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.

A cost ruling and a tax question

April 17, 2018

This cost ruling highlights a tax issue where it seems to be unclear whether charges for legal work performed on behalf of a foreign entity concerning an issued patent (or trademark) in Israel incur VAT. It also highlights the problems that can occur where firms split and one professional leaves taking clients and on-going issues with him. What is required is professionalism and good between the management of the original firm and the new representatives to deal with costs incurred by the original constellation. Unfortunately, sometimes this good will is lacking.

alkermesAlkermes Pharma Ireland LTD has an exclusive license from Novartis to manufacture a drug in accordance with IL 142896 and its divisional patent no. IL 179379 entitled “Multiparticulate Modified Release Composition”. The active ingredient is Methylphenidate and is commonly known as Retalin. It is used for the treatment of attention deficit hyperactivity disorder (ADHD) and narcolepsy.

MediceMedice Arneimittel GmbH filed a request to cancel the relevant patents and the claim scope was narrowed in a preliminary action by Alkermes, but the cancellation actions were unsuccessful. Now Alkerermes has requested costs of $1,029,561.95 which comes to 3,626,118.18 Shekels costs.

History and Timeline

IL 179379 is a Divisional Application of IL 142896. The allowed patents published for opposition purposes on 8 March 2007 and 31 March 2011 respectively. Since no oppositions were filed, they issued on 9 June 2007 and on 1 July 2011. On 6 August 2012, an exclusive license for manufacturing was issued in the name of Alkermes.

On 14 November 2012, Medice Arneimittel GmbH applied to cancel the patent. The application was supported by a technical opinion provided by Professor Golomb.

On 7th February 2014, before a counter-claim and evidence were submitted, the patentee requested to amend the specification under Sections 65 and 66 of the Israel Patent Law 1967 which allows the scope of a challenged patent to be restricted by the patentee within the scope of the monopoly originally allowed.

On 6 March 2013, the Medice Arneimittel responded and on 14 March 2013 Notartis answered and on 17 March 2013 Medice Arneimittel GmbH requested permission to respond to the answer. On 5 May 2013, then Commissioner Kling scheduled a date for a hearing to discuss the amendment. In the hearing which was held on 4 June 2013, the Commissioner ruled that he case be conducted under Section 102(vi) as if the amendment was accepted, and after the cancellation proceedings be ruled, on the amendment would publish for opposition purposes.

In light of this ruling, Medice Arneimittel submitted an amended cancellation proceeding together with a further affidavit from Professor Golomb.

On 4 March 2014, Novartis/ Alkerermes submitted their counter claims submitted with an expert opinion from Professor Mark A Stein and Professor Joseph Cost.

On 2 June 2014, Medice Arneimittel submitted their counter-evidence including a further affidavit from Professor Golomb together with a request to submit a further three prior art publications. On 18 June 2014, the Commissioner allowed this extra prior art to be submitted, and allowed Novartis/Alkerermes to relate Read the rest of this entry »


Israel Court Recognizes Copyright and Moral Rights in the Format of a TV Show

April 25, 2017

Background

Copyright protection is available for films, TV programs and other creative endeavors. The problem with TV formats is that ideas and concepts are not protected. The embodiment of the idea is, but a format that is ‘copied’ abroad will inevitably be re-shot and the content will change. A game show is scripted by its players. A quiz could conceivably have the same questions in different jurisdictions but the participants will answer differently. Much of the viewability of a TV program is related to the characters of the participants themselves. Different competitors in a song competition will sing differently. In a cookery program, the participants will cook differently. Different people look and act differently in game-show survival situations.

Until this ruling, it was not clear that formats of TV shows are copyright protected. The fact that they are bought and sold does not mean a court would recognize a rip-off program as being copyright infringing.

Upgrade

Armoza Productions Israel makes formats of TV programs that are successful abroad. Saar Brodsky and two partners created a format called “Upgrade” that was not successful in Israel, but which Armoza Productions managed to market abroad in 30 countries. In a groundbreaking ruling, the Israel District Court recognized copyright as subsiding in the format and thus ruled that the creators’ moral and financial copyright was infringed. It will be noted that the court could have ruled damages under the catch all tort of Unjust Enrichment.

Upgrade is a game show that goes into people’s homes and offers them a chance to upgrade their personal items for brand new ones! Each home can wager their belongings against their trivia skills. If they answer correctly, their homes will be upgraded… but there’s a catch! Wrong answers mean the items they own will be taken away. Are you ready to be left without a dishwasher, TV, or bedroom set?

In each episode the ‘Upgrade’ team will enter 2 households and play the game with them. It can be with a group of young bachelors or a big family in the middle of having their dinner – but no matter what, it is always by surprise and unexpected. Now on air in over 15 territories!

A link to the format that was posted on YouTube may be found here.

Saar Brodsky, Rodrigo Gonzales and Gili Golan created the format in 2008 and made a pilot episode for Israel’s Channel 10 that was eventually scrapped without being broadcast.

The ‘rights’ to the format were sold to ‘Tanin Productions’ which is owned by Golan (Tanin is a crocodile) and these were then transferred to Armoza Productions with a request that the three creators be credited with the concept.

Brodsky claimed that despite the significant worldwide success of the format his name was deleted from the credits in an attempt to prevent him benefiting from the copyright and profits. Judge Avnieli ruled that Armoza acted intentionally in bad faith despite knowing about his contribution to the format. Since Armoza Productions is a limited company with a single owner, the owner is personally responsible in this instance.

Judge Avnieli noted that Armoza claimed that Brodsky merely thought up the idea and discussed it with friends and did nothing to develop it further. She rejects this defense. The entertainment is the result of work by Brodsky, Gonzales and Golan which was embodied in a storyboard and presentation that was prepared for the filming of the pilot program, that was the result of deep contemplation regarding the details, the structure of the episodes, directions to the actors, choice of competitors, preparation of questions, activities and anchors that resulted in the specific end product.

The Judge noted that under cross-examination Armoza was asked to identify the creators of the format and whether the plaintiff was one of them, and Armoza’s response was that they didn’t know and that it wasn’t relevant. This was not compatible with the evidence submitted that clearly showed that Brodsky was the producer of the pilot. Judge Avnieli considers that each time Armoza claimed to be the creators of the format without attributing Brodsky and his partners, they were infringing Brodsksy’s moral rights. The Judge ruled that Brodsky and partners should be credited in each episode, that Armoza should refrain from describing themselves as the creators and fined Armoza 30,000 Shekels in legal expenses.  There is a parallel ongoing case for financial damages of 1.5 million shekels.

Armoza have vowed to appeal the decision.

COMMENT

It is almost embarrassing that Israel is developing a reputation for such programs.


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

September 22, 2016

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

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

BACKGROUND

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

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

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

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

The Main Documents in the Prosecution File Wrapper

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

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

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

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

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

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

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

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

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


Revival of IL 132540 Opposed

September 18, 2016

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

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

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

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

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

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

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

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

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

The Opposer’s Claims and Evidence

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

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

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

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

 Applicant’s Claims and Evidence

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

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

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

Discussion

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

CONCLUSION

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

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

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

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

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

 


Israel Trademark No. 158991 “פליסקה, PLISKA, ПЛИСКА” (stylized)

September 12, 2016

pliskaIsrael Trademark No. 158991 “פליסקה, PLISKA, ПЛИСКА” (stylized) was registered on 1 September 2014 for alcoholic drinks in class 33. On 24 March 2005 half the ownership was transferred from Capital Food Company ltd. to D.I.L. Trade (Maglan) ltd.

On 2 February 2016, Vinex Preslav Joint-Stock Company filed a request to have the trademark struck from the register due to alleged lack of use during the previous three years. Vinex Preslav Joint-Stock Company is a Bulgarian company that claims to have used the term Pliska for alcoholic beverages since 1994, and has registered the mark worldwide under the Madrid Protocol since 2005. Vonex Preslav claim to have sales in Israel.

Furthermore, Vinex Preslav notes that there is an agreement between the registered owners, Capital Food Company Ltd. and D.I.L. Trade (Maglan) Ltd, that was submitted to the Israel Patent Office, under which D.I.L. Trade (Maglan) Ltd undertook not to use the mark from 1 January 2005 onwards.

On 31 March 2016, Capital Food Company Ltd. submitted their statement of case. They claim that their rights to the Pliska trademark outweigh those of Vinex Preslav, that they have used the mark in recent years and intend to continue using it. Capital Food Company Ltd allege that a cancellation request filed 14 years after a mark was registered is surprising and itself indicates that the mark has a reputation.

On 25 May 2016, Capital Food Company Ltd submitted a request to transfer the mark to Vinex Preslav in accordance with an agreement reached between the parties. However, on 31 May 2016, Vinex Preslav submitted their evidence to have the mark canceled and requested a decision based on the evidence submitted without a hearing.

Vinex Preslav requested that the cancellation ruling be based on a statement by Mr Vadim Farber, the CEO of Carmi International Foods Ltd, who is the distributor in Israel that Vinex Preslav uses. Mr Vadim Farber affirmed the existence and contents of an agreement between Capital Food Company Ltd. and D.I.L. Trade (Maglan) Ltd. under which D.I.L. Trade (Maglan) ltd. were obliged not to use the mark, and he further affirmed that the mark had not been used in Israel over the previous three years.

Vinex Preslav also submitted a statement from Ronen Menashe, an investigator at SML Israel Intelligence Ltd, in which he affirmed that his investigations had yielded no evidence of usage by D.Y.L. Trade (Maglan) Ltd. today or over the past ten years. Mr Menashe had held a conversation with the director of D.I.L. Trade (Maglan) Ltd. who explained that he conducted his affairs via a further company, since D.I.L. Trade (Maglan) ltd.  is no longer active. Furthermore, the new company does not make any usage of Israel Trademark No. 158991 “פליסקה, PLISKA, ПЛИСКА”. Mr Menashe also visited a number of shops spelling wines and spirits but none of them sold products with Israel Trademark No. 158991 “פליסקה, PLISKA, ПЛИСКА” on it, or any other products manufactured by D.I.L. Trade (Maglan) ltd.

On 21 June 2016, Capital Food Company Ltd announced that they no longer had any connection with D.I.L. Trade (Maglan) Ltd, would not be submitting evidence, and requested a ruling based on the material of record.

RULING

Section 41 of the Trademark Ordinance 1972 states:

41. [a] Without prejudice to the generality of the provision of sections 38 to 40, application for the cancellation of the Registration of a trade mark regarding some or all of the goods or classes of goods in respect of which a trade mark is registered (hereinafter – goods regarding which the cancellation is requested) may be made by any person interested on the ground that there was no bona fide intention to use the trade mark in connection with the goods for which it is registered in connection with the goods regarding which there is a request to cancel the registration and that there has in fact been no bona fide use of the trade mark in connection with those goods in connection with the goods regarding which there is a request to cancel the registration, or that there had not been any such use during the three years preceding the application for cancellation.

The purpose of the section is to keep the trademark register clean from non-used marks. See BAGATZ 67/71 “Prem” Ltd. vs Registrar of Trademarks, p.d. 28(1) 802, 811, where, with respect to the previous version of the section it was ruled that:

Section 22 is intended, primarily, if not exclusively, to purify the trademark register of all marks that are not in use and without bona fide intent to use. This is a national issue, so that registers are not weighed down with theoretical marks. It was not incidental that the legislators required bona fide usage after registration.

The requester for cancellation first claimed that the owners had never used the mark in Israel. Following the request to transfer the mark to them by the current owners, there is no need to cancel the mark, but only to transfer ownership and to delete D.I.L. Trade (Maglan) Ltd from the register.

It will be noted that Section 41 of the ordinance allows for full or partial cancellation of a mark by narrowing the list of goods covered.  There is, however, no provision for cancelling some owners whilst leaving others as registered owners.

The request to cancel the mark focuses on a lack of usage by D.I.L. Trade (Maglan) Ltd, and the investigator did not attempt to determine whether or not Capital Food Company Ltd was using the mark. Mr Farber testified that the owners were not using the mark, but Capital Food Company ltd themselves claimed usage in recent years but did not substantiate this with any evidence. Furthermore, Capital Food Company ltd transferred their share in the mark to Vinex Preslav, leaving the fate of the mark with the Commissioner, and without making any demands themselves.

The net effect of this is that the request is really one of correcting the register by deleting D.I.L. Trade (Maglan) Ltd as an owner. Section 38(a) of the ordinance states:

38(a) Subject to the provisions of this Ordinance, any person aggrieved by the non-insertion or omission from the Register without sufficient cause, or by any entry wrongly remaining on the Register, or by any error or defect in any entry in the Register, may make application in the prescribed manner to the Supreme Court or may, at his option, make such application in the first instance to the Registrar. 

The requester for correcting  the register is an aggrieved person and is covered by Section 38a). It has previously been established that an “aggrieved person” is no different from the “interested party” referred to in section 41 of the Ordinance (- see Seligsohn “Trademarks and Related Laws” 1973, page 105. The Supreme Court related to this in Civil Appeal 941/05 Wine Maker’s Cooperative of Rishon l’Zion and Zichron Yaacov  vs. The Kerem Company Ltd. p/d/ 61(3) where it is stated:

The phrase “he that is disadvantaged” is explained liberally in the case-law to include someone who suffers some disadvantage in some manner vis-a-vis some third-party who enjoys a trademark registration that they are not entitled to. This explanation is based on the English phrase “Aggrieved Person” as understood in the English Law that the  Ordinance brings into Israel Law.

 The requester for cancellation fulfils this precondition since, according to his statement, he’s used the mark in his home country for decades, has usage abroad and is interested in using the mark in Israel.

The Commissioner’s has wide authority in this regard, a previous commissioner ruled regarding Israel Trademark No. 66312 “NIPRO” in Abbott laboratories vs. Nissho Corporation 13 July 1999:

Since Section 38 deals with various changes to the register, from cancellation due to lack of distinctiveness and including transfer of rights in a mark from one entity to another, the considerations behind allowing amendments depends on the underlying justification and on the scope of amendment requested. There are cases where a Section 38 amendment will be allowed and others where it will not.

This is demonstrated by the fact that the legislators limited the period under which a mark may be cancelled due to non-registerability, but did not limit the period during which the register could be amended (see section 39(a1) of the Ordinance, and also the words of explanation (published on 27 July 1999 Page 525 in the protocols of the Law for amending Intellectual Property legislation in light of the TRIPS agreement 1999, Book of Laws 1721 from 30 December 1999, Page 48, which resulted in this section being added to the Ordinance.

Nevertheless, when considering a request to amend the register, it is necessary to consider the rights of third parties that could be disadvantaged by the amendment. Such third parties are not merely the parties themselves, but include competitors who if the amendment is not allowed, could file for cancellation of the mark due to lack of use.

Furthermore, the requester of the cancellation wishes to be registered as the user themselves, after testifying that the mark is not actually in use. The correct procedure is to have the non-sued mark cancelled and then to file a new application. The new application is then open to third-party challenges by way of opposition and allows other parties, their say.

Additionally, if the mark is indeed dormant for so long, this increases the likelihood that other parties may be using the mark and assigning the mark in this manner could leave such other parties exposed to infringement actions.

Thus even if the end result is that the requester of the cancellation be registered as the mark owner, this result should be achieved with consideration for the rights of others, and not by devious means.

In light of the above, Deputy Commissioner Ms Jaqueline Bracha rules as follows:

  1. The request to amend the register such that D.Y.L. Trade (Maglan) Ltd is replaced by Vinex Preslav as the owner is not acceptable
  2. If Vinex Preslav wishes to continue with the cancellation request, they have 30 days to show lack of use of both owners. Since Capital Food Company Ltd. have stated that they will not be submitting evidence themselves, the decision will issue based on the submission by Vinex Preslav only
  3. Vinex Preslav may abandon the cancellation request within 30 days; the mark will remain owned by two parties and Vinex Preslav may substitute themselves for Capital Food Company Ltd as the part owner as per the transfer of ownership record that was submitted.

Cancellation or Change of Ownership of Israel Trademark No. 158991 “פליסקה, PLISKA, ПЛИСКА” (stylized) Ms Jaqueline Bracha, 22 August 2016

 

 

 


Statutory Damages for Reproducing Photographs

August 2, 2016

copyrightUnder the Israel Copyright Law 2007 there are statutory awards available for copyright infringement of up to 100,000 Shekels without proof of damage. There is a separate statutory award for damage to the moral right to be acknowledged as an author of a creative work that is up to an additional 100,000 Shekels .

Photographs are considered creative works and it is the photographer, not the subject of the photographer that owns the rights.

However, the would-be-plaintiff should be aware that although the courts can award up to 200,000 Shekels for copyright infringement by a photograph being reproduced without permission, they generally make much smaller awards.

Whether one sues under copyright infringement or under the Law of Unjust Enrichment the statutory damage despite lack-of-proof merely enables the court to grant compensation for estimated damages where the plaintiff has trouble proving the damage. Not every photograph is considered as automatically worth tens of thousands of shekels.

Here are four recent cases:

  • A website for an aluminium factory used an image taken from a competitor’s website without permission. The damages awarded were 3,500 Shekels.
  • A photographer took pictures of landscaped gardens, and the landscape architect reproduced these without permission. The name of the photographer was not mentioned. The compensation awarded for copyright and moral rights infringement was 10,000 Shekels.
  • A beautician and her husband sold cosmetics via eBay from a virtual shop. The cosmetics were made by Holyland Cosmetics. The beautician and her husband used photographs and text taken from  Holyland Cosmetics’ website and were fined 65,000 Shekels.
  • amir-peretzVery few photographs become iconic images. One that did was the famous picture of then Israel Defense Minister Amir Peretz looking interestedly at military maneuvers through binoculars without noticing that the lens caps were still in place. A journalist called Ephraim Shrir took the photo, and has since been busy suing every newspaper and media outlet that failed to acknowledge his moral rights to be recognized as the photographer, and that failed to pay him copyright compensation.  We have written about his claims in the past, see here and here, where both his copyright and moral rights were recognized by the courts. In a recent ruling however, Shrir sued HaAretz for reproducing the photograph, but they claimed that they had obtained the image legally from Associated Press (AP) who was acknowledged. The case was thrown out.