America-Israel Patent Law

Israel Reaches 300,000 Patent Applications

I didn't see anything about this on the Israel PTO's web site, but from the Patents Journal that published on February 1, I see that Israel hit patent application no. 300,000 on January 16, 17 or 18.  Patent applications in Israel are numbered sequentially and stay the same once a patent is granted, and since not all applications proceed to grant, this means that we're still at fewer than 300K granted patents.  Still, 300,000 applications is a respectable milestone.

To get a sense of timing, application no. 75,100 was filed in May 1985 (before Israel joined the PCT), no. 100,000 was filed in November 1991, no. 125,000 in June 1998 (after Israel joined the PCT), no. 150,000 in June 2002, no. 175,000 in April 2006, no. 200,000 in July 2009, no. 225,000 in September 2011, no. 250,000 in January 2017, and no. 275,000 in May 2020.  Most of those applications were all filed as national phase applications of PCT filings, and consequently in the ILPTO's database their filing dates are listed as the PCT filing date rather than the national phase date, but the application number accords with the date of national phase entry.

Patent Practitioners Aren't The Same As Lawyers: Quod Erat Demonstrandum

This afternoon, the Israel PTO and Justice Ministry held a roundtable discussion about in-the-works draft ethics rules for patent practitioners.  I may or may not report more on the meeting in a later post, but while that meeting was going on, this story broke about the head of the Israel Bar Association resigning because he whacked off during a video chat with a female colleague who he'd recommended for a judgeship. The story implies that he admits to the act, but didn't believe he did anything wrong because it was consensual.

Every time the issue of ethics rules for patent practitioners in Israel has come up, I've said that patent practitioners don't have a reputation as sleazebags and don't have the kind of opportunities for abuse of client trust that lawyers do. And usually I've pointed to the existence of canonical lists of lawyer jokes on the internet, but the noticeable absence of the same for patent practitioners. But I think this story proves my point. Especially when one considers that this guy's predecessor as head of the bar association resigned amidst criminal charges of trying to get his mistress through passport control improperly. Or that another former head of the bar association sued a cop for half a million shekels - and lost - after the cop arrested the lawyer when the lawyer refused to pay his cab driver.

Not the same professions. QED.

Pretending They’re Listening? MOJ and Patent Practitioner Ethics Rules

On January 8, the Israel PTO, in conjunction with the Department of Policy Planning and Strategy in the Ministry of Justice, announced a “roundtable” meeting scheduled for January 31 at the Ministry of Justice offices in Tel-Aviv, from 14:30-16:00. The purpose of the meeting is to discuss proposals for new ethics rules for Israel patent practitioners. People wishing to participate must respond by email to regulation@justice.gov.il. It should be noted that no actual rules have been proposed – the notice itself merely lists some topics, without explaining with the MOJ’s position is or why those topics are included (and why others are excluded).

If you didn’t know about this meeting, you’re not alone: although a notice was posted on the Israel PTO web site, no notice was sent via the Israel PTO’s regular email distribution system.  Instead, email invitations were sent to people who responded to an earlier “call for comments” that was posted on October 20 and that had a short response deadline of November 10. 

To the best of my knowledge, the comments that were received in response to that “call for comments” have not been posted anywhere, and my email request to receive a copy of them – sent to the same email address above – hasn’t even elicited a “received with thanks email”.

By way of background, Israel’s patent statute was enacted in 1967. The statute says that the relevant minister has the authority to enact (as regulations) “ethics” rules for patent practitioners. To date, no such rules have been enacted, but the practice doesn’t seem to be any worse for the wear.  Which leads one to wonder what the impetus is for enacting ethics rules for patent practitioners davka now, or even who is pushing for the adoption of such.  (In around 2013 or 2014, there was a push from within the MOJ to adopt such rules, and there was a similar “roundtable” meeting at the PTO, but that project did not result in the adoption of such rules.)

As I have noted in the past in comments to the MOJ/PTO, if you use an online search engine, you’ll find canonical lists of lawyer jokes, but jokes about patent attorneys are few and far between. There’s just far less potential for patent practitioners to engage in mischief of the kind that makes people distrust lawyers generally, and what potential there is would seem to be adequately covered by tort law.  Additionally, the statute includes provisions for discipline of practitioners, with “breach of the [non-existent] ethics rules” being only one of the things for which a practitioner can be disciplined, and as a practical matter, an ad hoc committee of practitioners has from time to time been formed by the Israel PTO when a complaint about a practitioner was received.  In other words, if it ain't broke, don't fix it.

One long-standing point of contention within the community of patent practitioners in Israel has been whether or not a practitioner can list himself as an inventor on an application he’s drafted. To any US-licensed practitioner, the answer to that question is a no-brainer: of course. And the way to regulate such situations is to make the practitioner assign his rights to the clients, at no extra cost, as was done in the case I reported on here, here, here and here.

A point that doesn’t seem to be on the MOJ’s radar, but which should be, is providing notification to clients when a practitioner leaves an office to practice elsewhere. It’s not uncommon for a practitioner to work with a particular client, local or foreign, over the course of years, during which that practitioner will often become familiar with the client’s technologies, personnel, and patent portfolios. In such a situation, the client would be best served by being given the choice of staying with the departing practitioner – thus preserving institutional memory – or staying with the old firm, with the understanding that someone new may need to learn about client’s needs. I am not aware of any firm in Israel that notifies clients when such departures occur and lets the clients know they have the option of staying with the departed practitioner.

Given the lack of transparency in how the current push for practitioner ethics rules has been handled to this point – no broad email distribution; no names of the people in the MOJ who are responsible; no disclosure of the comments received thus far; no explanations of why certain rules are deemed necessary, let alone actual draft rules to which the public can respond; a one-and-a-half hour meeting, when more time than that will probably be required – I am not alone among my colleagues in thinking that this “roundtable” is just a fig leaf to cover a fait accompli, and that the MOJ and PTO are just going through the motions of soliciting public input.

Update, a few minutes after posting: Earlier today I re-sent my email requesting copies of the comments to the email address above, with a cc to a particular person in the Israel PTO.  Shortly after I initially posted this blog post, I received copies of the five (!) submissions received in response to the "call for comments", one of which was my own submission.  Interestingly, the response from a group called "The Israel Patent Attorneys Association" suggested that a "roundtable" be held to discuss issues. I include links to all these documents below, although only my own comments were written in English.

Download Response of small offices

Download Response of association

Download Response of erez gur

Download Response of daniel feigelson

Download Response of small offices

What Were They Thinking In Congress (Assuming They Were Thinking)? Changes In Small and Micro Entity Fees

There was a piece last week in The American Spectator that argues that the 1998 SCOTUS decision Clinton v City of New York is the worst supreme court decision ever. That decision said that the line-item veto was unconstitutional. The author argues that by forcing the president to either approve or veto the Congressional spending bill in its entirety – a veto resulting in a shut-down of the federal government – all sorts of junk that would never get enacted otherwise now gets thrown into the spending bill.  If what happened with patent legislation last week is any indication, the author seems to have a point.

Tucked into the spending bill that Joe Biden signed into law on December 29 were several amendments that change 35 U.S.C., which is where most of the statutory language governing patents is found. (Hat tip to Scott Nielsen for the link; search for the word “unleashing” to find the relevant part.) The amendment with the most immediate effect was the change in fees for small entity and micro entity patent applicants.  If you’re already familiar with small and micro entity fees, skip ahead a few paragraphs. If not, keep reading.

Small entity fees have been around since before I started working in patents in 1995; these were meant to give small companies a break when seeking (or to remove a disincentive to seeking) patent protection, and provided a 50% reduction on certain PTO fees, most notably filing, search, examination, extension of time, and maintenance fees. Micro entity fees are a newer creature, the result of the 2011 “America Invents Act”, and these have hitherto reduced certain fees by 75%, but there are more requirements to qualify for micro entity status than there are to qualify for small entity status. 

Both micro entity and small entity status are asserted by the applicant/patentee at certain times in the lifetime of an application or patent (upon initial filing, upon payment of the issue fee, and upon payment of each maintenance fee), and normally the status is not something the PTO checks or even has the wherewithal to check.  Nevertheless, I’ve never filed an application for someone claiming microentity status, and I know other practitioners who are in the same situation: we think that the cost of verifying entitlement to microentity status (in attorney time) outweighs the additional 25% fee reduction over the 50% small entity reduction.  Micro entity status is thus an example of a nice idea that’s poorly implemented.

Small entity status, on the other hand, is easier to verify, because the way in which “small entity” is defined is fairly straightforward: if the application or patent is owned by an entity that has 500 or more employees, or there’s an obligation to assign to such an entity, then the applicant/patentee isn’t entitled to claim small entity status.

If one makes a good faith mistake in claiming small entity status, hitherto the remedy has been straightforward: you pay the difference in the fees that were due in accordance with the fee schedule in effect on the day you make the correction in entity status.  So if, for example, you paid a $500 fee at the small entity rate, and a week later discover that it should have been $1000, you pay the $500 difference.  If a fee increase or decrease went into effect between when the fee was originally paid and the difference paid, that difference will be in accordance with what the new fee is.

Of course, if the patent is valuable, and at some point the patentee corrects a payment that was mistakenly made at the small entity (or micro entity) rate, then in litigation the defendant will make an issue out of the applicant/patentee’s good faith, thus adding cost to the litigation…which is why practitioners try to avoid making such mistakes in the first place. This is also why, in situations in which the determination of small entity status is more complicated, some applicants may elect to pay full fare, to keep this issue off the table. Nevertheless, if the good faith in making fee payment at the reduced rate is demonstrable, then the mistake per se in claiming small entity status is not fatal, and fee-wise, there’s no penalty.

In contrast, deliberately paying the reduced fee to which one is not entitled is fraud, and, once discovered, it leads to one result: an invalid patent. And yes, there have been cases where people tried to pull a fast one on the PTO and later got caught. Bye bye, patent.

This brings us to last week’s statutory amendments. Among other things, they increase the small entity fee reduction to 60% of the normal fee and the micro entity reduction to 80% of the normal fee (viz. qualifying applicants/patentees now pay only 40% or 20% of the relevant fees).  But now there’s a catch if you incorrectly assert entitlement to fee reduction:

Penalty for False Assertions.--In addition to any other penalty available under law, an entity that is found to have falsely asserted entitlement to a fee reduction under this section shall be subject to a fine, to be determined by the Director, the amount of which shall be not less than 3 times the amount that the entity failed to pay as a result of the false assertion, whether the Director discovers the false assertion before or after the date on which a patent has been issued.

What’s meant here by “false assertions”? Off the top of my head, I can think of at least two ways to read this, one of which definitely is wrong. 

Let’s start with the way it could be read, but shouldn’t: it shouldn’t be read as saying that a willful false assertion of entitlement to fee reduction (viz. small or micro entity status) is subject to a penalty, because such a willful false statement constitutes fraud, and the result of fraud until now has been invalidation of the patent.  What’s the point in the PTO saying to a patentee, “You deliberately paid a fee a reduced rate to which you weren’t entitled, so now your patent is invalid, and please pay us $$$ to keep you invalid patent invalid”?  

So unless the amended statute means to say that fraud is now ok – and I don’t see any court buying into such a statutory construction – the new statutory language must be referring to cases of inadvertent false statements.

That means that now there’s a financial penalty for a mistaken good-faith payment of a small or micro entity fee.  If you paid it incorrectly, then that mistake is going to cost you at least three times the amount that you didn’t pay at the time.  If we’re talking, say, the third maintenance fee, that’s several thousand dollars. 

Since an applicant or patentee only needs to certify small or micro entity status at certain points in the life of a patent, I suspect that as a result of the amendments, more applicants/patentees than before who discover they have inadvertently paid the wrong fee will not immediately seek to pay the correct amount – which will now entail a significant penalty – but will simply wait until the next time they need update their status, and at that time pay the fee at the higher rate. The PTO will be none the wiser.

Which makes me wonder just what the sponsor of this particular bill thought s/he was going to accomplish with it.

Another Update On Docx

Following up the previous two posts (here and here) re docx:

First, David Boundy says that tomorrow there will be a Federal Register Notice in which the PTO delays by three months the imposition of the $400 charge for failure to file in "docx".

https://www.federalregister.gov/public-inspection/2022-28436/setting-and-adjusting-patent-fees-during-fiscal-year-2020

 

 

Second, Carl Oppedahl has written a superb explanation of the problems with docx, and how the PTO has repeatedly lied about this being a standard:

https://blog.oppedahl.com/?p=8681#comment-219169

If you're a practitioner, please sign the letter to Director Vidal, urging her to read his explanation.

 

I will be shocked if the PTO persists in this docx nonsense.

USPTO Backs Down, Maybe, At Least Temporarily, From Its Docx Fee Grab

Last month I wrote about USPTO Director Kathy Vidal’s statement in October (at the AIPLA Annual meeting) that the PTO was going to deign to continue to let applicants file pdfs with their new patent application filings.  What I didn’t make clear – because it wasn’t clear to me – was that the USPTO was still planning to impose a $400 fee for anyone who didn’t do the initial filing in “docx” format.  I also noted that as of November 30, I still hadn’t seen anything in writing about this.

On December 19, Director Vidal published a Director’s Blog post, and on December 20, the PTO published a Federal Register notice, stating that indeed, applicants would continue to be allowed to file pdfs with their “docx” filings…but that as of January 1, 2022 there would be a $400 fee if you didn’t file in docx.  In other words, you could only file the pdf if you also filed the docx file.* As of July 1, you’d get hit with the $400 fee if you had the chutzpa to include a pdf version of the application with your initial filing.

(Because of the high likelihood of errors entering an application when the PTO converts it from the docx version submitted by the applicant to the version to be used by the PTO, most practitioners were planning to continue to file in pdf and to pass the $400 fee on to their clients. Since the PTO estimated that forcing applicants to file in docx would save the PTO $3.15 per application, far below the fee to be imposed, the more cynical among us viewed this whole docx thing as a surreptitious attempt by the PTO to increase its revenues.)

Enter David Boundy and the group of dedicated practitioners on Carl Oppedahl’s listserv groups. By the end of the business day on December 23, David had drafted and, with input from many, revised a letter to Director Vidal, collected signatures from 117 practitioners on that letter, and sent it to director Vidal. The letter explained some of both the practical and legal problems with proceeding with the requirement for “docx” filing, and asked that applicants continue to be allowed to file in either docx OR pdf for at least another six months.  The letter also hinted that if the PTO were to proceed as planned, it would likely have a lawsuit on its hands.

On December 24 Director Vidal phoned David and, in a nutshell, said that a notice would be published this coming week giving applicants “breathing room”.  We’ll see how much time that is, but the expectation is that, come January 1, we’ll still be able to submit our applications in pdf format, without penalty.**

This is a good first step, but considering the myriad ways in which the PTO has repeatedly lied to, deceived, misled, and misrepresented to the public, the Office of Management and Budget, and the Small Business Administration – even its F.R. notice of December 20 – it would be best if the PTO would rescind this docx nonsense.

*To add insult to injury, you’d only be able to include the pdf document if you filed using PatentCenter, the combined filing and document access system that the PTO has been working for several years, a system has many bugs (some that were reported in alpha testing three years ago that still haven’t been fixed) and still lacks many features. The PTO’s handling of PatentCenter has been much like its handling of docx: no one to talk to, and no responsiveness.

**According to Carl on his blog, AIPLA, IPO, and Brad Forrest also told the Director that docx is not ready for prime time.

Where'd They Go?

Well, that didn't take long. On Friday I wrote about B&J's virtue-signaling (or is it peccancy-signaling?) statement on its website regarding Israel, noting that they still had Israel listed a place where they sell. By last they had changed it: no, they still hadn't posted a press release about the Unilever litigation, and no, they hadn't removed the "Don't worry, we still hate the Jews" notice. But Israel is no longer listed as one of the places where they do business:

Buh bye!

Ben & Jerry’s v Unilever Litigation Settles; Will B&J Try to Sell In Israel Via a Different Distributor?

Yesterday, Unilever published a one-liner on its web site: “Unilever is pleased to announce that the litigation with Ben & Jerry’s Independent Board has been resolved.”  There’s a longer story at the Jerusalem Post, but the information in Unilever’s statement is all we know for sure. And there’s nothing about the settlement of the litigation at B&J site.

But there is a whiny, “We’re self-absorbed Vermont leftists who are soooo pissed off at Unilever that we’re ready to explode, and please don’t question our commitment to the progressive cause” statement on B&J’s “Where We Do Business” page:

“Unilever has sold trademark rights to the Hebrew and Arabic language versions of the Ben & Jerry’s name to Blue & White Ice-Cream Ltd.  No English language trademark of the Ben & Jerry’s Homemade Inc. has been transferred to Blue & White Ice-Cream Ltd. Blue & White Ice-Cream Ltd. is a completely separate and distinct entity from Ben & Jerry’s Homemade Inc.  Ben & Jerry’s has no ownership of or economic interest in Blue & White Ice-Cream Ltd.”

Thanks for the clarification, guys. A simple "We are not connected with those Jews (or Snyder's of Berlin)" would have sufficed.

Interestingly, that page still shows and lists Israel as one of the places where they do business:

Does this mean that B&J is planning to try to sell English-labeled ice cream in Israel? I’m sure they’d love to give a license to someone in Ramallah, although doing business in the areas controlled by the corrupt PA might entail some looking the other way when it comes to B&J’s morals. But my understanding from Unilever’s memorandum filed recently in the B&J litigation is that the commercial decisions regarding B&J’s ice cream, like where to sell, are in the hands of Unilever. Moreover, depending on what B&J might try to sell and where, there are potential issues of infringement of what are now Blue & White’s marks.

I’ll keep buying Avi Zinger’s ice cream. But when in the USA, I’ll buy from a manufacturer other than Ben & Jerry’s.

Yet More on Ben & Jerry’s

I’ve written twice before about the saga of Ben & Jerry’s ice cream in Israel, specifically about (a) the 2021 decision by the B&J board to not renew the license of its Israeli licensee of over 30 years, Avi Zinger (and two companies he owns) because he refused to capitulate to a demand that he not sell in areas of Israel that were occupied by Jordan from 1948 through June 1967, viz. Judea and Samaria, and (b) the licensee’s suit against B&J and its parent company, Unilever, filed earlier this year in New Jersey, to force Unilever to continue to allow the licensee to produce Ben & Jerry’s ice cream in Israel and to sell it throughout the country, including in Judea and Samaria.

In June Unilever and the licensee settled that suit by agreeing, among other things, to transfer to the licensee all of the Unilever’s Ben & Jerry’s intellectual property in Israel, and that henceforth the Israeli licensee would be the owner of the that IP and would continue to sell manufacture Ben & Jerry’s ice cream throughout Israel, provided that its labeling be in Hebrew and Arabic, and not in English.  On that basis, the licensee’s suit against Unilever was dropped.

But that wasn’t good enough for some of the Jew-haters at B&J in Vermont: soon thereafter, Ben & Jerry’s board – or rather, a group of members of that board – sued Unilever in federal court in New York, seeking to nullify the agreement with the Israeli licensee.  Those B&J board members subsequently filed an amended complaint. Last week Unilever filed a memorandum of law in support of its motion to dismiss the case at the pleadings stage.  Unilever’s grounds for dismissal are numerous, and include the point that neither of Avi Zinger’s companies were named as defendants, so that as non-joined “indispensable parties”, the suit can’t go forward.  But the real crux of the motion is that in 2000, when Unilever took over Ben & Jerry’s, it assumed responsibility for all commercial decisions about IP, and that Ben & Jerry’s board therefore doesn’t have a basis to sue.

In the meantime, Avi Zinger & Co. continue to produce and sell Ben & Jerry’s ice cream, Unilever has assigned its Ben & Jerry’s trademarks in Israel to one of Avi Zinger’s companies, and at least here in Israel, they’re proceeding on the assumption that this is a done deal. Notice the signage on the Ben & Jerry’s factory, which I toured recently courtesy of Alyza Lewin, who spearheaded the Avi Zinger’s suit against Unilever and the subsequent negotiations that led to the settlement. The English lettering has been removed, and covered over with Hebrew lettering only.  I have to say I was a bit disappointed to discover there were no Oompa-Loompas working in the factory, but, as is usually the case in industrial manufacturing, there were some cool machines (how do you get all the caps for the tubs of ice cream oriented in the right position?) … that we weren’t allowed to photograph.

…But Persists In Another Dumb Idea

My last post concerned the USPTO wisely backing down from its proposed “voluntary CLE”.  This post concerns its ongoing insistence to plow ahead with its “docx filing” requirement.

In late October, at the AIPLA Annual Meeting, then-AIPLA president Patrick Coyne interviewed PTO Director Kathi Vidal. While some of her remarks in response to his questions were covered by IPLaw360, one statement in particular seemed to fly under the radar of that publication as well as the prominent patent blogs.

Specifically, Ms. Vidal was asked about the docx filing program, and she responded that (a) she appreciated AIPLA’s input on the matter, and per the suggestion of AIPLA and others, the PTO had begun to allow the submission of a pdf file along with the docx file, and (b) although that option was originally intended to be available only until January 1, 2023, when failure to file in docx format would incur a $400 fee, the PTO is delaying implementation of that rule until July 1, 2023, and thus the ability to file a pdf file along with the docx file, without financial penalty, will continue until then.

Readers familiar with the USPTO’s docx filing program and its many deficiencies will understand Vidal’s remarks are but one more instance of the PTO’s repeated failure to listen to the community of patent filers and to comprehend the problems with the docx filing requirement that this community has expressed on multiple occasions.

In this particular case, what AIPLA, and others (including yours truly) asked for was not the privilege of being able to submit a pdf document in addition to the docx file, but vice versa: to continue to have applicants submit user-created pdf files as the definitive documents, but to be encouraged to submit docx files in addition to the pdf files, to help the PTO do whatever it is it wanted to do with docx files.  This, in fact, is the way people filing PCT applications using WIPO’s ePCT already operate, and it works extremely well.

The primary concern with requiring filing in docx format is that the PTO uses proprietary software to convert the user’s docx document to something else, and it’s THAT something else that will become the official document. Since in many cases it will not be practical, prior to filing, to check this converted form line-by-line to ensure that the conversion did not create errors in the document (e.g. in mathematical formulas), filing in docx opens the door to malpractice suits.  Hence it is expected that a significant number of practitioners will continue to file in pdf, and to pass on the $400 fee to their clients. The more cynical among us believe the PTO knows this, and is using this docx requirement as an underhanded way to extort money from the public.

In any event, although more than a month has gone by since Ms. Vidal made her remarks at the AIPLA meeting, no official announcement has come forth from the USPTO regarding delay in the docx requirement. Which is a pity, because as of October 1, the USPTO did not have approval from the Office of Management and Budget (required under the Paperwork Reduction Act) to move forward with its docx program.  Since such approval must come three months in advance, the USPTO cannot legally move forward with the docx program on January 1.  If a lawsuit is filed against the USPTO to enjoin the docx requirement and imposition of the $400 fee – and I’m aware of at least one individual who is preparing to file such a suit – it is not only likely that and injunction will be granted, and that ultimately the USPTO will lose (just as it lost 15 years ago in the battle over the claims and continuation rules), but the USPTO will wind up with significant egg on its face, as it has been persistently duplicitous in its pursuit of the docx debacle.