Israel: Intellectual Property Highlights

In this article we review recent judgement of relative importance, as well as certain noteworthy statutory amendments. These include:

• Trademarks – the new service classes (43-45) come into effect on January 1, 2002
• Designs – an ornamental feature that may be applied to a number of objects, may be protected per se with the need to apply for registration of the different objects
• Filing of patent applications – continued to increase in 2000
• Contributory infringement introduced into the law by a Supreme Court Decision
• Copyright in sport events – Supreme Court rules that a television production of a sport broadcast is a copyrighted work
• Other decisions
• New legislation
• The Crop Protection (Arrangement of Importation and sale of Chemical Preparations) Regulations (Amendment), 2001 – Parallel imports of agro-chemicals
• The Electronic Signature Law, 2001
• Bill of Copyright and Performers Rights (Adjudication of Issues of Royalties) Law, 2001
• Bill of Copyright (Statutory Amendments)(Criminal Liabilities) Law, 2001
• Bill of Encouragement of Industrial Research and Development Law, 2001
• The Genetic Information Law, 2000
• The Prohibition against Capital Laundering Law, 2000
• RC&P news –Dr. Bossmat Gonen is appointed as the firms CEO

As all practioners in the IP field are aware, the International Classification of Goods and Services under the Nice Convention, was amended by splitting Class 42 into four classes – 42 to 45.

The Israeli Patent Office has now issued guidelines confirming that the new classification will be binding as of January 1, 2002. Until December 31, 2001, applications may be filed both under the current classification or the new one, but as of January 1, 2002, only the new classification will apply.

In case of pending applications, the change in classification may be made either with the initiative of the applicant or may be initiated by the Trade Mark Office. Regarding registered trademarks, these may be reclassified, if so requested by the applicant although it is not compulsory to do so.

In the event of reclassification of an application/registered trademark, this may at times require division of an application/registration into a number of applications/registrations. In such a case, the registrations/applications will be accorded new serial numbers but will be entitles and will bear the original filing date. Filing fees will need to be paid for each new application/registration stemming from such division.

It should be noted that in accordance with Israeli law, classification does not play an important role in determining the scope of rights under a registered trademark in case of infringement and the determining factors are the description of goods or services and consequent likelihood of confusion with the alleged infringing trademark. Thus, we do not currently see a reason to apply for reclassification of existing registrations.

With regard to searches, the Patent Office indicated in its guidelines that for applications in Classes 43, 44 or 45, a search will also be made in Class 42 in order to locate prior trademarks which have not been reclassified.

The Patent Office has issued guidelines regarding the manner in which to protect an ornamental feature, which may appear in different versions of an object. The example given in the guidelines are different versions of a telephone hand-set, all of which contain the same ornamental feature. Another example of this principle may be an ornamental feature printed on different types of shirts, etc.

The guidelines indicate that in such cases it is sufficient to submit a single application for the registration of a design. Such design application should include a novelty statement relating to the ornamental feature for which protection is requested, accompanied by drawings or photographs of one specimen product.

Thus, in case novelty of a design is embodied in a specific feature, it is advisable to let us know so that we can include a novelty statement, which in effect will somewhat broaden the scope of protection of the design.

According to a recent publication in Globes (the Israeli business evening daily), in the year 2000, 6,802 patent applications were filed with the Israeli PTO, 1,599 of which originated in Israel (and 2,982 originated in the United States). The data show a continued increase in the number of patent application filed. The data for the preceding four years are as follows: 1997 – 2,886 applications; 1998 – 5,056 applications; 1999 – 5,957 applications; 2000 – 6,802 applications.

The Supreme Court recently issued two important judgements regarding patent laws. One judgement, dealing with parallel importation of pharmaceuticals was reviewed in our last (August 2001) newsletter. In the second judgement, the Rav-Bariach case, the Supreme Court introduced, by way of judicial legislation, the concept of Contributory Infringement to the Israeli Patent laws.

The Appellant, Rav Bariach, was the proprietor of a patent that claimed an arrangement for prevention of car theft that includes a certain combination of elements. The system consisted of three parts: (i) a rigid bar secured to the body of the car in the vicinity of (and parallel to) the gearshift stick; (ii) a padlock body fixedly mounted onto the bar; (iii) a padlock yoke adapted to be locked to the padlock body, thereby enclosing the gearshift. Defendant imported and marketed in Israel the padlock body and the padlock yoke, but not the rigid bar. However, the padlock was adapted so as to enable mounting same to the bar. The District Court found in favor of defendants (the alleged infringers), because the Patents Law, 1967, does not deal with the issue of contributory infringement. The Supreme Court reversed the District Court’s decision and found the defendants liable for contributory infringement of the patent.

The Supreme Court noted the absence of controlling statutory provision. After reviewing the comparative law in the United States, England, Germany and Canada, it decided that it would be appropriate to introduce the concept of Contributory Infringement to the Israeli Patent laws by way of judicial legislation.

The Court ruled that on order to impose liability on the basis of contributory infringement, the following three conditions need to be met:

As may be apparent to those familiar with the provisions of U.S.C. 35 § 271(c) and with the British Section 60(2) of the Patents Act, 1977 (which follows Article 26(1) of the EPC), the above conditions are essentially a mixture of both.

The Court noted that in the United States the courts have added a forth requirement, namely, that actual infringement be proven to have occurred. The Court found this requirement to have been net in the case at hand. The Court did not expressly decide, however, that this is an additional requirement for imposing liability in the case of a contributory infringement. An additional issue, which was not at all raised by the parties and, hence, not touched upon by the Court, is the question of permissible repair.

The Supreme Court issued a long awaited judgement, setting precedents regarding the subsistence of Copyright in Sport events and broadcasts of same.

This appeal evolved on the issues of subsistence of copyright in broadcasting of live sport events and infringement of copyright by cable operators by live retransmission, and the rights of licensees to file action for infringement of copyright.

Appellant, Tele-Event Ltd. acquired the broadcasting rights of the Wimbledon tennis tournament in Israel. The defendants, five Israeli cable TV operators, retransmitted to their subscribers in Israel broadcasting of foreign television networks (such as Star TV, RTL Plus and others), which included as a matter of routine, live broadcasting of the Wimbledon tournament. Appellant sought a declaratory judgement and a restraining order enjoining respondents from broadcasting or re-transmitting the Wimbledon tournament without permission of the Appellant.

Both the District Court and the Supreme Court ruled that copyright does not subsist in a live sport event in itself. The rationale provided for this decision was not necessarily because sport events do not fall within any of the types of works enumerated in Section 1 of the Copyright Act (namely: literary , dramatic, musical and artistic), but rather primarily because recognizing a method of playing sport games and performances of sportsman during a sport event as a subject for a copyright will prevent copying by competing sportsmen and will frustrate sporting progress. The court distinguished, however, between the live sport events in themselves and a broadcast, for example, a TV broadcast, of such events.

Copyright laws are governed in Israel, unfortunately, by the UK Copyright Act of 1911, which was enacted in 1924 in the course of the British mandate over Israel. The definitions and classification of works under the 1911 Act do not refer to works such as a movie or TV broadcast, due to the mere fact that such technology did not exist at that time. Nevertheless, the court applied the 1911 Act to works involving new technologies, as it did in other cases (such as software and others).

Appellant argued that the television production of live sport event should be classified as an artistic work because it contains photos. The court however, chose to classify a television production as a dramatic work, which includes cinematographic work. It noted that, in principle, a work could be classified as falling under more than one category, but did not finally resolve the question whether a television production should also be classified as an artistic work.

The court found that the television production of the Wimbledon tournament meets the requirements of originality and of and of investment of skill and effort by the author, which renders it a different nature than of those materials of which it was shaped. The court held that the many decisions that have to be made before and during the broadcasting of a sporting event, such as for example, the determination of the number of cameras, their allocation between the different tennis courts, the allocations of shooting positions, live editing, incorporation of past recordings and the like, render the broadcast an original, copyrighted work that is differentiated from the tennis games themselves.

Lastly, the court held that the fixation requirement is met by the simultaneous recording of the broadcast into cassettes.

The court than turned to decide whether live re-transmission by the Israeli cable TV operators of satellite TV transmissions amounts to copyright infringement. The court answered this question in the affirmative.

Respondents, the cable operators, attempted to rely on the U.S. courts decisions in Fortnightly Corp. vs. United Artists Television and Teleprompter Corp. vs. Columbia Broadcasting Systems, in which the U.S. court held that cable operators performing live re-transmissions should not be held to infringe copyrights contained in the original broadcasts. The Supreme Court noted the criticism expressed against those decisions and the unfairness of such result. The court noted the subsequent amendment of the U.S. copyright law, which introduced the concept of compulsory license to solve the problems associated with live re-transmission of multiple works contained in TV broadcasts and noted that such solution is not provided by the Israeli law. Nevertheless, the court held the cable operators to be liable for copyright infringement in cases of live re-transmission. In reaching its decision, the court also dismissed the cable operators contention that the telecommunications legislation, which obliges the cable operators to re-transmit certain broadcast, exmpts the cable operators from copyright infringement.

The court noted the controversy whether a licensee can sue for copyright infringement in his own name, (and that such controversy was not settled in England, until the enactment of the 1956 Act). The court held that an exclusive licensee may sue in its own name, if it joins the licensor, the copyright proprietor, as party to the action (as was done in the case at hand). The left unresolved the question controversy whether an exclusive licensee can sue for copyright infringement in his own name, without joining the licensor as party.

In a related case, the Tel Aviv District Court issued a temporary injunction retraining the Israeli Broadcasting Authority (IBA) from live broadcasting of football games arranged by the Israeli Football Association. The Israeli Football Association supervises the football activities of the Israeli football clubs, including the Premier Football league.

The Football Association has for many years conducted agreements with various broadcasters such as Radio LeLo Hafsaka (which is a regional radio station) and the IBA (THE National Television and Radio Station) with regard to broadcasting rights of football games.

Prior to the 2001/2002-football season, the Football Association solicited and received offers both from Radio LeLo Hafsaka and from the IBA for purchase of exclusive broadcasting rights in the radio until 2003/2004 football season. After negotiation, the association entered into an exclusivity agreement with Radio LeLo Hafsaka. The IBA, who had lost the ability to broadcast football games, then sent its employees who used cellular telephones to report the games to mobile broadcasting stations that were located outside of the football stadiums. Both Radio LeLo Hafsaka and the Football Association moved to enjoin this activity and the court issued a temporary restraining order as requested.

The court’s decision is based on several grounds. The first ground is that the activities of the IBA constitute a violation of the unjust enrichment law and a misappropriation of the Football Association Intellectual Property. The court commented that live broadcast of a sporting event should be considered an Intellectual Property of the body that organizes the event.

The second ground for the decision was that for years the IBA entered into exclusivity agreements with the Football Association and is therefore now estopped from arguing that the consent of the Football Association is not required in order to broadcast football events.

The decision was given in the framework of an application for a temporary injunction and it remains to be seen what will be the final judgment.

Trademarks – Domain Names: the mark "Hapraklit" (Hebrew for "the attorney") is a generic mark. However, Applicant showed that it has become a famous trademark identified with it. A gTLD (".com", in the case at hand) cannot make the mark distinguishable. Use by the respondents of the domain name www. Hapraklit.com constitutes, prima facia, trademark infringement, passing off, and an unfair interference in a domain name. A temporary injunction was issued, prohibiting use of the domain name by the respondents and obliging them to transfer the domain name to the plaintiff, pending final judgement in the action. (O.M. 810/01 M.A. Israeli Lawyers Association v. Ben David et al)

Restrictive Trade Practices – Patents: In a landmark decision, the Restrictive Trade Practices Court dismissed an appeal lodged by company against a declaration by the Comptroller of Restrictive Trade Practices that the appellant is a "Monopoly". The Court held that the fact that a patentee acquired its monopoly as result of its ownership of certain patent rights does not bar a declaration of the patentee as a "Monopoly". However, ownership of the patent may be taken into consideration, if and when the question will arise whether the patentee has breached any duty imposed on "monopolists".

(R.T 3/97 Magal Security Systems Ltd. v. Comptroller of Restrictive Trade Practices)

Patents: in a regrettably depthless judgement, the District Court of Tel Aviv dismissed a patent infringement action filed by Merck & Co. The Court invalidated Merck’s patent which claimed crystaliline monosdium salt trihydrate alendronate (the API in Merck’s successful osteoporosis drug, FOSALAN). The court found the invention an obvious alteration of prior art that taught the non crystalline form of the product.

Domain Names: Registration of the domain name www.magnetics.co.il by Respondent (who operates a website using the company’s domain name, www.discopy.co.il) was held to constitutes an unfair intervention in the access to a competitor’s business. Defendant was ordered to transfer the domain name to the plaintiff.

(C.A 1627/01 M. SH Magnetics Ltd. v Discopy (Israel) Ltd. et al)

Domain Names: Plaintiffs, Nana Disc Ltd. and others operated a phone-records production business for twenty years. Defendants, Netvision Ltd., Israel’s largest ISP, launched a portal using the domain name www.nana.co.il. Plaintiffs’ action was dismissed, after finding that plaintiffs failed to establish goodwill. The court added that it would also dismiss the action on the ground of inexcusable delay. Defendants invested heavily in the new portal and plaintiffs failed to object for a period of merely five months. The court ruled, however, that in the context of the Internet business, even short period might amount to an inexcusable delay.

(C.A 751/00 Nana Disc Ltd. et al v. Netvision Ltd. et al)

Internet – Libel: Plaintiff filed a private criminal complaint, after defendants published an allegedly libelous article in the both the printed edition of Globes and in the paper’s Internet website. Defendants move to strike the complaint as far as it relate to the publication in the Internet, arguing that an Internet website is not considered "means of media" within the meaning of the Law Against Libel, 1965. The court refused the application, and held that although not expressly specified in the law, a newspaper’s the provisions in the Law Against Libel regarding newspapers should be interpreted to apply to publication in a newspaper’s website.

(C.C. 145/00 Weissman v. Golan et al)

Internet – Labor Law: Employee’s surfing in the internet during work-hours and printing pictures using employer’s printers constitute a disciplinary offence, which may entitle employer to terminate the employment of the employee.

(La. 3016/01 M.A 2250/01 Guri v. Ramleh Municipality)

• The Electronic Signature Law, 2001 – Entry into Force and promulgation of Regulations

• Bill of Copyright and Performers Rights (Adjudication of Issues of Royalties) Law, 2001 – Special Court for certain disputes arising in connection with the activities of collection societies

• Bill of Copyright (Statutory Amendments)(Criminal Liabilities) Law, 2001 – Increased penalties for copyright infringement coupled with limitation of the ability to bring private criminal complaints

• Bill of Encouragement of Industrial Research and Development Law, 2001

• The Genetic Information Law, 2000 ("the Genetic Information Law") – Regulating Genetic Information

• The Prohibition against Capital Laundering Law, 2000

Dr. Bossmat Gonen, one of RC&P’s senior patent attorneys has been appointed recently as the Company’s Chief Executive Officer. Dr. Gonen, who was admitted to practice before the Israeli Patent Office in 1994, replaces Dr. Ilan Cohn and Mr. David Gilat who jointly held the position of Managing Partners until Dr. Gonen’s nomination. Dr. Cohen and Mr. Gilat will continue in their role as professional directors of the firm.