Overview
Israel does not have, like other countries, a unique legal system which deals with
intellectual property matters, and patent infringement matters are dealt by the
regular courts system.
In addition, the Israeli commissioner of patents and trademarks has parallel authority
to render decisions on the validity of patents.
In such a state of things, plaintiffs and defendants in patent cases, as well as
anyone who is interested to act to invalidate a granted patent, have much
flexibility in choosing the proper tribunal which will decide these matters,
flexibility that can be leveraged by sophisticated attorneys to promote the
interests of their clients.
Plaintiffs Strategy – Choosing The Right Tribunal
A patent owner that recognizes an infringement of his patent rights and is
interested to act against such a person or entity that infringes the patent can
choose between different tribunals – each of the more suitable for a different
goal.
Choosing the Tribunal – Magistrates Court or District Court
The first step of choosing a proper tribunal for patent infringement deals with
choosing the court that will decide the case.
According to the current civil procedure in Israel , the plaintiff must choose the
tribunal which is authorized to grant him the requested remedy. The plaintiff
therefore has, by deciding which remedy he seeks, control over the chosen
tribunal.
When the sought remedy is monetary compensation as well as a permanent injunction,
the plaintiff must file his lawsuit in a district court.
When the sought remedy is only monetary compensation, it is possible to sue an
amount which is within the boundaries of the magistrates court, and that way,
file the lawsuit in a magistrates court.
In many cases, plaintiffs in patent cases will prefer the district court because
that court is authorized to grant an injunction preventing the sued party from
infringing the patent, and stopping the infringement is often what plaintiffs
in patent cases are looking for.
In addition, the district court is the only one authorized to grant a temporary
injunction, which will stop the patent infringement immediately, until the case
is decided.
Nevertheless, in many cases, the plaintiff has no interest in stopping the infringement. This
is the case, for example, when the plaintiff does not even use the patent. In
such a case, the plaintiff may have a clear interest that the defendant will
continue using the patent, because the more extensive the infringement, the
higher the compensation. In such a case, the plaintiff can certainly settle for
a monetary remedy and file his claim in a magistrates court.
While the district court’s large benefit is its ability to grant an injunction, the
great benefit of the magistrates court is the low cost of the procedure.
Another factor to consider is the pace of the proceedings. When, for example, the only
court with authority is the district court of Tel-Aviv, the meaning of filing a
lawsuit there may be having the case stuck in court for 7-8 years (!) whereas
choosing a magistrates court will normally mean a final decision within 2-3
years.
Choosing the Tribunal – A Question of Geography
When a patent is infringed throughout the whole country, or when there is a
difference between where the patent is infringed and when the infringing
company is registered (and in other cases as well), the plaintiff will have a
choice between different tribunals.
When the plaintiff chooses to file his claim in a district court, he can choose
between the following courts:
The district court of Tel-Aviv
The district court of the Central District (Petah-Tikvah)
The district court of Jerusalem
The district court of Haifa
The district court of Beer-Sheva
The district court of Nazeret
Since most of the practicing attorneys are based in the central district, most of the
claims are also filed in the Tel-Aviv or Petah-Tikvah court, but this is not a
good reason to choose a court! Israeli judges move between courts all the time,
and in any given point of time, some courts are better for plaintiffs and some
courts are better for defendants.
In the United States, plaintiffs chose to file claims in the Eastern District of
Texas for many years, because of its reputation as a “pro-plaintiff”
court, and the United States is a bigger country! In Israel, too, a court
chosen should not be the one closest to the attorney’s office, but rather, the one with the best
chances to win.
By way of example, for many years we recommended our clients who were interested
in preliminary injunctions in borderline cases, to avoid filing petitions for
temporary injunctions to the district court of Tel-Aviv. This court had a
single judge who recently retired, who heard all those motions and denied most
of them. Recently, this judge retired, and we are following up to see how the
rulings will now change.
The district court of Petah-Tikvah, established to take the pressure of the
Tel-Aviv court, has highly professional judges, but they also have a downside –
they push very hard to compromise, even when compromise is not advisable for
the plaintiff.
The importance of choice of the best venue is even more true when a plaintiff
chooses to file his claim in a magistrates court, where the choice is between
multiple courts, and in most of them there is a single judge dealing with
intellectual property matters, so that choosing the court practically means
choosing the judge, whose opinions are often known and ruling expected to some
extent!
To conclude – one cannot overstress the importance of choosing the ideal venue to
litigate a case!
Defendant Strategy – Choosing Venue
Defendants in patent infringement cases do not have much influence over choice of venue
because it is normally chosen for them.
However, defendants to have the option of trying to divert the case from the court to
the commissioner of patents and trademarks by filing a petition to invalidate
the patent and at the same time, file a motion to court to stay the proceedings
until the commissioner of patents has decided.
So far, there are very few decisions in such a cases, some staying the proceedings
and some not. In the US, it is a very common strategy known as “Reexamination and stay”. It is very often an advisable strategy in Israel as well, not least because judges are not bound by the decisions of the
commissioner of patents, and even if the defendant loses in the patent office
proceedings he may have a second chance in court. And, the length of the
proceedings before the commissioner of patents will normally allow the
defendant at least a few years to carry on practicing the patent before the
case reaches an actual hearing in court.
In addition, when a cease and desist letter is received by the defendant, it is in
liberty to approach any district court and request a declaratory judgment
stating that the patent is invalid. Many litigants in Israel try to avoid
litigation at any cost, but in view of the importance of choice of venue, such
a strategy can be a winning one and should be considered any time a cease and
desist letter arrives from a plaintiff who seems serious about suing.
By way of example, a party receiving a cease and desist letter can file a lawsuit
to the district court of Tel-Aviv asking for a declaratory judgment declaring
that the patent is invalid. If a claim will be filed against such a party in a
different court it would be reasonable to assume that both proceedings will end
up heard in Tel-Aviv court, and hence, the defendant may enjoy many years of
lengthy proceedings.
Plaintiff Strategy – Temporary Injunctions
A. Temporary Injunctions
When patent infringement results in immediate damage to a patent owner, such a
patent owner will normally seek to secure a temporary injunction.
In such a case, the patent owner will file a claim to the authorized district
court, and will try to choose a court that tends to grant such injunctions in a
given point of time.
When a regular claim is filed to court, the plaintiff must explain the outline of
the case, but evidence are provided in a later stage. However, to secure a
temporary injunction, the plaintiff must “come with clean hands” and
present to the court everything he knows, including all evidence he may have
that supports or that does not support his case. Therefore, petitions
for preliminary injunctions are often very long and include many appendixes and
affidavits (the Israeli court system works with affidavits and cross
examinations. There are no depositions). In practice, therefore, the case and
all its evidence are heard and concluded within a few weeks.
To win a petition for temporary relief, the plaintiff should show that:
- It has a ground.
- It has good chances of winning the case.
- The damage he will suffer if injunction is not granted is greater than the damage the other party will suffer
if injunction is granted. - That he filed his petition as soon or very shortly after he discovered the infringement.
In addition, the petitioner must deposit a guarantee in court if he receives the
injunction to compensate the other party if the injunction ends up being
cancelled. However, the amount of such guarantee is capped at around 13,000 USD.
Petitions for temporary injunctions that include all evidence are clearly expensive for
both parties, but it has a great benefit – the judge’s decision in the
temporary proceeding gives a clear indication where the case goes to, and often
leads to a compromise in an early stage. Recently, some courts began pushing
the parties very hard to conclude the whole proceedings during the hearings
regarding temporary injunctions.
A request for a temporary injunction is a sensible strategy when immediately
stopping the patent infringement is required, but it can also serve as an
excellent strategy in 2 completely different cases:
- When the patent is weak and likely to be invalidated in full evidential proceedings- in proceedings of preliminary injunctions, except for extreme cases, the court assumes that the patent is valid.Such an assumption is very strong when the patent is weak because winning in the temporary stage may lead to winning the whole case, a smart use of the temporary process can overcome patent weakness.
- When the petitioner is interested in a compromise – Courts in Israel do not like to decide on
petitions for preliminary injunctions. Therefore, even when such a petition is
completely without basis, courts will many times make offers that provide some
remedy to the petitioners, merely to avoid to have to decide, and will push
defendants to agree.
B. Ex-Parte Injunctions
It is possible to apply to the court and request ex-parte injunctions. This
is the case when a seizure order, for example, is requested, and informing the
applicant may lead to the order being useless.
Winning such an injunction and securing a seizure order, for example, can completely shock
a defendant who wakes up to an attorney accompanied by the police knocking on
his door and confiscating products.
C. Downside of Injunctions
The significant downside of injunctions is that losing them leads to much frustration and lower chances of winning the procedure. The judge has already expressed his opinion and the defendant now has “energy” to fight the
case.
The decision whether to ask for an injunction must therefore be taken very carefully.
D. Injunctions and cease and desist letters
It is very common to send a cease and desist letter before filing a petition for
injunction. Cease and desist letters are usually sent because plaintiffs
believe that they may save the costly legal procedure.
However, such letters should be used with much caution because they may backfire, since a good attorney can use the letter to almost certainly block the option of winning an injunction (as will hereby be explained).
Defendant Strategy – How to Avoid a Temporary Injunction?
In cases where the defendant receives a cease and desist letter before filing a claim,
he has received a great gift – a good shot at blocking the injunction!
When there is no risk for an injunction, a response to a letter should avoid, as much as possible, from reveling the defendant’s line of defense.
However, when there is a risk of the letter being followed by a petition for a
preliminary injunction filed to court, the letter of response can be a very
good basis for blocking the injunction (!)
Since the petitioner must “come in clean hands” and reveal all facts known
to him to the court, he must also disclose the fact that a letter of claim was
sent and the response to it, and a good letter of claim will include a reminder
to that duty (“we will ask that in any proceedings you may choose to
engage, you will enclose this letter…”).
Then, it is enough that the defendant will create enough doubt in his letter to
nearly certainly prevent the court from granting an ex parte injunction,
and then, the letter should include implying that the defendant has a strong
line of defense, but without revealing all the details (“the defendant has
strong evidence that your claims have no basis”). In seeing such a letter,
the court will want to see such evidence, and then, when presenting them, it
can also be argued that the plaintiff did not “come in clean hands”
and convince the court to completely refrain from granting an injunction.
Another good way of “blocking” an injunction is inviting the defendant to
mediation. Such an invitation, even if not done in a true attempt to end the
conflict, will strongly influence the judge.
Conclusion
Patent infringement cases in Israel allow parties much room for maneuver. Both
plaintiff and defendant can choose between different courts and different
strategies. It is a true chess game.
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Zeev Fisher (zeev@fwgip.com) is an Israeli Advocate and a Solicitor Licensed in England and Wales. He is one of the most senior intellectual property attorneys in Israel. He is the managing partner of Fisher Weiler Group, an IP boutique with offices in Tel-Aviv and London.
Zeev Started his career as a criminal defense attorney for the Israeli army advocate general, and afterwards transformed to IP. He is a distinguished member of the INTA internet committee and is an authorized IP mediator. Mr. Fisher appears frequently before all the courts in Israel on IP matters, including the commissioner of patents, trademarks and designs, the district court, and the Supreme Court of Israel.
