America-Israel Patent Law

Proposed Amendments to Regulations at Israel PTO: Powers of attorney (Part 2)

Yesterday I discussed many of the problems with the Israel’s PTO’s treatment powers of attorney. Today I discuss the ILPTO’s proposed amendments to the Regulations regarding powers of attorney.

The good news is that the ILPTO has now woken up to problem of the rules seemingly requiring a POA, and seeks to rectify it. The bad news is that the ILPTO’s proposed language not only won’t accomplish this, but (a) it will make things worse than they presently are, and (b) it doesn’t address other issues that need to be addressed, such as the appointment of multiple practitioners who are not part of the same firm (e.g. an in-house attorney along with outside counsel). 

Below I present side-by-side the current wording and the proposed wording for the relevant parts of Rule 17, in both cases my translation:[1]

Current	Proposed
17.(a). Any action required of a person in accordance with the statute or these regulations or which is permitted in accordance with them, he may, by written power of attorney that shall be delivered to the Office, appoint a patent agent or lawyer who are licensed to practice their professions to do that action.	17.(a). Any action required of a person in accordance with the statute or these regulations or which is permitted in accordance with them, he may, by written power of attorney that shall be delivered to the Office, appoint a patent agent or lawyer who are licensed to practice their professions to do that action. The appointee shall inform the Commissioner that he has power of attorney to take the action on the electronic application form at the time of filing the application, and if he is appointed after the filing of the application, by way of written notice which shall be delivered to the Office.
	(d) The Commissioner may, at any time, or for a specific matter, require the appointee to produce the power of attorney, and even to condition the taking of the action on the production of the power of attorney.

Ostensibly, the idea is to allow practitioners to file patent applications and to continue to take actions in those applications, without actually submitting powers of attorney, unless the Office requires such submission.  The problem is that way the proposed amendment is worded, the practitioner will need to aver upon filing that he already has a signed POA in hand. That’s worse than the present situation, since, as noted yesterday, at present a practitioner can file without a POA. 

Will practitioners be willing to make such a statement if it’s not true, viz. if they don’t have a signed POA in hand at filing time – especially if they can then be required to produce the document later? I suspect many if not most practitioners will not want to aver to something that’s not true. Thus the proposed amendment, as worded, will be a hindrance rather than a help.

Moreover, since, as also noted yesterday, the statute does not give the ILPTO the authority to close a patent application for failure to file a POA, from the perspective of making things easier for applicants and practitioners, the ostensible problem that needs addressing is one of the ILPTO’s own making, since it is the ILPTO that threatens, without authority, to close files if a POA is not filed. 

It’s also worth noting that there’s nothing in the proposed amendment to limit the power of the Commissioner to require production of a POA, i.e. that’s entirely at his discretion.  That leaves things open to abuse

It would be better to rewrite 17(a) to read something like, 17.(a). With respect to any action required of a person in accordance with the statute or these regulations or which is permitted in accordance with them, he may, by written power of attorney that shall be delivered to the Office, appoint a patent agent or lawyer who are licensed to practice their professions to do that action. The patent agent or lawyer may provide the Office with a written power of attorney from the person appointing him; in the absence of a written power of attorney, the submission of a document by a patent agent or lawyer in an application shall constitute an assertion by the agent or attorney that he is authorized to file the document.

And new 17(d) could read, (d) The Commissioner may, by way of public notice, specify classes of documents or actions for which the Office will require from the appointee a written power of attorney in order for such document or action to be valid.  (This wording could be appended at the end of 17(a) rather than appear as its own separate sub-section.)

By wording the regulation this way, all registered practitioners would be able to file documents in all patents and patent applications, but the ILPTO could still designate certain types of actions – such as express abandonments – that would require the submission of a power of attorney.  Because the electronic filing system utilizes two-factor authentication, the Office would be able to track who filed which document, and for further ease of reference the ILPTO could require documents submitted to specify the filer’s patent agent or lawyer registration number.  It would be necessary to modify the electronic filing system to enable these functions, but those technical concerns should not be an impediment to setting good policy.

Additionally, while the ILPTO’s proposed amendment doesn’t address the matter of applicants who wish to appoint multiple practitioners who are neither “partners” (a term that is not defined in the statute or regulations) nor who “work together in the same single office”, the modified proposal here would in principle facilitate such multiple appointments, since any practitioner would be able to file a document in any application, and for those documents or actions for which a POA is required, it would easy for the office to check to be sure that person filing the paper was authorized in the POA to submit the paper.  However, for the sake of completeness, it would be necessary to amend regulations 16(f) and 17(b):

Current	Proposed
16(f) If a person gave authorization in accordance with regulation 17, the address of the authorized party shall be regarded as the address for service for the authorizer, as long as the authorization remains in force and as long as neither the authorizer nor the authorized inform the Office otherwise; this sub-section applies also with respect to the address of the authorized or any other address provided, and the authorized may inform the Office of an email address as set forth in regulation 16(b) for use with all patent applications and proceedings before the office in which the authorized represents the applicant.	16(f) If a person gave authorization in accordance with regulation 17, the address of one of the authorized party parties, designated by the authorizer, shall be regarded as the address for service for the authorizer, as long as the authorization remains in force and as long as neither the authorizer nor the authorized inform the Office otherwise; this sub-section applies also with respect to the address of the authorized or any other address provided, and the authorized may inform the Office of an email address as set forth in regulation 16(b) for use with all patent applications and proceedings before the office in which the authorized represents the applicant.
17(b) No more than one person may be authorized per matter, unless there are authorized together several persons who are partners or who work together in the same office; however, a person may authorize more than one authorized to appear and argue in his name [in litigious proceedings before the ILPTO – DJF].	17(b) No mMore than one person may be authorized per matter; the Commissioner may, by way of public notice, limit to a number not less than 10 the number of persons that the authorizer may authorize, unless there are several persons authorized together several persons who are partners or who work together in the same office; however, a person may authorize more than one authorized to appear and argue in his name.

Finally, Regulations 16 and 17 should be further amended to specify that, after issuance of a patent, if a party pays a maintenance fee, then that party becomes the address for service for maintenance fees only, while any power of attorney already on file would stay in force for any other matters.  This would eliminate the present situation in which the practitioner who prosecuted the case but is not responsible for maintenance fees continues to receive notices about maintenance fees.

 

[1] In point of fact, I’ve cleaned this up, as the draft amendments appear to contain some errors.

Proposed Amendments to Regulations at Israel PTO: Powers of attorney (Part 1)

Last week the Israel PTO announced by email proposed amendments to the regulations (rules) governing certain aspects of practice before the Israel PTO in all four areas over which it has jurisdiction - patent, trademark and design applications and registrations, and appellation of origin applications and registrations.  I did not find a corresponding announcement on the ILPTO website, but the following links to the draft regulations appear in the email announcement:

• טיוטת תקנות הפטנטים (נוהלי הרשות, סדרי דין, מסמכים ואגרות) (תיקון), התשפ"ג-2023
• טיוטת תקנות הפטנטים (הארכת תקופת הגנה – סדרי דין בבקשה לצו, בהתנגדות לצו ובבקשה לביטול) (תיקון), התשפ"ג-2023
• טיוטת תקנות סימני המסחר (תיקון), התשפ"ג-2023
• טיוטת תקנות העיצובים (תיקון), התשפ"ג-2023
• טיוטת תקנות המדגמים (תיקון), התשפ"ג-2023
• טיוטת תקנות כינויי מקור (סדרי רישום של כינויי מקור שארץ מקורם היא ישראל), התשפ"ג-2023

Comments are due by the end of the day on Sunday, June 4.[1]  Sadly, the announcement doesn’t include an email address to which to send comments. Rather, the announcement refers to each of the web pages above, which include links for people to provide comments, although I have not yet checked to see that those links work.[2] 

The principal change proposed, and on the only one common to all the proposals, is a change in the procedures for filing power of attorney.  In tomorrow’s post, I’ll relate to those proposed changes and their shortcomings.  In this post I’ll focus on the current shortcomings concerning powers of attorney.  Although I’m going to specifically POAs with respect to patents, the ILPTO has proposed the same change with the same language in the relevant regulations for trademarks, designs and appellations of origin as well.

As one would expect, in Israel applicants for patents may act pro se, or such applicants may appoint an authorized representative.[3]  The relevant provisions are set forth in rules 16 and 17 of the Patents Regulations. Rule 16 concerns providing the ILPTO with an address for service in Israel; for pending patent applications, the applicant must provide the office with such an address.  Per the most recent amendments to the regs from several years ago, the applicant may also provide an address for email service of documents.[4] 

Rule 16(f) specifies that if the applicant is represented by an authorized representative per rule 17 (see next paragraph), then the address for service must be the address of that representative.  Since probably upward of 99% of patent applications in Israel are filed via representatives, and the regulations also stipulate that representatives must file electronically, de facto these provisions collectively mean that almost all correspondence with the ILPTO must be conducted electronically.

Rule 17 concerns the appointment of representatives, and says that, by way of a written power of attorney that “shall be delivered to the ILPTO”, an applicant may appoint a representative to act on the applicant’s behalf before the ILPTO.  Rule 17 also says that a person may not appoint more than one representative per matter, unless the multiple representatives are “partners or they work together in the same single office”.

It’s not always possible to get a signed power of attorney prior to filing a patent application, so the practice of the ILPTO has been to allow practitioners to submit a patent application without a POA, and then to requisition a POA (asserting rule 17 as granting authority to requisition the POA), giving the applicant a month to provide the POA.  Failure to file the POA will result in abandonment of the application.

As someone licensed to practice before both the USPTO and ILPTO, and who also makes use of WIPO’s ePCT filing system, I’ve long found the ILPTO’s approach to be suboptimal (to put it mildly), and possibly ultra vires.

Specifically, what practitioner is going to file a new patent application that he hasn’t been instructed to file? The electronic filing system that an Israel practitioner must use to file the application won’t allow the new application to be filed without paying the filing fee (around $600 for an application of 100 or fewer pages); why would any practitioner spend that money if he hasn’t been told he’ll be reimbursed?

More importantly, a practitioner’s license is his livelihood. What practitioner is going to knowingly file an application, or a document in an application, that he hasn’t been authorized to file, particularly if doing so will prejudice the putative client’s interests? It’s a safe bet that the practitioner is only going to file something if he’s been instructed to do so, or if he hasn’t received specific instructions but has a general standing instruction from the client to keep the case pending. It doesn’t take a genius to understanding that doing something to deliberately harm the applicant or patentee could not only cost the practitioner money in a tort suit, it could be the end of his career. (For readers who have studied Gemara, this is an example of one of the definitions of the term “migo” מיגו.)

The USPTO recognizes this reality, and operates accordingly.  As in Israel, US Rule 1.33(a) requires that a new application include a correspondence address. But Rule 1.33(b) says that amendments may be filed by a practitioner who is on record as having power of attorney, or by a practitioner acting in a representative capacity per Rule. 1.34.  And Rule 1.34 establishes when a practitioner who is not of record (viz. for whom a power of attorney has not been recorded) files papers, “his or her personal appearance or signature shall constitute a representation to the United States Patent and Trademark Office that under the provisions of this subchapter and the law, he or she is authorized to represent the particular party on whose behalf he or she acts”.

That’s a smart arrangement: it makes it clear that the practitioner can act without a POA, but by doing so he’s effectively certifying that he’s authorized to act. 

Additionally, the USPTO as a matter of policy still requires a POA for the filing of two documents: an express abandonment of an application or patent, or a terminal disclaimer that foreshortens the term of the patent.  That makes sense too, since those acts irreversible and, on their face, prejudicial to the applicant/patentee’s interests.

What this means in practice is that, for example, if an applicant wants a new US practitioner to take over a file, the new practitioner can do so without having to wait to obtain a power of attorney. Of course, if the new practitioner wants to receive notifications from the USPTO about new correspondence in the case, and the like, he’ll need to record a change of correspondence, but that’s a separate matter, and doesn’t prevent the new representative from filing responses or paying fees.

The USPTO arrangement also means that if, for example, a solo practitioner will be going on vacation, and some response will need to be filed or a fee will need to be paid, he can arrange for a colleague to attend to the matter. 

So for the ILPTO to insist on the submission of a signed POA as condition for continued representation of the applicant in most situations is, from the practical standpoint, not just silly, but counterproductive.[5]

Additionally, the threat of closing the file because a POA isn’t submitted is legal hogwash, both statutorily[6] and from the commonsense standpoint: if an application is incomplete upon filing (e.g. it contains illegible drawings), and the defect is never cured, or if an applicant doesn’t respond to an examination report, those could be a reason for closing the file. But failure to submit a POA? It’s not in the same league. And in point of fact, I have had cases that were filed without a POA, in which the ILPTO has asked for a POA, which I prosecuted through to grant.

Another problem with the present system in Israel is that, as mentioned earlier, Rule 17 says that an applicant or patentee may not appoint more than one representative per matter, unless the multiple representatives are “partners [a term not defined in the patent statute] or they work together in the same single office”.  That reflects a particular way of thinking about how people work or should work together that is outmoded: people work together in different constellations and with different arrangements, and it’s unreasonable for the ILPTO to try to force them into a particular work model. Such a narrow conception of what constitutes “working together” is also prejudicial to applicants, who may want a particular team of practitioners to work on a matter, even though the practitioners are not “partners” and do not “work together in the same single office”.

Inasmuch as the present regulations limit practitioners’ freedom to make their own work arrangements, and limits applicants’ ability to choose their representatives, this narrow conception of “working together” also stands in contravention to two so-called “basic laws”, the “Basic Law: Freedom of Occupation” and the “Basic Law: Human Dignity and Freedom”, which the “High Court of Justice” (not to be confused with the Supreme Court) regards as having constitutional status.  

By contrast, USPTO allows an applicant to appoint whichever registered practitioners it wants to represent it before the USPTO.[7] Similarly, in PCT applications, WIPO makes it possible for any combination of people that the applicant desires to have access to its PCT applications, with varying levels of authorization. 

A related point is that whereas the USPTO will send out notices of correspondence in a file to up to three email addresses, and WIPO’s ePCT allows for notifications to be sent to multiple email addresses, the ILPTO will only send such correspondence to a single email address.

There’s also the problem (discussed in an earlier blog post) that the Israel PTO does not have a mechanism that enables patentees to provide correspondence addresses for maintenance fees only.

As will be discussed in tomorrow’s blog post, the ILPTO’s proposed amendments attempt to address only one of these matters, and fails even at that.

 

[1] Like in the USA, statutes in Israel often omit details about the specific means of implementation of the statutes, and say that the details will be set forth in implementing regulations.  For readers familiar with the rule-making process in the USA, the process in Israel is similar, except that formally the job of enacting the regulations is assigned to a particular minister, and the regulations must be approved by the relevant committee in the Knesset, rather than being enacted by the administrative body itself (following notice-and-comment procedures) as is the case in the USA.  In the present case, it’s clear that the impetus for these amendments is coming from the Israel PTO itself, which will then ask the Minister of Laws (a title which is unfortunately mis-translated as Justice Minister, even though the Hebrew term משפטים does not mean “justice” and is never, ever translated that way in any other context) to sign them and bring them to the committee for approval.

[2] Why allow members of the public to send a single document with comments when you can have them go to six different web sites and provide six separate sets of comments?

[3]  Namely, a licensed patent practitioner who has a technical degree and has passed the ILPTO licensing exams, or, in keeping with the practice in banana republics, any one of the tens of thousands people who don’t have a technical background but have a law degree as a first degree and have passed the lawyer licensing exams – because we all know that law school is much, much more difficult than getting a STEM degree and passing the lawyer exams imbues people with wisdom otherwise not imparted to mere mortals.

[4] Until now, Rule 16 precluded email service of the patent certificate itself, and required the office to send a paper certificate, but the proposed amendments will allow the patent certificate itself to also be sent by email; patentees will have the option of requesting a paper copy from the ILPTO, presumably for a fee.

[5] The ILPTO’s position on this is that its hands are tied, and that Rule 17 as presently worded forces it to require the submission of a written POA. I find that disingenuous, because there are other areas where the ILPTO in effect doesn’t enforce the statute or the rules. But as those situations sometimes accrue to clients’ benefit, I’m not going to discuss them here.

[6] The ILPTO says that its notice to submit a POA constitutes a “notification of defects” under section 20 of the statute, and therefore failure to reply is cause to close the file, but that’s just plain wrong. Section 20 of the statute says that if the examiner or the Commissioner find that the (claimed) invention is unpatentable or that the application fails to meet the requirements of sections 11-16A of the statute (none of which say anything about a power of attorney), the then the Office will notify the applicant. Section 21 says that if the applicant doesn’t fix the defect(s) within a specified time, the Commissioner will refuse the application. So there’s no statutory basis for closing the file – viz., refusing the application – for failure to file a POA.

[7] The mechanism by which this is done at the USPTO will wait for a later blog post.

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

Another example of lawyers being a different breed than patent attorneys: members of Board of Trustees of California State Bar admit they screwed up by not investigating over 200 complaints against a lawyer over a period of 40 years. The lawyer is now disbarred and facing federal charges for misappropriation of $18 million of client funds.

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 [email protected]. 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.

MOJ and Israel PTO Ask for Suggestions for Amending the Regulations for Patent Oppositions

This morning the MOJ and Israel PTO posted a call for suggestions for changes to the regulations governing patent oppositions in Israel, and the ILPTO sent out an email notifying recipients of this fact.  The deadline for response is June 30, 2021.  A similar call for comments was published in 2016, and while many comments were elicited (posted here), no action resulted.  Apparently the powers-that-be now wish to move ahead with this.  

I've blogged about patent oppositions in Israel before, but for those who aren't familiar with the opposition procedure, it goes roughly like this: the examiner says the application is allowable, the applicant pays an "acceptance" fee, and a notice that the application has been "accepted" is published in the Patents Journal.  Any party then has three months to file an opposition to the grant of the patent, and then another three months to file its statement of case. The applicant then has three months to file its statement of case. Then the opposer has 3 months to file written evidence, the applicant has three months to file its evidence, and then the opposer can file further written evidence to address points raised in the applicant’s evidence.  Then there’s an oral hearing at which the parties cross-examine witness, followed by written summations (oral summations are common in the USA but rarely used in any litigation in Israel).  Eventually the Israel PTO issues a written decision, which is appealable to the district court.  The whole process, without appeal, usually takes a minimum of two years, and in practice longer, since parties (or more accurately, their lawyers or patent agents) often agree to extensions. If the applicant wishes to amend its claims during the opposition, this can further prolong the proceedings.  The applicant has no enforceable rights until it has a patent in hand, viz. until the ILPTO issues a decision upholding the grant of the patent.

One important point to note: the pre-grant oppositions are authorized by the statute, and thus can only be done away with, or modified to post-grant oppositions, by statutory amendment, which requires approval of the full Knesset.  The particular rules governing the opposition procedure are set by regulation, which requires only approval of the relevant Knesset Committee and the Justice Minister, and therefore are a bit easier to adopt.

I reproduce below my own comments from November 2016, which explain many of the problems with the current system.  My views haven’t changed in the interim, so I've yet to decide if I will change anything from what I wrote four-and-a-half years ago.    

Shalom Ayelet.

I write in response to the “קול קורה” asking for comments on the opposition procedure in Israel.  It’s not clear from the request itself if a change from pre-grant to post-grant opposition is going to be considered at this time, but I understand from other sources that the MOJ is interested in comments on making the existing opposition proceedings move along more quickly.  So I’m not going to discuss pre- vs. post-grant oppositions, despite the fact that I think Israel should transition exclusively to a post-grant proceeding, and that it’s inefficient to not discuss such a transition at this time.

By way of background: I’m not being paid by anyone to write these comments.  I deal primarily with helping inventive entities developing strategies for protecting their intellectual property, and I prepare and prosecute patent applications.  I also have a fair amount of experience with oppositions from the side of patent applicants, in several fields, and I’ve worked on behalf of local generic pharmaceutical companies in assessing their positions, or potential positions, in view of pending applications.  In short, I’ve seen the process from both sides, and I have no ulterior motive here: I call it like I see it, based on my experience.

A. It’s too easy to oppose

The single biggest problem I see with the existing opposition regime is that the barrier to entry for opponents is too low.  This leads to the filing of unjustified oppositions and unnecessary prolongation of the patent grant process.  To explain:

Presently, anyone has three months from the date of publication under section 26 to file a notice of opposition.  They then have a period of an additional three months to file their pleadings (כתב טענות).  Typically this document is a pro forma statement that “the claimed invention lacks utility under section 3, lack novelty under section 4 and lacks inventive step under section 5, the description is insufficient under section 12 and the claims do not reasonably arise from the specification under section 13”.  The אגרה for filing a notice of opposition isn’t particularly high, and the attorney fees for preparing a one-page notice of opposition and a one-page כתב טענות are pretty low as well. 

Thereafter, the applicant will file pro forma pleadings of its own within 3 months, denying the opponent’s contentions.  This is supposed to be followed by written evidence from the opponent within 3 months.  Often, however, at this stage, or sometimes even at the stage of the כתב טענות (!), the opponent will request an extension, and usually, the applicant will agree, because the applicant knows that it may later find itself in a situation in which it needs an extension, and therefore wants the opponent to be accommodating in the event that happens.  This is even more true in situations in which the same two parties, represented by the same counsel, have multiple oppositions pending simultaneously, since acquiescence to an extension in one case can be traded for acquiescence to an extension for the other side in a different case. 

If the opponent chooses not to file evidence, it can usually get the applicant to agree to have the opposition dismissed without a request for costs.  More on that below. 

The point here is that it is ridiculously easy for someone to oppose the grant of a patent application, and effectively delay the grant of the patent, at minimal cost to the opponent.  This has to end, and a few changes in the procedure would achieve this result.

1. Require submission of detailed pleadings, and only allow amendment of those pleadings by leave of the Rasham with good cause.

In the old days, when Israel patent applications were only opened to the public upon completion of ex parte examination, there was some sense in giving opponents 3 months to decide whether or not to oppose, 3 months to file pleadings, and additional time to file written evidence.  Not so anymore, with the examination file being open to the public 18 months after the priority date, or, more commonly, shortly after national phase entry.  (The vast majority of patent applications filed in Israel are PCT national phase entries, and I assume that most of the oppositions are filed against national phase applications; I’ve no doubt the ILPTO has statistics on that.) 

Today, interested parties can follow the examination for its duration.  This means they can be ready not only with detailed pleadings, but with written evidence, very soon after the application has published.  Under these circumstances, there is no reason to permit the submission of pro forma pleadings.  At a minimum, opponents should be required to present their detailed pleadings, including complete lists of prior publications upon which they will be relying, at the time the pleadings are due.  Frankly, I think they should be required to provide their evidence as well.  Perhaps, instead of a three-month window to oppose, a 6-month window could be put in place, concomitantly with the requirement that opponents file their detailed pleadings and evidence.  Note that this is similar to the existing rules governing cancellation actions (הליכי ביטול), in which the party seeking cancellation of a patent files pleadings at evidence at the same time.

Additionally, opponents should not be allowed to subsequently introduce or rely on publications or evidence that they could or should have known about at the time they filed their pleadings and evidence; when motioning to introduce new evidence, the opponent should need to show the rasham that the documents that the opponent seeks to introduce could not have been known to the opponent at the time it filed its pleadings and evidence.

The flip side of this, of course, is that the applicant would be required to file its response to the pleadings and evidence in a complete form within a similar, limited amount of time.

2. Require identification of the real party in interest, and introduce estoppel provisions

Currently, any party may oppose a patent application.  Moreover, if that party loses the opposition, and the patent is granted, there is nothing in the statute to prevent that party from raising the same arguments as invalidity contentions in litigation, should that party be sued for infringement by the patentee.  I don’t know if this has ever happened, and if it were to happen, there’s a chance the judge would agree with the patentee that the defendant is estopped from raising the same arguments after having lost at the PTO.  But the fact is that it’s not in the statute.  That’s unfortunate, because the risk of estoppel, when coupled with the requirement to submit complete pleadings and evidence at an early stage, would be one way to reduce the filing of frivolous oppositions. 

Moreover, estoppel normally doesn’t apply to ostensibly unrelated parties that were not part of the prior proceeding – in this case, that were not part of the opposition. 

What would be helpful, therefore, is to require identification of what in US law is called the real party in interest that is opposing the grant of the patent, and to statutorily introduce an estoppel against that party and any parties in privity with that party from raising in later court proceeding any arguments against the validity of the patent that could have been made (not just which were made, but could have been made) in the opposition proceeding.

3. Make it easier to reject oppositions out-of-hand (על הסף)

Opponents should be required to meet a minimum threshold, showing that the case they present goes beyond what was considered by the PTO during ex parte examination.  If an opponent merely cites publications that, taken together, teach no more than the publications considered by the examiner during ex parte examination, then there’s no reason to proceed with the opposition.  In such cases, the applicant should be able to have the opposition summarily dismissed.  The rasham has traditionally been reluctant to use סילוק על הסף as means of disposing of cases before him; perhaps the statute should be amended to make it clear that this is an acceptable remedy when the opponent’s contentions amount to the same contentions considered by the examiner.  This will also cause opponents to carefully consider the arguments to be made in an opposition.

4. Cap or eliminate cost awards

This is discussed in more detail below, but is mentioned here because this step would also reduce the likelihood of frivolous oppositions.

5. Increase the fee for filing oppositions

The usefulness of this step would seem to be self-evident, although if the changes outlined above are adopted, it might not be necessary.

B. Adopt an EPO-like procedure with respect to amendments

I once heard the late Eli Hurwitz say that there’s no patent that can’t be gotten around.  It’s a well-taken point: no matter how worthy of patent protection an invention may be, it’s much more difficult to draft a good patent application than it is to invalidate a patent or oppose its grant.  Moreover, the statute does not impose upon patent applicants a duty to search the prior art themselves before drafting their patent applications; rather, it assigns to the ILPTO the duty to determine the allowability of each of the claims of the patent application.  It’s therefore not surprising that adverse parties will sometimes raise points that were not taken into consideration during ex parte examination. 

In view of this asymmetry, if the application discloses something patentable but the claims do not define that something patentable sufficiently well, the applicant should be given the opportunity to amend its claims to a form in which the claims do define the invention so as to meet the requirements of the statute. 

The present legal framework seeks to allow this, but is deficient in that it treats such amendments as separate proceedings in and of themselves.  Moreover, while it correctly allows applicants to make such amendments as of right, if applicants find themselves having made one set of amendments, then find those amendments opposed by the opponent in the substantive opposition to the grant of the patent, the applicant may need to do another round of amendments.  This obviously slows resolution of the opposition.

A more efficient route would be to adopt the type of approach taken by the EPO: after the parties have presented their arguments and evidence, when it comes time for the oral portion of the proceedings the applicant should be able to present a reasonable number of sets of claims, in its order of preference.  Each set can then be considered by the PTO, with the opponent able to raise its objections, so that if there’s a set of claims that’s acceptable to the applicant and meets the statutory requirements, that fact will be discovered quickly.

C. Treat oppositions as private litigation

An irritating aspect of oppositions is that although they are designed as adversarial proceedings, the ILPTO often views its role as that of an inquisitor, whose job is to protect some amorphous, unidentified “public” from an invalid claims in patents.  That view, which is biased against patent applicants, evinces a misunderstanding of the ILPTO’s role.  The ILPTO’s role is to examine patent applications, to refuse to allow claims that are not new or are obvious over prior publications, or are insufficiently supported by the specification – i.e. that don’t meet the requirements of sections 4, 5, 12 and 13 of the statute – and to allow claims that do meet those requirements.  That’s how innovation is encouraged. 

To the extent that pre-grant opposition is viewed as an extension of patent prosecution, the scales should not be tipped against applicants whose applications happen to have been opposed by third parties, as is presently the case, with the ILPTO assuming a quasi-inquisitorial stance.  Rather, the opposition should be treated as private litigation.  If the opponent has not raised an argument, then it’s not for the patent office to raise that argument for the opponent.  Similarly, if the parties submit a mutually-agreed upon request to an extension for one of the sides to file some paper, this should be granted by the rasham.

D. Eliminate failure to cite prior publications as a ground for oppositions

The statute rightly imposes on applicants a duty to assist the PTO by informing the PTO of publications cited against corresponding applications elsewhere or that are otherwise known to the applicant to be relevant.  However, failure to cite a reference should not per se be grounds for invalidating a patent; such failure should only matter when (a) but for (אלמלא) the omission, the examiner would not have allowed the claims in the form in which they were allowed, and (b) the omission was deliberate, with an intent to deceive the PTO.  While the PTO can readily determine (a), it is in a poor position to determine (b), a task more suited to the courts.  Consequently, failure to comply with section 18 should be removed as a grounds for opposition.  

E. Cap or eliminate cost awards

In the last several years the PTO has gone absolutely berserk in its awards of costs to the prevailing party in inter partes proceedings, granting awards that are far beyond what a party could obtain from a judge in a regular court proceeding.  Applicants for patents should not be punished for unsuccessfully seeking patent protection, and opponents should not enjoy a windfall for convincing the rasham to sustain an opposition; in most instances, if an opponent is successful, the opposition has paved the way to commercial success that will far exceed what it spent on the opposition. 

Since the PTO seems to be unable to restrain its predilection for cost awards out of proportion to cost awards in litigation before the courts, it’s time to statutorily reign in such costs.  Or to do away with them altogether, since for most opponents the cost of the opposition is merely part of the cost of doing business – many of the same parties that regularly file oppositions today were filing them regularly 20 years ago as well, before the PTO starting enriching those parties for having filed those oppositions, which means in the past they really did view it as part of the cost of doing business.  Granting windfalls in the form of cost awards distorts the system.

I’d be happy to discuss these matters, and other points related to oppositions, with you or members of the MOJ staff.

Dan Feigelson

November 15, 2016

More on Proposed Provisional Patent Applications in Israel – Part I

As reported previously here, here and here, late last spring the ILPTO proposed instituting a mechanism for the filing of provisional applications in Israel.  In an effort to ostensibly gather input from the public, the ILPTO held two Zoom meetings, one in June in one in July.  I say “ostensibly” because in one of the meetings, the Commissioner, Ofir Alon, effectively admitted that he was going to move ahead with this, an admission which prompted a senior partner from one of the larger firms, who was opposed to instituting such a mechanism, to express some dismay at having wasted his time at the meeting. 

I’ll note at the outset that at the time, the ILPTO did not put forward any concrete proposals for how a provisional filing scheme might work.  However, after initially wondering if this could be accomplished solely via regulation, my own view on the matter was that it would be easier to do this via regulation (which only requires approval from the Justice Minister and Constitution & Law Committee of the Knesset) rather than by statutory amendment (which requires approval of the full Knesset).  And while initially I was unsure that this was possible solely via regulation (as expressed in my initial blog post), I subsequently came to conclude that, unlike many things the ILPTO does that are ultra vires, here it would be possible to legally effect the change via regulation.

In particular, the statute says that the fees for filing are set via regulation.  Presently, the relevant regulation sets a single fee for filing a patent application, which covers filing, search and examination.  There’s no reason this couldn’t be broken into two different fees (filing (small), search + examination (large)), or three different fees (filing (small), search (larger), and examination (also larger)), with the filing fee being due upon filing or shortly thereafter, and the other fee(s) being due within a year of filing.  If you don’t pay the other fee(s), your application goes abandoned.  [In one of the Zoom calls, I pointed out that many applicants would prefer the option of only getting a search report, without an examination report, and that England gives the latter option, but Commissioner Alon indicated his preference for the former...but either way would create a provisional filing mechanism.]

Last week the ILPTO published draft regulations for comment that are intended to establish what is effectively a filing scheme for a provisional patent application.  I have not yet looked at them; the second post of this series will include my comments once I’ve digested the proposed regulations.  Comments are due by February 23.

Even if the proposed changes in the regulations follow the path outlined above, there is at least one aspect of an ideal provisional filing regime requiring a statutory amendment.  Presently, section 16 of the statute requires that the title and name of applicant be published shortly after filing.  Inasmuch as a US provisional is not published unless it serves as the basis for a US benefit claim/Paris Convention priority claim in an application that publishes at 18 months, section 16 would need to be rescinded to make Israel provisional filings as attractive as US provisional filings.  This may happen in any event: since most patent filings in Israel are PCT national phase filings that are published soon thereafter under section 16A (18 month publication), the Israel PTO is pushing to rescind section 16, since it in effect doubles the ILPTO’s work, by forcing the ILPTO to publish notice of the filing of a national phase application twice, once under section 16 and then again under section 16A.

There is one other aspect of last summer’s Zoom meetings that bears mention, but it has nothing to do with the technical aspects of implementing a provisional filing scheme.  What amazed me was that one of the large firms had several senior people in the first meeting, all of whom raised specious arguments against implementing such a system, e.g. asserting that filing provisional applications can be deleterious to applicants’ rights, and given the low cost, many applicants think they can do it on their own but stand to inflict harm upon themselves.  Well, yes, there’s always a risk to anyone acting pro se vis-à-vis the legal system and/or the administrative state that they’ll mess themselves up, but that’s not unique to patents.  That’s why people like me hire a lawyer who knows something about property transfers when buying or selling homes, even though I have the right to represent myself.  But the right to act pro se is always there, and unless the litigant is shown to be mentally incompetent, we don’t take that right away.  Same thing for patents.  Paternalism is not an argument against implementing a provisional filing system.  In fact, one of my old bosses, whose views I don’t always share, made exactly that point early in the first Zoom call: the institution of US provisionals exists, not implementing a provisional filing scheme in Israel is not going to make US provisional go away, so why not do it?

Clearly the partners at the firm in question had spent not a small amount of time devising their cockamamie arguments, and divided up the presentation of the various points among themselves.  This is the same firm that in the Zoom call with the Israel PTO last March dealing with possible extensions of deadlines argued positions that were in the firm’s interest but not in its clients’ interest, as reported here.  But whereas in that case, the firm’s financial incentives were clear, here I didn’t see how facilitating provisional filings in Israel would be inimical to their business interests.  The best explanation for their take was provided by a colleague who has been involved in the patent scene in Israel longer than I have, who quipped to me, “Historically, [firm X] doesn’t like change until they are certain they can monetize the change.” Apparently the partners at this firm didn’t think they stood to gain enough from Israel provisional filings.  Since over 6 months have passed since those Zoom meetings, maybe now those same partners have figured out to monetize Israel provisional filings, and won’t spend significant time and money lobbying against the adoption of the proposed provisional filing regime.

Yet Another Attempt By the Israel PTO to Circumvent the Law: ILPTO Seeks to Expand Its Powers By Fiat, at the Expense of §17(c) of the Statute

I’ve blogged before about how a good thing became less good when it was codified in the statute, specifically §17(c) of the Israel Patent statute, enacted in 1995, which codified what had until then been an Israel PTO practice: you get a corresponding patent allowed in certain other jurisdictions, and if you amend the claims in Israel to correspond to the allowed foreign claims, you can piggy-back on that allowance to gain allowance in Israel. The policy was put in place at a time when the ILPTO was overloaded with work.  And while the ILPTO has in past 10 years significantly decreased its examination backlog, §17(c) remains on the books (at least for now), and for many applicants presents a way lowering their world-wide patent prosecution costs, by allowing them to leverage prosecution in larger, more important jurisdictions, such as the USA, Europe and Japan, to obtain a low-cost allowance in tiny Israel.

As an ILPTO policy, the office had some flexibility in its implementation of this practice. But now that it’s a statutory provision, the office, at least for the past 15 years or so, feels it no longer has such flexibility.  Hence, since the statute says you can piggy-back on a granted patent, but not an allowance, the ILPTO now makes applicants wait for the grant of the foreign patent. Similarly, because of poor statutory drafting, the ILPTO won’t let applicants springboard from a corresponding patent that constitutes a corresponding national phase PCT filing if the PCT application doesn’t claim priority from an earlier application. And whereas in the past you could convert US method-of-treatment claims to Swiss-type or purpose-directed-product claims and still get those claims allowed on basis of the granted US method-of-treatment claims, in the early 2000’s the ILPTO decided it was precluded by the language of §17(c) from doing so.

Now the ILPTO wants to restrict §17(c) even more, but in a way that I don’t think the statute authorizes it to do.  But first some background. 

In Israel, when prosecution on the merits concludes, there are two important dates to keep in mind: the date of acceptance of the application, and the date of grant of the patent.  “Acceptance” occurs after the acceptance fee is paid, when notice that the application has been allowed is published in the Patents Journal under §26.  This begins a three-month period to oppose the grant of the patent.  If an opposition is filed, pre-grant opposition proceedings ensue.  If no opposition is filed (or if the opposition is rejected and no appeal of the decision filed with the district court), the patent automatically grants (§35). So if the acceptance occurs upon publication per §26 on December 31, and no opposition is filed by the end of the day on the following March 31, on April 1 the patent automatically grants.

When §17(c) was enacted, the statute was also amended to include §17(e), which says that up until the time of the grant of the patent, the applicant must inform the ILPTO if opposition or cancellation proceedings were instituted against the foreign patent which served as the basis for the §17(c) request.  §17(e) does not state that the ILPTO may take any steps as a result of being so informed.  Recently, though – viz., November 2020 – someone at the ILPTO decided that if opposition or cancellation proceedings are instituted against the foreign patent prior to the acceptance of the application, that’s sufficient reason to withdraw the allowance, and it wrote this into Commissioner’s Circular notice no. 035/2017. Curiously, when this Circular was first published in early 2017, it didn’t say anything about returning §17(c)-allowed applications to examination.

I’m not sure of the ILPTO’s legal justification for this practice – I don’t recall seeing reasons for the change to this language when it was proposed just two months ago, and no reasons seems to be given on the ILPTO’s web site. I suspect, however, that that justification (and I use the term loosely) resides in §17(d), which says that the Commissioner, his deputy or the chief examiner may refuse to accept an application for which a §17(c) request was made if the application doesn’t meet the requirements of §17(c), or if there is “another special reason not to accept the application”.  The former condition seems obvious: if an application doesn’t meet the requirements of §17(c), then it’s not allowable under §17(c) (duh!), and if an examiner mistakenly concluded that the application met the requirements of §17(c) and so informed the applicant, but it was later discovered (prior to acceptance) that the requirements of §17(c) weren’t fulfilled, the Commissioner has the authority under §17(d) to revoke the allowance per §17(c), and to return the application to regular examination. 

If that was the ILPTO’s rationale or amended Circular 035/2017 in November, then it was flawed reasoning: the filing of an opposition to the foreign patent is irrelevant to the question of whether or not the dictates of §17(c) were fulfilled. 

Alternatively, maybe the Office thinks that the filing of an opposition against the foreign patent constitutes “another special reason not to accept the application”. To the best of my knowledge that phrase has never been clearly defined, and maybe the Office feels it’s free to shoehorn this situation into that rubric.

Whatever the ILPTO’s rationale for the November revision of the Circular, I don’t think anyone would contest that up until the actual publication under §26, viz. until the “acceptance” of the application, the Commissioner has the authority to rescind the notice of allowance (whether allowed under §17(c) or under regular examination) if there is justified cause to do so, even though the statute doesn’t explicitly provide for this.  If it becomes clear, for example, that the claims in fact recite something that defies the laws of physics, that might constitute justified cause to rescind the allowance and return the application to ex parte examination.  During the re-opened prosecution of the application, the applicant will be able to present its case and, if necessary, freely amend the claims.

Having said that, I’m not convinced that the fact per se of the filing of an opposition to a corresponding patent upon which a §17(c) request was based constitutes justified cause to withdraw an allowance.  The opposition might be frivolous. More importantly, if there are third parties that wish to oppose the grant of the patent in Israel, they have a three month window in which to do so following “acceptance” of the application. And they can file for cancellation of the patent after grant, and of course can avail themselves of an invalidity defense in infringement proceedings. If the Commissioner were to examine the prior art cited in the foreign opposition, and on that basis determine that there’s a genuine question of the allowability of one or more claims, that might justify withdrawing the allowance and reverting to examination.  But not the mere filing per se of the opposition.

If that’s the case for withdrawal of an allowance before §26 publication and “acceptance”, it’s all the more so with regard to the period of time after that: the statute simply does not authorize the Commissioner to take any steps against a patent application once that publication occurs, unless a third party files an opposition. 

[The fact that the period after “acceptance” is different than the period before “acceptance” is reflected in the in fact that, prior to “acceptance”, the applicant can amend its application pretty much as it sees fit, even introducing new matter (albeit usually being required to post-date that new matter, per §23), whereas after “acceptance”, amendment to the application is quite circumscribed, permitted on per §29 and §65.] 

And yet, on January 19 – less than two months after aforesaid amendment of Circular 035/2017, the Commissioner published yet another proposed change to that very same newly-introduced sentence of that same Circular, according to which applications which are allowed under §17(c) will be returned to regular examination if after “acceptance” but prior to the grant of the patent, notice is filed with the ILPTO that opposition or cancellation proceedings have commenced against the foreign patent on which the §17(c) is based. 

It seems a little odd that this proposed change is coming so soon on the heels of the previous change.  Be that as it may, I can think of reasons why the ILPTO might want to institute such practice, but the statute simply doesn’t allow it: as explained above, once the application is “accepted”, the patent grants automatically after three months if no opposition is filed.  Nothing in §17(e) abrogates that, or gives the Commissioner the power to withdraw the “acceptance”.   

If the ILPTO wants to change the policy concerning §17(c) practice, then it needs seek that change via amendment of the statute, not by asserting it has powers that it doesn’t have. 

Comments on the draft change to the Circular are due at that ILPTO by February 2 ([email protected]).

Call For Comments: Israel PTO Goes Fishing With Ideas For Statutory Amendments

Yesterday, the Israel PTO published a "Call for Comments" about possible changes to the Patent Statute.  Formally, it was the Justice Ministry that published the document, but enough of the content focuses on the patent examination process that it's clear that the ideas in the document originated with the Patent Office.  The deadline for responses is March 1, 2021.

While no specific changes to existing legislation are proposed - the document merely floats some ideas that apparently have been on the minds of some ILPTO personnel, and asks for comments - one gets the feeling from the (sometimes very pointed) questions asked that with regard to some of the issues, the person or persons behind the document  is leaning in a particular direction.  On other issues, the direction is less clear, and the questions make the document appear to be an ILPTO fishing expedition, without a clear sense of the quarry. 

The document is 15 pages long, so we'll save specific comments for later blog posts.  But among the curious aspects to the document are the fact that it includes a number possible statutory changes that would constitute significant changes in substantive patent policy. Which leads to the question, why is the ILPTO proposing IP policy?

On Living in Chelm and The Hiding of Ulterior Motives

Today is the eve of Passover, making this a short work week here in Israel, for those of us fortunate enough to still be working during this COVID-19 thing – a full 25% of working age Israeli adults sought unemployment compensation in the past week.  Nevertheless, for those who have been paying attention, it has been an interesting week in the IP world in Israel.  But first a bit of background.

On March 21 the government of Israel (what in the USA would be called the cabinet, except that under Israel’s parliamentary system it’s the entire cabinet and not just the Prime Minister that decides many executive matters) decided to reduce public sector expenditures across the board.  The result is that many state employees, including many from the patent office, have effectively been furloughed since then.  As we reported earlier, the ILPTO sent out a notice about the steps it was taking to mitigate the effects of this decision. 

Now the Knesset is considering adopting emergency legislation that would push off by 90 days the deadlines for many acts in connection with administration of the state – either decisions or actions that the state is supposed to take, or actions that individuals (people or organizations) need to take.  And the draft legislation would give the government the option to extend those deadlines by an additional three months.

In combination, for those of us with a narrow focus on IP, these two things have created a perfect storm, not so much for applicants or IP owners, but for IP practitioners and for the ILPTO staff. 

Let’s start with the furloughing of ILPTO staff.  As a result of the government’s March 21 decision, many patent examiners and other at the ILPTO have been sitting home since then, doing nothing.  I suspect many of them are not presently getting paid.  Applications going unexamined also contributes to the examination backlog that the ILPTO had for several years hitherto been steadily decreasing, a result that is unfair to all applicants attempting to secure IP rights.  And for IP firms for which the reporting of Office Actions from ILPTO examiners is a significant source of income, this means that an important revenue stream has just dried up.   

But what’s Chelm-like about the March 21 decision being imposed on the ILPTO is that, unlike most state bodies, the ILPTO is self-supporting.  The ILPTO doesn’t run off of taxes paid by Israeli citizens or people transacting business here.  It runs off the fees it collects each year from the parties that utilizes its services, fess that more than offset the ILPTO’s operating budget.  Furthermore, following a program instituted by previous Commissioner Asa Kling, the ILPTO is set up for examiners to work from home, as many of the examiners already did so prior to the corona outbreak.  So by telling examiners they’re not allowed to work, even from home, the government isn’t reducing expenses. It’s reducing revenue – by ensuring a period in which no patent applications will be allowed, thus ensuring no payment of allowance fees, and by not giving patent practitioners work that they can bill to their clients and then pay of portion of to the state in the form of taxes on the payments for that work.  At a time when many parts of the economy are tanking, it’s not only foolish, but inexcusable to shut down an office that generates revenue for the state.

Then we have the draft legislation.  If all it said was that all deadlines falling between dates X and Y would be extended by three months, across the board, that would be easy to implement.  But, of course, some things really shouldn’t be extended.  For example, someone who’s been arrested for an alleged crime deserves a prompt arraignment, but that means that the courts need to be at least partly open for business.  And as soon as you start making exceptions in one area, others jump in clamoring for an exemption from the legislation, insisting that in their particular sphere of operation, it’s important that deadlines not be extended.  In some cases, it may be that deadlines in question really shouldn’t be extended.  But in other cases…

Stepping back for a moment from my position as someone whose clientele includes companies that file patent applications in Israel, and therefore who has a personal interest in keeping the ILPTO running as close to normal as possible, it seems to me that certain deadlines in the ILPTO should not be extended: the deadlines to file notices of opposition to the grant of a patent, and deadlines for the payment of renewal fees. 

I mention the former because (a) opponents of the grant of patent applications, whether those opponents are based in Israel or outside, have generally been following the progress of the applications they are considering opposing, so they know when the opposition deadline is going to arise, (b) all that’s required is to submit a notice of opposition – a one-line letter – plus a fee, with the substantive arguments being due later and with a deadline that the Commissioner has discretion to extend, and (c) the applicant, conversely, has no vested rights until the opposition procedure is concluded and a patent granted, and since the draft legislation doesn’t talk about extending patent rights another three months, it’s important that the institution of oppositions not be delayed, especially since opposition proceedings anyway tend to take time from the life of the patent. 

As to the payment of renewal fees, it seems to me that there’s no reason to extend these deadlines: for the patentee, the deadlines are known years in advance, and the amounts in question are also known; and for competitors who are following the life of a granted patent, it’s important to know if a patentee is no longer interested in protecting a particular technology.

It’s also clear that deadlines for the Israel PTO, acting as PCT receiving office, search authority or examination authority, cannot be unilaterally extended by the Knesset (and any attempt to do so could have adverse consequences for local PCT applicants relying such an extension).  Those deadlines can only be extended by amendment of the PCT itself. 

But I don’t see any harm to applicants in uniformly granting an extension to enter the national phase in Israel: they can still file at 30 months if they wish to do so, but if as a result of the corona situation there’s some difficulty in making filing decisions or in their cash flow, no real harm will come to those applicants from extending the deadline by a few months. 

On the other hand, considering that most patent filings in Israel are national phase filings, granting such an extension might have an impact on the ILPTO’s workflow – in the three months following the statutory extension, there will likely be a higher number of filings to process than usual – and its cash flow, as noted above.  The ones who would be most impacted by such a statutory extension would be those practitioners who rely on such filings as a significant part of their business, a point to which I’ll return below. 

Another deadline that I think could be extended is the deadline for filing patent term extensions for pharmaceuticals.  In such cases, there’s a significant burden on the patentee in terms of the documentation it needs to submit, a burden that could be affected by the corona virus situation.  And since normally such requests are submitted several years before the patent is due to expire, a difference of three months in the filing of the PTE request wouldn’t significantly affect the local generic drug manufacturers which might be impacted by the grant of the PTE (and which will retain the opportunity to oppose such PTE grant before it occurs).

Now back to this week.  On April 5, the Commissioner of Patents held a Zoom session to discuss the draft legislation, which by that point included exemptions for PCT international phase deadlines and the deadlines for payment of renewal fees (i.e. they would not be extended), but not for PCT national phase deadlines (which therefore would be extended).  

From a sociological standpoint the session was interesting.  Among other things, after about a 10 minute introduction from the Commissioner, nine people spoke (some more than once), but that discussion (roughly 2/3 of the time, if not more) was dominated by four partners from the same organization, one of the biggest IP offices in Israel.  Their view, exactly opposite to my own, was that (a) PCT national phase deadlines shouldn’t be extended and (b) renewal fee deadlines should be extended.  They gave various reasons for their positions, e.g. not wanting their offices to deal with a crunch of filings when the extended deadlines expire, and not wanting the ILPTO to be burdened at that point either.  But as noted above, that’s not really the situation: deadlines falling with the period in question – between March 10 and June 30, 2020 – would be extended by 90 days.  That doesn’t mean that come July 1, there will suddenly be a rush of filings to get 90 days’ worth of national phase applications in.  It just means that on July 1, filings that were initially due on both April 1 and July 1 will be due.  So while that may amount to twice as many filings as normal for July 1, it’s not something that can’t be dealt with. They also said if the national phase deadline was extended, docketing programs will need to be adjusted to reflect the extended deadline.  Considering that many docketing services constantly update their systems to reflect changes in the law in various countries, I don’t think a temporary change in Israel would constitute a significant impediment.

As for renewal fees, the assertion was that companies may need more time to make decisions about whether to renew or not.  Yet the possible need for more time to decide whether to file national phase in Israel wasn't mentioned by the four in the discussion of PCT national phase deadlines.

What none of the four explicitly stated was their personal interest in the matter: as partners, they employ many people, and national phase filings are a cash cow for them.  If potential PCT national phase filers are given the option of delaying their filings by 90 days, they might exercise that option, which would keep the firm’s revenue stream lower than usual.  Which might mean having to reduce the partners’ draw during that period. 

As for renewal fees, the office in question has a contract with at least one and possibly more than one of the big renewal fee companies.  What I gathered reading between the lines of what was said is that they don’t demand payment up front, and that paying out renewal fees now when they may not get compensated later could be disastrous for the partners…er, the firm.  (By comparison, I work with a renewal fee company that demands payment in advance.) 

In this respect, for the attuned listener, the Zoom session also highlighted the differences between large firms and small firms.  Small firms tend to have little patent prosecution or renewal fee work in Israel, and tend to concentrate on drafting and filing new applications, which is work that has been less affected by COVID-19.  They don’t have as many salaries to cover, nor are the proprietors likely to be accustomed to as high a style of living.  As Hillel the Elder said, “The more flesh, the more worms.”

We’ll see were things end up.  Yesterday, the heads of three trade associations sent a letter to the Justice Minister Download Letter, encouraging him to reopen the ILPTO for full business, as well as presenting views on the draft legislation that align with the view of the four speakers on Sunday.  I’m in full agreement about getting the ILPTO back up to full examination speed, if possible.  And while I disagree about extending deadlines for PCT national phase entry and renewal fees, ultimately, I don’t feel terribly strongly one way or another about how the matter is resolved.  What will stick with me was the concerted effort to mask ulterior motives, ostensibly in the name of the common good.  It’s a fair bet the people involved won’t tell their clients that they lobbied to maintain PCT national phase deadlines in place.

ILPTO Proposes to Stop Rejecting Divisional Applications for “Overlap” with Parent Cases

We have from time to time blogged about the Israel PTO’s obsession with “overlap” between patent claims, an obsession which in our view is unfounded, being based on a far too-expansive reading of section 2 of the Patent statute (see here, here, here, and here).  The problem with the ILPTO’s view is that it lumps statutory double-patenting with obviousness-type double-patenting, and as a result wastes significant amounts of both examiner and applicant time.  The issue can arise in all fields, but particularly affects patent applications in the life sciences, and is often a thorny issue between parent and divisional applications.

To address the issue, we have proposed implementing a system analogous to terminal practice in the US, which would allow applicants to overcome these “overlap” rejections by promising enforceability only as long as the two patents are owned by the same entity, and as long as they expire the same day (excepting any patent term extension time granted in one of them). 

It now appears that at least partial relief may be on the way.  In a notice published last week regarding proposed revisions to the Examination Guidelines (the ILPTO’s equivalent of the MPEP, albeit – thankfully – far less voluminous than the latter), the ILPTO has proposed foregoing the raising “overlap” rejections in cases of patent applications or a patent application and a patent which are (a) owned by the same entity and (b) have the same filing date, provided that the two documents do not contain claims of “literally or substantively” identical scope.  This means that the ILPTO plans to stop raising such rejections in cases of parent and divisional applications, as long as the claims are of different scopes.  The specific proposed wording can be found here beginning at page 30.

The ILPTO has asked for comments on the proposed revisions to the Guidelines, to be sent to [email protected] by January 29, 2020.

It is interesting, but not surprising, to note that the impetus for this proposed change is to save examiner time: making life easier for itself seems to be the overriding rationale behind many changes implemented by the ILPTO in recent years, even if those changes impose excessive burdens on applicants or their representatives.  In the present case, it is expected that the proposed change will ease life for applicants as well.

One other interesting point is that the proposed wording will not require applicants to promise co-ownership of the two patents as a condition for enforceability; the ILPTO will look at co-ownership at the time of examination.  Perhaps, upon further reflection, the ILPTO will realize that adopting a terminal disclaimer practice for all co-owned applications where there is “overlap” between the claims, irrespective of filing date, would achieve an even better result. 

Even if the ILPTO’s proposed change doesn’t go far enough, it is nevertheless a welcome one.