Source: https://www.iliplaw.com/americaisrael_patent_law/legislation/
Timestamp: 2019-04-19 09:13:04+00:00

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Humorless disclaimer: Nothing on this blog is meant to constitute legal advice. This blog doesn’t create an attorney-client relationship. This blog is not soliciting business. The accuracy of statements made in this blog is not guaranteed. The views expressed herein are those of the authors only.
This is a story about how a good idea that originated in the Israel PTO tripped over its own shoelaces (in a manner of speaking) when it was eventually enacted into law.
The story begins in the late 1980’s, when the Israel PTO had a significant backlog in the examination of patent applications. The Commissioner at the time had (or had suggested to him) a bright idea: why carry the load all by yourselves when there are other patent offices examining related applications?
Thus was born Commissioner’s Circular no. 9, which said that if applicants for Israel patents amended their claims to correspond to claims granted in corresponding patents in certain other jurisdictions, notably the USA and the EPO, then the ILPTO would view those claims as meeting local criteria for novelty, inventive step, unity of invention, sufficiency of description and clarity of the claims.
The idea proved to be so good that in 1995, during major round of statutory amendments, this policy was written into the statute as §17(c).
Neither Circular no. 9, nor §17(c) after it, solved all of an applicant’s problems, however. In particular, section 7 of the Israel statute forbids the patenting of methods of treatment of the human body. So those granted US claims reciting “A method of treating X, comprising administering to a patient in need thereof drug Y…” can’t be granted in Israel.
Under Circular no. 9, the ILPTO was willing to allow applicants to convert such method of treatment claims to “Swiss” style claims or purpose-directed product claims, and to proceed in accordance with the Circular. This was true as well for many years under §17(c).
In recent years, the ILPTO has taken this literally, and will not allow applicants seeking to invoke §17(c) to amend method of treatment claims to “Swiss” or purpose-directed product format. If such method of treatment claims appear alongside claims on compounds and/or pharmaceutical compositions, the method of treatment claims will need to be cancelled if §17(c) is to be used, and a divisional with the claims rewritten in an acceptable format filed. The divisional will not be able to benefit from §17(c).
When this practice was initiated by the ILPTO, the Office maintained flexibility in the application of the practice with respect to method of treatment claims – Circular no. 9 was simply a way for the Office to say, “We’ll accept the word of the USPTO or the EPO regarding these claims and this application if you, the applicant, want us to. To the extent this may call the validity of the patent into question, caveat emptor.” And that was the way the statutory provisions were viewed by the PTO in the years after their enactment, likely because the same Commissioner who issued Circular no. 9 was in office for several years after §17(c) was enacted.
It’s ironic that the ILPTO now views itself as constrained by a statutory provision that was intended to enshrine in the statute the practice that the ILPTO itself initiated and applied with a greater measure of flexibility than is presently the case.
So when making statutory amendments, as in many other things, be careful what you wish for.
In July 2012, Israel enacted legislation facilitating publication of patent applications 18 months after the earliest priority date. Unlike in the USA, where the move to 18-month publication did not have retroactive effect, in Israel the decision was that all pending applications would be laid open to the public 18 months after the earliest priority date. No opt-out for already-filed applications was provided, nor was there the possibility for filing a new application with a non-publication request. The only provision for preventing publication of one’s application was, and remains, to abandon the application before publication occurs.
“Publication” in this context doesn’t really mean publication in the sense of the ILPTO printing up a document. What it means is that on or shortly before the last day of the calendar month in which the 18-month date falls, the ILTPO publishes its Patents Journal online, which lists newly publicly-accessible applications. Simultaneously with publication of the Journal, the application file as it appears in the ILPTO’s public database is made accessible. Thus preventing public access to an abandoned application doesn’t really require much work on the ILPTO’s part, and abandonment should be possible relatively close to the date of publication, since all that needs to happen is for the application file to remain invisible online.
In practice, the ILPTO sends applicants a letter about a month before the scheduled publication, informing them that they have 14 days to abandon the application in order to prevent publication.
Acting pro se, Zamir Tribelsky filed patent application no. 220352 at the ILPTO on June 13, 2012, several weeks before the “we publish all applications” legislation was enacted. Under the law at the time he filed, the application file would only become public at the conclusion of examination, after payment of a publication fee. Even after the statutory amendment took effect, as a new filing with no priority claims, the application was due to be made publicly available in late December 2013, when that month’s Patents Journal published.
And despite that letter, on December 31, 2013, the ILPTO published notice of the application in the Patents Journal and opened the file to the public, where it is still visible today.
Mr. Tribelsky is not my client. I’ve no idea if his invention was worth anything, or if his patent application was well-drafted, or, if granted, if it would have provided commercially valuable protection. But I do know through an independent source that Mr. Tribelsky was unaware of the publishing of his abandoned application until long after that publication had occurred. So if he had dreams of re-filing his application at a later date, the Israel PTO destroyed that possibility.
The treatment of Mr. Tribelsky by the Israel PTO contrasts sharply with the image the ILPTO likes to project that it is a truly modern patent office. To hear the ILPTO tell it, it is an office with modern computer systems, including a wonderful e-filing system, so wonderful that everyone except pro se individual applicants are forbidden from filing any other way.
However, the publishing of an abandoned application, contrary to law and contrary to what the ILPTO indicated to the applicant, so as to adversely affect that applicant's rights worldwide, is entirely consistent with the reality of the ILPTO's computer systems. The e-filing system, to put it generously, leaves much to be desired, on many levels. The uploading of documents to the public database, whether those documents were filed by the e-filing system or generated by examiners, is done manually, so that sometimes documents are simply never loaded into the database. The public database itself is subject to manipulation (I had a case last year where a document that was in the database one day was gone the next). And there is no way for filers to view the application files for their own unpublished applications, i.e. there is no corollary to the USPTO's private PAIR.
This is why, notwithstanding my lack of knowledge of the particulars of Mr. Tribelsky's case, if he was my client, I would recommend suing the pants off the ILPTO. Not because he'll get lots of money: although proving negligence on the part of the ILPTO in this case is a slam dunk, putting a monetary figure on the damage caused will be difficult if not impossible. No, I would recommend suing the ILPTO because someone needs to get it through the heads of the higher-ups at the ILPTO that no matter how great the degree of computerization and automation, any system involving people is fallible, and making the ILPTO a defendant in such a suit would most definitely get the ILPTO’s attention, not to mention the attention of the people in the Justice Ministry to whom the ILPTO Commissioner reports. And as a result of that, maybe the higher-ups will realize that redundancy – say, by allowing people to file applications and responses in paper, by fax, as well as through an electronic filing system – is something to be embraced, not eliminated.
One regulation that bears watching is the establishment of a fee for requesting expedited examination of someone else’s patent application (what we’ve term third party requests for expedited examination, or TPREE). This part of the statute was enacted in 2012 and discussed here. The statute says that a fee must accompany the TPREE, if such a fee has been set by regulations, but when regulations to enable implementation of the new statutory provisions were adopted in late 2012, no fee was set for TPREEs, as discussed here, leading to our prediction that, with no fee imposed, the ILPTO would be flooded with TPREEs. In point of fact, the ILPTO has NOT been flooded with TPREEs – apparently the number of TPREEs can be counted on one hand – despite the lack of a fee.
That’s about to change with the new regulations: as of December 20, it will cost 10,000 shekels (about $2700) to file the TPREE, and, if the request is granted, another 5,000 shekel fee to actually advance the examination out of turn. So although the new fees are considerably higher than zero, it will still be possible for under $4000 to force one’s competitor’s application into examination, if one provides the ILPTO with a good enough story.
The new regulations also clarify, finally, that it’s permissible to file papers in patent cases by fax. The ILPTO has occasionally been resistant to the filing of documents by fax, so we congratulate the ILPTO upon its entrance to the 20th century. However, this welcome development is obviated by the electronic filing requirements, which will be discussed below and in several follow-up posts.
Undoubtedly, the single biggest change effected by the new regulations is the enablement of electronic filing of Israel patent applications. Sadly, and ironically, after many years of criticizing the ILPTO on this blog for its failure to implement electronic patent filing, we now find ourselves criticizing the ILPTO for the high-handed, ham-fisted way in which it’s decided to go about this.
There are several problems with this requirement, but for the moment we’ll focus on just one: what do you when the system is down? Regular users of the USPTO’s EFS realize that’s a non-trivial question. And people here in Israel should realize it’s non-trivial as well: see this article and this article about recent flooding in Israeli cities; storms two weeks ago left tens of thousands of homes without power for several days. Suppose the server housing the ILPTO’s electronic filing system loses power, or literally ends up underwater?
The regulations ostensibly deal with this, but in a bass-ackward manner: if the Commissioner declares (via the ILPTO’s website) that there’s a problem with the electronic filing system, then you have until two business two after the problem is fixed, or two days after the Commissioner declares the problem to be fixed, whichever is later, to file the document(s) in paper. If the Commissioner doesn’t declare such a problem, then you can still file in paper, but the onus is now on the filer to provide a declaration explaining why it was necessary to file in paper. Interestingly, that part of the regulation doesn’t say that the Commissioner has any discretion in accepting such a paper filing.
What is stunning is the ILPTO’s inability and/or unwillingness to learn from the experiences of other patent offices. As noted, the USPTO and WIPO allow applicants to file in paper, to file by fax, and to file electronically, but they encourage applicants to file certain documents electronically by reducing fees for such filings. There’s no good reason for requiring that all filings be done electronically. There is a bad reason, though, for such a requirement: it will ostensibly make life easier for the ILPTO. And that, apparently, is what these regulations are really all about. Not serving the public, but instead shunting to the public those tasks that rightfully should be carried out by the ILPTO. As we go through other aspects of these regulations, and their implementation, in future posts, we’ll see that that concern for the ILPTO itself, rather than the public it’s meant to serve, is a recurring theme.
As of last night a fair number of comments had been submitted to the USPTO about its examination guidelines under Myriad. My two cents are here Download Comments on Myriad guidelines, even though I don't think I can say it better than Nancy Linck, and I don't have her gravitas.
The MOJ has proposed significant changes to the implementation rules for the patent statute, and in its notice it has requested public comments, which can be sent to ayeletf@justice.gov.il.
Yup, a total of nine days (12 if you got the ILPTO's email) to comment.
There's no explanation of the rationale behind the proposed rule changes, although looking through them (detailed comments to follow later), it appears that these are the brainchild of ILPTO itself, rather the something originating in the MOJ. There's also no mention of where, if at all, the comments will be posted for public consumption.
The short comment period, coupled with lack of explanatory material, is enough to make one think the prime mover behind the proposed rules (the MOJ or, more likely, the ILPTO) isn't really interested in hearing from the public. But even the USPTO, which also sometimes seems not to care too much what the public has to say, nevertheless gives about two months minimum to post comments on proposed rules, and those comments are made available for the public to view. See, for example, here, with public comments on the so-called "attributable ownership rules"; those proposed rules were first published on January 24 and the comment period, originally set for March 24, was then extended into April.
There's also the small matter of Hamas ratcheting up its latest round of missile attacks on Israeli citizenry around July 4, and Israel beginning to root out the problem with air strikes on July 8 followed by a massive call-up of reserve soldiers not long thereafter, and the present ground action to destroy tunnels used by Hamas to store weapons, protect its leadership (but not other Gazans) from aerial bombardment, and enter Israel to carry out terrorist attacks. No doubt some people who might want to comment have thus been otherwise preoccupied.
There's no real reason to rush the comment period: the rules will have to go through the Knesset Constitution, Statute and Law Committee, which will be on break throughout August and unlikely to schedule these proposed rules for discussion until at least September.
If the MOJ is serious about wanting public comments, it will extend the comment period by at least a month, and post the comments received for public viewing. I'm fairly sure it will do the former, but in case it doesn't do the latter, I ask any readers who do submit comments to send copies to me so they can at least be posted here.
So many things going on in the patent world here and in the USA to write about, but so much work, so little time to blog.
There’s been a lot of talk lately about imposing fee-shifting in US patent cases, with Judge Rader encouraging district court judges to be more liberal about award attorneys’ fees, Supreme Court oral arguments this week about fee-shifting, possible changes to the pleading requirements in patent cases per the Federal Rules of Civil Procedure, and Congress contemplating several bills that would impose some sort of a “loser pays” system in patent cases. Chances are if you’re reading this blog you’re already familiar with these issues, and if you’re not then have a look at Patentdocs, PatentlyO or one of the other popular patent blogs where these issues have been discussed frequently in recent months.
This post is about a different aspect of the “loser pays” notion, one that I got to thinking about after David Hricik pointed it out a few weeks ago: in post-grant proceedings before the USPTO (formerly called re-examination, now going under a variety of names thanks to the AIA), there’s no provision for fee shifting, and if you think the post-grant proceeding was brought frivolously, you can’t even sue in court for abuse of process or malicious prosecution. So some people are now saying that a secondary troll market has sprung up, in which patent holders who were victorious in court find themselves being threatened by people or shell corporations, who say they’ll institute post-grant proceedings at the PTO to challenge those same patents unless the patent owners pay tribute. What goes unsaid is that without the threat of misconduct sanctions in the PTO proceedings, it’s a lot easier to cheat.
Israel has two ways to challenge patents before the PTO: in post-examination, pre-grant oppositions; and in post-grant cancellation proceedings. The two types of proceedings are basically the same, except that procedurally the post-grant challenger has to come in with all guns blazing – i.e. he opens the proceedings by filing both his pleadings and written evidence at the same time – whereas the pre-grant opponent merely needs to make some generic pleadings and can file his written evidence much later. In either case though, the ILPTO treats the proceedings as being akin to court proceedings, and imposes costs on the loser (what in the USA are called attorneys’ fees, plus in some cases expert witness fees).
Traditionally, the ILPTO pretty much treated those costs as lip service, awarding attorneys’ fees far below the actual amounts spent. Coupled with the low cost of filing an opposition, in certain industries this meant that certain local companies almost routinely opposed patent applications of certain foreign companies. It just made good business sense: the mere filing of the opposition would delay grant of the patent by a few years, during which time there was no patent for the applicant to enforce, and when all was said and done the opposer would be subject to maybe a few thousand shekels’ penalty, at worst. At best, the applicant would fold or the ILPTO would determine that a patent shouldn’t be granted, in which case the applicant would have to pay something to the opposer.
In the last 8-10 years, there has been a rise in the amounts the ILPTO has been willing to award. Although I haven’t done an empirical study (any law students out there looking for a good project to research?), it appears to me that the large awards have invariably been given to challengers who prevailed in oppositions to patent applications. This just gives more impetus to parties here to oppose. And while there’s not a “shake-down” industry here as far as I know, there’s not really a disincentive to oppose either.
This brings us to a recent decision involving one of Israel’s serial opposers, Unipharm. Unipharm routinely opposes patent applications of large, foreign pharmaceutical companies. It’s a strategy that has worked well for Unipharm, and if anyone were to call Unipharm an “opposition troll”, it’s response would probably be, “Our oppositions are meritorious, as evidenced the fact that we win many of them.” One of the unusual aspects of Unipharm’s oppositions is that it handles many of them largely pro se, at least during the initial phases of the opposition. In the case at hand, Unipharm opposed Lundbeck’s patent application no. 173788; shortly after Unipharm filed its pleadings, Lundbeck withdrew the patent application. For purposes of awarding fees, the ILPTO treats such a withdrawal as a loss and says that the applicant has to pay. (I may post on the propriety of that arrangement another time). Unipharm then asked for an award of costs: 40,000 shekels for the time of the company’s general manager (for 80 hours of work invested in the opposition), 1500 shekels for secretarial time, and 2000 shekels for the opposition filing fee.
The Commissioner ruled that Unipharm was only entitled to 3500 shekels, 2000 for the fee and 1500 for secretarial time. He reached this conclusion on the basis of two primary factors: first, since the GM was a salaried employee, his work on the opposition was part of his regular pay and therefore the company wasn’t entitled to compensation for what he did in connection with the opposition; and second, because Unipharm hadn’t brought any sort of detailed breakdown of the time or expenses involved.
It’s unclear whether this decision represents a temporary departure from the general trend of awarding higher costs to opposers who prevail in ILPTO oppositions, or signals an actual change in the trend in the opposite direction.
Israel has three different procedures for expediting the examination of patent applications.
One of these procedures, section 17(c) of the statute, concerns substantive examination of the application. Under 17(c), the Commissioner from time to time publishes a list of recognized patent-granting jurisdictions. The grant of a corresponding patent in one of these recognized jurisdictions can then be used as basis for allowance of the Israel application (fulfilment of the requirements for unity of invention, novelty, inventive step, sufficiency of description, and basis for and clarity of the claims), if the Israel claims are amended to be substantially identical to the foreign claims and the Israel application shares priority with the foreign patent. This procedure is only useful once substantive examination of an application has begun; the fact that a corresponding foreign patent has been granted can’t be used to induce the ILPTO to actually examine the application.
The upshot of 17(c) practice is that it frees up examiners to spend their time examining other cases, without duplicating the efforts of examiners in other countries.
In this context, it’s worth mentioning that during his tenure from 2003 through 2010, the previous Commissioner expanded 17(c) practice in two ways. First, rather than making applicants wait for the ministerial act of the granting of the foreign patent, he deemed a notice of allowance sufficient to invoke 17(c). Second, he stated that a positive PCT examination report could be used to establish the novelty, inventive step and unity of invention of the claims of an Israel national phase application (or an Israel application which was later filed as the PCT that received the positive examination report). In this way, he further reduced the ILPTO’s workload.
The other two procedures are not directed to substantive examination but to the order of examination, and enable an applicant to have its application moved to the front of the examination queue. The first of these is the patent prosecution highway. Israel has bilateral PPH agreements with the USA, Denmark, Japan, Finland and Canada, and PPH-PCT agreements with all these countries except Denmark. (And I noted yesterday, in a display of multiple personality disorder it also has a PPH-PCT agreement with itself. Really, I can’t make this stuff up.) Per the PPH, an applicant can ask to have his application examined out of turn based on a positive PCT WOISA or IPRP from a country with which Israel has a PCT-PPH agreement.
The second procedure for getting one’s application moved to the front of the line is similar to the old “petition to make special” practice in the USA: you ask the ILPTO to move your application to the front of the line. Historically this was set out in Rule 35, which stated that an applicant could ask that his patent application be examined immediately on the basis of “reasonable grounds”; these were typically the advanced age of the inventor, imminent launch of a product to be protected by the patent, or concern about possible infringement.
In July 2012 a new statutory section, 19A, was introduced, in which subsection (a) codified, clarified and replaced the prior Rule 35 practice. Section 19A(a) provides six different reasons one can give for advancing the examination of one’s patent application, but it is the second one listed that is of interest here: “A notice of the Commissioner regarding the possibility of advancing the examination on the basis of examination of a corresponding application under the conditions and in the countries indicated by the Commissioner”.
To date, the Commissioner hasn’t published a list of countries under 19A(a)(2). However, in a notice published at the beginning of October, the Commissioner said that a PCT-PPH request would be viewed as a request under 19A(a)(2) to begin the examination of a national phase application in Israel. It’s not clear why the need was felt to explicitly tie PCT-PPH to the new statutory provision. The Commissioner could have let things stand as they were.
But at least the October announcement does no harm to the PCT-PPH program. Where the October announcement took a bizarre turn was when it concluded with the statement that the Commissioner was rescinding the policy of allowing partial substantive examination on the basis of a positive PCT work product, which was published in circular MN 71 of the previous Commissioner. That’s a non-sequitur: PCT-PPH and 19A(a) concern the order of examination, not substantive examination – a fact the Commissioner himself pointed out in the October announcement! Why rescind the existing policy regarding partial substantive examination, and force examiners to do examination work concerning industrial applicability, novelty, inventive step and unity of invention, when someone in another respected patent office has already done so? Unfortunately, no reason was given for this change in policy, which seems to be a case of shooting oneself in the foot.
If the Commissioner was already going to make an announcement, he could have taken the opportunity to publish a comprehensive list of countries that can be used to invoke the 19A(a) procedure, and on that list he could have included the ISAs of the countries with which Israel has PCT-PPH agreements. Or even more easily: he could have just said that any country already recognized for purposes of 17(c) substantive examination (including its PCT ISA or IPEA, if it has one) will henceforth also be recognized for purposes of 19A(a). Which would allow applicants with patents granted in certain other countries to quickly gain allowance of their applications here, and get more pending applications out of the examination queue more quickly.
I’m not sure if the rescinding of the is more reminiscent of the Monty Python sketch in which Graham Chapman wrestles himself and wins in a knock-out, or of Cleavon Little kidnapping himself in Blazing Saddles. It’s certainly a step in the wrong direction.
 The other five grounds for advancing the case out of turn are (1) the advanced aged or poor health of the inventor; (3) knowledge or a well-founded suspicion of infringement of a claim of the application; (4) unreasonable delay in the commencement of examination of the application (which may be determined inter alia by comparison to the time from filing to first office action for applications in the same class); (5) the public interest; and (6) special reasons justifying such examination out of turn.
In US patent practice, the conclusion of ex parte patent prosecution is marked the issuance of a Notice of Allowance, at which point (a) the applicant has three months to pay the issue fee and (b) control of the application passes from the examining corps to the USPTO’s publications branch. Other than review applicants’ requests for after-allowance amendments, the examiner’s involvement in the application ceases at this point. That’s not to say that under unusual circumstances, the PTO can’t withdraw the allowance of the application; there’s case law that says until the patent issues, the PTO can withdraw the allowance and place the application back into the examination queue, even if the issue fee has been paid. But it’s almost unheard of for the USPTO to do this. Even in the dark days of Jon Dudas’ “quality assurance program”, to the best of my knowledge the quality assurance checks took place before notices of allowance were mailed; applications were not withdrawn from allowance by the QA process.
By now it should be clear where I’m going with this: the procedure in Israel is similar, BUT… In Israel, upon conclusion of substantive examination, the applicant is mailed a notice of allowance (technically called a “notification before acceptance”), telling the applicant to pay the publication fee (now officially called the “acceptance fee”) within a set time period. The applicant pays the fee, notice of the acceptance is published, and if three months go by without an opposition being filed, voila! The applicant is now a patentee.
So you would think. But I spoke with a colleague who recently received such a notice of allowance from the ILPTO, and then a short time later received a letter withdrawing the notice of allowance and re-opening prosecution as a result of the ILPTO’s own QA program. (The new reference cited, so I am told, was irrelevant.) Why this couldn’t have been done before the mailing of the notice of allowance is anyone’s guess. One wonders what would have happened had the applicant immediately paid the acceptance fee, since publication of the fact that the application was accepted is now supposed to take place on the ILPTO’s web site very soon after the fee is paid.
One also wonders if, yet again, the ILPTO has overstepped its authority, although the relevant statutory and regulatory provisions are less than clear on this point. Section 17(a1) of the statute says that the examiner “shall accept the application if he is convinced that the conditions of this section [viz. that the invention meets the substantive requirements for patentability and the application meets the formal requirements - DJF] are met; in his notice [to the applicant] the date of acceptance shall be noted.” Section 20 of the statute says that if the invention or the application doesn’t meet the requirements of the statute, the ILPTO will inform the applicant of the basis for rejection; section 21 give the applicant the right to respond. It’s not clear from the statute itself if a notice of acceptance per section 17 precludes the further issuance of an office action under section 20.
The implementing regulations aren’t much more helpful in this regard. Rule 41 sets forth what an Examiner must include in an Office Action; Rule 42 sets out how the procedure for the applicant’s response, and Rule 43 discusses the further examination of the application by the ILPTO after a response is filed, including the issuance of further OAs per Rule 41. Rule 52 says that if the application has been accepted per section 17 of the statute, the ILPTO will notify the applicant and ask for payment of the acceptance fee, which Rule 52 says the applicant has three months to pay.
So the statute doesn’t explicitly prohibit the ILPTO from withdrawing a notice of allowance, and substantively, it’s inconceivable that the ILPTO would not be allowed to withdraw a notice of allowance if it became aware of a compelling reason to do so: if the ILPTO is supposed to be the gatekeeper for ensuring that only valid patent patents are granted, it should be able to correct its own mistakes in examination prior to publication of the fact that the application has been accepted. Indeed, with regard to oppositions, section 34 of the statute explicitly reserves to the Commissioner the ability to refuse to grant an application that has been opposed, even if the opposition itself is withdrawn, on the basis of materials that came to the Commissioner’s attention during the course of the opposition and that “in accordance with which there was no basis to allow the application in the first place”.
But that same statutory section could be read as saying that for procedural reasons, the grounds on which the Commissioner can withdraw a notice of allowance are limited: the Commissioner is not empowered at that point to reopen substantive prosecution and look for more prior art himself, he can only refuse to grant the application on the basis of materials that came to his attention as a result of the opposition. This, it can be argued, implies that the mailing of the notice of allowance marks the end of ILPTO’s involvement in looking for prior art (or other defects itself), i.e. that once the ILPTO mails a notice of allowance, substantive prosecution is closed and the ILPTO it cannot sua sponte withdraw the notice of allowance, absent some very compelling reason to so. It’s hard to believe that a routine QA check that could have been carried out earlier would qualify as a compelling reason.
Regardless of whether or not the ILPTO is empowered to withdraw a notice of allowance as it did in the case of my colleague, conducting QA review after the mailing of a notice of allowance is a really dumb policy, more appropriate for the wise men of Chelm than the PTO of country that’s a world leader in innovation.
EPO To End Divisional Dunderheadedness; Will the Israel PTO Persist in its Perfidy or Profess to Penitence?
A recurring theme on this blog is the topic of divisional applications in Israel, specifically the impropriety of the Israel PTO’s decision a few years ago to limit the time frame for the filing of divisionals. A quick recap: the Israel patent statute allows applicants to divide an application as long notice of the allowance of the application hasn’t been published. Hence if I have application A, at any time before the ILPTO publishes notice of its acceptance I may file divisional application B. I may then file divisional application C at any time before the ILPTO publishes notice of the acceptance of application B. And so on. The end result is that I can keep an application pending for the entire 20-year term of the original application A, in the same way that continuation practice in the USA can be used to achieve the same result.
For over 40 years following the enactment of the statute in 1967, the ILPTO followed the statute. And then, sua sponte (or maybe at the behest of someone, like a lobbyist for an industry with a strong patent antipathy), the Commissioner decided that the ability of applicants to keep application pending in perpetuity was bad policy. So he unilaterally announced that neither his predecessors as Commissioner nor the courts that had adjudicated divisionals of divisionals understood the statute, and that the statute only allows the filing of progeny applications from application A prior to the publication of the allowance of A. Hence C, a divisional of B which is a divisional of A, can only be filed before notice of the allowance of A is published.
Lest one think that the filing of late-stage divisionals might be possible in response to a lack-of-unity finding in an earlier divisional application, the ILPTO published a clarification stating that the limitation on the timing of the filing of divisionals applies even if the ILPTO makes a finding of disunity in application B: if publication of the allowance of the parent application A has already taken place, then the applicant has to choose which inventions to continue to prosecute and which to give up on, because the ILPTO won’t allow the applicant to file a divisional of application B.
To date, it appears no applicant has challenged the ILPTO’s illegal adoption of this policy.
Now the EPO has announced that is changing tack once again: effective April 1, 2014, EPC Rule 36 will change so that the only criterion for the filing of a divisional application is that it be a divisional of a pending European patent application. In order to dissuade the “evergreening” of applications by the serial filing of divisionals, the EPO is simultaneously introducing a progressive fee scale for filing divisional patent applications. A divisional patent application filed from an original European patent application will only be subject to the regular filing fee (and of course the retroactive payment of the EPO’s egregious renewal fees, but we’ll leave that topic for another day). But a divisional patent application filed from a prior divisional patent application (i.e. a divisional-of-a-divisional) will incur an additional fee (via an amendment to Rule 38 EPC). This additional fee will increase in accordance with the generation of the divisional application. Thus a second generation divisional would cost less to file than a third generation divisional and so on. The actual fees to be charged have yet to be announced; like the permissive policy regarding the timing of the filing divisionals, these additional fees will take apply to divisional patent applications filed on or after April 1, 2014.
Will the ILPTO follow suit? No predictions here, but it would be well-advised to do so. Its current untenable position flat-out contradicts the statute and is therefore ultra vires; someday the ILPTO’s position is going to be challenged, and the ILPTO is going to be slapped down by the courts. If the unelected and unaccountable higher-ups in the ILPTO erroneously think that policy-making is part of their job, then they can try to impose their will via fee setting, just as the EPO has now done. Fee-setting is done legally via rulemaking, with the Justice Minister promulgating the rules, subject to approval from the Knesset Statute, Constitution and Law Committee. Given the particular personalities currently involved, it’s not clear that such an attempt at rule making would be successful, if it were to even gain any traction at all. But that’s how things work in democracies, even that of the People’s Free Democratic Republic of Israel.
It’s been a while since I wrote about how the Israel PTO deals with the issue of “overlap” between the claims of applications, but that doesn’t mean the issue has gone away. It’s still there. In fact, rumor has it that the higher-ups at the ILPTO will be reconsidering this policy this year. In light of that, this (admittedly long) post will address the matter again, presenting the issues involved, why I think Israel should implement a terminal disclaimer policy similar to that in the USA, and why I think the legal machinery to implement such a policy is already in place.
One point of clarification at the outset: this discussion does not pertain to situations in which there is overlap between the claims of a later application and the claims of an earlier application (or patent) which was published before the earliest priority date of the later application. In that situation, under sections 4 and 5 of the statute, the earlier application is available as prior art against the later application, and the normal assessments of novelty and non-obviousness are made.
Rather, the issue of “overlap” arises in situations in which there are two different patent applications with claims of partly overlapping scope (e.g. “A table comprising a top and at least three legs” and “A table having a top and four legs”), and neither application was published before the earliest priority date to which the claimed subject matter is entitled. The ILPTO long ago adopted the view that in such cases, the overlapping material must be excised from the later-filed application, even though the earlier application cannot be cited against the novelty or inventiveness of the later application. (The “why” of this policy will be explained shortly.) Within this fact pattern there are two possible situations: the two applications are co-owned (same applicant), or they’re not (different applicants). Although the ILPTO ultimately treats both cases similarly, it uses different legal mechanisms to get there.
If a patent was applied for on one invention by more than one applicant, the patent shall be granted on the invention to the one who first applied for the patent in accordance with the law.
In general, the ILPTO interprets “invention” in this context to mean anything included within the scope of the claims (but see below re: selection inventions). Thus, by requiring the later applicant to amend its claims to eliminate overlap with the claims of the earlier-filed application, the ILPTO believes it is upholding section 9. From a strict legal construction standpoint, there is a problem with this interpretation. Section 13(a) of the statute says that “The specification shall conclude with a claim or claims that define the invention, provided that each such claim shall arise in a reasonable manner from the description in the specification”. This would seem to mean that claims of differing scope define different inventions, even if those claims overlap, and therefore there is no basis to require limitation of the scope of the claims of the later filed application. Be that as it may, the rationale for this policy, evidently, is to avoid the situation in which potential infringers will have to contend with more than one patent covering the same aspect of an invention.
The owner of a patentable invention is entitled to apply, in accordance with the dictates of this statute, that a patent be granted on that invention.
Section 2 says a patent (singular), not patents (plural), and therefore an applicant may not receive two patents for the same invention. As with its interpretation of section 9, in taking a broad view of section 2, the ILPTO ignores section 13(a)’s statement that it is the claims that define the invention. Hence, rather than conclude that claims of different scope are not claims to the same invention, the ILPTO interprets “that invention” in section 2 to mean anything falling within the scope of the claims, so that overlap between the claims of an applicant’s different applications is precluded. It will be appreciated that such rejections are sometimes raised with respect to applications having a parent/divisional relationship, i.e. in which they have the same disclosure, filing date and priority date.
As we have just seen, the rationale behind the ILPTO’s “no overlap” policy is to reduce transaction costs for parties interested in licensing patents (or considering mounting challenges to those patents). It will be appreciated that this policy consideration is waived in the case of so-called “selection inventions”, in which the later claims are dominated, at least in part, by the earlier claims, but (a) there is no specific disclosure in the earlier application of what is claimed in the later application (let alone claims that specifically claim what is claimed in the later application), (b) the degree of overlap is small relative to the earlier disclosure, and (c) an inventive step can be demonstrated for what is claimed in the later application that overlaps with the earlier claims. Apparently here the thinking is that since the later-claimed grouping is inventive over the earlier generic disclosure, the two claimed inventions are not the same, so section 9 (or section 2, in the case of the same applicant) doesn’t apply; but why the “sameness” of the invention should be contingent upon inventive step considerations is unclear. While the selection invention doctrine is normally applied in the context of published prior art in the obviousness context, applicants may invoke this doctrine to overcome “overlap” rejections, whether between their own applications or their application and that of a third party.
The concern about an applicant effectively multiplying its patent pool so that multiple patents cover the same aspect of the same invention, and the potential for mischief that such multiplication engenders, is not necessary an illegitimate concern. Indeed, as will be discussed shortly, US courts long ago recognized this as a potential problem. But in Israel, having adopted the view that, in the name of promoting efficiency in hypothetical negotiations that may or may not take place, “overlap” between co-pending applications must be eliminated at all costs, the ILPTO has adopted policies that themselves promote inefficiency of a different kind.
Alternatively, as noted above, in some cases, applicants may invoke the selection invention doctrine, but this too necessitates adducing (in the lab) proof of unexpected superiority, and presenting the results to the ILPTO.
As noted above, US courts long ago recognized the problem of claims of overlapping scope in an applicant’s different patent applications, and how the grant of several patents having overlapping claims could lead to “vexatious litigation” if different patents were to be assigned to different entities. In fact, in the US, the problem was more acute than it is in Israel: under the pre-1995 US statute, in which patents had a term of 17 years from the date on which they were granted, but enjoyed the benefit of the filing date of the earlier application in the continuation chain, a savvy applicant could theoretically obtain a series of patents spaced years apart but having overlapping claims. Since the claims weren’t identical, they were deemed to be directed to different inventions. Therefore no section 101 rejection (akin to the Israel section 2 rejection described above – applicant is entitled to a single patent, not multiple patents, on its invention) would arise; and with the continuation priority in place, the earlier patents in the chain could not be cited as prior art. Hence an applicant could in principle extend his patent rights beyond the initial term by obtaining patents on obvious variations of the same invention, by using continuation practice to ensure that the patents issued at different times.
What resulted from the courts’ sensitivity to this potential problem was the judicially created doctrine of “obviousness-type” double patenting. If the claims of a pending application are obvious in view of the claims (not the specification or disclosure, but the claims) of an applicant’s earlier-issued patent (or earlier-filed-but-still-pending application), then the pending application will not be allowed, on the grounds that the later claims are an obvious variation of the earlier claims and therefore in principle could have been included in the earlier patent.
However, this rejection will be waived if the applicant promises two things: first, that the two patents will always be owned by the same entity; second, that the term of the later patent will not extend beyond the term of the earlier patent. In this way, the possibility of “vexatious litigation” is averted, as is the possibility of receiving an effective time-wise extension of exclusivity.
The terminal disclaimer is part of the patent’s file history, and a notice that a terminal disclaimer was filed is published on the front of the issued patent. And by its very wording, the terminal disclaimer is binding upon all subsequent owners of the patent.
Thus the terminal disclaimer addresses the same concerns that underlie the current ILPTO practice for dealing with overlap between the claims of an applicant’s own applications. The terminal disclaimer model, however, is a more efficient way to address those concerns: it spares the applicant the need to (i) assess the degree of overlap between the claims of co-pending applications, (ii) devise claims that eliminate the overlap, or (iii) possibly file divisional applications as a result of the amended claims. And it frees examiners from assessing whether or not overlap has been eliminated. Moreover, since both patents will expire simultaneously, it also allows potential infringers to more easily identify the date on which they may commence activities that, if performed before that date, would constitute infringement.
Of course, under US practice, an applicant reserves the right to challenge the propriety of the obviousness-type double patenting rejection, or to amend its claims to overcome that rejection. But it’s the applicant’s choice – the applicant isn’t forced to excise the overlap.
The terminal disclaimer effectively allows an applicant to say, “The claims of these two applications/patents really should be kept together in a single patent, because the two inventions claimed are not patentably distinct from one another, and therefore I promise that if the two patents cease to be commonly owned, the later-issuing patent won’t be enforceable.” But the legal mechanism by which the terminal disclaimer operates may be explained in a number of different ways.
For example, the terminal disclaimer may be conceived of as a partially conditional dedication of the later patent to the public: if at any time prior to a certain date (viz. the date on which the first patent will expire), the ownership of the two patents is split, then the later patent is dedicated to the public (and is therefore unenforceable). Even if the ownership of the two patents remains in the same hands, the later patent is dedicated to the public as of the date on which the earlier patent expires.
Alternatively, the legal mechanism of the terminal disclaimer maybe thought of as the partially conditional granting of a paid-up, royalty-free license to anyone who is interested exploiting the patent: if prior to a certain date, the ownership of the two patents is split, then a license has been granted to anyone who wishes to practice the later patent. After that date, such a license is granted even both patents remain owned by the same party.
Other ways to conceive of the mechanism of making the later patent unenforceable include the partially conditioned grant to the public of a covenant not to sue; the patentee’s partially conditional forfeiture of the rights conveyed by the later patent; and the patentee’s acceptance of less than all the rights to which it would otherwise be entitled (i.e. the patentee explicitly accepts a patent term in the later patent of less than 20 years from filing if certain events occur subsequent to the grant of the patent, namely the splitting of ownership). The latter may be explained in terms of contract law: a patent is often likened to a contract between the state and the patent applicant, in which the state agrees to give the patentee exclusivity for a claimed invention in exchange for adequate disclosure of a way to make and use the invention. Although the state cannot grant the patentee more rights (e.g. a longer period of exclusivity) than the law allows, the patentee can agree to accept less than maximum that the state is allowed to give. The terminal disclaimer is an agreement by which the patentee does that.
The terminal disclaimer also states that it is binding on anyone who steps into the shoes of the applicant, either before or after grant of the patent. This too can be explained in a number of ways. Through the lens of contract law, the patentee can be thought of as agreeing to condition the grant of the patent on the patentee’s other self-imposed conditions being binding on subsequent owners of the patent. It can also be viewed as analogous to an easement or other encumbrance that runs with the land.
If this section has seemed pedantic, it’s been for a good cause: to show that the terminal disclaimer operates using legal mechanisms and frameworks that are familiar to American lawyers – and to their Israeli counterparts. It therefore shouldn’t be too difficult for Israeli lawyers to get their heads around the terminal disclaimer idea – and in the next section, I discuss how Israeli law already contains the legal mechanisms for implementing terminal disclaimer practice.
Terminal disclaimer practice in the USA utilizes familiar legal mechanisms, and seeing how the American model works, it doesn’t take a lot of effort to understand how Israel law likewise has mechanisms that can be put to similar use. For example, sections 82-88 of the Israel patent statute deal with patent assignments and licenses. As long as such assignments or licenses are in writing and recorded with the ILPTO, they are enforceable against third parties. If, as suggested above, the terminal disclaimer is conceived of as the granting of a conditional, paid-up, royalty-free license, then these sections of the statute provide a mechanism for the implementation of terminal disclaimer practice in Israel: the terminal disclaimer would be a non-exclusive license (i) granted to everyone (sections 84 and 86), (ii) in writing (section 84), (iii) having effect toward everyone by virtue of its being recorded (section 87), (iv) with the license’s coming into force being conditioned (section 86) on the splitting of the ownership of the particular patent and one or more additional patents listed in the terminal disclaimer. If the ownership of the patents is split, the license comes into force and effectively dedicates the later patent to the public. If the ownership remains in the same hands, the license has no effect against anyone until the earlier patent expires.
Alternatively, Israel patent law provides for the cancellation of a patent by its owner, either actively by informing the Commissioner that he wishes to cancel the patent, or passively by failing to timely pay a maintenance fee. A terminal disclaimer could thus be viewed as a conditional cancellation of the patent, triggered by the splitting of the ownership or the expiration of the earlier patent. In a comparable fashion, it could be deemed to be a conditional gift to the public, in accordance with the Gifts statute.
Similarly, Israel law provides for imposing conditions on that are binding upon subsequent owners of property. The Patents statute in particular specifically provides for patents serving as pledges against obligations, so that ownership can change hands if the obligation is not fulfilled. The imposition of the conditions of enforceability upon subsequent owners of the patent can thus be viewed, for example, as being the emplacement of a limitation on subsequent owners of the patent, or the pledging of the patent to the benefit of the public, should the ownership thereof and that of the earlier patent ever split.
Thus the legal tools for implementation of terminal disclaimer practice in Israel already exist. That being the case, rather than continuing requiring examiners to look for “overlap” between applications (instead of examining substantive patentability issues), and rather than requiring applicants to spend time and money figuring out ways to eliminate such overlap, the Commissioner should offer applicants an easy out: file a terminal disclaimer and make the “overlap” problem between the applicant’s different applications disappear. This being the Hebrew month of Elul, with Rosh Hashana just around the corner, now would be a good time for the ILPTO to admit the error of its ways and repent by making terminal disclaimer practice available to patent applicants in Israel.
For those weirdos who find the Israel patent regulations to be a scintillating topic for discussion (and for those who are just gluttons for punishment), here are a two more points not mentioned in yesterday’s post.
First, in addition to raising filing fees, many other fees are also going up significantly, effective January 1, 2013. Examples: extension fees will rise from 64 shekels per month to 200 shekels per month; the first renewal fee for a patent (through the end of the 6th year) will go from 157 to 800 shekels, and the second renewal fee (for years 7-10) will rise from 320 to 1600 shekels. (Admittedly, that doesn’t come close, in absolute or percentage terms, to raising the re-examination fee from $2500 to $17,000, as the USA recently did.) There will also be a new excess page fee of 250 shekels for each group of 50 claims, or portion thereof, beyond the first 100 pages of the application; sequence listings won’t count, but no word on whether the Israel filing form or the PCT Request (for national phase filings) are included in the page count.
Second, what is most glaring is what wasn’t included in the new regulations: a fee for making a third party request for expedited examination (TPREE). As reported in a previous post here and in a guest post on PatentDocs, statutory amendments enacted earlier this year will allow third parties to request that someone else’s application be moved to the front of the examination queue (and stay there); that provision comes into effect in mid-January 2013. Such requests must be accompanied by a fee, “if such a fee is established”. One would have thought that such a fee would have been included in the latest set of amendments to the Regulations, alongside all the other new and amended fees, but there’s no mention of a fee for TPREE. The Justice Ministry, which proposes the fees, is on record as supporting a TPREE fee of 25,000 shekels; one surmises that the non-inclusion of this fee in the latest group of fees means that the local generic drug lobby – the same group that lobbied for TPREEs in the first place – wants the fee to be set lower (a conclusion confirmed by a source involved in the discussions regarding these fees).
Prediction: there won’t be a TPREE fee in place come January 13, at which time there will be a flood of TPREE requests, all directed to patent applications in the pharma field. At which point the proverbial excrement will hit the proverbial fan, with Pfizer et al. demanding hearings on the propriety of expediting examination in each case, and the Commissioner have conniptions trying to figure what he needs to do. In the spring, after Knesset elections, TPREE fees will be set in the amount of at least 25,000 shekels per request. And a good time will be had by all, or at least by the lawyers who represent the major players in pharma in Israel.
First, the filing fee for new patent applications has been nearly doubled, from 1075 shekels to 2000 shekels. This wasn’t unexpected. In a populist response to the previous Patent Commissioner’s collecting publication fees for notices that were never published on paper (but were published online, in an understandable but nevertheless ultra vires move), earlier this year the outgoing chairman of the Knesset’s Constitution, Statute and Law committee forced the words “publication fee” out of the statute. But the money has to come from somewhere, so now the filing fee has been raised significantly. Ironically, the same committee that did away with "publication fees" was the one that approved the new fee increase. Go figure.
Second, the fee increase was accompanied by the establishment of a small entity status, of sorts: individuals, or partnerships or companies having an annual turnover of up to 10 million shekels (roughly $2.5 million at current exchange rates) can get a 40% discount on the filing fee and the issue fee – a whole 800 shekels, or about $200 for the former, and 280 shekels, or about $70, for the latter – for “filing for a particular invention a first patent application”. What exactly constitutes a first patent application for a particular invention is anyone’s guess: if it’s disclosed but not claimed and I claim it in later filed divisional, am I entitled to the discount? What if in the first application I claimed a compound and in a later application I claimed a use of that compound (and does it matter if that use was disclosed in the first application or not)? What if I recast my original claim in a slightly different form using different terms, but in a way that effectively claims the same thing? Was anyone who knows anything about patent prosecution involved with the drafting of this new regulation? Beam me up, Scotty.
What is clear is that the savings involved simply aren’t worth arguing about, should the ILPTO assert that you’re not entitled to the discount, since the attorney time alone will eat up the savings.
That drawback is heightened in view of the ILPTO’s statement that in order to qualify for the discount, the applicant will have to submit a sworn statement attesting to entitlement to the small entity status. Just preparing the statement for each case and getting it executed will involve professional time that eats into any potential savings.
Moreover, the imposition of such a requirement, aside from being over-the-top – it should be sufficient for the practitioner of record to assert in an unsworn statement that the applicant is entitled to small entity status, as is the case in the USA – and possibly ultra vires (I don’t think the ILPTO has the authority to require that level of proof of small entity status), also constitutes a stunning contrast to the Office’s supposed policy of transparency. Various Commissioner’s notices and circulars are now distributed in draft versions and the public invited to comment on them before they are finalized. That’s a new policy under the current Commissioner (in office since May 2011) which was put in place in the name of “transparency”. Here, there was no public discussion regarding the appropriate policy for ensuring truthful small entity status claims; the requirement for a sworn statement was put in place by ILPTO fiat.
Which, in truth, isn’t all that different from the way the Commissioner’s circulars and notices work. Because even when comments are solicited beforehand, those comments aren’t made public, the ILPTO doesn’t publicly relate to them, and rarely do the draft versions differ appreciably, if at all, from the final versions. Basically, the distribution of the drafts appears to be a fig leaf meant to provide the appearance of transparency without actually achieving transparency.
Finally, if you’re still awake, you probably need prescription narcotics.
Daniel Feigelson on What's Wrong With the ILPTO's Telephone System?
Joe Felber on What's Wrong With the ILPTO's Telephone System?
Daniel Feigelson on Was The Israel Patent Office Online Filing System Designed by Sergeant Schultz?
Zvi Benari on Was The Israel Patent Office Online Filing System Designed by Sergeant Schultz?
Zvi Benari on We don’t care. We don’t have to. We’re the USPTO.
Benny on Is There A Difference Between Fox News And The National Enquirer?

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 application no. 220352
 application no. 173788