America-Israel Patent Law

John Belushi at the Israel Patent Office, or, Court to Israel PTO: Delay to Pay Doesn’t Automatically Mean “No Way”…Even if the Patentee Gives Multiple Stories

I’ve written in the past about petitions to revive Israel patents (or patent applications) that went abandoned for failure to take some action, most often failure to pay a renewal fee.

The most common such situation has been failure to pay the first renewal fee, which is due within three months for the grant of the patent. Whereas the ILPTO normally sends email notices before the deadline for payment of the renewal fees due at 6, 10, 14 and 18 years from filing, in the past it did not send an explicit notice reminding patentees of the fee due within three months of grant. Rather, until relatively recently, the practice of the Israel PTO was to include such notice on the back of the printed copy of the patent certificate, which was sent by snail mail.

This procedure was rife with opportunities for screw-ups: sometimes the certificate wouldn’t arrive (not a surprise in view of the continually declining state of Israel Post); or it would sent to the wrong address; or if it reach the right person, the notice on the back of the certificate would be overlooked. And this explains why it was the first renewal fee that was most commonly missed. (At the urging of yours truly and others, the ILPTO now includes a notice about this first renewal fee in the cover letter that is sent by email with the copy of the patent certificate.)

I’ve also written in the past about the perils of acting pro se (in patents or in anything else), especially when you’re unfamiliar with the relevant statute and regulations.

Enter one Mr. Ron David, who owns an auto body shop where he installs roof racks on cars. Working with a colleague, he developed a kit for mounting the roof rack, and sought to patent this. He hired local counsel to file an Israel patent application (no. 240582; a PCT application was also filed), and prosecuted the application through to allowance.

At that point, apparently in a cost-saving measure, he fired local counsel. And then didn’t pay the first renewal fee. Oops. He only found about the error a few years later, when his colleague told him that competitors were making knock-offs and the colleague found that the patent was no longer in force. So, still acting pro se, Mr. David tried to revive the patent. After several procedural mis-steps, he eventually got the Israel PTO to consider his request, and even got to an oral hearing (this time with re-hired local counsel) in early 2023.

If you recall the movie “The Blues Brothers”, there’s a classic scene (one of many in that film) in which Jake Blues, played by John Belushi, explains to his jilted fiancé (played by Carrie Fisher), who has a loaded machine gun pointed at him, why he didn’t show up for the wedding that her family had gone to much trouble to organize:

“I ran outta gas. I had a flat tire. I didn't have enough money for cab fare. My tux didn't come back from the cleaners. An old friend came in from outta town. Someone stole my car. There was an earthquake, a terrible flood, locusts. It wasn't my fault!! I swear to God!!”

I don’t know if Mr. David has seen this film, but his cumulative explanations to the ILPTO and (then to the district court) about why he didn’t pay the renewal fee on time were somewhat reminiscent of this scene. He said that the patent certificate – the one with the renewal reminder printed on the back where normal people don’t notice it – was sent not to him but to his colleague, who was not responsible for the Israel patent (but who’s address was the one on file with the ILPTO after Mr. David fired his patent counsel, and who was responsible for the patents outside of Israel, and who as noted above was the one who first informed Mr. David of the possible infringement and the lapse of the patent), who didn’t forward the document to Mr. David. And he thought that his colleague would pay the fee (even though – see a few lines above – he also said his colleague wasn’t responsible for the Israel patent). And, being familiar with trademark practice, he assumed that patent renewals were like trademark renewals, once every ten years, so how was he supposed to know that a renewal fee was due so soon after the grant of the patent? Plus, for two years during the corona virus scare, his business wasn’t active. And who would pay all this money to draft, file and prosecute a patent, and then let the thing go abandoned?

Sections 59 and 60 of the statute says that a patent can be revived, provided the Commissioner is convinced that (a) the lapse happened for “reasonable causes”, (b) the patentee didn’t want the patent to lapse, and (c) the reinstatement request was filed as soon as possible after learning of the lapse. Needless to say, on the Jake Blues-type pleadings, the Deputy Commissioner wasn’t convinced that the circumstances surrounding the lapse per se were reasonable.

Here I’ll interject one point. The same regulations that establish the renewal fee dates and amounts also clearly establish that the ILPTO has to send out notices to patentees before renewal fees are due. My reading of those regs is that if the Office doesn’t send such a notice, no renewal fee is due and the patent doesn’t lapse. The ILPTO takes a contrary view and has, through its own case law, conveniently excused itself from the latter requirement, asserting that although it does in fact normally send out such notices, if the Office fails to send out a notice, the responsibility for renewals is ultimately on the patentee, regardless of the ILPTO’s behavior.

Mr. David appealed to the District Court. The ILPTO argued that, given the conflicting versions of facts presented by Mr. David, it was not possible to determine that the cause of the lapse was reasonable (and, as noted in the Deputy Commissioner’s decision of March 2023, presenting conflicting arguments showed a lack of good faith).

Reading through the materials in the file, it’s clear that this was a case of multiple factors leading to the initial non-payment, and that by acting pro se, Mr. David not only caused the initial screw-up (because competent local counsel would have told him there’s a first renewal fee to pay) but messed up his own arguments in the revival proceedings.  On the other hand, the ILPTO’s take seemed rather harsh and formalistic: it’s clear from reading the materials that, indeed, Mr. David didn’t know there was a fee to pay, and had no desire for his patent to lapse. Why WOULD a small business owner prosecute a patent application to grant and then not pay the first renewal fee? The fact that after learning of the lapse occurred, he did a bad job of lawyering for himself (viz. provided conflicting explanations for the non-payment), doesn’t derogate from the conditions of section 60 having been met.

Which is probably why, at the oral hearing in the appeal in September 2023, the District Court judge strongly suggested to the ILPTO that it agree to reinstate the patent, which it did, with caveats that it was doing so only in this particular case, and that really Mr. David had a responsibility to track the status of his patent.

All’s well that ends well, I suppose. It’s worth mentioning that at the court hearing, counsel for the Office argued that upon lapse, the invention became public domain, and by reinstating the patent, “the public” would be prejudiced. That’s an argument that I’ve heard multiple times over the years, and I’ve never bought it. The statute establishes the conditions for reinstatement; it’s not for the ILPTO to add further, extraneous consideration to the mix. Moreover, the statute itself in section 63 includes a carve-out for parties that rely on the lapse to begin practicing the invention or who have made substantive preparations to do so: they can continue to practice the invention even after reinstatement. It seems that paternalism remains part of the mindset of some in the ILPTO.

How Is The Patent Grant Date Calculated In Israel (i.e. When is the First Maintenance Fee Due)?

In Israel, after the ILPTO allows an application, the applicant pays a fee, and then notice that the application is allowed - the so-called "acceptance of the application" - is published in the Patents Journal.  This now normally occurs on the 1st of the month on the Gregorian calendar, although if the 1st falls on a day when the ILPTO is closed, then the publication occurs on the next day on which the office is open.  Opponents then have three months - non-extendible - to file a notice of opposition.  But by statute, if THAT deadline falls on a day when the ILPTO is closed, that deadline gets pushed off.  Once the opposition deadline passes without an opposition being filed, the patent automatically grants, although the ILPTO sometimes takes a few days to issue the patent certificate. 

The grant date is important, because maintenance (renewal) fees the deadlines for which occurred during the pendency of the application must be paid within three months of grant - minimally, the fee for years 0-6 of the patent, and sometimes for years 7-10 or even for later years.

This year, patent applications for which the "acceptance of the application" was published on July 1 ostensibly became patents on October 2, assuming no opposition was filed by the end of the October 1 deadline. But the ILPTO was closed on October 1 as part of the intermediate days of the Succot festival, and stayed closed until October 8.  So the deadline to file oppositions should have been yesterday, October 8, with unopposed application issuing at patents on October 9, and the maintenance fee deadline

Imagine my surprise, then, when this morning I received patent certificates for several patents that listed the issue date as October 2, 2023 - a date on which the Office was closed.

I don't imagine this shortchanging of my clients a week to pay their maintenance fees will be an issue, as we usually report patent grants immediately, and 12 weeks to pay should be sufficient. But it would be nice if the ILPTO got its dates right.

Follow up: I emailed the head examiner at the ILPTO, Simona Aharonovitch, about this problem.  Turns out that I alerted them to it last year, and they mostly fixed it, but there's still a glitch: the patent certificates got prepared automatically on October 2, but they weren't mailed until October 9. In fact, potential opponents had the ability to file oppositions through October 8.

What blows my mind is that according to Ms. Aharonovitch, I'm the only one who has ever called this mistake to the PTO's attention.  Evidently the big offices are asleep at the wheel.

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.

Address for Renewal Fee Service: Another Suggestion for the Israel PTO

Patent renewal fees, also sometimes called maintenance fees or annuities, are a feature of most patent systems.  Readers can look at economic-analysis-of-law textbooks for an explanation of the economic rationale for these fees, but from the standpoint of most patent offices they’re just another form of income.  In the US, renewal fees are due 3.5, 7.5 and 11.5 years after patent grant; in Israel they’re due within three months of grant and thereafter at 6, 10, 14 and 18 years from the filing date.

Although the renewal fees themselves can get hefty, particularly toward the end of the life of a patent, administratively it doesn’t take much to pay the fee, especially now that most patent office accept online payments.  It should therefore come as no surprise that there are several companies that in essence function as renewal fee payment aggregators: they have managed to get lots of customers to pay them to manage renewal fee payments, and as a result they’re usually able to negotiate bulk discounts with a local service provider that takes care of the actual payment.  (I say “usually” because it's not always the case that the cost when working through one of these providers is cheaper.) For patentees, especially patentees with large portfolios, this can be a good deal, since the renewal fee company keeps track of the deadlines and the costs, for less than it would cost having a law firm track this information.

The USPTO recognizes the fact that paying a renewal fee is a purely ministerial act, and allows a patentee to maintain one address for service for correspondence for substantive matters (like patent term extensions), while maintaining a separate address for correspondence pertaining to renewal fees. This way, if the patentee chooses to use a renewal fee service, and there’s a power of attorney on file, the attorney of record is off the hook for renewal fees.

Sadly, while the Israel PTO recognizes that paying renewal fees is purely ministerial and therefore will accept a renewal fee payment from anyone, the Israel PTO does not recognize that it’s possible to have separate correspondence addresses for renewal fees and for other matters. This oversight creates unnecessary work for local practitioners, particularly since the Israel PTO usually requires – unjustifiably, in my view, but that’s a topic for another blog post – that patent applicants submit a power of attorney.  The way it works is that the Israel practitioner will generally prosecute a case through to grant, and then pay the first renewal fee due within 3 months of grant.  Thereafter, though, the patentee often uses a renewal fee service, which contracts with one of the large Israel patent firms to take care of its renewal fees.

That in and of itself wouldn’t matter, but (a) the Israel PTO sends renewal fee reminders* to the address for service on record, and that’s usually the address of the practitioner to whom the POA was given, and (b) the renewal fee certificates that are issued once the fee has been paid are sent to that same address for service. 

The result is that a practitioner who has been told by the client that he is not responsible for renewal fees in a particular case continues to receive notices about renewal fees for that case, something that may necessitate checking the docket system to confirm that he is not responsible for renewal fee in question.

While a practitioner could in principle withdraw from representation once the patent issues, that’s overkill, since the patentee may want the practitioner to continue to be responsible, e.g. should the patent be subject to a cancellation action of if it’s desired to obtain an extension of a pharmaceutical patent.

There is no reason the Israel PTO can’t do like the USPTO does, and enable the recording of a separate address for renewal fee correspondence. It would make life easier for everyone involved.

*The fact that the Israel PTO sends renewal reminders BEFORE the fees are due is a nice service. The USPTO, by contrast, only sends out a reminder once the initial deadline has been missed, as if to say, “Oops, you missed your deadline and now you can still pay, but with a 10% penalty.”

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.

Initial Israel Patent Renewal Fees (Follow-Up Post) and Mailing Dates/Deadline Dates

In May I wrote about the problem with the way in which the Israel PTO notified patentees of the initial renewal fees that are due within three months of the grant of the patent: by including such notice on the back of the patent certificate, which was (and still is) sent by regular Israel Post, the Office risked the patentee either not receiving the certificate and renewal fee notice (because of the unreliability of Israel Post), or the patentee ignoring the notice because of its being printed on the back of the patent certificate.  I wrote then that there was an easy solution to the problem:

“[T]he Israel PTO already sends the attorney of record an email notice when the patent is granted, which currently reads, “You are informed that the [patent] application has matured into a patent and the Office’s records have been updated accordingly.  The patent certificate will be generated and uploaded to the Office’s web site in the next few days.”  It would take minimal effort to add a sentence to that letter that says, “In accordance with Regulation 86, you are reminded that the first renewal fee is due three months from the date of grant of the patent.”  Such a reminder would likely reduce the number of patents that lapse for non-payment of the first renewal fee(s).”

Evidently someone at the Israel PTO was paying attention, as this morning I received such a notice of renewal as part of an email attachment telling me the patent had granted, which notice included the following language:

For your attention: a renewal fee must be paid within three months of the date of grant of the patent (which appears on the first page of the patent certificate).  This period may only be extended for six months, subject to payment of an extension fee.

Non-payment of the renewal fee in the aforesaid time period will result in lapse of the patent without prior warning!

Additional details regarding renewal fees can be found on the back of the patent certificate.

This appears to be a new and welcome addition to the ILPTO’s standard notification of issuance of the patent.  Of course, the patent certificate wasn’t included with the email, and as of this writing it still hasn’t been posted on in the database, so that’s the next thing the ILPTO can work on.  Nevertheless, this is progress of a sort: it fulfills the ILPTO’s duty to remind patentees – at least those represented by counsel – of the deadline for the first renewal fee.  However, as I noted in the previous blog post, I suspect that most practitioners don’t wait for the ILPTO, and simply docket the relevant dates of their own accord. I don’t know if pro se inventors – the ones most in need of such reminders – receive these kinds of notices by email.

The non-inclusion of the patent certificate led me to discover a discrepancy within the ILPTO’s system.  Notice of the allowance of the patent in question published in the Patents Journal on April 1, which meant that oppositions had to be filed by July 1.  Since July 1 was a Friday, when the Israel PTO is officially closed, the deadline for filing oppositions was by law extended to Sunday, July 3.  This means that the patent should have granted today, July 4, and presumably that’s why the letter I received informing me of the grant of the patent was sent today and not yesterday. 

But when I look at the “nesach” for this patent from the ILPTO database – sort of the official printout of the status of the patent – it shows the grant date as July 2, not July 4, thus foreshortening the deadline to pay the first renewal fee by two days.  I suspect that the ILPTO’s systems that calculate deadlines have been programmed accordingly, but clearly this is a glitch in the system.  I’m curious what the patent certificate itself will say regarding the grant date.  To be safe I docketed for October 2, but the discrepancy could become an issue if someone goes to pay their renewal fee on October 3.

It’s also interesting that the current Patents Journal was published on July 1, which was a Friday (as was April 1 of this year), when the ILPTO is officially closed.  I know that the USPTO publishes its Gazette every Tuesday, regardless of the date – my grandfather had a patent issued by the USPTO on December 25, when the USPTO was clearly closed, so in that respect publication of the Israel Patents Journal on a day when the ILPTO is closed isn’t unusual.  But what will happen when the first of the Gregorian month falls on Shabbat (Saturday)? Publication on that date would be legally and politically problematic.  We’ll see what happens on October 1, 2022.  (January 1, 2022 was also Saturday, but because of the change in the electronic publication format of the Patents Journal, all publications that would have taken place then were pushed off until February 1, 2022.)

Initial Patent Renewal Fees at the Israel PTO: A Problem With An Easy Solution

Patent renewal (or maintenance) fees in Israel are due for five periods of time: for years 0-6, 7-10, 11-14, 15-18, and 19-20 of a patent’s lifetime.  Normally, the fee for the next period is due by the appropriate anniversary of the filing date, viz. at years 6, 10, 14 and 18 from filing, and is payable from three months before the deadline until as many as six months afterward (with the payment of the appropriate extension fee).  (There is also an option to pay all 20 years up front.)  However, the fee for years 0-6, and for any additional renewal fees that accrued during patent prosecution, is not due while the patent application is pending, but rather is due within three months of the grant of the patent, with this deadline also being extendible by up to six months.  Failure to pay the fee results in lapse of the patent; when that happens, the patentee can petition for reinstatement of the patent.

The patent statute itself has little to say about renewal fees: §56 says that in order for a patent to remain in force, payment of such fees must be made “as has been established [in the regulations]”, and §57 establishes the six-month grace period for late payment of renewal fees.  The heavy lifting with regard to renewal fees falls to the Regulations, specifically to regulations 85-88 and paragraph 12 of the second addendum to the regulations, which set forth inter alia the aforesaid five periods for payment of renewal fees and the amount for each renewal fee. 

Regulation 86 explicitly states that “The Registrar shall send a notice to the patentee regarding every period for which he must pay a renewal fee, not later than three months prior to said period.”  Although the ILPTO has for years maintained that this statement is merely exhortative rather than compulsory (an issue beyond the scope of the present blog post), it nevertheless is usually good about sending out such reminders, usually by email to the attorney of record.  Additionally, because the deadlines for payment of most of the renewal fees are predictable (as noted, on certain anniversaries of the patent filing date), it’s easy to program these into a docketing system.

There’s one situation, however, in which the Israel PTO consistently fails to adequately inform patentees of the renewal fee, and that’s for the first renewal fee (or renewal fees, if the patent is granted more than 6 years after filing), which is due 3 months after grant.  Rather than send the patentee (or attorney of record) a notice by email, the ILPTO sends the notice by snail mail.  As I’ve blogged about before, Israel Post is bad, and has been really bad for at least 15 years.  If anyone in the private sector wants to get a letter to someone in Israel, he sends it via private courier, or alternatively via registered mail with the Israel Post, so that when it isn’t delivered to its intended recipient, the sender at least has a record of such.  No one in Israel who wants to be sure a document gets into the hands of the person who’s supposed to get it, let alone that the person receives it in a timely fashion, sends such a document by regular post.

And yet, that’s exactly what the Israel PTO does with its notices about the first renewal fee. 

To make matters worse, that notice is usually printed on the back of the Patent Certificate, which the ILPTO also sends by regular Israel Post.  Inasmuch as the electronic file is now the official record, and the patent certificate appears in the file (usually a few days after the patent is granted), there’s no need to send the physical certificate. But the Israel PTO does, with the reminder about the first renewal fee printed on the back.  Which means that (a) many patentees never receive the notice (since the certificate that appears in the electronic file does not contain the renewal fee reminder on the back), and (b) many patentees who do receive the notice don’t pay attention to it, because it’s printed on the back of the patent certificate.

I suspect that most patent firms in Israel don’t wait for the patent certificate to show up, but instead (a) docket to see that no opposition to the grant of the patent was filed by the deadline to file oppositions, and if no opposition was filed (b) docket to pay the first renewal fee within three months of grant (which occurs automatically upon expiration of the opposition period).  But not everyone is represented by counsel, and sometime inventors try to save money by taking it upon themselves to handle administrative matters.

Given the foregoing, it should come as no surprise that of the petitions to revive patents that lapsed for failure to pay renewal fees, roughly half pertain to lapses that occurred for failure to pay the first renewal fee.  And seeing as how the Israel PTO allocates personnel and office resources to handle such petitions (including to render decisions on the petitions), and how the preparation of such petitions likewise consumes significantly more time and effort than does the paying of the initial renewal fee on time, it would benefit everyone if the Israel PTO would start sending out email notices, reminding the patentee of any renewal fees that are due within three months of grant of the patent.  

This shouldn’t be difficult to do: the Israel PTO already sends the attorney of record an email notice when the patent is granted, which currently reads, “You are informed that the [patent] application has matured into a patent and the Office’s records have been updated accordingly.  The patent certificate will be generated and uploaded to the Office’s web site in the next few days.”  It would take minimal effort to add a sentence to that letter that says, “In accordance with Regulation 86, you are reminded that the first renewal fee is due three months from the date of grant of the patent.”  Such a reminder would likely reduce the number of patents that lapse for non-payment of the first renewal fee(s).

While we’re on the subject of lapsed patents, it is interesting – and inexplicable – that the ILPTO sends the attorney of record a notice when a patent application lapses for failure to respond to a communication from the ILPTO, but that it does not do so when a patent lapses for failure to pay a renewal fee.  Notice of lapse of a patent is only published in the Patents Journal.  I do not make a practice to scour the list of lapsed patents – and the list is published only as numbers of the lapsed patents, without any other identifying information – to see if any of my clients’ patents have lapsed.  Because of this, it’s not uncommon for a patentee to discover the failure to pay a renewal fee when he goes to pay the next renewal fee (due to a notice in his or his attorney’s docketing system, not because of a notice from the ILPTO, since the ILPTO doesn’t send renewal fee reminders for lapsed patents).  It would be helpful for the ILPTO to program its systems to send out notices when patents lapse for non-payment of renewal fees, and not simply publish a list of numbers of lapsed patents.

More Fun With the Israel PTO Electronic Filing System

We've refrained from ragging on the ILPTO electronic filing system for a while. Partly that's because criticizing IL-EFS is like shooting fish in a barrel, partly that's because no one wants to hear a perpetual complainer. If you don't like reading whines/rants/gripes, read no further. But if you too suffer using IL-EFS, you can commiserate about the following encounters, some recent, some from a while ago.

1.  When you file something via IL-EFS, it emails you an acknowledgement that you filed whatever it was you filed.  There's always a lag between when you click "submit" and when the acknowledgement email is sent.  If you're lucky, that lag is only a few minutes, but until now our record was around 48 hours.  The IL-EFS has now outdone itself: two weeks ago we paid a fee in a particular Israel patent application.  This morning we received the acknowledgement email.  Yay!  (To be fair, since this was a file in which a payment was made, we were able to download a payment receipt immediately, and the system generates payment acknowledgement emails immediately as well, so we weren't really concerned about the delay in email acknowledgement of the submission per se.  Still, until now, we couldn't see anything in the ILPTO database showing that the fee had been paid. Within a day the database should be updated to show the response filed two weeks ago. We hope. As of this minute, the ILPTO's patent database is down.) 

2. We filed third-party prior art submissions in someone else's patent application. The system won't take .zip files, only .pdf files, so the choices are to (a) attach each file individually before uploading, or (b) combine all the files into a single .pdf, then attach and upload that.  The former choice is particularly onerous, as, unlike PAIR or ePCT, which allow the user to first choose the application of interest, then choose the action and upload the documents, the Israel system (i) first makes the user choose the action he wishes to take, then (ii) indicate the file number, and only then (iii) does the system tell the user whether or not he can take that action.  Denial of the ability to take action may be because the user isn't associated with that application (even though a power of attorney may have been filed), or the system may think the application is at a stage where a particular action isn't authorized (see the next entry for more on that). 

Additionally, the system is fickle about pdfs, but doesn't explain why it won't accept a given .pdf.  So if you go through (i), (ii) and (iii) but the system gags on your .pdf, you've gotta start over again. This is why filing a single .pdf may not be an option. That and size limits on uploads.  But have no fear: if you succeed in uploading your pdfs and filing them, the IL-EFS will confirm that success by emailing back to you the same files you uploaded, all 20 MB of them...sometime within 24 hours of the upload. Because, apparently, that's easier than immediately issuing a filing acknowledgement form that lists all the files submitted. (The USPTO does this, and includes a number generated by a hash function to indicate the size of the pdf submitted.) Or having the uploaded documents automatically entered into the publicly visible database immediately upon uploading. (The USPTO does this too, although sometimes there are delays between submitting things via EFS and being able to see them in PAIR. But in at least 90% of the cases, there aren't.)

And if you have a problem with the IL electronic filing system? Don't worry, there's tech support. Sort of. Five days a week, for maybe eight hours each day, if the one ILPTO employee assigned to the task is at work that day and answers the phone. Otherwise, in the words of Rev. Johnson, "Son, you're on your own!"

3. By law, after the three month period for filing oppositions expires, an Israel patent application becomes a patent. Renewal fees that accrued prior to grant are then due within three months of the grant date. But the ILPTO is sometimes slow about actually issuing the patent certificate after the opposition period expires. So when we went to pay a renewal fee in a case that became a few days before, but for which the patent certificate hadn't yet been mailed, IL-EFS told us, "the application is not at a stage at which you can take that action".  At least it didn't say it in that fake-calm Hal 9000 voice. Apparently the ability to pay the renewal fee is linked to the system recording the status of the patent as "granted" rather than pending", but the system doesn't automatically update that status upon termination of the opposition period without an opposition being filed.  We're sure that when the patent certificate is sent out, the patentee won't be given additional time to pay that first set of renewal fees to compensate for this particular bug in the system.

4. In a point related to point 3, a client asked us to request suspension of examination. But in order to that you first have to respond to the ILPTO's pre-examination letter.  So we filed the response to the pre-examination letter, then went to request the suspension...and the system said, "the application is not at a stage at which you can take that action".  Here too, we had to wait for the IL-EFS to generate the acknowledgement email - in this case it took about an hour - before we could submit the suspension request.  Why can't we just file everything together?

Two More Suggestions for the Israel PTO: Allow Practitioners to Act in a Representative Capacity, and Allow Address for Renewal (Maintenance) Fees Only

I tend to think of the USPTO as being significantly more rule-burdened (i.e. bureaucratic) than the ILPTO. This is, perhaps, a natural outgrowth of the USPTO being a significantly larger organization – something like 8,000 employees rather than the fewer than 300 at the ILPTO – although there are also cultural factors at play. And it’s reflected in the voluminous MPEP, weighing in at hundreds of pages (maybe over 1000 now, I haven’t looked at a print version in years), versus the ILPTO’s examination guidelines, which are probably still under 100 pages total.

Whatever the reasons, this normal difference between the two offices means that those cases in which the USPTO is easier to deal with than the ILPTO to jump out like a blotch of red paint on a white canvas.  And one such difference is the question of who can file papers in a patent application.

You might think that at the USPTO, a power of attorney is required to file papers, but in most cases it’s not.  Instead, the USPTO is extremely reasonable: per rule 1.33(b) any registered practitioner can file papers in an application, as long as that practitioner is acting in a representative capacity per rule 1.34, which states:

“When a patent practitioner acting in a representative capacity appears in person or signs a paper in practice before the United States Patent and Trademark Office in a patent case, 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. In filing such a paper, the patent practitioner must set forth his or her registration number, his or her name and signature. Further proof of authority to act in a representative capacity may be required.”

In other words, the USPTO assumes that a practitioner’s livelihood is of sufficient importance that the practitioner won’t file a paper that he’s not authorized to file.  So the USPTO doesn’t require a power of attorney.

Of course, it’s still best to file a POA, for reasons that are beyond the scope of this blog post. And for certain actions, like filing a terminal disclaimer under rule 1.321, or expressly abandoning an application that is not being abandoned with the filing of a continuation application per rule 1.138(b), a POA is required. Presumably that’s because these actions irreversibly affect an applicant’s or patentee’s rights. 

Nevertheless, the ability of a practitioner to generally file papers in the absence of a POA is extremely sensible.  It’s also extremely convenient, especially when it’s coupled with the ability to file things electronically.  To give one example, if a practitioner takes over a case, and there’s a looming deadline to file a response, the applicant and practitioner can focus on the response, without also having to worry just then about getting the necessary signatures for a POA and getting the USPTO to accept the POA (which isn’t always as trivial as one might think).

Contrast this with the way the ILPTO operates.  Although a POA is not required for the initial filing of an application by a registered practitioner, the ILPTO subsequently requires the submission of a POA, and the ILPTO’s electronic filing system – which for four years now all registered practitioners have been required by Rule to use – will not allow a practitioner to file a paper in an application in which he is not the practitioner of record (except for things in which he represents an adverse third party, e.g. third party observations or a notice of opposition). 

There are additional issues with how the ILPTO EFS is administered that will be subject of subsequent blog post.  Suffice it for now to say that preventing practitioners from filing papers in applications in which they are not of record is a sub-optimal arrangement.  Israeli practitioners are no less concerned about their license to practice than their colleagues in the USA, so prohibiting practitioners from filing papers until they are officially appointed as counsel in a particular patent application is an unnecessary bit of paternalism that is, at the end of the day, economically inefficient. 

Curiously, there is one glaring exception to the requirement that a practitioner be of record in an application or patent in order to file papers in that application or patent: the payment of maintenance fees.  Maintenance fees for an Israel patent are due within 3 months of the grant of the patent for years 0-6, and then at 6, 10, 14 and 18 years from the filing date.  By Rule, the ILPTO must send a notice to the patentee’s local address for service before each fee is due, and after payment is received it sends a renewal certificate to that same address.   The ILPTO will let any registered practitioner pay the maintenance fee, and it doesn’t require a new power of attorney for this, or even a change of address. 

It’s not uncommon that applicants with large patent portfolios, having patent family members in many jurisdictions, will engage a maintenance fee payment company to monitor and attend to those maintenance fee payments.  By agglomerating the patents of many payors, those companies can in principle negotiate lower rates from local counsel for attending to maintenance fee payments than if each patentee itself tried to negotiate rates.  Those companies then typically engage a small number local firms, possibly only one in smaller jurisdictions, to handle all of their maintenance fee payments in each jurisdiction. 

Because the ILPTO allows third parties to pay maintenance fees, and does not require a new POA, the result is that many practitioners are told by their clients, “Don’t docket maintenance fees”, but then continue to receive notices from the ILPTO that fees are due and that fees have been paid.  This places such practitioners in a quandary: are they to send reminders of upcoming fees or reports of paid fees to clients who have already told them not to do so, and thus in effect told them, “We won’t pay you for such reminders or reports”?  Why should they be obligated to waste their time that way?  But if they don’t report, are they in dereliction of a duty toward their client?

“OK”, you might say, “so why doesn’t a practitioner in that situation just withdraw from representation?”  There are several answers to that. 

One answer is that the practitioner who prosecuted the case may have other cases from the same client, and withdrawing from representation in one case might risk alienating the client and result in loss of an entire portfolio of work. 

Another answer is that the practitioner may not want to withdraw from representation, and the patentee may want the practitioner to remain as counsel of record.  For example, if the patent is later the subject of a cancellation action, or is involved in litigation, both the patentee and the practitioner may want the practitioner to remain involved in the case. 

A third answer, with respect to patentees that are not domiciled in Israel, is that the view of the ILPTO is that failure to maintain an address for service in Israel results in cancellation of the patent.  See Commissioner’s Circular no. 010/2012, update no. 7, paragraph 44.  For such patentees, a practitioner’s withdrawal from representation might result in loss of the patent, at least as far as the ILPTO is concerned. 

Now let’s circle back around to the USA.  The same considerations that cause patentees to entrust their maintenance fee payments to a third party that apply in Israel likewise apply in the USA.  So how does the USPTO handle this?  Easy.  It enables a patentee to have a separate address for service for maintenance fees only.  So notices of missed payments, or notices that a payment has been made, can be sent to one party, while the address for service for all other correspondence remains as it was, e.g. the firm that prosecuted the patent. 

It would be extremely helpful to patentees and practitioners alike if the Israel PTO would implement the same sort of system, allowing patentees to list a different address for maintenance fee payments.  Then reminders of upcoming fees and renewal certificates could be sent to the party that is actually responsible for them.

There is an alternative that might be easier for the ILPTO to implement, but less desirable, namely to require a power of attorney from the party paying the maintenance fee.  But as noted above, the patentee may want the practitioner who prosecuted to the case to remain the practitioner for substantive matters.  And getting the necessary signatures, and recording a new POA, would add to the patentee’s cost of maintaining the patent.  So this “solution” is really a non-starter.

English Translation of Israel PTO Notice About Work Arrangements Under Coronovirus Shut Now Available

Further to yesterday's blog post, today the ILPTO published an English translation of its notice about work arrangements during the Coronavirus shutdown.

Update March 27: the ILPTO published a further clarification on March 25. English version here. If you're recording a pledge against a patent, the 90-day limit to do so still applies, and the office will record the pledge. If you are a patent practitioner trainee on now unpaid leave, you should read the update.

Israel PTO Aware of Bug In System But Prefers To Inconvenience Users Rather Than Fix The Bug

We have a patent for which renewal fees are due.  The application was filed January 12, 2012.  The patent was granted on September 30, 2017, so renewal fees for years 0-6 are due by December 30, 2017.  Renewal fees for years 7-10 are due by January 12, 2018, and by law became payable three months in advance, viz. on October 12, 2017. 

In principle there are two ways we could pay these fees.  The first way is to use the online legacy payment system, under which one pays fees and then sends the ILPTO a copy of the payment receipt, along with an explanation of what the payment is for. The second way is to log into the ILPTO's electronic filing system and pay through that, which results in the ILPTO automatically being notified that the payment was made and what it was made for.  But under the brilliant rules adopted in 2015, as patent practitioners we can only use the second method, unless the ILPTO is feeling magnanimous.

On October 13 - within the three-month window for the second renewal fee - we logged into the ILPTO's system in order to pay both fees, but we found that the system would only let us pay for years 0-6 and not also 7-10. It's unclear why this is so. One guess is that the takanot (ILPTO Rules) require the ILPTO to send a reminder regarding upcoming renewal fees, and since no such reminder has gone out for the second renewal fee, the system won't let us pay.  The mailing of that reminder letter may in turn be tied to payment of the first renewal fee - it could be that the system simply won't issue the payment letter for the second fee until it sees that the first renewal fee was paid, thus preventing patent practitioners or institutional patentees from paying renewal fees beyond the first fee if the first fee hasn't already been paid. 

What we have established is that (1) the ILPTO is aware of the problem - the person in charge of patent renewals admitted this to our paralegal a few minutes ago - and (2) the ILPTO not only refuses to fix the bug, but insists that patentees pay the renewal fees in two installments - pay the first fee using EFS, wait for the renewal certificate for years 0-6, then pay the second fee using EFS. 

We suggested something more reasonable than logging into the defective EFS twice: that we simply pay both fees simultaneously using the legacy system, and send them that receipt.  The ILPTO is perfectly capable of processing fees in accordance with the legacy payment system, so this shouldn't present a problem.  But no: we were told by the person in charge of patent renewals that she would refuse to process the renewal fees, issue a refund, and force us to pay using the EFS.  And that if we had a problem with that, we could take it up with the head of patent administrative services at the ILPTO.

So once again, the ILPTO tells the patenting community to go screw itself, because it's better that the time of the applicants and their attorneys be wasted than an ILPTO clerk have to spend a few more minutes inputting data because the ILPTO refuses to fix its farkakte electronic filing system.

It's our understanding that the recently-installed ILPTO commissioner was chosen with the goal of making the organization more efficient. Telling the patent practitioner community that it is not required to use the EFS until the system is fixed, and then setting about fixing the system, would be a good start.