Opposition to IL 187923 to Xeda International – keeping fruit and vegetables free from penicillium mould

August 26, 2018

Penicillium on orangePhosphite ions have been long used to prevent infection of citrus fruits with penicillium mold. The treatment is less than successful for treating fruit that is already infected and typically additional chemicals have been used, but these are carcinogenic and thus it is preferable to phase out. This opposition considers the novelty, efficacy and inventiveness of the treatment, including secondary tests for inventiveness.  The awkward terminology of ‘solely comprising’ is also construed.

IL 187923 to Xeda International is a patent that relates to treatment of fruit and vegetables by application of phosphite ions to prevent penicillium.

On allowance, Pimi Aggro Cleantech ltd opposed the application issuing. IL 197923  claims priority from FR 0610688 filed on 7 December 2006 and is a divisional application of Il 191496 which has issued.

The patent application includes three independent claims (1, 14 and 15) which all relate to treating fruit and vegetables to prevent penicillium growth solely by the application of H2PO3 ions at a temperature of between 30ºC and 60ºC.

The independent claims are as follows:

“1. Method for treating fruit or vegetables against penicillium comprising applying solely a treatment composition comprising a compound which allows the release of a phosphite ion H2PO3 at a temperature of between 30° and 60° C”

“14. Kit comprising:

a system comprising:

means for packaging the fruit or vegetables in a retention means,

means for forming a bath containing a treatment composition of a compound which allows the release of a phosphite ion H2PO3 at a temperature of between 30° and 60° according to any one of claims 1 to 7,

means for lowering and raising the retention means, and

a unit for controlling the lowering and raising means adapted, on the one hand for controlling the following steps:

lowering the retention means so the fruit or vegetables contained therein are completely immersed in the bath, and

raising the retention means so the fruit or vegetables are completely removed from the bath, and, on the other hand, for controlling, between these two steps, the following intermediate steps:

raising the retention means of the fruit or vegetables contained therein emerge at least in part from the bath, and

lowering the retention means so the fruit or vegetables contained therein are once again completely immersed on  [sic] the bath;”

“15. Kit comprising:

A system comprising:

a chamber comprising a band of lateral walls extending in a longitudinal direction, the band delimiting inside the chamber, a housing for receiving the fruit and vegetables to be treated, at least one of the lateral walls being deformable between a configuration for engagement and a configuration for release of a load arranged inside the housing,

a device for feeding treatment composition into the chamber and for removing treatment composition from the chamber,

means for heating the treatment composition, and

a system for deforming the deformable walls

and

  1. A treatment composition comprising a compound which allows the release of a phosphite ion H2PO3, said treatment composition having a temperature of between 30° and 60° according to any one of claims 1 to 7.”

The Evidence of the Parties

Pimi  Aggro Cleantech ltd submitted affidavits from their CEO Mr. Nimrod Ben Yehuda, Mr. Amnon Sivan and Dr. Yuval Binyamini, and an expert opinion from Dr. Nizan Nadav. The Applicant provided an expert opinion of Professor Ruth Ben Aryeh.

The grounds for the Opposition were lack of clarity of claim 1 and lack of novelty.

Lack of Clarity in Claim 1

The parties disagree regarding the interpretation of claim 1. The Applicant considers that the claim should be understood as relating to a method for treating fruit and vegetables against penicillin infestation with a treatment that only includes a formulation that releases phosphate ions in the specified range of temperatures.

In contradistinction, the Opposer considers that claim 1 should be understood as further comprising other active ingredients. However, the Opposer considers that even if one were to interpret the claim as the Applicant wishes, it is still lacking in novelty

The basis of the disagreement is the combination of the term ‘comprising’ together with ‘applied solely’. The term comprising is generally understood as broader than consisting and implies ‘consisting but not necessary limited to ingredients mentioned in the claim’. This was clarified by the former Commissioner in IL 194774 LANTMANNEN AS-FAKTOR AB

The term comprising is wider than consisting.

“A requirement that a claim “comprises” certain elements does not mean that other elements may not be present: “comprising” does not mean “only consisting of”.“ (Terrel on the Law of Patents, 17thed., pp. 288)”

In light of the above, the Opposer considers that claim 1 should be construed such that the word ‘comprising solely’ indicates that only the treatment composition is used, whereas the second comprising implies that the composition is not limited to a compound which allows the release of a phosphite ion H2PO3 but can include one or more additional ingredients that perform other functions in the stated temperature range.

The Opposer finds support for this construction in the specification, and refers to page 13 which combines calcium phosphite with imazalil which acts against penicillium in a different manner, and applies the two ingredients at 52ºC, and it appears from the table on that page, that the combination is rather better than calcium phosphite alone.

It is noted that the current phrasing of claim 1 was finalized after the opposition was submitted. The amendments accord with Sections 29, 65 and 66 of the Patent Law, 1967. Prior to the amendment, claim 1 included claims directed to combinations of the phosphite ion releasing agent with other fungicides (see claims 2-4, 14-16). The Deputy Commissioner Ms Jacqueline Bracha notes that while the specification does support combining the calcium phosphite ion releasing agent with other materials, it appears that the intention of the amendment was to limit the claim to the phosphite ion releasing agent. This was also how the Patent Office understood the amendment in their Office Action of 8 September 2013.

The Applicant notes that the Opposer did not claim anything regarding the clarity of claim 1 when the Application was amended, and argues that this estoppels the Opposer from raising the issue in Opposition proceeding.

Even if the Opposer did not raise the issue when the amendment was made, this does not prevent him from challenging the meaning of the claims or arguing that they are unclear. This claim was in the corrected Statement of Case whose purpose is to clarify the points of contention between the parties after the amendment and it is reasonable for the Opposer to raise issues after the amendment, caused by the amendment, that were not issues earlier.

It is noted that Regulation 102(vi) of the Patent Regulations (Patent Office Procedures, Procedures before the Court of the Patent Office, Submissions and Fees 1968 allows a hearing to be postponed by amending the specification and then continuing the hearing, assuming that the amendment is compatible with the Law. It is obvious that this state of affairs allows the Opposer or the Commissioner to consider the amendment within the main proceeding.

Additionally, there is no doubt that the Commissioner who is sitting in judgment on an Opposition has to ensure that an allowed patent will be as clear as possible, to avoid the relevant community being confused as to its scope and regarding the amount of protection it gives.

Currently the claim is self-contradictory in that it requires treatment solely by phosphate ion releasing agent but allows addition of other materials that are not detailed. To the extent that the applicant submits that the correct interpretation is treatment solely by phosphate ion releasing agent without additional agents, the Deputy Commissioner is willing to go with that interpretation, but should the Applicant prevail in the Opposition proceeding, the claim should be amended to remove the ambiguity and to clarity this point.

The discussion focuses on claim 1. However, claims 14 and 15 include the term ‘comprising’ but don’t include the term ‘solely’, and thus appear to allow the phosphite ion releasing agent to be combined with other ingredients. In light of this, the discussion will assume that claim 1 is limited to a formulation including the phosphite ion releasing agent only, whereas claims 14 and 15 relate to kits that include other active ingredients.

Lack of Novelty

Section 4 of the Law states that:

An invention is considered novel if it has not been made available to the public in Israel or abroad, prior to the Application date –

  • by a description in writing or by exhibition, or by an oral presentation or by another way, such that persons of the art can implement it based on the description.
  • By being applied or demonstrated such that persons of the art can implement based on this disclosure.

There is a general rule that a claim will be considered as lacking novelty if there is a single publication that reveals all its elements in a way that is enabling to a person of the art (see 345/87 Hughes Aircraft vs. State of Israel, 105 (2 July 1990). In this regard, it should be noted that a publication is not considered as novelty destroying unless each and every aspect of the invention is taught by the one publication:

The first general rule is that to prove a prior publication that is sufficient to be novelty destroying, one has to be able to point to a document that includes the entire invention and not create a mosaic of teachings taken from different publications to fabricate a collage that teaches the invention.

Also taught in Hughes:

It is not enough for there to be a general description that does not teach how to do the invention, and one cannot rely on signposts that lead towards the invention described in the patent.

The Opposer claims that claim 1 of the Application lacks novelty, whether understood broadly or narrowly. He claims that the lack of novelty is a result of publication of the invention in a number of ways, and each of the publications, when taken alone, are novelty cancelling:

  • The label on the PH nidation equipment
  • Publication by way of demonstration of the PH nidation equipment
  • A publication in writing Y. Gutter, Supplementary Antimold Activity of Phosethyl AL, A New Brown Rot Fungicide for Citrus Fruits, Phytopath. Z., 107 301-308 (1982)
  • Publication of the invention in the PHG and Gutter publications.

The elements of Claim 1

Claim 1 includes the following elements:

  • Treatment of citrus fruits or vegetables
  • Against penicillium
  • Solely by a formulation that allows release of phosphite ions
  • In the temperature range of 30º to 60º.

The Statements of Case and the summations show that the parties concur that these are the elements, apart from the disagreement concerning the scope of (c), related to above.

Lack of Novelty Due to Use of the PH Nidation Equipment

The PH Canon is a machine that is intended to treat the fungus that causes heat rotting of citrus fruits. There is no disagreement that this machine was known before the filing date of the patent application; that the formulation releases phosphite, and that it is used in a hot water bath. The Opposer alleges that this alone negates the novelty of claim 1 under Section 4(2) of the Law.

Under cross-examination, Professor Ben-Aryeh agreed with the Opposer that even prior to the patent application being filed, persons of the art were using the machine. Professor Ben-Aryeh agrees that this usage includes all the elements of claim 1, however notes the caveat that the usage was against heat rot and not against penicillium. (protocol 3.8 page 8 lines 36-39).

Since one of the elements of claim 1 is that the treatment is against penicillium, and the previous usage was against another problem, this publication is not enough to anticipate the invention.

Cancelling novelty due to the label on the PH Nidation Equipment.

The packaging of the PH nidation equipment includes a label which provides instructions and a description of the purpose. Examination of the label from 2006, which is relevant to the priority date (see the appendix to Nimrod Ben Yehuda’s statement), shows that this includes an instruction that the equipment is intended for use against heat rot, and that it should be used in a hot water bath. It describes combining the phosphite with imazalil. Furthermore, this label notes that ‘the formulation does not prevent infection by rotting fungus and so should be combined with an appropriate formulation” and later on relates to combination with imazalil.

In light of the warning regarding heat rot and that for treatment of fungal rot it should be combined with some other ingredient, it cannot be considered as anticipating treatment of penicillium as claimed in claim 1.

The Report of the Committee for Marketing Citrus Fruits

In the Committee Report which is Appendix 31 of Ben Yehuda’s affidavit, experiments using the PH nidation equipment together with other materials for preventing post-harvest rotting of citrus fruit are described. The researchers conclude that the PH Nidation equipment acts in synergy with an aqueous imazalil solution to reduce penicillium. Thus there is nothing in this document that anticipates treatment by the phosphite ion releasing agents alone. 

The Gutter Publication

The Gutter publication deals with treatment of citrus fruits against heat rot by use of Phosethyl Al which is known to release phosphite ions at 36ºC. In the conclusion section of this paper, Gutter notes that use of Phosethyl Al can hinder the development of penicillium (green rot). However, the same paragraph later states that this material can be used against heat rot without causing an increase in penicillium.

The Applicant argues that this publication does not anticipate the invention. The Applicant argues that the publication deals with use of Phosethyl Al only as a pesticide against heat rot, whereas its effect against penicillium is only to prevent its spreading, rather than to remove it. The Applicant does not deny that the publication includes all the elements of the invention, only that the purpose of the formulation and treatment is different than that claimed, and it is thus not novelty destroying.

In the abstract at the beginning of Gutter’s paper the following is stated:

“…In vitro and in vivo experiments have shown that phosethyl Al is capable – although to lesser extent than SOPP and TBZ – of inhibiting growth of P. digitatum and reducing the incidence of decay of citrus fruits, caused by a wild-type, and apparently also by a benzimidazole-resistant strain of this fungus.”

The parties concur that Phosethyl Al allows release of the phosphite ions. So it is clear that the paper teaches (a) treatment of citrus fruit (b) against penicillium (Penicillium digitatum) and (c) that the formulation releases phosphite ions.

In some of the experiments conducted by Gutter and described in his paper, (tests IV and V) the fruit is dipped at 36ºC, which is in the range claimed in claim 1. So this element is also found in the paper.

It is also clear that Gutter examined the efficacy of Phosethyl Al against other formulations such as SOPP and TBZ as restricting the development of penicillium in oranges. The researcher concludes that Phosethyl Al without additional ingredients has an efficacy for preventing penicillium development in oranges. So it appears that all the elements of claim 1 are described in Gutter’s publication.

Certainty

Professor Ben-Aryeh acknowledged that the Gutter publication teaches the claimed invention to persons of the art. However, he considers that since Gutter does not come to the clear understanding that the formulation can treat penicillium, it is not novelty destroying.

  1. Amended Claim 1 of the Application is before me, and assuming that it does relate to the formulation without additional active ingredients, can you point out what is claimed that is NOT taught by Gutter?
  2. Gutter does what is written here.
  3. But he does not unambiguously conclude that this treatment may adequately prevent penicillium infection.
  4. Agree with me that the wording of claim 1 is what he does, and he does that which is written in the Application in claim 1 thereof.
  5. He does.
  6. Thanks, and he published?
  7. He published.

Protocol 3.8 pages 45-26 lines 8-35.

The Patent Application describes experiments that the Applicant conducted to show efficacy of the treatment of penicillium in oranges that were not affected, in oranges that were affected. The Applicant’s expert witness argues that Gutter did not show sufficient efficacy of Phosethyl Al in infected oranges. This argument makes it worth looking at the results obtained by the Applicant himself and reported in the Application. In the table on page 13, it is stated that using phosphoric acid alone on infected fruit at 52ºC gave a yield of 42.5% of rotten fruit. The Applicant further claims that the combination of imazalil and phosphoric acid has a symbiotic affect:

“As is evident from the table above, the rate of decay was halved when each product was applied individually (42.5% in contrast to 85%), whereas the rate of decay was 8.5 times lower with a combination of the two products.

These results clearly show the synergistic effect of the combinations according to the invention.”

When Mr. Ben Yehuda was asked what the infection rate should be for a person of the art to consider a treatment successful, he responded:

Deputy Commissioner: What bothers me, and the previous expert asked a similar question, I understand that if one applied phosphite ions at 52ºC then 42.5% which is currently infected will rot, correct? This is a high percentage?

Witness Mr. Ben-Yehuda: It is insane.

Deputy Commissioner: What is the percentage that I should strive for with a treatment that is considered effective? What is the approach of the market, it is clear to me from the previous witness that to dream of 100% remaining fit for sale is an unreasonable expectation, so what should be striven for? 90%?

Witness Mr. Ben-Yehuda: 10% rotten, how was it achieved? phosphite ions and imazalil.

Deputy Commissioner: I understand how that was attained, but you state that 42.5% is not something to be aspired to, and is not a good result.

Witness Mr. Ben-Yehuda: No industry can absorb losses of that magnitude.

From this one can understand that an effective treatment is one that significantly reduces the percentage of fruit that is infected.

One cannot accept the Applicant’s claim that Gutter does not show certainty of the treatment when the Application itself only demonstrates very partial success. Furthermore, the success of penicillium treatment is not actually part of claim 1 as Deputy Commissioner clarifies below:

A further claim that the Applicant raised in the summation, is that while the invention deals with a treatment against penicillium, the Gutter publication deals with a “material that does not accelerate penicillium development”. This claim is only raised in the summation and does not find any support in the Applicant’s evidence. As is clear from Professor Ben-Aryeh’s cross-examination, it does not distinguish between materials that do not accelerate development, and those that actively combat the fungus.

Beyond that which is necessary, the Deputy Commissioner notes that we appear to be talking about synonyms, since fungicides both prevent infection and treat existing infection. To the extent that the Applicant’s claims are that Gutter’s publication does not detail the success of removing penicillium but merely of preventing its spreading, and so one cannot rely on this publication as anticipating the application, one has to reject the argument. The Application describes experiments where 42.5% of the oranges rotted, so it is clear that the Application is only partially effective at treating penicillium with phosphoric acid.

Furthermore, the Deputy Commissioner notes that Claim 1 does not use the term fungicide or preventing the spread, but simply refers to treating, which does not imply a 100% success in killing off the penicillium. In this context she notes that to consider novelty, one can use the ‘infringement test’ wherein one considers whether the publication would be considered as infringing the patent if it were to issue. The answer to this question is positive, and this implies that the claimed invention is not novel. This test does not require usage of the same terminology in the publication and the patent application. It is sufficient that doing that stated in the publication would necessarily infringe the patent to render the patent lacking novelty:

“When the prior inventor’s publication and the patentee’s claim have respectively been construed by the court in the light of all properly admissible evidence as to technical matters, the meaning of the words and expressions used in the art and so forth, the question whether the patentee’s claim is new for the purpose of section 32(1)(e) falls to be decided as a question of fact. If the prior inventor’s publication contains a clear description of, or clear instructions to do or make, something that would infringe the patentee’s claim if carried out after the grant of the patent, the patentee’s claim will have been shown lack of novelty, that is to say, it will have been anticipated.”  (Terrel p. 118)

See also that stated in the Opposition to IL 179995 Camtek vs. Orbotech ltd, paragraph 56, 20 July 2014.

I accept the Opposer’s claim that the semantic differences between the patent and the invention are not differences relevant to Novelty and Inventive Step. In other words, if the same inventive concept is described in different words in a prior publication, the difference in wording is not sufficient…

Applying this test in the current case by following word for word what Gutter describes in his publication necessarily infringes claim 1 of the patent application, which supports the finding that the claimed invention is not novel.

Finally, the Deputy Commissioner relates to the Applicant’s claims that since prior to filing the Application, penicillium infection was not treated solely by phosphoric acid and heat, the prior art publications cannot anticipate claim 1.  She disagrees with the client’s claim. The novelty requirement in claim 4 of the Law does include a requirement to use the prior art for anticipation purposes. It is enough for them to be publically available. In this regard, that which Terrel states is very relevant:

“It has sometimes been said that if prior disclosure is contained only in a document and there is no evidence that such disclosure has given rise to any practical result, this is “mere paper anticipation” and must be appraised in some specially strict manner. It is difficult to understand the relevance of this observation. If the document in fact discloses the invention and is to be found in a place (e.g. a public library) to which the public have access, it is wholly immaterial that in fact no one had ever read it.” (TERREL, ON THE LAW OF PATENTS, 123-124 (1994))

As stated above, independent claims 14 and 15 deal with kits that include formulations that I addition to phosphite ion releasing ingredients, further comprise additional ingredients. So, since claim 1 lacks novelty, claims 14 and 15 clearly do as well. To remove any doubt, all the references brought by the Opposer, individually anticipate claims 14 and 15.

Inventive Step

Having found the claims lacking novelty, it is superfluous to consider whether they are inventive. Nevertheless, the Deputy Commissioner notes that she considers the claims as lacking inventive step.

Unlike Novelty, which was discussed above, in re Hughes it was stated that inventive step is considered in light of different prior art publications that can fairly be cobbled together to obtain a general picture of that known in the relevant field.

A basic general rule concerning obviousness is that the complete professional knowledge in the field is considered, and that it is acceptable to discount inventiveness on the basis of several prior art publications taken together to give a general picture. (See 314/77 [1] above, on page 209. However, one must always consider that the combining has to be obvious to persons of the art at the relevant time and if the combination is inventive; if an inventive step is required to couple the teachings together; particularly in cases where crumbs of knowledge are gathered from different places – the general picture is not self-evident and one cannot say that the patented evidence is lacking in inventive step.

Thus for an invention to be considered inventive, one has to consider the prior art taken together and whether the combination of the prior art is inventive or self-evident to persons of the art. (See Appeal 47/87 Hasam Defence and Reliability Systems ltd. vs. Abraham Bahri, p.d. 45(5) 194, and whether a person of the art would be motivated to combine the different teachings – See Opposition to IL 138347 Sarin Technologies led. Vs. Ugi Technologies ltd, 14 January 2008.

In this instance, the parties agree that at the relevant time, persons of the art used phosphoric acid and heat to treat against head rot. Nevertheless, Applicant contends that those same persons of the art would NOT have considered it obvious to try this treatment against penicillium due the significant differences.

However, as is apparent from the citations, the difference in organisms would not have prevented persons of the art from trying the heat rot treatment against penicillium. The parties disagree regarding the conclusions that can be drawn from the experiments, but the fact that the parties attempted the treatment against penicillium indicates that it was a fitting research possibility to explore.

Knowledge in the Field

Once can summarize the evidence of the parties as showing that at the relevant date it was known that putting the active ingredients in a warm water bath increased their efficacy. (see Professor Ben-Arieh’s statement on page 33 lines 4-8 of the protocol). The regular fungicides had caused a resistance to such materials, and imazalil, which was the most effective agent, was considered as carcinogenic and so alternative agents were sought; phosphoric acid was considered as having some efficacy against penicillium. The Deputy Commissioner considers that the combination of these facts would lead persons of the art to attempt the claimed invention, and, as shown in Gutter, this in fact happened.

Publications that Teach Away

The Applicant also argued that at the relevant date, there were a number of publications that taught away from the invention.

For example, G. Eldon Brown, Evaluation of Iprodion and Fosethyl-Al and Other Fungicides for Postharvest Citrus Decay Control, 1992 describes a number of experiments that were made to compare different fungicides. The results in tables 2 and 5 show that imazalil is the most effective treatment against penicillium. The author concludes that “green mold in degreened (Table 2) and non-degreened (Table 5) Valencia oranges was not controlled by Phosethyl -Al “

The main tables that summarize Brown’s experimental results show the following:

Imazalil leaves 3.8% of the fruit rotten. A 4000 concentration of Phosephyl–A1 was shown to leave 8.3% of rotten fruit. At an 8000 concentration, 15.2% of the fruit was rotten, whereas a control group had 14.3% rotten fruit.

The Deputy Commissioner is doubtful whether these results would cause persons of the art to stop researching Phosephyl–A1. Although imazalil is more effective, Phosephyl–A1 does seem to have an effect compared to the results of the control group. The Deputy Commissioner notes that Mr. Nimrod Ben Yehuda considered that Brown’s research did NOT show a clear preference for imazalil, but Brown himself considered that imazalil was preferable. That as may be, Mr. Ben-Yehuda is not an expert in this field, and his testimony can only be considered as interpretation.

Brown’s results are actually better than Applicant’s since the Applicant obtained better results with a combination of imazalil and Phosephyl–A1 than with the phosphite releasing agent alone. One could argue that persons of the art reading the application would conclude that it does not support using a phosphite releasing agent alone for treating penicillium. This conclusion is not surprising, since the original claims related to a combination of the phosphite releasing agent together with imazalil. Consequently, one cannot accept the claim that Brown’s research teaches away from the invention, since the Applicant himself did not show better results.

A further publication considered as teaching away is US 6,797,301 from 2004. The Applicant considers that this publication teaches away from the invention since it teaches that Phosephyl–A1 is not effective against penicillium at room temperature, even if imazalil is added.

As Professor Ben-Yehuda noted in his opinion, this paper related to various fungicides and to treatment of fungi based on an understanding that each operated in a different manner, and with an attempt to widen their efficacy range. In his counter-statement in response, Mr. Ben-Yehuda claimed that the experimental results show that the addition of the Phosephyl–A1 made the difference. It is thus difficult to accept that this publication would distance persons of the art from the invention. Reviewing the results shows that most of the experimentation took place at room temperature and not at elevated temperatures which is generally accepted as improving the efficacy of the treatment. The efficacy of Phosephyl–A1 alone was not tested. The results for Phosephyl–A1 together with fenamidone at room temperature are not far from the Applicant’s results using the PK nidation equipment at elevated temperatures. From here it is not reasonable to conclude that persons of the art would conclude that using a phosphite ion releasing agent alone would not be effective against penicillium.

A further publication that the Applicant refers to is US 5,998,910 from 1999 (Appendix 3 of Ben-Yehuda’s Affidavit). which the Opposer also cited. In this publication it is stated that using phosphite ions creates more pathogens than the fungus. As the Opposer notes, this publication deals with treating the fruit prior to harvesting and so will not be done in an elevated temperature surroundings. Furthermore, of five samples brought in the publication, only one relates to penicillium treatment. For these reasons, this publication cannot be considered as teaching away.

Applicant also relates to J.M. Gaulliard et R. Pelossier “Efficacite de Phosethyl Al en trempage des agrumes (fruits) contre Phytophora parasitica agent de la pourriture brune et contre Penicilium digitatum.” Fruits, 1983, vol. 38, No 10, p. 693-697(Appendix 42 of Ben-Yehuda’s affidavit which claims that use of Phosethyl –Al against penicillium is secondary. The publication shows that the researchers tested Phosethyl –Al against both heat rot and penicillium. The main use was indeed against heat rot, but it was also tested against penicillium and the researchers concluded that it had a prophylactic effect against penicillium rather than an effectiveness against an established infestation. The Deputy Commissioner does not find this publication teaches against use of the material since the results are similar to those obtained by Gutter with the PH nidation equipment.

In this context it is difficult to accept the Applicant’s allegation that these teach away since they were published over a 20 year period, in 1983, 1992, 1999 and 2004, and this shows that despite the ‘adverse publications’, persons of the art continued to consider this research path. After the Opposer has shown that this material has been considered for 30 years and the Applicant has not shown a different trend, one cannot accept that the publications teach away from the invention.

 Supplementary Tests for Inventiveness

Although unnecessary, the Deputy Commissioner has considered Applicant’s claims that the invention is inventive due to the ‘long-felt need’ secondary consideration. The Applicant is correct that there is a long-felt need to find non-carcinogenic fungicides, and the prior art supports this, and they date back to the 1980s and on to the 21st century. All the publications describe researchers’ attempts to treat penicillium solely by phosphite releasing agents, but only with partial success.

The “solution” that the Applicant suggests is to use the PH nidation equipment against penicillium, and the label on the equipment advises using it together with imazalil, which was the recommended treatment up until the relevant date. In these circumstances, the Deputy Commissioner cannot accept that their invention was the response to a long-felt need.

In their summary, the Applicants claimed that they had submitted evidence that showed that their solution was commercially successful, and supported this was an Affidavit of their CEO that was submitted during the Examination of the corresponding application in the US and appended to the current proceedings at the request of the Opposer. Since this was not submitted in the evidence stage and the CEO was not cross-examined on the Affidavit, it has little evidentiary weight. That as may be, Mr. Ben-Yehuda testified before the Deputy Commissioner that rotting to the extent described in the Application is not commercially acceptable, and the Deputy Commissioner finds this convincing.

A final attempt to show inventiveness is that the persons of the art responded favorably to the invention. No evidence of this was submitted beyond a statement of Professor Ben Aryeh to the effect that he was not thinking of the invention itself. See cancellation proceedings against IL 155671 to Rontal Engineering Applications 2001 ltd vs. Dr. Elad Barkan, paragraph 122, 23 August 2017. This statement is insufficient to conclude that persons of the art considered the invention revolutionary.

Conclusion

In light of the above, the Opposition is accepted and XEDA International will cover Pimi Aggro Cleantech’s costs of 15000 Shekels and legal fees of 150,000 Shekels + VAT. These costs are based on the complexity, amount of evidence and arguments, number of days of hearing and the complexity of the summations. Payment is due within 30 days.

Ruling by Deputy Commissioner Ms Jacqueline Bracha re Opposition to IL 187923 to XEDA International, 26 June 2018    

 


Is Screening a Football Match on Public Television at a Restaurant, Copyright Infringement?

August 22, 2018

burgerim 2

Burgerim is a chain of burger shops. Back in 2013, a Burgerim branch in Givatayim screened a football match that was part of the Euro-league on a regular television set that was connected to their Cable TV supplier HOT, and was sued for copyright infringement by Charlton who owns the transmission rights. Charlton claimed that the screening was a public performance, whereas the restaurant claimed that they simply switched on the television. Judge Ronen Ilan of the Tel-Aviv Jaffa Magistrate’s Court ruled that even if the match is copyright protected, allowing customers to watch a publicly-broadcast match is not a performance of the copyright-protected work, and ruled costs of 12000 Shekels against the plaintiff.

This is a summary of his arguments:

Is switching on a television receiver in a work-place, whilst a TV game is broadcast on a public channel, considered copyright infringement?

Apart from screening the match on a television set, without any additional equipment such as an amplifier, for example, the defendant did not do any action whatsoever. In these circumstances, one cannot accept the plaintiff’s claim of copyright infringement for two reasons:

Firstly, in these circumstances, where the game is screened on a television set, there is no ‘performance’ of the transmitted creation due to the minor involvement of the one setting up the TV and the received in passing on the transmission, the involvement being limited to setting up the TV receiver. Thus specifically, due to the change in legislation due to the introduction of the Israel Copyright Law 2007, which differentiates between “public performance” and transmission. Due to all these reasons, activating the television in order to watch the transmitted program is not a “performance” of the creation.

Secondly, even where one to accept the claim that screening a transmitted creation is a “performance” of the creation, one still could not see a copyright infringement in this instance, since we are dealing with a transmission of something on a public channel. The plaintiff did not show that the Law prohibits screening a public broadcast to the public. Activating the television receiver to the public so that they can watch the game that is being broadcast on a public channel is not copyright infringement of a transmitted creation.

Furthermore, even if we were to accept the plaintiff’s claim that their creation was infringed; in the specific circumstances of this instance, where we are dealing with the screening of something on a public channel, where there was no advanced warning of any possible copyright infringement, but against this there is an attempt to prevent screening of sports programs which may be damaging to the defendant, the defendant is entitled to the claim of innocent infringement.

Civil Ruling 271019-09-15 Charlton vs. Bowling World, Ruling by Judge Ronen Ilan, 6 August 2018

COMMENT

Israel has public television channels that can be received on a television set equipped with an aerial. In the past, one required a license, but even this formality is no longer the case with the disbanding of the former television authority and the establishment of the new one.  Charlton holds the broadcasting rights for the Euroleague. The sports channel is a component of basic packages of “HOT” – the cable TV company, “YES” – the satellite TV company, and IDAN+ – the digital over-the-air option that gives you a small number of basic channels. All these are subscription services. No-one has a basic human right to access the sports channel but can purchase a subscription from a service provider.

Now there are sectors of the population, particularly the ultra-Orthodox, that do not have television. I know a number of people who are by no means ultra-Orthodox, but nevertheless have forgone having television, as they see it is a waste of time, and something that prevents their children from developing useful reading skills and the like.  I also know many families that make do with the public stations and do not receive the sports channel. When there is a major sporting event such as the World Cup (Mondial), some of these people, including ultra-Orthodox youth, returnees to the faith, and others, go to pubs, pizza parlors and burger outlets to watch the match.  There are also others that have access at home, but go as a group to such a place to cheer on their team.

Givatayim backs onto the ultra-Orthodox neighborhood of Bnei Brak where owning a television set is frowned upon. I suspect that this is why the Givatayim Burgerim branch chose to screen the football.

In Appeal 6407/01 Tele-Event vs. Golden Lines, 7 July 2002, the Supreme Court recognized that sports matches, though not scripted (at least not officially and legally scripted) were, nevertheless, entitled to copyright protection.  This meant that the licensee with distribution rights in Israel could prevent the cable and satellite networks from transmitting broadcasts on foreign channels as part of their bundle.

Now when a match is screened by a food-outlet for their customers, it is part of the entertainment package. For similar reasons, for it to be improper for a hotel to connect TV receivers in every room to a single subscription but rather to require the hotel to obtain a commercial package, it makes perfect sense to prevent restaurants from screening matches without obtaining a special package to do so.

There is certainly a concept of de minimis fair use in copyright, and when a child of mine invites neighbors over to watch a match (or preferably goes to them), that is not copyright infringement, but a restaurant essentially rents chairs and tables. If it uses such screenings to attract punters, there is a good argument that they should pay to do so.  It will be interesting to see if Charlton appeals this ruling, and whether it is reversed.

 

 


OurCrowd at 5 Years: $750 Million Raised, 160 Companies & 21 Exits

August 16, 2018
OurCrowd, a leading global investment crowdfunding platform, has shared an infographic highlighting the past five years of operation. OurCrowd is unique in the fact that every single offering listed on the site receives backing from the platform – thus interests are aligned as OurCrowd has skin in the game. This is a best in class practice as early stage investing is a risky endeavor and you know OurCrowd is dedicated to the success of the issuer. And where else can a smaller investor participate in a funding round alongside some of the biggest VCs and private investors in the world?

According to OurCrowd’s numbers:

  • OurCrowd has raised over $750 million and invested in 160 portfolio companies and funds
  • During the past five years they have racked up 21 different exits
  • Today, they offer 12 different funds to enable ease of diversification
  • Over 25,000 accredited investors participate on the site from 120 different countries
  • In 2017 50% + of capital raised came from Asia
  • They currently have 10 different global offices and 150 + employees

OurCrowd is on track to top $1 billion in crowdfunding this year making it the largest investment crowdfunding platform in the world. This growth is being fueled, in part, to interest from institutional investors. OurCrowd has partnered with a good number of family offices, banks, corporates and more.

Our-Crowd-at-5-years-2018-600x1705


Appeal to Supreme Court, Should a Judge who points out the Weakness of a Case at Pretrial, Recuse Herself for Having Preconceptions?

August 15, 2018

justiceYehoshua Fishler is suing G.A. Ehrlich LTD (Ehrlich & Fenster) in the Tel Aviv – Jaffa District Court.

He requested that Judge M Amit Anisman withdraw from the case.

The case concerns allegations and counter allegations of breach of contract concerning G.A. Ehrlich (1995) Ltd obligating themselves to register Fishler’s patent in various jurisdictions. In his Statement of Case, the complainant alleges that the defendant did not timely pay issue fees and as a result the case was not registered.

In a pre-trial hearing held on 7 February 2018, the parties stated their cases and Judge M Amit Anisman asked various questions and then ruled that “after the court explained to the complainant the likelihood and risks of the case and the difficulty in managing it, the complainant will have 14 days to reconsider the case and if they decide to continue, the defendant will be allowed to request that the complainant deposit a bond to cover defendant’s costs should the defendant prevail.”  

Fischler informed the court that he intended continuing with the case and so J A Ehrlich (1995) Ltd (henceforth Ehrlich) requested that Fischler be obliged to deposit a bond to cover costs should he lose. The court acquiesced to this request, ruling that such a bond was appropriate in this instance, inter alia because of the chances of the complainant prevailing. Regarding this, the Judge stated that “I am doubtful if the case can be considered as ‘a complete waste of time’. Nevertheless, one cannot be blind to the chances of the complainant prevailing that were shown by the defendant (requesting the bond) in light of the fact that the plaintiff is not relying on a point of law that obliges the agent acting as a service provider, to pay fees on behalf of the client.” Following this, Fischler appealed to the Supreme Court to have the Judge removed from hearing the case due to having adverse preconceptions as evidenced from the decisions of 7 February 2018 and 23 May 2018.

On 18 July 2018, the Judge presiding over the Court of First Instance refused the request for her to recuse herself. The Court argued that their referring the complainant’s attention to issues that adversely affected their chances of prevailing, does not provide grounds to a real claim that the court had interests or that the Judge should recuse herself. The Court had not reached a conclusion regarding the substance of the case, and the statements have to be understood in the context of the early stage then reached. The complainant’s allegation that the court invited the defendant to request that the complainant post a bond is incompatible with the sequence of events, since the defendant made it clear at the pre-trial hearing, that they intended making such a request. The Court emphasized that the fact that the defendant was given an opportunity to request the deposition of a bond does not indicate that the Court has reached any conclusion regarding the outcome of the trial, nor does it imply an assessment of the complainant or a ‘threat’ in any shape or form.  This is true regarding the 23 May 2018 ruling. The Court explained that requiring the complainant to post a bond does not imply that the Court had closed its mind. The additional claims of the complainant were a kind of appeal, and were improper in a request for a Judge to recuse herself.

This resulted in an Appeal to the Supreme Court, which was heard by Chief Judge Hayot. In a hearing before Judge Hayot, the complainant reiterated his allegations that the pre-trial hearings demonstrated that the Judge had already made up her mind. He reiterated his statement that the Court had invited the defendant to request a bond be set and that this was an “implied threat”. Fischler claimed that the decision to require a bond itself testified to the Court of First Instance having already made up its mind.

After considering the Statement of Appeal and its appendices, Judge Hayot ruled that it should be rejected. The protocol of the pre-trial hearing has nothing that provides a real indication that the Judge had a conflict or had made up his mind, and this is true of the interim ruling regarding deposition of a bond. The District Court did not ‘invite’ the defendant to request that a bond be placed. The defendant themselves announced that they would make such a request. Similarly, and without going into the issues themselves, the mere fact that the Court indicated problems with the charges brought is not a reason for the Court to disbar itself. The contrary is true. An effective management of the case is likely to result in the presiding Judge expressing an opinion – tentatively and with care – regarding the contended issues, and there is no reason for the Court to refrain from pointing out the weaknesses in the case of one of the parties, and even to suggest that a plaintiff consider withdrawing the case (Appeal 8893/17 Nasrallah vs. Aladin, paragraph 5 (22 November 2017).

Chief Judge Hayot considers that the Court has acted in an analogous manner in the current case by allowing the defendant to require that the complainant posts a bond should they decide to continue with the case. Finally, after reviewing the plaintiff’s allegations regarding the posting of the bond, it appears that they relate to the matters under dispute and it is not superfluous to note that when considering whether or not it is appropriate to require a party to post a bond, the Court should consider the likelihood of the parties prevailing. Consequently, requests for a Judge to recuse herself and appeals regarding these decisions are not the correct forums to raise these issues, and the correct way to appeal is via a formal appeal (see Appeal 2004/18 Plonit vs. Plonit, paragraph 4 (18 July 2018).

The Appeal is rejected. Since no response was required, no cost ruling is made.

Interim Ruling on Appeal by Judge Hayot in Appeal 5685/18 Fischler vs. G.A. Ehrlich (1995) ltd, 12 August 2018. 

COMMENT

Whether or not a Judge has preconceptions, unsuccessfully requesting her to recuse herself and then unsuccessfully appealing to the Supreme Court that the Judge be considered unfit to hear the case is unlikely to enamor the plaintiff with the Judge in question.

Israel Magistrate Court Rules that Screening a Football Match on Public Television at a Restaurant, not Copyright Infringement

Burgerim is a chain of burger shops. Back in 2013, a Burgerim branch in Givatayim screened a football match that was part of the Euro-league on a regular television set that was connected to their Cable TV supplier HOT, and was sued for copyright infringement by Charlton who owns the transmission rights. Charlton claimed that the screening was a public performance, whereas the restaurant claimed that they simply switched on the television. Judge Ronen Ilan of the Tel-Aviv Jaffa Magistrate’s Court ruled that even if the match is copyright protected, allowing customers to watch a publicly broadcast match is not a performance of the copyright protected work, and ruled costs of 12000 Shekels against the plaintiff.

This is a summary of his arguments:

Is switching on a television receiver in a work-place, whilst a TV game is broadcast on a public channel, considered copyright infringement?

Apart from screening the match on a television set, without any additional equipment such as an amplifier, for example, the defendant did not do any action whatsoever. In these circumstances, one cannot accept the plaintiff’s claim of copyright infringement for two reasons:

Firstly, in these circumstances, where the game is screened on a television set, there is no ‘performance’ of the transmitted creation due to the minor involvement of the one setting up the TV and the received in passing on the transmission, the involvement being limited to setting up the TV receiver. Thus specifically, due to the change in legislation due to the introduction of the Israel Copyright Law 2007, which differentiates between “public performance” and transmission. Due to all these reasons, activating the television in order to watch the transmitted program is not a “performance” of the creation.

Secondly, even were one to accept the claim that screening a transmitted creation is a “performance” of the creation, one still could not see a copyright infringement in this instance, since we are dealing with a transmission of something on a public channel. The plaintiff did not show that the Law prohibits screening a public broadcast to the public. Activating the television receiver to the public so that they can watch the game that is being broadcast on a public channel is not copyright infringement of a transmitted creation.

Furthermore, even if we were to accept the plaintiff’s claim that their creation was infringed; in the specific circumstances of this instance, where we are dealing with the screening of something on a public channel, where there was no advanced warning of any possible copyright infringement, but against this there is an attempt to prevent screening of sports programs which may be damaging to the defendant, the defendant is entitled to the claim of innocent infringement.

Civil Ruling 271019-09-15 Charlton vs. Bowling World, Ruling by Judge Ronen Ilan, 6 August 2018

COMMENT

Israel has public television channels that can be received on a television set equipped with an aerial. In the past, one required a license, but even this formality is no longer the case with the disbanding of the former television authority and the establishment of the new one.  Charlton holds the broadcasting rights for the Euroleague. The sports channel is a component of basic packages of “HOT” – the cable TV company, “YES” – the satellite TV company, and IDAN+ – the digital over-the-air option that gives you a small number of basic channels. All these are subscription services. No-one has a basic human right to access the sports channel but can purchase a subscription from a service provider.

There are sectors of the population, particularly the ultra-Orthodox, that do not have television. I know a number of people who are by no means ultra-Orthodox, but nevertheless, have forgone having television, as they see it is a waste of time, and something that prevents their children from developing useful reading skills and the like.  I also know many families that make do with the public stations and do not receive the sports channel. When there is a major sporting event such as the World Cup (Mondial), some of these people, including ultra-Orthodox youth, returnees to the faith, and others, go to pubs, pizza parlors and burger outlets to watch the match.  There are also others that have access at home, but go as a group to such a place to cheer on their team.

Givatayim backs onto the ultra-Orthodox neighborhood of Bnei Brak where owning a television set is frowned upon. I suspect that this is why the Givatayim Burgerim branch chose to screen the football.

In Appeal 6407/01 Tele-Event vs. Golden Lines, 7 July 2002, the Supreme Court recognized that sports matches, though not scripted (at least not officially and legally scripted) were, nevertheless, entitled to copyright protection.  This meant that the licensee with distribution rights in Israel could prevent the cable and satellite networks from transmitting broadcasts on foreign channels as part of their bundle.

When a match is screened by a food-outlet for their customers, it is part of the entertainment package. For similar reasons for it to be improper for a hotel to connect TV receivers in every room to a single subscription, but rather to require the hotel to obtain a commercial package, it makes perfect sense to prevent restaurants from screening matches without obtaining a special package to do so.

There is certainly a concept of de minimis fair use in copyright, and when a child of mine invites neighbors over to watch a match (or preferably goes to them), that is not copyright infringement, but a restaurant essentially rents chairs and tables. If it uses such screenings to attract punters, there is a good argument that they should pay to do so.  It will be interesting to see if Charlton appeals this ruling, and whether it is reversed.


Fischler vs. Ehrlich – Should the Judge Recuse Herself for Expressing a Negative Opinion on Plaintiff’s Likelihood of Prevailing in Pre-trial Hearing?

August 15, 2018

This is an interim ruling concerning a financial dispute between Joshua Fischler and G.A. Ehrlich (1995) ltd. In response to a preliminary assessment that the case was weak, and plaintiff (Fischler) should post a bond to cover Ehrlich’s costs, should he lose,  In this instance, Joshua Fischler, Complainant in the case, has requested that Judge Michal Amit Anisman rules herself unable to hear the case due to preconceptions and that she should transfer the case to a colleague.

The bond decision is given here.

The judge’s ruling about reclusing herself follows.

Joshua Fischler has sued G.A. Ehrlich (1995) ltd (Ehrlich & Fenster Patent Attorneys) for failing to pay the issue fee of an Australian Patent, thereby allegedly causing them damage of 21,000,000 Shekels. For the sake of the court fee, Fischler sued for 5,000,000 Shekels.

In a pre-trial hearing, the presiding judge, Michal Amit Amisman, indicated that in her opinion, it would be very difficult for the plaintiff to prove his case. It was also decided that the plaintiff would have to post a bond to cover costs to defendant in case he lost.

The plaintiff has now requested that the judge disqualify herself from hearing the case due to having made up her mind in advance. He also alleged that the judge had suggested that a bond would be appropriate which the Judge denies, claiming that the defendant raised the issue of the bond.

The factual background

On 6 July 2017, Joshua Fischler sued G.A. Ehrlich (1995) ltd (Ehrlich & Fenster, henceforth Ehrlich) alleging breach of contract, for not registering his patents in various jurisdictions and thereby causing Fischler damage that he should be compensated for. Specifically, Fischler claims that Ehrlich did not pay the issue fees for a patent that subsequently lapsed.

On 1 November 2017, Ehrlich responded by denying Fischler’s allegations and alleging that Fischler was himself in breach of contract for failing to pay Ehrlich’s fees. Ehrlich claimed that Fischler had failed to pay the fee despite being warned of the consequences, and so could not come along with claims against Ehrlich.

On 7 February 2018, there was a preliminary pre-trial hearing, where the parties stated their cases. During that hearing, Ehrlich’s attorneys stated that they intended to request that the plaintiff deposit a bond (see page 6 lines 14-16 of the protocol).  After the parties stated their allegations, and after the court raised issues regarding the parties’ allegations, in a preliminary ruling, the court stated that “After the court explained the chances and risks in prosecuting the case and the problems anticipated in managing it, the court gave the plaintiff 14 days to consider and decide on whether to continue. Should the plaintiff decide to continue, the defendant would be entitled to request that a bond be posted”.

On 22 February 2018, the Plaintiff stated that they intended to continue with the proceeding. Consequently, on 22 February 2018, Judge Amit Amisman ruled that the defendant could request that Plaintiff posts a bond, and can make this request within 30 days.

On 21 March 2018, the Defendant requested that the judge oblige the plaintiff to post a bond. After reviewing the case and hearing from both parties, on 23 May 2018, the judge ruled that a bond of 50,000 NIS should be posted by the plaintiff to guarantee the defendant’s expenses should the defendant prevail. In her ruling, the judge stated that the claims could not be considered as totally groundless, but one could not, nevertheless, ignore the real problems that the defendant’s counsel had pointed out, since the plaintiff had not based his case on a legal obligation that showed that the service provider should have paid the fee on behalf of his client.

On 20 June 2018, the applicant submitted a further request in which he claimed that in the circumstances, there is a real danger that the court is partisan, since according to his allegations, in a string of statements, the court has indicated that it has already made up its mind. The applicant alleged that in the decision of 7 February 2018, the court threatened him by stating that if he continues with the suit, the court would give the defendant the opportunity to request that a bond be deposited. The Applicant also raised issues against the decision to require a bond itself. He alleged that this decision is a statement by the court concerning the likelihood of him prevailing, which indicates that the judge had made up her mind regarding the case, and so should disqualify herself.

The defendant claimed that the Applicant had not indicated real grounds for suspicion that the court had prejudged the issue, and had not concluded that the defendant was innocent to the extent necessary for the court to recluse itself. The defendant claimed that the job of the court is to review the statements of case and to get a general feeling for the case at this early stage, from the papers submitted, and this is what it did. The defendant also claimed that the court had not invited the defendant to request a bond as a threat to the applicant, but rather, in the hearing of 7 February 2018, the defendant themselves had stated that they intended making such a request and the court simply agreed to this request.

Discussion and Ruling

Section 77a(a) of the Law of the Courts states that:

(a) A Judge will not sit in judgment if one of the parties or the judge himself considers that there are circumstances that indicates a real suspicion of bias in managing the case.

In this regard, Bagatz 2148/94 Gilbert et al. vs. President of the Supreme  Court, p.d. 48(3), 763, 605 (1994) establishes a test for a real suspicion as follows:

The judge has reached a (final) conclusion regarding the matter under dispute, such  that there is no point in conducting the trial. The point is that there is no expectation that the judge will be impartial. The conclusion could be the result of knowing one of the parties in advance, or prior knowledge of the issue under consideration, such that there is no real likelihood that rational persuasion will result in a change of mind. Note: it is not enough that the judge should have an opinion. For a judge to be disqualified from judging a case one has to show a prior opinion, but that he has closed his mind and  is not open to reconsideration during the trial.

Similar things were stated in Appeal 7858/06 Walhorn vs. Narkis,. 31 July 2007:

It is not uncommon for a judge to express an opinion regarding the likely outcome of a case before him. If this opinion is merely  a presumption and the judge is open to accepting a different position, the mere expressing an opinion is insufficient for the judge to recluse himself from the case. It is not sufficient that the judge has an opinion in the matter in question. To be disqualified that judge has to have a preconception that is not open to change during the trial.

In this instance, the Applicant claims that there is a real likelihood of bias that disqualifies this judge, but the judge do not accept this claim.

The Civil Court Regulations 1984 give the court wide discretion at the pretrial stage. Amongst other rights, the regulations allow the court to order that claims be cancelled where the statement of case does not provide legal grounds for prevailing (regulation 100 of the Regulations) or to reject the charges for any other reason that provides a basis for throwing the case out (regulation 101(3). Consequently the court is allowed and is even expected to relate in a pretrial hearing to the apparent legal and factual problems inherent in a case as they appear from the Statements of Case. The Supreme Court ruled this in Appeal 10353/09 Shindleman vs. Bank HaPoalim ltd, 14 February 2012:

As known, the pretrial hearing is intended to clarity the point of contention and the way the proceeding should be conducted to make it as efficient as possible, to simply, shorten or deny the case, or to find a point of compromise between the parties, In the framework of the pre-trail hearing, the court can point out problems in a parties’ statement of case, and even ask leading questions if necessary. In this context, one must understand the court’s statements , which are in writing, where it states an opinion regarding the apparent likelihood of the charges and the defense working, with regards to the stage reached. (Appeal 1150/09 Zvi Zickler vs. The Week in Ashdod 22 March 2009 (not published). Here we are talking about an early stage of the proceeding, and the opinion stated by the court does not indicate that the court has locked its opinion and the final verdict is known in advance.  

In light of that stated above, there is no reason why an opinion expressed by the judge in a pre-trial hearing should bar the judge from trying the case. As stated previously, the job of the court in the pretrial hearing is to act to make the trail more efficient, and in so-doing, may point out flaws in their positions to the parties. This is how the judge acted in this instance. One cannot state that in this instance, the court has closed its mind and is not open to persuasion  by evidence to be brought by the parties. That stated by the court is only based on the statements of case and on the legal submissions at this stage of the trial, and cannot be understood as indicating that the court had reached a final conclusion

The allegation that the court had invited the defendant to request a bond is rejected since it is incompatible with the way the hearing was held. It was the defendant who in the pretrial hearing,  stated that they intended to request a bond be posted – see page 2 lines 31 of the protocol of 7 February 2018.  The court only gave their permission for this once the plaintiff made it clear that he wished to continue. In so doing, the court has not taken a position against the plaintiff and is not threatening him.

Contrary to the plaintiff’s claim, the court has NOT reached a conclusion regarding the likelihood fo the plaintiff prevailing in ordering that a bond be deposited “because the likelihood of prevailing are small”, but rather the court stated that the charges are not baseless, but one cannot ignore the problems that the defense indicated. These statements do not imply that the court has made up its mind regarding the merits of the case.

The remaining claims of the plaintiff regarding the 23 May 2018 ruling, are really an appeal of this ruling and should not be considered a ruling on whether the judge should recuse herself.

Judge Michal Amit Anisman, in interim ruling re Complaint 13934-07-17 Fischler vs. G.A. Erhlich (1995) ltd and Complaint 38720-10-15 G.A. Erhlich (1995) vs. Fischler, Fischler , 9 July 2018

COMMENT

This ruling, and that to require a bond was appealed to the Supreme Court.


District Court Judge Requires Plaintiff Suing Patent Attorney for Failing to Pay Issue Fees on his Behalf, to Post Bond of 50,000 NIS to Cover Defendant’s Costs

August 15, 2018

Joshua Fischler has sued G.A. Ehrlich ltd (Ehrlich & Fenster Patent Attorneys – henceforth Ehrlich) for failing to pay the issue fee of an Australian Patent, thereby allegedly causing them damage of 21,000,000 Shekels.

For the sake of the court fee, Fischler sued for 5,000,000 Shekels.

Judge Michal Amit Amisman of the Tel Aviv District Court was asked by Ehrlich to order that Yehushua Fischler deposit a bond under Regulation 529 of the Civil Court Regulations 1984.

The plaintiff (Fischler) has sued the defendant (Ehrlich) claiming damages of 5,000,000 Shekels that were caused by breach of contract.

In 2010, Fischler, as owner of 99% of the shares in Koron Industries ltd, approached G.A. Ehrlich  to manage the registration of a patent in a number of jurisdictions, including Australia.

Erhlich could only make a very approximate estimation of the costs for this service since they could not tell in advance how many actions would be required in each of the various jurisdictions, and Fischler was also informed that the estimate did not include the various official fees. Consequently, from time to time, Fischler made various additional payments at Ehrlich’s request.

Fischler claimed that at the end of 2013, he suspected that he was paying additional sums that were not required, and so requested a breakdown of what had been paid for which application, and what additional charges could be expected. However, he did not receive the requested breakdown. Fischler claimed that this led to an agreement between the parties, that he would pay 8962 Shekels in cash, and the balance of the claimed debt of 41,109 Shekels would be checked. He gave a security cheque for this sum, that was post-dated six months.

Fischler claimed that this security cheque was not intended to be banked, but was banked anyway, was not honoured, and a district court proceedings was initiated (number 38702-10-15) that was subsequently combined with this case.

The present case was submitted after the case regarding the security cheque was filed, and it relates to failure to register the patent in Australia.

According to Ehrlich, on 7 August 2014, they informed Fischler that the Australian patent had been allowed and that they had to pay 2100 Shekels + VAT + 635 Australian dollars in official fees and local agent’s fees by 7 November 2014.

Fischler alleges that Ehrlich made their acceptance of the Australian issue fees conditional on Fischler settling the open debt, including that relating to the registration in other jurisdictions that he’d asked them to check.

In consequence of this, the fee was not paid to the Australian Patent Office and the period for registration lapsed. Fischler claims that Ehrlich broke the contract between the parties, and should have allowed the client to pay the issue fees directly or via his credit card (whose number Ehrlich had) and not allowed the patent to be canceled.

Fischler is relying on two opinions. The first states that the patent was relevant and economical for use in Australia, and the second opinion, that failure to register the patent in Australia had resulted in losses of 21 million shekels. However, for the sake of limiting the court fee, he was only claiming damages of 5 million Shekels.

Ehrlich counter-claimed that the effect of this lawsuit was that the plaintiff was asking the court to establish an absurd norm under which a client could make it absolutely clear, after warnings, that he had no intention of paying the requested service charges and official fees, and the service provider would have to bear the burden of paying the costs, instead of the client, to save him from the trouble he’d brought upon himself.

Ehrlich claimed that there was no disagreement that he’d informed the client regarding allowance of the patent in Australia, and to ensure that the patent would issue, he had to pay both local and Australian agent fees and the official issue fees. Similarly, there was no disagreement that Ehrlich had reminded him of the timeline and the fees, and that if the client failed to pay the fee, the application would lapse. It was explained to the client that unless he transferred the money by 7 November 2014, the application would lapse. In their final correspondence, he had informed the client that failure to transfer funds would result in him taking no further action and the application would lapse.

Nevertheless, the client, despite knowing the deadline and the result of not paying, chose not to transfer the required payment and so the issue fees were not paid and the patent lapsed.

Ehrlich claimed that there is no legal obligation for him to pay fees on behalf of a client, and at the time in question, the client owed tens of thousands of shekels, and a cheque that was supposed to cover the debt had not been honoured by the bank. Ehrlich claimed, and considered that the client concurred, that there was no agreement that he would provide  services for free and to pay fees on client’s behalf from his own pocket. He noted that the agreement with the client was that all actions required advanced payment and he was acting in accordance with this agreement.

Ehrlich further noted that the client in this instance was actually Koron and not Fischler himself. Thus even if there was some basis for the charges (which Ehrlich denies), then Fischler has no legal standing but Koron does. Ehrlich has no disagreement with Fischler and this alone is sufficient justification to throw the case out.

Finally, Ehrlich denies making payment of the Australian issue fee conditional on settling the accumulated debt for other legal services. Had Fischler paid for the issuance in Australia, he would have paid the issue fees, regardless of the open debt.

The claims of the parties

The Defendant (Ehrlich) claimed that there is room to require the Plaintiff (Fischler) to deposit a bond to ensure that should he lose, that Ehrlich’s costs be met, since the allegations are ridiculous (in Ehrlich’s opinion) and lack a legal foundation, and so should be simply thrown out.

Ehrlich considers it would be wrong to establish a legal norm wherein when a client makes it clear to a service provided that he will not pay fees and service charges and is warned of the consequences, that the service provider (in this instance, a patent attorney) should be obliged to cover costs himself, and there is no normative source that can serve as a basis for the charges brought.

Ehrlich further claims that the post-dated cheque given to him was not a conditional cheque that should not have been deposited, and it bounced due to insufficient funds in the account, and not because the client had given an order not to honour it. This is indicative of economic difficulties of the client.

Fischler claims to own two real estate properties; one in Shoham and one in Givatayim, owned together with his wife, and failure to cover the cheque was due to a legitimate business disagreement between the parties.

Fischler counter-claims in an affidavit, that the registration of the patents was supposed to be done in his name, and so he himself filed the suit. Fischler further claims that Ehrlich could have used Fischler’s credit-card to pay the official fee, and failure to pay the fee was negligence on the part of Ehrlich.

Ehrlich pointed out that Fischler did not provide documentary evidence for the real-estate that he claimed to own, and reiterated that he was under no legal obligation to pay the fee on behalf of the client, he did not have the client’s credit card details and was anyway forbidden by law to use the client’s credit card without permission.

The Normative Framework

Ehrlich is relying on regulation 519 that requires the plaintiff to post a bond to guarantee funds to cover the defendant’s expenses.

A bond to cover costs

(a) The court or the registrar, can, if deemed appropriate to do so, order the plaintiff to post a bond to cover the costs of the defendant.

The rationale of Regulation 519(a) is to prevent frivolous lawsuits and to ensure that the defendant’s costs will be covered in cases where the likelihood of the defendant prevailing are deemed weak. The case-law establishes that the judge should seek a balance between the rights of the defendant to have his costs covered, and the right of the plaintiff to have access to the courts, such that the bond should not be set too high to cause a difficulty for the plaintiff to sue. See Appeal 5488/16 Netanel vs. Rishan Buiding and Investments ltd, 17 July 2016, Appeal 8575 Hamad vs. Elvatin ltd., 30 December 2015, Appeal 2142/13 Naamat vs. Kramin, 13 November 2013, Appeal 5738/13 Amu Saluk vs. The General Health Service 14 November 2014, and 2142/13 Abraham vs. Jaegerman, 16 January 2013:

We are dealing with a regulation that invites a meeting and clash between important values. On one hand, the request to post a bond can block access to the courts before a plaintiff with few resources, and can seal his fate before he has his day in court. This conceals a real damage to the right to a trial to someone, merely because of poverty. On the other hand, the purpose of the bond is to prevent baseless charges being brought, and to ensure that if they are brought, the defendant can recuperate his costs should he prevail.

In setting this balance, the Case-Law establishes that posting a bond under Section 519 is a rare occurrence and is done only in extreme circumstances, since one should not require the plaintiff to post a bond merely as an aggressive strategy, and it is noted that there is a ‘balance of powers’ between his chance of winning in the proceeding, between the plaintiff’s ability and the right to use the courts, as a normative activity. (see Plony vs. Plony, paragraph 9, 18 February 2016).

When the court comes to rule on whether a bond is appropriate, it has to consider four issues, which the Supreme Court has divided into two groups: The first is where the plaintiff is a foreign entity and where there is no update address of record, and the second is where there is only a slight chance of the plaintiff prevailing, and where the plaintiff is in financial straits.

The two issues relevant in this instance are that the chances of prevailing and financial state of the plaintiff.

As to the chance of prevailing being slight, in re Naamat it was established that “in light of this request, the court has to consider the a priori likelihood of prevailing at a relatively early stage of the proceeding, but is not expected to make a detailed analysis. It is also stated that this consideration alone is insufficient to require a bond to be posted unless the case looks to be totally baseless.  In such cases, it is ruled that “The defendant’s interest not to be distracted by the proceeding and the public interest that the court’s time is not wasted prevails. However, it is also important to ensure that the right of access to the courts is not limited, except in exceptional cases.”

As to the financial condition of the plaintiff, in re Naamat it was established that this consideration is problematic. Particularly as the sole consideration, and even as one of the considerations. Where we are dealing with a plaintiff who is in a poor financial state, one is particularly worried that he may not be able to compensate the defendant for his expenses at the end of the proceeding. Despite this, the court has ruled more than once, that one doesn’t require the plaintiff to deposit a bond merely as a deterrent (see Appeal 544/89 Oykel Industries (1985) ltd vs. Nili Metal Works ltd, p.d. 650, and the Jaegerman case mentioned above). Furthermore, where we are dealing with a party who is resident in Israel, his financial condition does not have to be considered when weighing up whether he should hae to post a bond. The approach is that where a plaintiff is based in Israel, even where the financial state is poor, he is considered an economically viable entity that can be collected from over time (see Abu Keva above). In Judge Amit’s opinion, this approach requires the court to be very careful before ordering a bond be posted. The gates of the court should be open to all litigators, poor or rich, destitute or financially solid, and we cannot allow a situation where it appears that justice is the inheritance of the financially well off.

From the case-law taken together, it appears that requirement for a bond to be posted should reflect the balance between the right of access to the courts of the plaintiff and the property right of the defendant to be protected from baseless law-suits.

Applying the principles to the case in question

Having expressed her preliminary opinion regarding the merits of the case, the defendant’s comments and the plaintiff’s response, and to the law and case-law, Judge Amit doesn’t think that the plaintiff will prevail.

As to the likelihood of the plaintiff winning, Judge Amit Amisman first notes that case-law establishes an interest to avoid frivolous law-suits, and this is not only an interest of the defendant (which should not be sneezed at) but also of the public in that court resources are limited and expensive and should be available for handling significant issues. This itself is part of the importance of ensuring access to the courts (see re Halid, above).

In this instance, the court is not sure that the complaint can fairly be labeled a “completely groundless proceeding”. However, one cannot ignore the defendant’s points regarding the chances of the plaintiff prevailing, notably the lack of legal grounds for claiming that a service provider is obliged to pay fees on behalf of the client. Furthermore, there is no disagreement that the parties had agreed that the fees should be borne by the client, and the plaintiff had received warnings from the defendant that failure to pay the fee would result in the application becoming abandoned (see emails from 20 October and 3 November 2014).

As to the financial standing of the plaintiff, it seems to the judge that lack of cover for the cheque is sufficient grounds to establish a doubt that the plaintiff will pay defendant’s costs if he loses. True, the defendant provided documentation that claimed that he owned real estate, but there were no land registry certificates that proved that the properties were indeed his; are these properties co-owned with his spouse, or are they being used as securities or is there a lien on them? The plaintiff did not submit a valuation of the properties or any indication of his personal wealth.

The defendant has only asked for 53,807 Shekels in the parallel law suit regarding unpaid bills, and this also supports the judge’s decision to accept the request for a bond to be posted.

In this instance, the defendant has stated that should he be required to pay costs, he will do so without trying to wriggle out of them. If so, the defendant has the financial wherewithal to post a bond or to pay the defendant’s costs, and so access to the court will not be denied.

In light of the above, Judge Amit Amisman comes to the conclusion that in this instance, the balance of interests leads to requiring a bond to be placed.

Size of the Bond

When balancing all the interests and those pertinent to the case in question; plaintiff’s right of access to the court, the judge’s preliminary assessment of the case and the right of the defendant to be compensated if the case fails, with a rough estimate of the cost of mounting a defense, the size of the outstanding debt due to the bounced cheque, Judge Amit saw fit for the plaintiff to post a bond of 50,000 NIS, to cover at least part of the defendant’s anticipated costs.

Conclusion

The plaintiff will deposit a bond of 50,000 NIS (cash or index-linked bank guarantee) as guarantee to pay costs should he lose.

IF the bond is not timely paid, the case will be dismissed under regulation 519b.

As an afterword to this decision, but not to the case, the judge considers that the parties should try arbitration to try to bridge the gap between them, outside the court. The parties will respond to this suggestion by 7th July 2018.

Interim ruling by Judge Michal Amit Amisman regarding posting of a bond in Civil Case 13934-07-17 Fishler vs. G.A. Ehrlich (1995) ltd, and Civil Case 38720-10-15 G.A.Ehrlich vs. Fischler, 23 May 2018.

COMMENT

Following this ruling, Fischler requested that Judge Amit Amisman recuse herself as having preconceptions that made it impossible for her to judge the case fairly, and then appealed both the size of the bond and the request that she recuse herself to the Supreme Court.

I will translate and post the appeals. As it is ongoing, I will not comment on the merits of the case at this stage.


Suspending a Patent Opposition Pending Examination of Divisional Application

August 12, 2018

janssen pharma.jpgApplication for patent IL 253468 to Janssen Pharmaceuticals is a divisional application of IL 206448, filed under Section 24 of the Law. The parent application is being opposed by TEVA.

TEVA has asked that the Opposition against the parent application be frozen for 18 months from when the Opposition was submitted, in accordance with Circular 020/2012 which regulates oppositions to allowed patents where there is a pending divisional application.

The Opposer claims that there is an overlap between the invention claimed in the parent and that claimed in the divisional.  Thus it is reasonable to assume that if an Opposition is filed against the Divisional application, similar factual and legal issues will arise, and the expert witnesses will likely be identical. Consequently, freezing the opposition to the parent application until the examination of the divisional application is completed will contribute to the efficiency of both the current proceeding and the expected future proceeding.

TEVA further claims that if the current opposition is not frozen, the Applicant will obtain an advantage since he can manipulate the prosecution process of the divisional application in response to issues revealed in the Opposition process of the parent.

The Applicant does not consider it appropriate to freeze the procedure. Nevertheless, they agree that conclusions reached in the Opposition to the allowed parent application will apply to the divisional application if the Opposer should file an opposition against it. The Applicant considers that this agreement makes freezing the Opposition unnecessary, since if an opposition is filed against the divisional, the findings of the present opposition will apply to it, and this makes the process efficient.

Discussion

The Commissioner thinks that on the grounds of efficiency, the request to freeze the Opposition proceedings should be accepted. As explained in the ruling concerning the Opposition to IL 195030 Teva Pharmaceuticals ltd vs. Boehringer Ingelheim International GMBH, 28 January 2002, paragraph 3 of the ruling:

The authority of the courts to delay a proceeding whilst a different proceeding occurs, raises similar issues that are not contentious. These issues are authority to do so, and discretion, which are applied to ensure efficiency of the proceeding, efficiency of the legal system, saving time and resources, preventing conflicting decisions from issuing, convenience for the parties, fast resolution, balance of convenience and the like. These are true, not only when the parties in the two proceedings are identical, but also when there are different parties but similar issues, similar legal considerations, and the interests to be considered are identical.

In this instance, the parties concur that there is a similarity between the inventions in question. In this case, if an opposition would eventually be filed against the divisional application, it is indeed likely that the similar issues will be raised, similar witnesses will be required to testify and the prior art will be the same in the two proceedings.

The Applicant’s consent that findings in the parent opposition be applied to the divisional, does not adequately address these issues. From a practical perspective, it is unreasonable to make a determination concerning the parent opposition before an opposition is filed in the divisional.

Such a situation would create a state of affairs wherein it is necessary to manage two proceedings with similar witnesses and experts, and similar issues will be considered, or that either the opposition in the divisional case be suspended until the issues are determined in the parent case, or the opposition in the parent case be suspended until the issues are determined in the divisional case or the cases are combined.

Furthermore, even if even various determinations are made in the parent case, it will be appreciated that the parent and the divisional will not have identical claims, and so uncertainty will arise as to whether conclusions from the parent case can be applied to the divisional, and what is the decision in similar but not identical matters to those raised in the parent case.

The commissioner rejects the Opposer’s claim that freezing the opposition is essential to prevent the applicant from applying lessons from the Opposition to the prosecution of the divisional application. Whilst there is some truth in this, it is insufficient, in and of itself, to justify freezing an opposition proceeding. It will be remembered that the Opposer can oppose the divisional application and in that framework, issues relating to the patentability of the divisional application will be considered.

In light of the above, the Commissioner rules that the Opposition proceeding to the parent application be suspended for 18 months from when it was filed, i.e. until 29 September 2019.

The Secretariat of the Patent Office will ensure that the Examiner of the divisional application is aware that there is an opposition against the parent case, and that the divisional application should ,therefore, be examined in accordance with Circular 020/2012.

No costs are awarded at this stage.

Interim ruling regarding suspension of an Opposition to a parent application pending examination of a divisional application, in re IL 206448 to Jenssen, opposed by Teva, ruling by Commsioner Ofer Alon, 19 June 2018.