America-Israel Patent Law

Addedum to "Another Example of How To Fleece Clients Without Them Knowing (Part 3)"

In response to January 17's post, an alert reader who wishes to remain anonymous pointed out that part of 8(d) of the APAI's "code of ethics" would seem to preclude an Israeli patent practitioner from listing himself an a "applicant of convenience" on a PCT application. 

For the uninitiated, an "applicant of convenience" is most commonly used when either (a) none of the actual applicants are from a PCT member state, and therefore there's no way to get the PCT application filed, or (b) there's at least one applicant from a PCT member state, but not from a member state that will facilitate using the PCT Search Authority of interest. 

Prior to 1996, when Israel joined the PCT, situation (a) was quite common in Israel: Israeli applicants wishing to avail themselves of the PCT would assign their rights in some irrelevant jurisdiction to their foreign patent counsel in the USA or Europe, who would then file the PCT listing themselves as the applicant for the irrelevant jurisdiction only, and listing the Israeli applicant as applicant for everywhere else.  See, e.g. WO 1997/002439. 

Situtation (b) still sometimes arises, for example if an Israeli entity wants its search done by ROSPAT or KIPO, which costs less than having the search done by the Israel PTO, the EPO or in the USA, the three PCT Search Authorities available to Israelis. If the Israeli entity's agent is a US citizen, for example, then the Israeli entity will make the agent the applicant for an irrelevant jurisdiction, thus obtaining the ability have ROSPAT or KIPO do the search.

Apparently members of the APAI who engage in this practice would be considered persona non grata by the association. Which is why it's a good thing that that organization's "code of ethics" doesn't have the force of law. 

Another Example of How To Fleece Clients Without Them Knowing (Part 3)

This is the third installment discussing a situation in which patent practitioner X listed himself as an inventor on an application he drafted and filed on behalf of Z, assigned all his rights to Z, and was then asked by by Y, the practitioner to whom the case was subsequently transferred, to (a) confirm in writing that X was not an inventor with respect to a new set of claims that Y planned to file in the USA (discussed here), and (b) confirm that X had no "demands" against Z (discussed here).  Today we'll look another aspect of Y's letter to X.

The third part of Y’s letter said the following; I have inserted my own translation of the Hebrew text:

"You may also want to refer to paragraph 8(d) of the Code of Ethics of the Association of Patent Attorneys in Israel:

(d) It is forbidden for an orech patentim who dealt with a patent application, design or trademark of his client, or who participated in the dealing with them, to include himself in any way as the owner, in Israel or abroad, or to demand property rights in the subject of the application, directly or indirectly. [translated from Hebrew text; “orech patentim” is often translated as “patent attorney”, although an orech patentim is not a lawyer, and might better be translated as “patent agent” or “patent editor”]

as well as to paragraph 12A(b) thereof:

(b) in any event, an orech patentim shall not record or request to be listed as a joint inventor with his client regarding an invention with which he deals, if the client did not agree to this in writing before the filing of the patent application, and there is an absolute prohibition against an orech patentim to be listed as a joint inventor against the will of his client [translated from the Hebrew text]"

Ignoring for the moment the substance of these two specific clauses, the reference to this “Ethics Code” is baffling, because it has no legal force.  The Association of Patent Attorneys In Israel is a non-profit association of the same sort as the Association of Americans and Canadians in Israel, the National Geographic Society, and the Boy Scouts of America.  The APAI is not established by statute, Israeli patent practitioners are not required to be members of the APAI, and the APAI’s rules apply only to APAI members.  Which, it should be mentioned, X is not.  The maximum penalty for violating one of those rules is expulsion from the association; violation of an APAI rule per se carries no civil or criminal penalties.

The cited “rules” are also substantively unwise, for at least two reasons.  First, as discussed in the first post in this series, getting inventorship right matters for US patents. And, being the single most important market for the vast majority of Israeli entities that do business outside of Israel, the US remains the single most important patent jurisdiction for such entities.  But it’s not hard to picture situations in which adherence to the cited rule 12A(b) could potentially jeopardize a client’s US patent application.  A better default rule would be that, absent an agreement to the contrary, if a practitioner finds he’s an inventor, his client automatically owns the practitioner’s portion of the invention and the right to patent it, and the practitioner isn’t entitled to additional remuneration beyond his already agreed-upon fee.  In other words, exactly what X did in the situation he encountered.

Second, association rule 8(d) would seem to preclude practitioners taking an ownership stake in their clients’ businesses.  But services-for-equity is a well-established, if risky, way for practitioners to assist clients who are short on cash but have potentially winning ideas.  Indeed, the AIPLA will be including a session at its spring meeting in May on the topic of “Startup Stock Ownership: How to Contribute IP for Equity”. Rule 8(d) doesn’t appear to be in the interest of clients. Or risk-taking patent practitioners.

So given all that, why would Y refer to irrelevant rules – particularly when he himself even professed to be aware of the requirements of US law regarding the listing of inventors, writing to X, “As I'm sure you know, US law requires the mention of the inventors of the claims on record…”? 

I can only speculate, but a few possibilities come to mind.  One is that Y assumed that Z (the applicant) doesn’t know that the “Code of Ethics” to which Y referred is as binding on X as are the Rules of Major League Baseball, and therefore Y figured he could impress Z by referencing these rules.  A corollary to this is maybe Y figured that X doesn’t know that that “Code of Ethics” is irrelevant, and thus could be bullied into saying he’s not an inventor.  (No one who knows X would think such a tactic could work, but Y doesn’t know X.)

Another possibility is this: for more than 20 years, there’s been a push by some patent practitioners in Israel to forbid all patent practitioners from listing themselves as inventors on applications they draft for clients, or from holding an ownership interest in patents they draft for others.  That still hasn’t come to fruition, but maybe Y is one of those in favor of such a change, and Y confused his aspirations with reality.

And then there’s the prosaic reason, common to all three parts of Y’s letter: he could bill for it.

 

Is There A Difference Between Fox News And The National Enquirer?

Before you answer that question, first read this story that appeared on the Fox News website under the headline “UN agency helps North Korea with patent application for banned nerve gas chemical”. Then after you’ve read it, write me offline to explain the differences between Fox and the Enquirer.  Because from where I sit, they’re both into passing off fiction for fact.

What seems to have gotten the ire of the Fox “reporter” is the fact that North Korea is member of the PCT, and as such North Korean entities can – gasp! – file PCT applications, including this one, entitled “PROCESS FOR PRODUCTION OF SODIUM CYANIDE”, which published last December. 

Now, sodium cyanide is nasty stuff, if you ingest it. But calling it a “nerve gas chemical” – well, that’s kind of hard to picture, seeing as the stuff has a melting point of 563ºC. It’s like calling table salt a “nerve gas chemical”. If you want to get it into someone, you’re going to have to get them swallow it, or dissolve it in water and inject it. Inhalation ain’t happening.

And to say that a UN agency “helps North Korea” with a patent application…well, that seems to imply somehow WIPO helped someone in North Korea received help from WIPO to draft the application. But as we all know, that’s like saying the USPTO “helps” people with their patent applications because it lets them file those applications (for a fee).

WIPO is a neutral body that administers the PCT for citizens of member states. That’s all. If Fox has problem with the fact that North Korea met the criteria for joining the PCT, then that’s what it should be complaining about.

Not to mention that neither North Korea nor any other state needs a patent application in order to practice a chemical process. And if Mr. Funny Haircut Man has a process for making nerve gas, you'd think he'd keep that to himself, instead of publishing it the form of a PCT application.

FWIW, there are exactly 68 published PCT applications that list an inventor from North Korea (KP in WIPO terminology), dating back to 1990. Yeah, that WIPO is definitely aiding and abetting the Democratic Republic of Korea in development WMDs.

Don't Try This At Home (Unless Home Doesn't Have Rule 11)

If you're going to sue someone for infringement, it's a good idea before filing suit to make sure that you've got at least a colorable argument that your claims cover the allegedly infringing product.  Not only will you increase the odds that you (or your client) will prevail, but you can avoid those nasty Rule 11 sanctions.  As the CAFC just explained to some Israeli expats who were playing New York lawyer.