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Israeli Patent Law - Theoretical and Comparative Perspective

Final Report Summary - ISRAELI PATENT LAW (Israeli Patent Law - Theoretical and Comparative Perspective)

Marie Curie Project – Israeli Patent Law
Dr. Miriam Bitton
The following summary provides the main results of the project on Israeli patent law. Dr. Bitton has completed the writing of a book manuscript in Hebrew and some chapters in English that will be published as stand-alone articles. The book is in its final editing and updating phases (approximately 350 pages in length) and will be submitted for publication with a university press in Israel in a few months after some final updating and revisions (end of 2013).
The books main contributions are as follows:
The book offers a comprehensive, comparative critical analysis of Israeli patent law. It critically reviews the following subjects and offers important findings regarding the analyses of these subjects:
1. Patent Theories Under Israeli Law
This Chapter explores patent law theories as they are reflected and implicitly implemented by the Israeli Patent Office, the legislature and the courts regarding a selected group of issues and policies during these past 25 years. It offers a complex picture, suggesting that while the Israeli Patent Office positions have been very patentee-oriented and tried to offer policies that will provide inventors with broad economic incentives to innovate, the Israeli courts and legislature have not been responsive to inventors but rather subject to industry interest groups, especially generic drug companies. In that realm, they focused on the incentives of such and as a result significantly dis-incentivized innovation mainly in the pharmaceutical sector. This, however, has not been the case in other fields of innovation such as the hi-technology field.
2. Patentable Subject Matter in Israel
In this Chapter patentable subject matter eligibility under Israeli law and generally has been explored and some critical findings have been offered regarding domestic as well as American and EU patent law. Specifically, this Chapter has explored subject matter eligibility under Israeli patent law, touching upon a few major problematic fields: software patents, business method patents, and exceptions to patenting under Israeli law (mainly the exclusion of abstract ideas). The Chapter shows that historically, the patent system's scope has been restricted to protecting tangible products or processes as opposed to abstract ideas. Ongoing advances in information technologies, however, have blurred the boundaries of the traditional doctrine, and many recently issued patents appear to protect abstractions. A recent U.S. Supreme Court decision, Bilski, as well as Israeli Supreme Court and the Israeli Patent Office examination guidelines provided new, but vague guidance on subject matter eligibility thresholds, leaving the question of the patentability of abstract ideas open. The Chapter addresses Bilski’s as well as Israeli courts and patent office cases and decisions' vague guidance both by descriptively showing that domestic patent law has consistently excluded abstract ideas and by proposing a more robust framework for assessing the patentability of abstractions. The proposed framework can be applied to the highly contested questions of whether business methods, computer software, and diagnostic methods each constitute patentable inventions. The Chapter concludes with the argument that the Federal Circuit’s updated approach in State Street Bank v. Signature Financial Group was inevitable and is consistent with the information economy while the Federal Circuit and Supreme Court’s decisions in Bilski v. Kappos and Mayo v. Prometheus reflect stagnation and an ill-devised policy making process. The Chapter concludes with specific recommendations regarding subject matter eligibility thresholds in Israel.
3. Analysis of Patentability Threshold Requirements: Utility, Novelty, Non-obviousness and the Description Requirements
In this Chapter the different patentability requirements of the Israeli Patent Act have been thoroughly explored, examining the way in which the Israeli Patent Office and the Israeli courts have interpreted these requirements and evaluating whether their interpretation is in line with the goals that these requirements aim to advance. The main findings of this extensive discussion are: The utility requirement has not been discussed significantly under Israeli patent law and its role has been very limited; The novelty rules of Israel are anachronistic and are not in line with other developed countries and should be reformed and modernized in different ways so Israeli inventors can obtain patent protection overseas because under the current novelty rules Israeli inventors may not be entitled to protection in other legal systems, mainly in the U.S. and Europe; The non-obviousness requirement has been wrongly shaped under Israeli law in a way that is not responsive to the innovative environment and it should be modernized so it accounts for the complexity of the innovative process, taking into account the variety of prior art sources that inventors employ, using the U.S. doctrinal development of the doctrine as a good benchmark for reformulating the doctrine
4. Claim Construction and Patent Infringement
Claim construction analysis and infringement as well as infringement defenses are discussed in this Chapter. The main findings of this part are that Israeli patent law should offer a more robust framework regarding claim construction. While other legal systems offer a detailed claim construction framework, ranking the different sources that can be used in that process (intrinsic and extrinsic evidence), in Israel there is no framework in place, which introduces, in turn, high transactions costs for patentees, the public, the courts, and the Israeli Patent Office. If also shows how different claim constructions rules that have been employed by the courts in leading Supreme Court cases (the Hughes and Tzuk Or cases) should be abandoned because they are not in line with the role of the patent system and the notice function of the patent claims, incentivizing opportunistic behavior by patentees. The Chapter analyzes infringement doctrines under Israeli law (infringement of the "heart of the invention") and the difficulties entailed in this doctrine. It suggests that Israel should adopt modern doctrines for patent infringement analysis, such as the doctrine of equivalents, and also adopt a more robust body of exceptions to patent infringement, which are currently not well-developed or thought through under Israeli law.
5. Remedies for Patent Infringement
This Chapter analyses remedies for patent infringement in Israel, discussing the lack of guidance under the Israeli Patent Act as well as court decisions concerning calculating damages due to patent infringement. The consideration and adoption of comparative approaches to remedies is thoroughly advanced and introduced.
6. Patents and the Pharmaceutical Industry in Israel
This Chapter offers a closer look regarding the insignificant presence of Israeli pharmaceutical R&D centers in Israel (as opposed to flourishing industries in other fields, mainly hi-tech) and trying to identify the reasons for this phenomenon by looking, inter alia, at Israeli patent law policies in this field and whether they have any impact on innovation in this field. The Chapter offers a critical review of Israel patent policy in the field of pharmaceutical inventions, studying thoroughly different policies in that regard: compulsory licensing, parallel import and exhaustion of patents, experimental use of pharmaceutical patents and patent term extensions orders (the Israeli "Hatch-Waxman" policy), and the ability to use unjust enrichment remedies in addition to reliance on patent law remedies. The data and policies review suggest that overall Israeli patent law policies were dictated by local economic industry interests, mainly generic drug manufacturers interests. Those interests called for very liberal use of competitors patents in different ways over the years: liberal issuance of compulsory licenses during the 80s and 90s by the state, allowing parallel import of pharmaceuticals and adopting de facto and de jure international exhaustion of patents, failure to provide data exclusivity regarding drug files of pharmaceutical companies and allowing generic drugs manufacturers to free ride on that information (in violation of international agreements), and allowing for very liberal defenses to patent infringement for generic drug manufactures. These policies, in turn, created a very hostile environment for drug developers. However, in recent years some changes have been made in a way that reflects a better balance between generic drug manufacturers and pharmaceutical companies. The Chapter concludes with some policy suggestions that must be made in order to create a better innovative environment in this field: abolishing the compulsory license regime altogether, adopting a robust data exclusivity regime, and reconsidering the policy of parallel import and international exhaustion of patents.
7. Technology Transfer in Israel and The Technology Transfer Bill of 2004
This Chapter is based on a study of technology transfer between Israeli universities and the private sector in Israel and considering whether Israel should regulate this field in a way that is similar to the way it has been done in many western countries, such as the U.S. in the Bayh-Dole Act. The analysis offers data regarding the extent of patenting activity by technology transfer companies of the universities and suggests that it has been extensive during the years they have been active and has grown continually since their foundation. These technology transfer offices have been working with no mandatory guidelines regarding technology transfer. The Chapter offers an analysis of Israeli government and legislature consideration of the subject and their policies and suggests that maintaining freedom of operation to universities rather than regulation of these activities has been a value that has been preserved over the years. Additionally, it shows how despite the decentralized and unregulated nature of this innovative sector and lack of a unified policy regarding technology transfer, this market has been operating well while taking into account the public interest.
8. International Patent Law Dimensions of Israeli Patent Law
This Chapter offers a critical analysis of Israel compliance with international patent law agreements, touching mainly upon the TRIPS agreement and some of the major deviations from it mainly in the pharmaceutical patenting field and offering some future steps that should be taken in order to comply with Israel international obligations.