluding a real danger of misleading.

Brooks further notes that their goods and Speedo’s are very different, are intended for different consumers and are marketed in different ways.

Finally, the Applicant notes that Speedo have failed to establish any reputation in their logo alone (without wording) and so the claim that their mark is well-known should be rejected.

The Evidence

To support their claim, the parties submitted their evidence as follows. On 26 April 2014, Speedo submitted evidence with an affidavit from Mr Andrew Michael Long. On 21 July 2014, Brooks submitted their evidence with an affidavit from Mr David N Bohan and Mr Ilan Benisti. On 10 July 2015, Speedo forewent submitting a counter-statement in response.

Following submission of evidence, a hearing was set for 21 January 2016. Not long before this date, Speedo (represented by Pearl Cohen) submitted various interim proceedings and requests to postpone the hearing. On 17 January 2016, Speedo forewent cross-examining Brooks’ witnesses. In a ruling of 18 January 2016, the Adjudicator, Ms Yaara Shoshani Caspi rejected the interim requests and ordered Speedo’s witnesses to be available for the hearing.

Despite this, Speedo’s representative did not attend the hearing and was thus not available for cross-examination. This raised the question of whether their witness’ statement could remain on file, and what its evidentiary weight should be considered as being. On 1 February 2016, the Adjudicator ruled that the Affidavit should remain part of the file, but should be given low evidentiary weight.

DISCUSSION AND RULING

We are dealing with an Opposition to a trademark registration proceeding in which the burden of proof that the mark IS registerable, is initially on the applicant. However, the Opposer has to bear the burden of proof required to establish their opposition. If they succeed in so doing, the burden of proof moves from one side to the other as the proceeding proceeds. See, for example, Opposition to Israel TM Applicant No. 17051 Orange Personal Communications Services Limited vs. Gemcom LTD. 11 October 2009, and Opposition to Israel TM Application Numbers 175808 and 175809 Gizeh Manufacturing Company Greek Cooperative Cigarette vs. Raucherberdarf GmbH S.A. Sekap S.A. 6 February 2012.

Are the marks well-known?

It seems indisputable that the wordmark Speedo is well-known in Israel, and the Applicant and their witnesses do not dispute this. However, the question remains whether Speedo’s logo is now well-known in Israel. Speedo considers this to be case and relies on the long and wide-scale usage and the significant sums spent on promoting the brand around the world.

The term well-known mark is defined in the Ordinance as follows:

“Well-known trade mark” – a mark that is well-known in Israel as a mark owned by a person that is a citizen of a member state. A permanent resident of such state or who has an active business or factory in such state, even if the mark is not a trade mark registered in Israel or if there are no users of the mark in Israel; for the purposes of determining whether a trade mark is a well-known in public circles relating to it and the extent to which it is known as a result of marketing, shall be taken into account, inter alia;

As known, the sight and sound test is the central test of the three, and it considers the appearance of the marks in their entirety, emphasizing the first impression made by the comparison. The importance of the first impression is due to the simple reason that consumers do not stop to consider marks in their entirety. See for example, Appeal 6658/09 Multilock ltd. vs Rav Bareakh Industries ltd. paragraph 9 (12 January 2010).

In the Opinion of the Adjudicator, the graphic symbol of the Opposer is Israel TM No. 76627 which is very similar to the applied-for mark.

The Adjudicator does not consider the fact that Opposers’ mark is filled and the Applicant’s mark is defined by an outline as sufficient to create distinctiveness and to prevent confusion between them, particularly as it seems that Brooks uses the filled-in symbol. Nevertheless, she does not consider that one can fairly consider the combination marks of symbol and word Speedo of the Opposer with the symbol of Brooks.

Distribution Channels and Customers

In this instance, the Applicant argues that the applied for mark and the Opposer’s marks are not used on the same goods. Their position is that although both Applicant and Opposer manufacture sports goods, their goods are nevertheless in different categories since the Applicant’s goods are for running, whereas the Opposer’s goods are for swimming and water sports. It would appear that there is no need to give this further consideration since the Adjudicator has already ruled that these are goods of the same type. However, since we are considering the likelihood of misleading under Section 11(9) one has to consider the details of the mark. From this consideration it transpires that the Opposer’s (Speedo) marks are registered for the entire class 25, covering clothing per se, whereas the Applicant (Brooks) have applied for only some of the goods in class 25. From this it is clear that there IS overlap between the applied for range of goods of the Applicant and the range of goods covered by the Opposer’s mark. Because of this, the Applicant’s point that the marks are used for a different range of goods in practice is not acceptable.  Any consideration of the goods bearing the mark HAS to relate to the range of goods covered by the mark.

As to the customers, it seems that both Applicant and Opposer market their goods to the entire spectrum of people who engage in sporting activities, both professionals and amateur. So the customer base is identical. Nevertheless, it is likely that professional sporting people will be careful about what goods they purchase and will know the logos well. They will be more alert as the matter is of importance to them, so it is not reasonable to assume that this population will be misled. See re Bank Igud page 676, 673. However, this is not the case with amateurs, who purchase goods without much consideration, particularly when dealing with sports goods. For these consumers, it is not inconceivable that they will not be sufficiently attentive and could be confused or misled. In this instance, due to the similarity in goods for which the Speedo mark has been registered, it is not inconceivable that the Opposer will widen the scope of their business and only use the graphic element without the word Speedo. This could create misleading regarding the origin of the goods of Opposer and of the Applicant, which are both for class 25 and for the same family of goods.

As to marketing channels, the evidence shows that the Applicant’s goods are sold in both brand stores and general retail stores; however Speedo’s products are ONLY sold in Speedo stores. However, the Opposer, having a registered mark, could widen their distribution and sell in regular stores as well. So this test does indicate a danger of consumer confusion. See Appeal 4116/06 Gateway Inc. vs. Soundtrack Advanced Technologies ltd. 20 June 2007.

 Other considerations and Common Sense

This test includes the other case-specifics that should be considered when determining the likelihood of consumers being mislead by the similarity between the Applicant’s and the Opposer’s marks.

In this regard, the Adjudicator was not persuaded that the Applicant’s mark had acquired such significant recognition that overcome the risk of confusion with the Opposer’s graphic mark. There is a strong similarity between the visual appearance of the marks and between the goods covered, the customers and distribution channels.

Furthermore, the Adjudicator does not accept that the mark should be registerable since the sports field includes other marks that are very similar. This claim contradicts the Opposer’s other claim that the graphic marks of the Applicant and Opposer are distinctive and different.

A further claim raised by the Applicant was that their mark and the Opposer’s mark carry a different conceptual message. See paragraph 21 of Bohan’s affidavit. Whereas Speedo’s mark conveys the message of hydrodynamics, the Applied for mark is like a path and is more rounded and gives a sensation of flexibility, solidity and movement. The comparison of marks in light of subliminal messages was discussed at length in Appeal 8441/04 Unilever Plc vs. Eli Segev 23 August 2006 (Dove). The Opposer considers that this difference, even if acceptable, is not sufficient to overcome the similarities between the marks.

The Adjudicator does not accept the claim that the marks conjure up different messages. As the court ruled in the Dove decision, such messages are of value to the extent that they create a linkage between the product and the idea in the eye of the customer. In this instance, the Adjudicator is not convinced that the consumer would identify the Applied for mark with flexibility, stability and motion, and certainly this is not proven to be the case.

The Adjudicator also does not accept the Applicant’s claim that in this instance there is no likelihood of confusion since, despite the usage of both companies, there has never been a complaint of being misled in practice. The Adjudicator does not consider this lack of a complaint to be significant in establishing that there never was confusion or that there never will be confusion.

In light of the above, the triple test leads to the conclusion that there is a likelihood of confusion similarity between Speedo’s graphic mark and the applied-for mark. So Brook’s mark is refused under Section 11(9) of the Ordinance.

It is noted that to reach the conclusion of non-registerability under Section 11(9), the Adjudicator did NOT rely on the evidence supplied by the Opposer.  The burden of proof of registerability lies with the Applicant. The Adjudicator did not consider that the Applicant supplied sufficient proof, and so the onus was not transferred to the Opposer who did not need to demonstrate that the mark could not be registered.

The grounds of Opposition under Sections 11(5) and 11(6) and section 39a1 are moot.

Conclusion

In light of the above, the Opposition to Israel TM No. 238375 is accepted.

COMMENT

In general, the Adjudicator would be correct to give little weight to the fact that in the past, there has been not a single recorded case of customer confusion. However, in this instance, both Speedo and Brooks have a hundred year history.

nike

Not taking into account other marks has some validity, but in this instance, Brooks earlier registered mark is far closer to Speedo’s. Furthermore, there are a whole slew of other somewhat similar marks, such as Nike’s mark shown alongside.

Although Speedo has indeed registered their graphical mark for all goods in class 25 they do not make and have never made running shoes. The graphical mark was registered in 1990. 28 years later, if Speedo have not expanded into running shoes and there is no bona-fide indication that they intend to, Speedo’s registration should be amended to limit the range of goods to exclude running shoes. Possibly this should require Brooks and their representative to request this, but there is no overlap. There is no likelihood of confusion, and the marks are different.

In the circumstances, to rule that Brooks did not make a sufficient case to move the burden of proof to Speedo is frankly ridiculous.

 

1 Comment | Israel IP, Israel Patent Office Rulings, Israel Trademark, opposition, trademark, החלטת רשות הפטנטים, התנגדות, מחלקת סימני מסחר, סימן מסחר, סימני מסחר, קניין רוחני, קנין רוחני | Permalink
Posted by Dr Michael Factor

Can a Knowingly Abandoned Patent Application be Reinstated?

May 22, 2018

BioMarin

IL 206845 to BioMarin Pharmaceuticals Inc. was refused under Section 21a of the Israel Patent Law 1967. The patent application was the national phase of a PCT application submitted on 6 January 2009. The national phase entry was submitted on 6 July 2010 and claims priority from US applications filed on 7 January 2008 and 22 April 2008.

On 30 January 2013, the Applicant was sent an Office Action to which the Applicant had four months to respond. No response was forthcoming. Following the extensions available under Circular 005/2011 then in force, on 5 March 2014 the Applicant was informed that the file would be closed if no response was submitted within 30 days. This letter went unanswered and the file was closed on 23 June 2014.

3 years

Three years and three months later, on 15 October 2015, the Applicant requested a retroactive extension to respond to the notice of abandonment.

The request was accompanied by an Affidavit that testified to the developments leading to the case becoming abandoned.

  1. In 2005, Merck Serono purchased all rights to the Kuvan medical product, and to the process for manufacturing the active ingredient claimed in the application.
  2. This transfer of rights was not recorded in the patent register and the Application was filed in the name of Biomarin.
  3. In 2012, Merck Serono decided that it was not interested in the patent issuing in Israel and told Biomarin not to respond to the Office Action.
  4. In 2015, Biomarin repurchased their rights to the invention and in 2016-2017 reviewed the usefulness of getting the patent to issue in Israel.
  5. Following the reconsideration, the present request for extension of time to respond was submitted in October 2017.

change-my-mindThe Applicants argued that their repurchasing of their rights and their reconsideration of the portfolio provides sufficient justification for reconsidering the refusal of the patent. Furthermore, unlike in the US and Europe, there is no legal requirement for abandonment so thus, even if the abandonment was following an intentional decision by Applicants or the predecessor thereof, this does not mean that, following a change of circumstances, this cannot be reconsidered and they are entitled to a further opportunity

mistake EinsteinThe Applicants presented their arguments at a hearing on 14 February 2018, during which they claimed that the Applicants can be considered as having made a mistake that they now wish to rectify. They also claimed that returning the application to examination will not cause damage to third parties. Finally, they argued that in Appeal 8127/15 Association of Israel Industrialists vs. Merck Sharp & Dohme Corp. et  al. (15 June 2016), certainly is no more important than other considerations.

Sections 21 and 21a of the Law set out the normative arrangement for these matters as follows:

21.  If the Applicant did not remove the grounds for the Application not being approved within the timetable set out in the regulations or did not correct the lacunae under Section 20, the Commissioner will refuse to allow the patent.
21a. If the Commissioner refuses the patent under Section 21, he can, at the request of the Applicant, reconsider the refusal provided that the request to do so was submitted within 12 months of the refusal.

reasonable

The period laid out in Section 21a of the law is extendable under Section 164 of the Law at the Commissioner’s discretion. The Commissioner’s discretion is summed up in the phrase “if he sees a reasonable basis for so-doing” which is found in Section 164a. The Commissioner’s considerations will change with circumstances, and as Judge Naor stated in Appeal 826/04 Commissioner of Patents vs. Recordati Ireland Ltd (26 June 2004):

The policy regarding different requests for extending deadlines that are brought before the Commissioner, will change with circumstances and with the nature of the proceedings for which an extension is requested.  

 Similarly, the Commissioner has the authority to make the extension dependent on “conditions that he considers to be correct” as stated in Section 164b of the Law.

In cases such as this, there are two main interests. Firstly, that of the Applicant who wishes to protect his invention and, secondly, that of the public which can benefit from inventions that are not patent-protected and are thus in the public domain. It is noted that this case is the national phase of a PCT application and the application and its status is published under section 16a of the Law.

limited

The Deputy Commissioner Ms Jacqueline Bracha considers that the period given in Section 21a, though long, is limited. This protects the public and brings matters to a close. The period given in the Law is a balance between the competing interests.

To extend the 12 month period after the file closes under Section 164 requires ‘reasonable grounds’, as defined in Opposition to IL 110548 Shmuel Sadovsky vs. Huglat Kimberly Marketing ltd, 12 August 2010. The relevant considerations for ‘reasonable grounds’ are the duration of the extension requested and the existence of a real cause for the delay.

Ms Bracha does not consider that the Applicants’ request can be considered reasonable with respect to the delay incurred or the justification to reopen the file. The request to reopen the file was received 39 months after the case was closed. This is 27 months after the usual deadline which is a long time.

As to the submission that the client changing their mind is grounds for opening an intentionally abandoned application, the Deputy Commissioner does not find this convincing. She finds support in Appeal 83/86 Sokol vs. Yismach, p.d. 40(1) 577 cited in the Sadovsky case, where it is stated that:

The discretionary authority to extent deadlines is intended to overcome mishaps and externalities that are beyond the litigant’s control.

One cannot consider a decision not to continue prosecuting as being an external cause, a mishap or an error. Ms Bracha notes that the circumstances described in the Affidavit show that the error we are dealing with is imported from Contract Law and is at best “a mistake in the equity of the deal” which is not grounds for cancelling a contract.

In a similar manner, it has been determined that not paying a renewal of a patent due to a determination that it is not worthwhile to do so is NOT considered as a reasonable ground for reinstatement, and that is where we are dealing with an actual right that the patentee was awarded and not with a pending application as in this case. See Request for Reinstatement of IL 177522 of “Yad Conena Ltd from 9 June 2014:

The circumstances of the case before me do not fulfill the above requirements. A decision was taken not to pay the Renewal fee. The patentee knew that the there was a need to pay the renewal fee as this was not the first time that he had needed to pay it. One can assume that after the case lapsed and was reinstated in 2011, the patentee made inquiries regarding the next renewal. From the Affidavit it transpires that the patentee made an informed decision NOT to pay the fee. In these circumstances one cannot conclude that the fee was not paid in reasonable circumstances that justify reinstatement.  The economic difficulties that the Applicant noted are not considered reasonable grounds for not paying the renewal, particularly where no evidence of the debit was submitted.

As a footnote, Ms Bracha relates to the claim that the request finds support in Appeal 8127/15 Association of Israel Industrialists vs. Merck Sharp & Dohme Corp. et  al. (15 June 2016), that in patent law, fidelity and consistency is no more important than other considerations. Ms Bracha considers that certainty is not all-seeing and that sometimes certainty will be sacrificed for other interests. In  re Association of Israel Industrialists, it was stated:

True, there is validity to the suspicion that certainty may be damaged when a court comes to interpret the Law (Aharon Barak Legal Interpretation, Interpreting Legislation Volume 2 583 (1993). Nevertheless, this is one consideration amongst many that can be used where there is nothing in the wording of the Law or elsewhere to directly contradict this. In this instance, it appears that the legislators did not put the question of certainly regarding when a patent lapses as the main consideration.

In other words, the consideration of certainty is an important consideration but where the wording of the Law or its purpose indicate that the legislators preferred some other consideration, the Court will interpret the Law accordingly.

Ms Bracha does not consider that in this instance the Law or the case-law expounding the Law indicate that the legislators preferred the interest of the Applicant over that of public certainty, She considers that to the extent that there is a legal tradition for interpreting Sections 21a and 164 of the Law, it is one that requires the Applicants to provide a real and reasonable cause for incurring a delay, and this is necessary since there is public reliance on the patent lapsing.

revival-2

The Applicants also requested to learn from what is stated in foreign legislation, that what is not stated in our Law is not a requirement. That is, that whereas other laws explicitly state “unintentional” this implies that there is no such requirement in Israel Law. Whilst it is true that Section 21 does not require abandonment to be unintentional, it does provide a normative timeframe for reinstatement, whereas the US and European law do not.  Any deviation from this period is considered in the mirror of Section 164 which is interpreted in light of the nature of the deadline to be extended and the type of proceeding before the Commissioner. This was detailed above, and will not be repeated. It is sufficient to note that one cannot rely on the inclusion or omission of a word in the Israel Law as the basis for its interpretation whilst ignoring the case-law.

It seems that the circumstances are such that the case was abandoned intentionally and can only be rectified if this was not legal. The request is refused.

IL 206845 to Biomarin: refusal to reinstate application, Deputy Commissioner Ms  Jacqueline Bracha, 17 April 2018.     

COMMENT

In extraordinary circumstances, long-dead applications have been reinstated. See for example IL 194015 to Natapov, Perstnev, Perstnev and Vilacer titled “the Insulating Material”. Here the patent had lapsed three years earlier, but had not published. The record is probably Israel Patent Number 139892 “INNER WORKINGS FOR A WATER TREATMENT UNIT” to Yigal Tsabri  which was revived seven years after it lapsed.

I am frankly surprised by the audacity of the Applicants’ representative for trying to  argue that this knowingly abandoned patent application could be revived more than 12 months after going abandoned and am pleased that the Deputy Commissioner came to the decision that it could not be.

1 Comment | Israel IP, Israel Patent, Patents, PCT, pharmaceuticals, pharmaceuticals and Biotechnology, reinstatement, Section 164, Section 21a, Uncategorized, פטנט, פטנטים, קניין רוחני, קנין רוחני | Permalink
Posted by Dr Michael Factor

Pending Israel Copyright Amendment to Address Internet Piracy of Audio Visual Works

May 8, 2018

pirate bay

Oh, better far to live and die
Under the brave black flag I fly,
Than play a sanctimonious part,
With a pirate head and a pirate heart.
Away to the cheating world go you,
Where pirates all are well-to-do;
But I’ll be true to the song I sing,
And live and die a Pirate King.

Pirates of Penzance Gilbert & Sullivan

From 2006 to 2014, we have noted that Israel has been on the United States Special 301 priority watch list of countries having allegedly inadequate IP protection. The main criticism was the pharmaceutical extension regime in Israel which was believed to be too liberal to generic manufacturers. The amendment of the amendment was reamended and Israel’s status was upgraded.

A second criticism was that Israel’s copyright regime did not provide tools to hold Internet Service Providers (ISPs) responsible for preventing free access to copyright materials such as songs, movies and television series over the Internet. There are good arguments for and against making service providers responsible. They are not policemen and should not be. There is a perceived problem that without monetary compensation for their creative output, producers and artists will not create.

There is a new copyright bill pending legislation in Israel that addressed this issue, and a copy of which may be found here. The purpose of the bill is to try to reduce copyright piracy on the Internet, particularly of audio-visual works.

The following is an analysis of the proposed amendment. The bill contains four elements:

  1. An expansion of the concept of indirect infringement, to include websites that offer viewers access to unauthorized content such as movies and TV series. The indirect inclusion includes links to an offshore location in cases of actual or constructive knowledge of the act and intent to profit.
    This element will have utility to the extent that the Israeli courts can thereby obtain jurisdiction over the operators of the web site that aggregates the links. However, where this entity is not identified, then this part of the amendment won’t have much real world effect.
  2. Blocking Orders. While some courts have issued these in the past, other courts claim that without specific authorizing legislation they do not have authority to grant blocking orders. Hence the legislation.
    This element is likely to become the best tool for disrupting internet piracy. The proposal also clarifies that the cost of the blocking order will be borne by the applicant and not the Internet Service Provider (ISP). Apparently, there are actual costs in carrying out such blocking order.
  3. Discovery of the identities of up-loaders of infringing content.
  4. Enhanced criminal penalties.

The Tel Aviv Law School (Amnon Goldenberg Institute run by Professor Michael Birnhack) has published their comments on the bill, as have others, and it is scheduled to be debated by the Economics Committee of the Knesset on 21 May 2018.

ISP-1

The goal of the Ministry of Justice in formulating the bill was to find language that would be wide enough to catch pirates, but narrow enough to not cause any unwanted collateral damage. This goal was difficult to achieve in the proposed 48A.

Content developers and rights holders would prefer that the legislator err, if at all, on the side of over-protection, whereas the advocates of fair use and free speech prefer that the legislator err, if at all, on the side of under protection.

What is not included in the Bill, despite calls for such, is:

  • A codified “notice and takedown” type regime; and
  • WIPO style “technological protection measures” legislation.

The “notice and takedown” case-law seems to work, so why fix it? Although we have heard comments from legitimate web sites that a “safe harbour” might help them should 48A prove to broad in practice.

pirate dated

Currently, Israel does not have technical performance measures (TPM), something mandated by the 1996 WIPO treaties and intended for a different era, but which may have some unintended relevance in a world where content is no longer delivered on DVD, but rather through on-line subscription services. The Israel Justice Ministry does not have any a priori objection to either of these matters. However they are both incredibly complex to draft and if drafted improperly can have grave unintended consequences. For example, an overly broad TPM provision might have unintended consequences for tech companies and their developments.

The Justice Ministry considers that both of these issues are worthy of further study, but to move forward with them considers they should get the full legislative process by issuance of a proposal, requesting public comment, the drafting of a bill, and Knesset discussion, rather than a last-minute add-on to a pending bill.

The current bill is cautious and conservative, with the drafters having the perception that it is easier to add measures than to cope with overly broad powers and runaway judges.

 

Comment

The proposed legislation seems balanced and well-considered.

Certainly consumers of content should compensate the developers of the content for their efforts, and have little patience for those that download films and series, arguing that the developers don’t lose anything as they wouldn’t pay for it anyway. Traditionally, Jewish Law did not generally recognize non-tangible property rights, although entertainment, such as a dance, could have value and be used instead of a ring, for marriage purposes. The modern economy and civilization has moved on and IP rights are an essential development. Israel should be a light to the world in judicial matters. However, where there are widely accepted minimum standards of behaviour, it is important that Israeli legislation and private behaviour do not fall behind.  That said, I don’t think that there is any basis for assuming that people write songs or create films for revenue in 70 years’ time or for 50 years after death. The actuarial depreciation of such revenue streams to the time of writing results in such future profits as being negligible. I would prefer that:

  • laws on copyright infringement be coupled with the need to register copyright (as once required in the US, and required for trademarks, patents and designs
  • that the period of protection be significantly shortened to perhaps 10 or 15 years
  • that after initial launch in cinemas or as albums, movies and songs become available for reasonable cost over the Internet by legitimate streaming services, and that viewers can choose between premium advertisement-free access and sponsored access
  • there should be broad fair use exceptions
  • I am very put out that academic papers are developed by public universities and that access often requires payment. I want to see access for all with the universities sponsoring the publication rights, and more journals being exclusively on-line. Knowledge should be in the public domain, but authors should be recognized. There seems no place for commercial publishers of academic journals in the modern world.

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Posted by Dr Michael Factor

The Economy of Innovation

May 3, 2018

zombie.jpgIlan Cohn, Dorit Karine and Former Commisioner Asa Kling are to be congratulated for organizing a balanced high level program with parallel sessions relating to different aspects of IP, that was fairly well-structured. It was less schleppy than the 2016 reincarnation, but was nevertheless not inspiring. Participants returning to their offices would probably use terms like OK (בסדר) to describe the event to their colleagues. However, I can’t see anyone telling those colleagues that they missed out by not attending. Attendance levels were high for an Israel IP event, but low when considering the potential and the resources invested.

intercontinentalAs in previous years, the event was held at the prestigious David Intercontinental in Tel Aviv. There were over a hundred speakers, but luckily they were spread out over two days and with three sessions running in parallel and most having panels of four or five speakers, this was less overwhelming than it sounds.

ASHER_D._GRUNISAfter the usual self-congratulatory opening remarks, the conference kicked off with Judge Asher Grunis former Head of Supreme Court criticizing Judge made law, specifically the infamous A.Sh.I.R. ruling. Being a formalist myself, it was enjoyable hearing a Supreme Court president criticizing judges doing what they like.
It  would have been nice would have been reference to the recent injunction against Rami Levy in the Baladi case and also the controversial Unipharm vs. Sanofi which both related to Unjust Enrichment in IP matters. Then again, Rami Levy recently appealed the pasta injunction and may well be appealing the minute steak injunction, and Unipharm vs. Sanofi is under appeal, so perhaps he was correct not to address these cases.

It is not every day that one gets to hear a former Head of the Supreme Court discussing judicial legislation which is a hot topic at present due to attempts by the Justice Minister to reign in judicial activism.

Unfortunately, Judge Gronis didn’t bother using visual aids, and did not balance his talk by showing how judicial creations such a contributory infringement and indirect infringement (Srori, Rav Bareakh) can be valuable.

Variety

varietyThe conference was wide-ranging, with sessions on various aspects of patenting, including pharmaceuticals and computing which are always controversial.

There were also sessions on the interfaces of trademarks and designs and copyright and designs. The issue of content piracy over the Internet and new legislation addressing this issue was presented. There was a session on trade secrets and one on copyright infringement over the Internet, so there was much to interest IP lawyers and not just patent attorneys.

crowd.jpgNew tax issues relating to international companies were discussed, and how this would likely affect Israel. I took the opportunity to ask the panel about the VAT issue, and Adv. Ayal Shenhav confirmed my understanding that services relating to an asset in Israel do indeed incur VAT.  This is a practical issue that affects IP practitioners. I would have preferred some sessions on such practical matters, as there is confusion among practitioners.

There was a session on the fashion industry and one on IP rights and competition law. Licensing agreement and Medical devices were discussed, as was the Internet of Things and standard non-discriminatory  licenses. There was also a session on traditional knowledge.

adidas.jpgApart from the keynote lectures and the final session, there were generally three parallel and diverse sessions going at any time, so everyone could find something of interest; whether related to their practice or a window on some other aspect of IP.

As I had to pick and choose myself, although I did try to slip in and out to get some sort of feel for the different sessions running in parallel, it is difficult to give a fair overview of the entire event. It is certainly possible that the scheduling resulted in me totally missing sessions that I would have thoroughly enjoyed.

I rather enjoyed a session on the Interface Between IP Law and Competition Law, where Judge Grosskopf (now of the Supreme Court) related to the Read the rest of this entry »

5 Comments | AIPPI, Intellectual Property, Israel IP, Uncategorized, קניין רוחני, קנין רוחני | Permalink
Posted by Dr Michael Factor

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