Patent Litigation 2020

Last Updated February 10, 2020

Israel

Law and Practice

Author



Gilat, Bareket & Co., Reinhold Cohn Group is the leading intellectual property consulting firm in Israel and offers a full breadth of IP-related services and expertise, including protection, asset management, due diligence, litigation and legal services. The firm operates in all areas of IP such as patents, trade marks, designs, copyrights, open source, plant breeders' rights, etc. The group includes the patent attorneys firm Reinhold Cohn & Partners and the law firm Gilat, Bareket & Co., which specialises in litigation and the legal protection of intellectual property rights in patents, technology, brands, designs, creative works and inventions. Gilat, Bareket & Co. employs 23 attorneys at law, several of whom also hold academic degrees in the sciences. Key practice areas include filing suits for patent infringement in courts, representing clients before the Patents Registrar, rendering opinions regarding infringement and freedom to operate, and counselling on service inventions. The firm would like to thank Stav Tuval, Keren Lindenfeld and Tomer Rosenfeld for their assistance in connection with this and past editions of this chapter.

The Israeli legal system provides protection for inventions by way of patents and trade secrets. In addition, protection may also be provided by way of the law of unjust enrichment (unfair competition).

Unlike some countries, there is no protection for utility models. Other forms of intellectual property (such as copyright, layout-design (topography) of integrated circuits, trade marks, industrial designs, plant breeders' rights) exist.

Since the Israeli legal system is a common law system, intellectual property law is primarily governed by legislation and regulations therein and by case law laid down by the courts.

Patent applications are filed with the Israeli Patent Office (ILPTO). The requirements of patentability are set forth in the Patents Act and clarified in court judgments and in the Practice Guidelines for Patent Examination published by the ILPTO.

After filing the patent application, it usually takes a few years until examination commences. There is no need to request examination. Under certain circumstances, the applicant may request an expedited examination (eg, in cases of elderly inventors, "green applications", or where a third party has begun to exploit the invention).

A third party may also submit a request for an expedited examination accompanied with an affidavit, in the following circumstances:

  • examination of the application of the patent according to the set order may cause the applicant for expedited examination, who works in the field of the invention, a delay in the development or production of a product or a process claimed in the patent application;
  • the time that has passed since the application was filed, or since the date of entry into the national phase, is unreasonably lengthy, and more specifically, significant time has passed when contrasted with the beginning of the examination of another application of the same type;
  • public interest; and
  • extenuating circumstances providing justification.

Companies may use this option against competitors and to reduce the period of uncertainty in the market. 

There is also the possibility of a modified examination, whereby a patent is granted based on a corresponding foreign patent, without undergoing substantive examination in Israel. Patent prosecution highway (PPH) examination is also available for some countries.

Shortly after a local application is filed, the Registrar of Patents will publish the name of the applicant, the application date and information regarding priority (if claimed).

The patent application remains confidential for 18 months from the date of filing or, if priority is claimed, for 18 months from the date of the earliest priority document. Shortly after the expiry of that 18 months, the fact that the application is laid open for inspection is published again by the Registrar of Patents. Until 2012, patent applications would have remained confidential until acceptance of the application (see below) by the Patent Office.

International (PCT) applications are also published under the same principles, but since these applications are usually filed shortly before the 30-month deadline for filing the national phase expires, they become available to the general public shortly after filing.

Third party observations may also be submitted – see 1.7 Third-Party Rights to Participate in Grant Proceedings.

After the examination is concluded and the application is accepted by the patent examiner, the acceptance of the application is published online.

During a period of three months following that publication, third parties may lodge a pre-grant opposition to the grant of the patent. If no opposition is filed during this period, the patent is granted, and a patent certificate will be issued. If an opposition is filed, the patent will be granted only after that opposition is dismissed and, if appealed, only after that appeal is dismissed.

Representation is not mandatory, but highly recommended.

Duration

The length of the grant procedure varies significantly between different technological fields. The length has also changed over time (in recent years examination has been shortened in duration due to an increase in the number of patent examiners).

Based on the ILPTO Annual Report of 2018, the average prosecution period has shortened in the last few years. According to the Patent Office this is due to reorganisation and more efficient examination procedures. Their report shows that recent prosecutions have lasted (in months):

  • 2018 – mechanics and physics (19), electronics computers and medical devices (14), chemistry and pharma (22), biotechnology (27) and average (13);
  • 2017 – mechanics and physics (21.5), electronics computers and medical devices (15), chemistry and pharma (24), biotechnology (30) and average (17);
  • 2016 – mechanics and physics (16), electronics computers and medical devices (16), chemistry and pharma (26), biotechnology (31) and average (24.3);
  • 2015 – mechanics and physics (21), electronics computers and medical devices (21), chemistry and pharma (29), biotechnology (40) and average (30); and
  • 2014 – mechanics and physics (22), electronics computers and medical devices (22), chemistry and pharma (24), biotechnology (34) and average (26.6).

Average Costs

The costs of the grant procedure for the national phase in Israel, from filing to grant, including professional fees and official fees also varies between technological fields (and based on the amount of work required from the local patent attorney). For:

  • life sciences – USD7,000-8,500;
  • technology – USD7,000-7,300;
  • high-rech – USD6,100-7,000; and
  • physics – USD5,500-7,000.

Please note that the duration and average costs relate only to the examination period and do not include opposition proceedings, which can significantly increase the costs and duration of the grant procedure.

Patents are granted for a period of 20 years from the date of the application.

It is possible to receive a Patent Term Extension (PTE) of up to five years for applications dealing with medicines, certain medical devices and veterinary products registered with the Ministry of Health. PTEs are not available for agrochemical inventions.

A successful patentee who prevails in an infringement action is entitled to the remedies prescribed in the Patents Act, namely injunctions and damages, as well as any other remedy the court may determine.

When ruling on damages, the court may take into consideration the acts of the infringer, the scale and magnitude of the infringing acts, the profits made by the infringer and the reasonable royalties that the infringer would have had to pay, if he or she had been given a licence to exploit the patent. The foregoing list is not exhaustive.

The court may also rule for punitive damages for an amount that does not exceed the actual damages ruled (namely, double damages), in case the infringement was committed after the patentee or the exclusive licence owner warned the infringer prior to the infringing act. As such, under some circumstances it is advisable to send warning letters to the alleged infringer prior to filing a suit.

As to the obligations of the patentee, s/he has to pay renewal fees only after the patent is granted. The fees payable and the periods of renewal are as follows:

  • first term (six years) – USD230;
  • second term (four years) – USD459;
  • third term (four years) – USD689;
  • fourth term (four years) – USD1,149; and
  • fifth term (two years) – USD1,608.

It is also possible to pay the renewal fees in advance for the entire 20-year period with a slight cumulative discount (USD3,447 rather than USD4,135).

It should be noted that all official fees are charged in Israeli new shekels (ILS). US dollar ammounts appearing in this review are approximate and calculated based on an exchange rate of ILS3.5 to USD1. Thus, adjustments may need to be made to reflect currency fluctuations. In addition, these fees are linked to the consumer price index.

As noted above, it is possible, pursuant to Section 64D of the Patents Act, to receive a Patent Term Extension (PTE) for up to five years for applications dealing with medicines and medical devices. There is no PTE for agrochemical inventions. The PTE Order must be granted before the basic patent lapses.

Third parties may participate during grant procedures via the following procedures. 

Opposition

After the examination procedure has been concluded, the acceptance of the application is published in the Official Monthly Gazette (available online). Any third party can oppose the patent’s grant within three months from the date of publication.

The grounds for filing an opposition include:

  • there is reason for which the Patent Registrar was authorised not to accept the application;
  • the application does not withstand the requirement set forth in Section 4(2) (ie, novelty by public use, which the Patent Office is not required to examine); or
  • if the opponent is the true owner of the invention rather than the applicant.

The patentee may apply for an amendment during revocation proceedings only for the purposes of clarification, removing an error in the specification, or restricting the claims. The Registrar will permit the amendment if he or she is convinced that the amendment will not broaden the scope of the claims and will not add anything to the specification not already included from the start.

Post-grant Revocation (Cancellation)

Any person may file with the Patent Office an application to revoke a granted patent, without needing to show locus standi. An application for revocation may be filed at any time and the statute of limitation does not apply. The grounds for filing a revocation application are identical to the grounds for filing a pre-grant opposition. The Registrar may accept the application (and revoke the patent), deny the application, or accept the application partially (eg, by deleting/narrowing some of the claims).

Third-Party Observations

According to the statutory provisions of the Patents Act, during the course of examination, any third party is entitled to submit copies of relevant prior art publications to the PTO. The examiner may use these during the examination as long as they were sent within two months from the due date for the applicant's response to the request under Section 18 (demand to send any cited publications and other pertinent prior art publications known to the applicant).

Third-Party Request to Initiate Examination

In addition, third parties are allowed to file an application, supported by an affidavit, for immediate examination, for one of the following reasons:

  • there is reason to believe that examination based on the order in which the applications were filed will cause the applicant (of the request for immediate examination) to postpone the development/manufacture of the process/product that is claimed in the patent application;
  • the amount of time that has passed from the date the application was filed is unreasonably long and is significantly longer than any other application of the same kind; or
  • public interest or any other special circumstances.

Lastly, it is always possible to challenge the validity of the patent as a defence during an infringement trial.

Patent examiner decisions, including decisions not to grant a patent, are subject to an administrative appeal before the Registrar of Patents. The applicant may appeal the Registrar's final decision to the district court. The judgment of the district court, sitting as a court of appeal, may only be appealed to the Supreme Court with leave.

There is a six-month grace period for the payment of renewal fees. The fee is approximately USD60 for each month the patent renewal fee has not been paid (plus the regular renewal fee as detailed above). If all fees are paid during the grace period, the patent is deemed never to have lapsed.

After this grace period, it is still possible to restore the patent, but it would require filing an appropriate application, supported by an affidavit (and payment of additional fees of approximately USD200) and it is at the Patent Registrar's discretion whether to allow the restoration of the patent.

In order to succeed with restoration, the Registrar must be convinced that the renewal fee was not paid due to a reasonable cause and that the patentee did not wish for the patent to lapse and asked for the restoration as soon as possible after the patentee (or the one responsible on his or her behalf) learned that the renewal fees had not been paid in a timely manner.

If the Registrar of Patents accepts the application for restoration, it will be published for a three-month pre-grant opposition period. Anyone may oppose the application for restoration within three months of the application being published, on the grounds that the Registrar had no basis for allowing the restoration of the application.

If no opposition is filed (or if any oppositions filed are dismissed), the Registrar will order restoration, but it may make the restoration subject to conditions.

Prior User Rights

Anyone who began exploiting the invention after publication of expiry of the patent due to non-payment (namely, after the six-month grace period) shall be entitled to continue to exploit the invention – though only for the sake of his or her own business – even after the patent is restored. This right cannot be transferred, except together with the business in which that invention was used.

Patent infringement cases are heard before the district court. Arbitration of patent disputes may take place before arbitrators operating within private arbitration institutions (mainly retired judges) or other attorneys from private practice.

Third parties that wish to remove the effects of patents may:

  • file a pre-grant opposition (see 1.2 Grant Procedure), there is no standing requirement for lodging an opposition;
  • use post-grant revocation procedures (see ‎1.7 Third-Party Rights to Participate in Grant Proceedings), there is no standing requirement for filing a revocation request;
  • ask for a declaration of non-infringement (see 2.8 Protection for Potential Opponents), the court shall not grant the declaration unless the applicant gave the patentee full particulars of the product or process he or she wishes to use and the respondent has refused to make it or has not made it within a reasonable period; or
  • in theory, file an application for a compulsory licence (see 2.13 Restrictions on Assertion of Intellectual Property Right), notably, an application for a compulsory licence provides a remedy to the applicant and does not result in the revocation or narrowing of the patent (this procedure has not been used since the early 1990s).

The Israeli judicial system consists of three tiers: magistrates' courts, district courts and the Supreme Court. Patent infringement cases are heard exclusively before district courts as first instance.

Each of the six district courts has local jurisdiction within its district. Local jurisdiction among the six district courts is determined based on the general principles of the choice of venue applicable to all civil litigation; of particular relevance to IP cases are the rules based on the defendant’s residence or place of business or the place of the infringing activity.

A claim against a foreign entity that has no place of business in Israel may be brought before the District Court of Jerusalem, which has residual authority.

A leave of court is required in order to affect service out of jurisdiction. If the defendant is unable to challenge the leave, the court will deem to acquire international jurisdiction over the defendant.

Judgments handed down by district courts may be appealed to the Supreme Court without requiring leave. Other decisions, such as decisions in interim relief proceedings, may be appealed only with leave.

The Committee for Compensation and Royalties is a specialised body for resolving intellectual property disputes concerning employee's entitlement to remuneration for service inventions.

Only the person or entities recorded as patentees, or as exclusive licensees, may file an infringement lawsuit. All co-patentees (and the exclusive licensee, if he or she exists) must be joined as parties to an infringement action in order to have standing to sue.

Thus, except recordation of rights to the patent, there are no prerequisites (such as warning letters or engaging in mediation) for filing a lawsuit. 

For court fees for filing a lawsuit, see 8.2 Calculation of Court Fees.

In large-scale cases the court fees may reach significant amounts. The usual practice is to indicate merely a nominal amount for court fees; however, at the damages phase of the trial, the court fee for the full amount of the damages sought must be paid. One half of the court fees is paid as a condition to filing the lawsuit. The second half is payable before the trial date.

Security for Costs

At the defendant’s request, the court may require the plaintiff to provide security for costs. Where the plaintiff is a limited liability company, the burden is on the plaintiff to prove that it is able to bear the costs that may be awarded against it. In the absence of such a demonstration, the court will be inclined to order security for costs. The court may, however, where it deems this appropriate, refuse to order such security, having regard (inter alia) to the strength of the plaintiff’s case.

Where the plaintiff is an individual, and although formal power to require security for costs exists, the court will usually refrain from making such an order. However, where the individual plaintiff is a foreign resident lacking assets within the jurisdiction, the court will be inclined to issue such an order (unless the plaintiff is a resident of a country that is party to a treaty with the State of Israel in which the State of Israel agreed to waive the requirement of security for costs for residents of the other contracting country).

Representation before courts and the Registrar is not mandatory and parties can represent themselves in proceedings. Nevertheless, representation is highly recommended.

Representation before courts is done solely by attorneys-at-law licensed by the Israeli Bar Association. In addition, patent attorneys may, by leave of court, argue in court on non-legal matters related to an invention or a patent, provided that the opposing party’s attorney-at-law is present. In proceedings before the Registrar of Patents the party may be represented by a licensed patent attorney. 

Following a recent amendment to the Bar Association Law, foreign lawyers may represent clients in Israel in a limited capacity, namely by counselling on the laws of the foreign jurisdiction where the foreign lawyer is certified and drafting documents to which the law of such foreign jurisdiction applies. Accordingly, foreign lawyers are not permitted to represent or counsel clients regarding patent infringement litigation in Israel.

Foreign lawyers licensed to represent a party or interrogate witnesses on behalf of a party in a foreign jurisdiction may actively take part in proceedings before an Israeli court for the taking of evidence pursuant to a foreign state’s letter of request in accordance with the Mutual Legal Assistance Between Countries Law, 1998.

Preliminary remedies are available in the Israeli legal system; these include preliminary injunctions, Anton Piller–type search-and-seizure orders, receivership orders, attachment (lien) orders, and other interim reliefs. In addition, the court has the power to grant any appropriate remedy under case circumstances.

A preliminary remedy is typically requested simultaneously with, or shortly, after filing the statement of claims; the court may grant a preliminary remedy prior to filing the statement of claims if it is found that such a measure is justified in the circumstances, in which case the claim must be filed within seven days or as prescribed by the court.

In order to receive a preliminary remedy, the applicant must show that immediate intervention by the court is needed to preserve the status quo and to prevent irreparable harm. The applicant must also petition for interim remedy in good faith and in a timely manner to avoid the petition from being barred by the doctrine of “unclean hands” or by laches, respectively. The court will consider whether the interim remedy is just and appropriate in the circumstances.

To obtain preliminary remedy, the applicant must establish through prima facie evidence that:

  • it has a prima facie case and reasonable chances of proving its case;
  • the balance of convenience is in favour of the applicant;
  • the remedy was applied for in good faith, without delay and with clean hands; and
  • the grant of the requested remedy is just and appropriate in the circumstances and does not cause unnecessary injury.

Interim relief proceedings are normally conducted inter partes. Ex parte remedy may be available if the applicant persuades the court by prima facie evidence that deferring the remedy until an inter partes hearing may defeat the purpose of the order or cause the applicant severe damage.

Applications for search-and-seizure orders, attachment orders, and orders restricting the use of an asset (Mareva-like orders) are the exception to the general rule and are normally heard ex parte unless the court is satisfied that an inter partes hearing would not frustrate the purpose of the requested order. An ex parte order other than one for attachment must be followed by an inter partes hearing within, and no later than, 14 days. When hearing an application for an ex parte order, the court will exercise greater caution than in inter partes proceedings.

Applications for an interim remedy are made in writing. The respondent then has 20 days to respond to the application and the applicant may choose to reply to the respondent’s response. All factual contentions in the application, response, and reply must be supported by an affidavit. As a general rule, the parties have a right to cross-examine the affiants during the hearing of the application. The judge may issue the decision at the conclusion of the hearing or may defer the decision, for the purpose of either taking the matter under advisement or for allowing the parties to sum up in writing. Applications for interim remedy may be resolved within days, weeks, and sometimes several months.

The president of the remedy court or a judge to whom such powers have been delegated may order the main case to be expedited in lieu of hearing an application for interim relief. Where the issues are complex, judges may be inclined to follow this route.

In general, for an interim remedy to be issued, the case should be relatively clear and strong. In recent years, there has been a decrease in the tendency of trial courts to issue interim remedies.

Security for the Defendant’s Damages Resulting from an Expired Temporary Remedy Order

As a precondition for an interim remedy to become effective, the applicant is required to provide a personal undertaking not limited by any amount and, in addition, a third-party guarantee (typically, a bank guarantee) at an amount set by the court to indemnify the defendant for its damages if the claim terminates or if the order expires. The court may exempt the applicant from the requirement of providing a guarantee out of considerations of justice and for special reasons, but the requirement of providing a personal undertaking not limited by any amount is mandatory. In addition, the court may require the applicant to post a bond if the court deems this just. The court, as a general rule, will require a bond in respect of an ex parte order unless it deems it just to exempt the applicant from this requirement.

On termination or expiration of a temporary remedy order, the defendant (respondent) may file, within six months, an application to order the plaintiff to compensate the defendant for damages it suffered from the order, and the court will rule thereon. In this context, regard must be paid to the decision in the matter of Unipharm v Sanofi where the court ordered that a company that manufactured generic drugs, and which opposed a patent application that was subsequently withdrawn by the patent applicant, may be entitled to disgorge part of the patent applicant’s profits where it was found that the patent application was prosecuted improperly in an attempt to extend the patent protection for a pharmaceutical about to become off patent. 

Declaration of Non-infringement

A third party can ask the court for a declaration that his or her exploitation of the invention disclosed in the patent does not constitute an infringement. The patentee and the exclusive right owner are the respondent in this application. The applicant must give the patentee full details of the product or process he or she wishes to use. It should be noted that in these proceedings the applicant cannot argue that the patent is invalid. Furthermore, the grant or refusal to grant the declaration of non-infringement shall not be decisive on the question of the patent’s validity.

There are no special statutory limitation provisions regarding intellectual property matters, and these matters are subject to the general seven-year limitation period prescribed by law.

The seven-year limitation period on infringement actions commences on the date when the cause of action accrued. The limitation period "race" is suspended in the following circumstances:

  • the plaintiff did not initiate the lawsuit since the defendant deceived it (including consciously hiding a fact (or facts) constituting the cause of action); or
  • the defendant exerted its influence against the plaintiff, threatened it or took advantage of its weakness.

If the plaintiff was unaware of the fact constituting the cause of action, for reasons not dependent on it, and this could not have been prevented even by taking reasonable care, the limitation period begins upon the plaintiff learning of the relevant fact.

Case law shows an accepted position that in patent infringement each act of infringement gives rise to a new claim; thus, a claim seeking injunction is not time-barred by the statute of limitation even when infringement commenced more than seven years before the claim was brought: however, damages cannot be recovered for a period in excess of the seven-year limitation period. An exception to this rule is that an employee's claim for payment of remuneration for a service invention owned by an employer becomes time-barred seven years after the date of filing of the patent application for the invention.

Discovery, inspection, and written interrogatories proceedings are available in Israel, albeit in a less extensive manner than in, for example, the USA.

Exchange of requests for discovery, inspection, and written interrogatories occurs soon after the conclusion of the exchange of pleadings. An unsatisfied party may file a motion to compel. The entire process may take several months, sometimes more than a year.

There are no depositions. Moreover, there is no pre-complaint discovery in Israel.

Interim orders such as Anton Piller-type search-and-seizure orders and receivership orders may also assist a party in the collection and preservation of evidence.

Discovery is not available against non-parties. However, a third party may be summoned to produce particular documents from third parties under subpoena duces tecum issued by the court on a party’s application. Disclosure from non-parties must be limited to specific documents.

A lawsuit is initiated by filing a statement of claims, which starts the exchange of pleadings. The statement of claims must set forth the facts that, if subsequently proven, will establish the plaintiff’s cause of action, and thus requires substantially more detail than a complaint filed in the USA.

Nevertheless, the plaintiff need not prove any evidence at the stage of filing the statement of claims but will typically undertake private fact-finding and gathering of evidence before bringing a legal action, because the statement of claims must set forth in some detail the facts that support the plaintiff’s cause of action.

The defendant must respond with a defence statement within 30 days of being served with the statement of claims. The defence statement must set forth all the material facts underlying the defences raised by the defendant. The plaintiff is entitled, but not obliged, to respond to the defence statement with a response statement within 30 days.

The case then proceeds to pre-trial hearing, which is intended for delineating issues in dispute between the parties and in which the parties are encouraged to resolve discovery and interrogatory controversies. If not settled, the case proceeds to trial. The judge prescribes the schedule for the submission of evidence, usually by way of written affidavits and expert opinions. The evidence (and summations – see below) may not include factual allegations not substantially raised in the party's pleading, unless a party seeks and obtains leave to amend its pleading. The grant of such leave is discretionary.

There may be another oral hearing before the judge to ensure that all the evidence has been submitted. Thereafter a trial hearing is held where the witnesses and experts are cross-examined. Afterwards, the parties exchange summations (usually in writing), and the judge will later hand down the judgment.

There are no collective actions (such as class actions) for intellectual property proceedings. However, a patentee is exposed to class actions if, for example, it violated antitrust laws, as in the case of Sanofi (see 2.13 Restrictions on Assertion of Intellectual Property Right).

As a general rule, if a rights owner files suit against more than one defendant regarding infringement of the same rights and more or less the same factual background, the suits will be unified (and vice versa, if several plaintiffs file suits against the same rights owner).

Compulsory Licences

The provisions of the Israeli Patents Act were amended in order to accord with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) regarding compulsory licences. Nevertheless, these provisions have little significance in practice and have not been in use since the early 1990s.

These provisions hold that if the patentee or the exclusive licence owner is misusing its "monopoly power", the Registrar may grant a compulsory licence to exploit the patent to third parties who petitioned for a compulsory licence, provided that the motion was filed after the later of either three years from the grant of the patent or four years from the application date.

Examples of the misuse of monopoly power include:

  • when all the demand for the product is not satisfied in Israel on reasonable terms;
  • when the conditions attached by the patentee to the supply of the product or to the grant of a licence are not fair under the circumstances, do not take account of the public interest and arise essentially out of the existence of the patent;
  • when exploitation of the invention by way of production in Israel is impossible or restricted by the importation of the product; or
  • when a patentee refuses to grant a licence for a local producer on reasonable terms.

Upon request, the Registrar may also grant a compulsory licence, for medical purposes, for: (i) a patented product that can be used as a medicine; or (ii) a patented process for the production of a medicine.

Compulsory licence to exploit an earlier patent

If a patented invention cannot be exploited without infringing an earlier patent, then the Registrar may grant a licence to exploit the earlier invention to the extent necessary, and under the conditions that the later invention serves a different industrial purpose and that it shows a considerable advance over the earlier invention.

Antitrust Law and Patents

Section 49(b) of the Patents Act expressly provides that the grant of a patent does not allow the patentee to unlawfully exploit the invention in a manner that breaches any other enactment. As such, even though there are no special provisions in the Patents Act regarding the incidence of the Antitrust Law, one must keep in mind that that there might be liability in accordance with the Antitrust Law regarding a misuse of rights.

In particular, in a recent decision issued by the district court, in the case of Unipharm v Sanofi, the court held that the patent applicant, Sanofi, misled the ILPTO and breached its duty of disclosure since it filed a PCT application which claimed priority from an application with erroneous example. Sanofi continued to claim priory even though it knew about the error and did not include sufficient details concerning the reason for the error and circumstances.

This judgment creates, by way of judicial legislation, a new cause of action under the doctrine of unjust enrichment. It allows a private competitor to bring a suit against an innovative pharmaceutical company (that was found to have improperly prosecuted a patent application), seeking accounting and disgorgement of its profits, as a punitive measure, without regard to damage to that private competitor.

The court further held that it was irrelevant whether or not the error would have been easily overcome, as argued by Sanofi. In effect, the court held that because of Sanofi's perceived omission, it was not entitled to raise this argument and it was not decided on the merits.

These findings, if not overturned on appeal, mean that every error in a priority application known to the patent applicant must be rectified prior to filing the national applications. This monumental burden applies also to errors that a person skilled in the art may easily overcome.

In addition, patent applicants are now subject to a very broad duty of disclosure, the boundaries of which are unclear. This may in turn lead to an increase of inequitable conduct in litigation in the future, an indication of which can already be found in recent case law by the ILPTO.

In its suit, Unipharm further claimed that Sanofi's abandoned patent application was a "weak application" that was filed merely to block legitimate competition and, having reached this unacceptable objective, was therefore abandoned. The judge did not accept this argument.

It therefore left open the question of "whether, and under what conditions, the filing of a patent application, whose chances are slim, by an ethical company with the purpose of delaying the entrance of generic [products] into the market establishes cause for action for the generic company delayed [from entering into the market] following the patent application".

In addition to the findings regarding improper prosecution and breach of disclosure duty, the court found that Sanofi's actions amounted to abuse of a dominant position under Israeli antitrust law, and did so without discussing the relevant conditions stipulated by law in order for a company to be considered a monopoly.

It is worth noting that Sanofi appealed to the Supreme Court and Unipharm filed a counter-appeal. Both the appeal and the counter-appeal are currently pending before the Supreme Court. In addition, a class action complaint was filed against Sanofi for violating antitrust laws. This class action is currently stayed pending a decision in the appeal and counter-appeal.

The necessary parties to an action for infringement are the patentee or the exclusive licensee, they are the only parties that can file an action for infringement. Therefore, non-exclusive licence owners cannot file an action for infringement. In the case of a jointly-owned patent, each partner is entitled to bring action for infringement.

Co-patentees and exclusive licensees who chose not to actively join the action for infringement with the plaintiff must be joined by the plaintiff as defendants. A person who is joined as a defendant but does not take part in the proceedings will not be required to participate in the payment of litigation costs.

Direct infringement is expressly defined in the Patents Act as the violation of the right of the patentee to prevent any other person from exploiting the invention, either as defined by the claims or in a similar manner which involves the essence of the invention.

Israeli courts have also recognised infringement by joint tortfeasors (such as aiding or inducing infringement) who are then jointly and severally liable. Liability as joint tortfeasors is based on the provisions of the general Torts Ordinance concerning joint tortfeasors.

Furthermore, the courts have recognised a court-made doctrine of contributory infringement. Contributory liability does not require a showing of concerted action between the direct infringer and the contributory infringer. The concept of contributory infringement has been applied under the following accumulated conditions:

  • the defendant supplied some, but not all, of the components of the patented invention and theose components formed a substantial part of the invention;
  • the defendant knew, or should have known, that the components would be used for infringing; and
  • the components could not form part of a staple commercial product with a substantial non-infringing use. 

In such instances of liability, it has not been definitively ruled whether a specific instance of direct infringement must be shown, and it remains an open issue regarding whether the direct infringer must be joined.

The remedies for indirect infringement are the same as those for direct infringement.

The Patents Act defines infringement as exploitation of the invention in the manner defined by the claims or in a similar manner that, in light of the claims, involves the essence of the invention.

Thus, in addition to protection against literal infringement, the Patents Act also confers protection against infringement of the “essence of the invention” (gist) sometimes also referred to as the "doctrine of equivalents".

In addition, the Supreme Court has emphasised the principle of reading the patent document as a whole. As such, the specification cannot be used to broaden the scope of the claims and cannot be used selectively and it is the rule that interpretation of the claims should be purposive. It has been ruled that claim construction aims at ascertaining the inventor’s intention expressed in the patent document, as understood by a person having an ordinary skill in the art in the relevant field given the knowledge existing on the determining date.

A patentee is expected to formulate the patent claims with a reasonable degree of clarity. The Supreme Court enunciated several criteria to assist in determining whether this degree of clarity is achieved:

  • the complexity of the field of the invention and the difficulty of describing the invention clearly;
  • the ability of the language to describe the invention in a better way; and
  • that unwarranted ambiguity operates against the author toward a narrower reading of the claims, whereas the invention’s greater contribution to the field allows for a more liberal construction of the exclusive right afforded by the claims.

Where the proper interpretation of the patent document is unclear, the Israeli and foreign file wrappers may aid in the interpretation. It should be noted, however, that the Supreme Court left the question of whether the doctrine of file-wrapper estoppel is applicable in Israel open.       

Claim construction is an issue of law.

The available defences against infringement are (non-exhaustive list):

  • Non-infringement (the claims do not cover the accused product or method).
  • Non-infringement (exceptions to the definition of "exploitation of an invention"; these include statutory "experimental Use" and "Bolar-like" exceptions).
  • Invalidity.
  • Lack of standing to bring suit – a challenge to ownership of the patent is a defence since the right to bring an action for patent infringement belongs to the patentee or to the exclusive licensee provided the licence has been duly recorded in the patents register; any of the co-owners or the exclusive licensee may sue alone, but the suing party must join all other co-owners (and the exclusive licensee, where an exclusive licence was granted); failure to comply with the foregoing will result in claim dismissal.
  • Prior use rights (see 1.9 Consequences of Failure to Pay Annual Fees).
  • Statute of limitation and laches – laches is a strong defence in interim relief proceedings; it will, however, only be considered a defence in the main action in rare and exceptional circumstances.
  • Equitable estoppel – as a general principle, a plaintiff may be estopped from bringing an action if his or her conduct through action or inaction was such that the defendant reasonably inferred that the plaintiff would not enforce the patent against him or her, and the defendant relied on that conduct and materially changed his or her situation based on that reliance; acquiescence will not be easily inferred.
  • Patent exhaustion – the Patents Act does not expressly deal with this matter; however, in the case of Bristol-Myers Squibb Company v The Minister of Health, the question of whether parallel importation of patented medicine to Israel is allowed was examined and although the issue arose obiter dicta (such that no decision was made on the merits), the judge expressed an opinion in favour of the international exhaustion of rights.
  • Compulsory licence and compulsory licence to exploit earlier patent – compulsory licences are theoretically available (see 2.13 Restrictions on Assertion of Intellectual Property Right); however, allegation to entitlement to a compulsory licence (not actually granted) is not a defence.
  • Market overt – there is controversy among scholars with respect to the question of whether "market overt" is a defence in cases of patent infringement; although this matter was discussed at the district court level, it has not yet been decided on by the Supreme Court.

Experts Engaged by the Parties

Experts are frequently engaged by the parties, both in Patent Office litigation and in infringement litigation before district courts. Foreign experts may file their opinions in English. During trial, the experts will be cross-examined on their opinions. 

Court Appointed Experts

In proceedings before the Patent Office, no experts are appointed by the registrar. If necessary, the Registrar is aided by one of the examiners.

A district court trying an infringement action may appoint an expert. The court-appointed expert may be cross-examined by both parties (plaintiff and defendant). The default rule is that a court-appointed expert renders parties' expert opinions inadmissible. Pending final judgment, the parties will typically be ordered to share the costs of the court-appointed expert.

The district court also has power to appoint an assessor (a scientific advisor) who assists the judge in taking evidence and may render advice to the judge, but shall not take part in rendering the judgment. The costs for the court-appointed scientific advisor are paid by the State Treasury.

In Israel there is no Claim Construction Hearing ("Markman hearing") in which the judge examines the evidence of the parties in order to understand the appropriate meaning of the key words of the patent claims.

The grounds for filing an application for patent revocation are identical to the grounds for filing an opposition.

Partial revocation may occur following an application for partial revocation, or following a revocation application that has been only partially accepted.

The Registrar has the discretion to partially revoke the patent by narrowing, or revoking part of, the patent claims.

The patentee may apply for an amendment during revocation proceedings for the purposes of clarification, removing an error in the specification, or restricting the claims. The Registrar will permit the amendment if he or she is convinced that the amendment will not broaden the scope of the claims and will not add anything to the specification not already included.

As opposed to , for example, Germany, infringement and validity arguments (in an infringement litigation) are heard before the same court. In terms of procedure, the issue of damages is bifurcated. At the first stage the court addresses issues of validity and infringement, with the judgment at this stage addressing the grant of an injunction and usually an order for accounting. At the second stage – the bifurcated damages proceeding – the parties conduct a trial over the accounting and calculation of damages. The parties usually settle the dispute during this proceeding and do not conduct it in its entirety.

There are no special procedural provisions for intellectual property rights proceedings.

Infringement cases are heard before professional judges possessing a legal background; there are neither technical judges nor juries in Israel. There are also no specialised intellectual property judges. The parties have no influence on the allocation of their presiding judge.

The parties may resolve the dispute via mediation (which is regulated by law). Mediation is voluntary and, even though the judges usually encourage the parties to resolve the dispute using mediation, currently there is no mandatory settlement conference. The court may also, with the parties' consent, refer the case to arbitration.

If an application for revocation is filed with the Patent Office after a patent infringement action has been initiated before a district court, the Patent Office will not hear that application unless the court permits it.

Where a patent infringement action has been initiated before the district court, when a revocation application is already pending before the Patent Office, the court has the power to stay the proceedings before the Patent Office.

The court trying an infringement action may also stay the proceedings before it, pending resolution of a revocation action before the Patent Office (judges may sometimes encourage the parties to first resolve the validity issue by instituting a revocation action before the Patent Office).

If the Patent Office revokes the patent, revocations act in rem. If the Patent Office dismisses the revocation action, the district court is free to invalidate the patent (subject to the general rules of issue preclusion).

As set forth in 1.5 Rights and Obligations of Owner of Intellectual Property Right, the remedies available to a successful plaintiff in an infringement case are injunction, damages and delivery up. The judge has the power to fashion any additional remedy he or she finds appropriate.

As set forth in 6.2 Rights of Prevailing Defendants, generally the prevailing party is entitled to reimbursements of their court and attorney's fees. In practice, however, reimbursement is almost always partial.

As a general rule, the prevailing party is entitled to reimbursement of its reasonable legal costs. However, in practice reimbursement is almost always partial. The court also has the power to award costs in interim proceedings, but will sometimes defer its decision until after a decision on the merits is made.

The courts also have regard to the parties’ conduct, which may result in denying an award of costs to the winning party (in whole or in part) and may even result in the court providing for an award in favour of the losing party, or in providing for an award to the state treasury.

According to Section 364 and 365(b) of the Civil Procedure Regulations, the application for an interlocutory injunction shall be accompanied by the applicant’s personal undertaking to compensate the person against whom the order is directed for any damage caused to him or her by the interlocutory injunction, if the action ceases or the order expires for any other reason.

As far as attorneys' fees are concerned, the courts usually award attorneys' fees (without extensive factual inquiry), which are significantly lower than the actual attorneys' fees incurred. Thus, the attorneys' fees awarded by courts are but a fraction of the attorneys' fees actually incurred.

The prevailing party is also entitled to reimbursement of all reasonable out-of-pocket expenses. Court fees are generally viewed as a reasonably incurred cost and are reimbursed by the losing defendant in full, though the court has discretion to refuse this reimbursement, in part, where it finds that the amount initially claimed (and on the basis of which court fees were paid) were unduly high.

Costs appearing in the court docket (such as payments ordered by the court to witnesses for their lost time, which are relatively low) are reimbursed as a matter of right. Reimbursement of other costs, such as expert fees, travel and accommodation costs, translation costs, photocopies, couriers, and the like require submission of an application, proving the costs in a detailed manner, and the costs are then scrutinised to ensure their reasonableness as a condition for reimbursement.

The practice before the ILPTO in oppositions and revocation actions is different. Following judgment, the prevailing party is entitled to submit an application that details, on an itemised basis, not only out-of-pocket costs but also attorneys' fees paid. All items are scrutinised, and practice shows that the amount of attorneys' fees reimbursed is substantially higher than in district court litigation.

Accordingly, in district court infringement litigation, the recovery may be well below 15%. However, in proceedings before the ILPTO the recovery may be 50% or more and legal fee awards may be as high as hundreds of thousands of US dollars.

According to the Commercial Wrongs Act, a successful plaintiff in a trade secret infringement case may be entitled to injunction and damages, including statutory damages of up to ILS100,000 per infringement (approximately USD28,571).

If the patent was found to be valid and later infringed, at first instance, the common practice is that an injunction is granted and the default rule is that execution is not stayed.

There are no special provisions concerning the appellate procedure for intellectual property rights proceedings.

The appellate courts typically refrains from interfering with findings of fact made by the trial court. The court sitting in appeal over the decisions of the Patent Office will typically defer to the findings of the Patent Office, premised on the notion that the Patent Office is a body with high professional expertise.

The Supreme Court sees decisions on interim relief as discretionary and will therefore not readily interfere.

There are no protective briefs. It is common practice that, upon request from the other party, one should add a copies of warning letters that were sent related to every motion filed with the court.

According to a schedule to the Court Regulations (Fees), the filing fee rate is 2.5% of the claimed amount up to ILS23.971596 million (USD6.849027 million) and 1% of any additional amount.

Section 6(a) of the Court Regulations (Fees) states that the court fee shall be paid in two equal installments: the first when filing the action and the second up to 20 days prior to the date scheduled for the first evidence hearing.

Please see 6.2 Rights of Prevailing Defendants.

The use of ADR is more widespread in general commercial disputes than in the field of intellectual property. However, the awareness of ADR in patent litigation has significantly increased in recent years and mediation is generally encouraged by the courts.

Due the high workload in the Israeli court system, judges encourage parties to use mediation (which is regulated by law), but doing so is possible only with the mutual consent of both parties.

Arbitration is also regulated by law and allows the parties to agree upon the possibility of appealing the arbitrator's verdict.

There is no legal obligation to record assignment agreements for registered patents or pending applications at the Patent Office. Failure to record such assignments does not influence the validity of the application or the patent granted thereon, nor does it have any bearing on the relationship between the parties to the agreement. Nevertheless, we would recommend recording the change for a number of reasons, including the following:

  • recordation is required in order to allow the assignee to assert the right against third parties (the Patents Act is silent in this regard and does not explicitly state whether an exclusive licensee may collect damages in respect of an infringement that occurred prior to the date of recordation of the licence); and
  • unlike in the USA, failure to record may cause delay when immediate enforcement actions are required (since the right to file these actions is the preserved of the registered patentee/exclusive licensee) and such recordation is required prior to filing an action.

The application for assignment may be filed by the assignee or by his or her legal representative.

According to an administrative directive issued by the Patent Registrar, two documents will be required in order to record an assignment agreement at the Patent Office.

The Original Assignment Agreement or a Certified Copy Thereof

According to the directive, the assignment agreement must indicate the exact transaction, the date of the transaction, the signature of the assignor and a specific reference to the Israeli patent or patent application involved, identified by its official serial number. If the original agreement was not made in Hebrew, Arabic or English, a certified translation into one of these languages must be provided by an Israeli or foreign notary.

If the agreement is signed by a liquidator or trustee, it is necessary to submit the document evidencing the appointment of that person and his or her authorisation to sign on behalf of the legal entity for which he or she had signed the agreement.

If the agreement indicates that it is executed in accordance with, or subject to, the provisions of a previous agreement, it will be necessary to file an affidavit on behalf of the party requesting the recordation or his or her attorney, stating that the previous agreement does not include any provisions which may revoke or restrict the recordation of the requested change.

If the agreement includes confidential information, one may file both an abbreviated version of the agreement, along with the duly notarised complete unabbreviated version thereof and request that the Patent Office clerks return the complete unabbreviated version once the agreement is duly recorded so that the only document to remain on record will be the abbreviated version.

Alternatively, it is possible to file the abbreviated version of the agreement only, as long as the applicant explains to the Patent Office why certain parts were redacted, what the general content of these parts was, and confirm that these parts do not include any provisions which may revoke or restrict the recordation of the requested change.

If the application for assignment is requested following an order of a foreign court or a will (testament), the applicant must present a decision, order or ruling of an Israeli court (or the Israeli registrar of wills in respect of the inheritance) in order for the change to be executed.

A Duly Signed Power of Attorney in the Name of the Assignee, Indicating the Full Name and Address of the Assignee and the Date of Signature

No legalisation or notarisation of the signature is required. Furthermore, it is not necessary to file the original form or a certified copy thereof (a simple copy will suffice).

Costs for Recording an Assignment

There is an official fee of approximately USD67. Professional fees vary significantly

The Patentee may give an exclusive or non-exclusive written licence to exploit the invention. An exclusive licence confers the exclusive right to act as if the licensee were the patentee, and it prohibits the patentee from exploiting the invention in Israel. A non-exclusive licence confers the right to exploit the invention to the extent, and on the conditions, prescribed in the licence. A non-exclusive licensee does not have a right to file an action for infringement.

The recordation of licences for registered patents or pending applications is not mandatory under the Patents Act. Moreover, non-recordation of the licence does not affect the validity of the patent (or patent application) involved, nor does it have any bearing on the relationship between the parties to the agreement. Nevertheless, a recordation of an exclusive licence is required in order to assert that licence against third parties. Therefore, a patent licence agreement that was not registered in the Patents Register is generally in effect only for the parties to the agreement.

The procedure for recording and licensing an agreement, as well as the cost involved, is similar to that of recording an assignment (See 10.1 Requirements or Restrictions for Assignment of Intellectual Property Rights).

Gilat, Bareket & Co., Reinhold Cohn Group

26A Habarzel Street
POBox 13136
Tel Aviv 6113101
Israel

+972 3 5672000

+972 3 5672030

info@gilatadv.co.il https://gilat-bareket.rcip.co.il/en/
Author Business Card

Law and Practice

Author



Gilat, Bareket & Co., Reinhold Cohn Group is the leading intellectual property consulting firm in Israel and offers a full breadth of IP-related services and expertise, including protection, asset management, due diligence, litigation and legal services. The firm operates in all areas of IP such as patents, trade marks, designs, copyrights, open source, plant breeders' rights, etc. The group includes the patent attorneys firm Reinhold Cohn & Partners and the law firm Gilat, Bareket & Co., which specialises in litigation and the legal protection of intellectual property rights in patents, technology, brands, designs, creative works and inventions. Gilat, Bareket & Co. employs 23 attorneys at law, several of whom also hold academic degrees in the sciences. Key practice areas include filing suits for patent infringement in courts, representing clients before the Patents Registrar, rendering opinions regarding infringement and freedom to operate, and counselling on service inventions. The firm would like to thank Stav Tuval, Keren Lindenfeld and Tomer Rosenfeld for their assistance in connection with this and past editions of this chapter.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.