Introduction
Technological innovation is the lifeblood of the Israeli high-tech industry, which is currently the country's leading industry. Technological innovation has become the Israeli economy's primary growth engine, as indicated by the country's macroeconomic performance and position on the world stage.
There is a close cause-and-effect relationship between a country's development of technological innovation and its economic performance. However, innovation is not created by chance. Israeli innovation is made possible by the country's investment in R&D infrastructure, the cultivation of personal capital, the promotion of the financial system and venture capital, and a long list of additional parameters.
This can clearly be seen in global intellectual property data, where there is an explicit correlation between a country's economic growth and a spike in its registered patents and vice versa. In this respect, intellectual property data serves as a mirror image projecting financial performance in various countries. According to the latest statistical report issued in 2021 by the Israeli Patent Office, the year saw an increase of approximately 1,500 patent applications filed in Israel, with an about 4% increase in the percentage of foreign applicants relative to the previous year. Data on trademark activities show a similar trend, with an increase of approximately 1,000 trademark applications in 2021 compared to the previous year. In this case, the percentage of foreign applicants remained essentially unchanged.
In Israel, maybe more than anywhere in the world excluding China, there is a clear, definitive, direct correlation between economic growth and technological innovation, and it is its technological innovation that propelled Israel from being a second-world country to establishing and cementing its status as a world leader in high-tech. It is also the factor that has raised Israel's GDP per capita to roughly 40 thousand dollars, surpassing that of France and Italy and approaching that of Britain and Germany – all unequivocal industry superpowers.
International Treaties
Israel ratified the following treaties:
| Treaty | Instrument | In Force |
| Berne Convention | Accession: December 14, 1949 | March 24, 1950 |
| Budapest Treaty | Accession: January 26, 1996 | April 26, 1996 |
| Hague Agreement | Accession: October 3, 2019 | January 3, 2020 |
| Lisbon Agreement | Ratification: January 30, 1963 | September 25, 1966 |
| Madrid Agreement (Indications of Source) | Accession: December 14, 1949 | March 24, 1950 |
| Madrid Protocol | Accession: May 31, 2010 | September 1, 2010 |
| Marrakesh VIP Treaty | Accession: March 21, 2016 | September 30, 2016 |
| Nice Agreement | Accession: September 19, 1960 | April 8, 1961 |
| Paris Convention | Accession: December 14, 1949 | March 24, 1950 |
| Patent Cooperation Treaty | Ratification: March 1, 1996 | June 1, 1996 |
| Phonograms Convention | Ratification: January 10, 1978 | May 1, 1978 |
| Rome Convention | Accession: September 30, 2002 | December 30, 2002 |
| Strasbourg Agreement | Accession: October 7, 1974 | October 7, 1975 |
| UPOV Convention | Accession: November 12, 1979 | December 12, 1979 |
| WIPO Convention | Ratification: July 30, 1969 | April 26, 1970 |
Israel is also a signatory to the following treaties but has not yet ratified them:
| Treaty | Signature |
| Brussels Convention | May 21, 1974 |
| Nairobi Treaty | October 24, 1981 |
| Patent Law Treaty | June 2, 2000 |
| Trademark Law Treaty | October 28, 1994 |
| WIPO Copyright Treaty | March 25, 1997 |
| WIPO Performances and Phonograms Treaty | March 25, 1997 |
Legal and Regulatory Infrastructure in Israel
In light of the unique characteristics of intellectual property and its growing importance in international trade, processes of globalization, and technological development, there is great importance to the legal framework that constitutes the legislative and regulatory infrastructure for protecting intellectual property rights.
Israel, as a significant, quality player in the global technology arena, has taken it upon itself in recent years to adjust its norms of conduct in all matters related to intellectual property—including its local laws, regulation, and its enforcement regime—to conform with those accepted in the developed world. This followed many years in which Israel was relatively backward compared to developed countries and was even placed on an uncomplimentary list of countries under strict surveillance for violating intellectual property rights.
In recent years Israel implemented several steps:
- Changes and reforms in the Patent Authority, including turning the Authority into an executive agency and a significant increase in personnel to handle patent applications, with significant professionalization of the workforce and reduction of examination backlog;
- Amending local law to conform with binding international conventions such as the Madrid protocol, the Hague Agreement, and the Global PPH;
- Joining the OECD and making amendments to intellectual property law;
- Strengthening the enforcement regime against counterfeiting and smuggling counterfeit merchandise, which significantly improved the level of specialization and efficiency of customs authorities.
Upgraded Intellectual Property Registration
The first and most basic contact of entrepreneurs, inventors, companies, and corporations when they seek legal protection for their inventions is with the government body in each country, which is responsible for registering patents, designs, and trademarks. The quality of the work of this body significantly and clearly impacts the willingness of these entities, including outside investors, to operate in each country and clearly impacts the scope of industrial and technological development in the country.
For years, the process of obtaining patents in Israel suffered bureaucratic delays. While the length of time required in Israel to register a trademark or design (model) was reasonable (usually between one year and eighteen months), the length of time needed for obtaining a patent was long (more than four years on average, and in some cases, even longer. The delay in the work of the Patent Authority stemmed, in essence, from a shortage of personnel. Training patent examiners is a task that indeed takes a great deal of time and requires resources. Therefore, Israel was required because of its objective situation and the commitment it took upon itself on the international legal and commercial plane to advance a significant reform in the Patent Authority. In 2014, the Patent Authority began to serve as an authority for international search and examination for Israeli and foreign patent applicants. At the beginning of 2014, an agreement was signed with the U.S. Patent and Trademark Office, according to which, beginning in October 2014, the Israeli Patent Authority began to operate as a search and examination authority for international patent applications that were submitted to the U.S. Patent Office. In this agreement, patent applicants from the United States were given the option to choose the Israeli Patent Authority to conduct searches for them as one of the certified International Search Authorities. Nowadays, the Israel Patent Office is recognized by patent practitioners as an excellent PCT searching and examining authority.
Patents
Israel's current patent law was enacted in 1967. The law was amended several times, lastly in 2017, with some of the changes being major in nature, notably in 1998, 2006, and 2014, with the introduction of the patent term extension provisions and their further amendment, in 2011 as a result of Israel joining the PCT, and in 2017 as a by-product of the establishment of a new Designs Law.
The Israeli Patent and Trademark Office (ILPTO), which is an independent authority, is the regulatory body for patent, trademark, and design prosecution. Patentable inventions in Israel can be a product or a process in any technology field, which is new and useful, has an industrial application, and involves an inventive step. Like in most countries, patents remain in force for twenty years from the application date, on the condition that renewals are paid timely. The time frame for the payment of annuities is upon grant, up to the 6th year from the filing date, and every four years thereafter, with the remaining two years paid at the end of the 18th year. There is a grace period of six months for the late payment of annuities with a fine.
Unpatentable
inventions falling in the following classes are deemed unpatentable in Israel:
(1) methods of therapeutic treatment on the human body;
(2) new varieties of plants or animals, except microbiological organisms not derived from nature;
(3) although not explicitly mentioned in the statute, inventions the Patent Office considers mere representations of thought processes are rejected. Some Internet and software inventions may fall within this category.
A patent term extension (PTE) was introduced in 1998 and later amended in various respects for pharmaceutical and medical device patents. Although formally available to patent owners of medical devices, it has not been used to extend such patents to date.
The Israeli PTE resembles the European SPC in that it does not extend the patent in its entire scope but only to the extent that it covers the pharmaceutical product on the basis of the marketing authorization of which it was approved.
Trade Secrets
Trade secrets are covered under the Commercial Torts Law of 1999 and do not require registration for protection. However, the definition under which trade secrets exist may be limiting in many cases.
Under Israeli law, a trade secret is defined as commercial information of any kind which is not public knowledge or which cannot easily and legally be discovered by the public, the secrecy of which grants its owner an advantage over his competitors, provided that its owner takes reasonable steps to protect its secrecy. Whether a trade secret can or cannot be easily discovered is also, in many cases, connected to the level of protection given to it by the secret owner. This, of course, means that a patentable invention for which a patent application is filed automatically loses its status as a trade secret when the application is published.
The main advantage of trade secrets is that the term of protection is unlimited as long as they can remain secrets. However, according to Israeli law, reverse engineering is permitted and is an exception to the misappropriation of trade secrets. Under the Commercial Torts Law, Israeli civil Courts can award statutory damages (without proof of damage) of up to NIS 100,000 for every trade secret misappropriation.
Designs
A new Israeli designs law and related design regulations came into effect in 2017 (identified as "The Designs Law of 2017"), replacing the Patents and Designs Ordinance of 1924, which was abolished in respect of patents when the 1967 Patents Law came into force, that remained in force in respect of designs. The new law provides strong and wide protection to registered and unregistered designs.
The Designs Law substantially changed the way design rights are covered in Israel:
1) it extended the term of protection to 25 years, subject to periodic renewal fees, which is a significant improvement for rights owners since, under the previous ordinance, the term of protection was 15 years only;
2) it allows some protection for unregistered designs, which is available for products offered for sale or commercially distributed in Israel. In this context, sales made through the Internet are considered commercial distribution. However, the term of protection for unregistered designs is limited to three years counted from its publication and is therefore particularly useful for designs with a limited market life.. one of the drawbacks of unregistered designs is that they will not be considered by the Israeli Customs authorities, which are otherwise quite efficient in identifying and stopping counterfeit goods from reaching the Israeli market.
The new law was also adapted to deal with Israel's joining of the Hague system for the filing of international design applications. The Hague system simplified the process of obtaining design protection in many countries for Israeli applicants but also made it simpler, and hence more attractive for foreign applicants to apply for design registration in Israel, in light of the much-simplified designation procedure as compared to the previous system where this option was not available under the old ordinance.
The regulations for implementing the new Designs Law also made it possible for the ILPTO to implement an online system for filing design applications. It also allows the general public to search existing design registrations in the database of the Israeli Patent Office.
Trademarks
The trademark activity in Israel is substantial and constantly growing, with applicants seeking to protect their products and services with a trademark. The Type of registrable trademarks include letters, plain or stylized, Logos and other graphic symbols, two or, under certain conditions, three-dimensional, and even sounds.
Trademarks are regulated in Israel under the Trademark Ordinance of 1972 and related regulations. Notably, in 2007 Israel acceded to the Madrid Protocol, and Israeli applicants make wide use of the option of filing international trademark applications conveniently and cost-effectively. Since Israel's population is currently around 9 million, the interest in the market has grown in many exporting countries, and the variety of goods available on the Israeli market has substantially expanded. As a result, many more trademark owners cover Israel using the Madrid Protocol.
Israel is also a member of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks and, as said above, of the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks.
Under Israeli law, trademark registration is valid for ten years from the application's filing date. The registration may be renewed for further periods of 10 years each. Previously, trademark registrations were in force for seven years, following which they could be renewed each time for 14 years. This change in the renewal date caused some confusion with trademark owners in the past.
It is important to note that a trademark can be revoked due to non-use and that a use made by a third party is not "use" in this sense. Accordingly, when a trademark owner grants a license to a third party to use its trademark, the license has to be registered with the registrar of trademarks to count as "use."
Copyright
Copyright protects the author of an original work from unauthorized use of his work. Protected works include artistic, musical, photographic, cinematic, architectural, dramatic works, and more. Copyright does not protect ideas but only the specific form of expression of those ideas.
Copyright is governed in Israel by the Copyright Act of 2007 performers' rights are governed by the Performers' and Broadcasters' Rights Law of 1984. Israel is a member of the Bern Convention on the Protection of Literary and Artistic Works. Israeli copyright law protects foreign works in accordance with the provisions of the international conventions to which Israel is a signatory.
Copyright works are protected for 70 years after the author's death, with a few exceptions. Ownership in the work is to the author, unless otherwise contractually provided for, or when an employee created the work for the purpose and in the course of the employ, in which case the employer is the owner of the work.
The Copyright Act also protects the moral rights of authors, which include the author's right:
(1) to have his name identified with his work to the extent and in the manner appropriate in the circumstances;
(2) to ensure that no distortion shall be made of his work, mutilation or other modification, or any other derogatory act concerning the work if any such act would be prejudicial to his honor or reputation. The assignment of copyright does not affect the moral right that cannot be waived.
Copyright infringers can be sued in a civil claim, the available remedies being both an injunction and monetary relief. However, some types of infringements may constitute a criminal offense. Statutory damages of up to NIS 100,000 for each infringement can be claimed.
Customs Enforcement
The owner of a trademark or a design registered in Israel may petition the Customs Authority to seize a shipment of suspected counterfeit goods. The Customs Authority also often initiate the seizure of suspected counterfeit goods of their own volition and notifies the rights holders accordingly. To continue in the process, the rights holder must post a bond as a bank guarantee for an amount determined by the Customs Authority, which depends on the number of counterfeit goods and their value. Should the seizure be found to be unjustified, the rights holder shall cover any expenses relating to the seizure, such as storage or to compensate the Customs Authority and/or the importer of the goods.
After the goods are seized, the rightsholder has a limited time to file a civil claim against the importer. If no bank guarantee is posted, or a civil lawsuit is not filed before the deadline determined by Customs, the goods are released. The above applies to the "long procedure." A "short procedure" also exists, which can be applied at the discretion of the customs authority if the number of suspected counterfeit goods is small, or when the total value of the goods is relatively low. According to the "short procedure," the rights holder is not required to deposit a bank guarantee or file a civil claim but must submit a written opinion explaining why the goods are Believed to be counterfeit, along with an undertaking to compensate the importer for damages and to indemnify Customs if the seizure is found to be unjustified. If the importer of the suspected counterfeit goods does not take legal action against Customs Authority or the rights owner within a limited timeframe, the goods are destroyed.
The Israeli customs provide real protection to intellectual property rights registered in Israel and perform proactive activities in cooperation with rights holders and their Israeli representatives.
Geographical Indications and Appellation of Origin
A registered geographical indication limits the use of names of specific geographical locations in product names. It indicates the product's source, demonstrating that the product has a certain quality or characteristics identified with that geographical area.
One such geographical indication is the appellation of origin that protects the geographical indication of a defined area. The name of a country, region, or locality can be considered an appellation of origin. When included in the name of a product, it conveys that it originated from that location, and its quality and properties are mainly due to that geographical area.
Israel is a signatory to the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration (1958).
Passing Off
Goodwill is protected in Israel by the application of the Commercial Torts Law of 1999. A business that acts in such a way that its goods or services are mistaken for the goods or services of another business or related to another business commits the tort of passing off. Passing off is often argued by plaintiffs when no clear trademark or design infringement can be proven in situations where the mark or design used is undoubtedly different from that of the plaintiff, but the public is still misled into believing that the goods or services it is acquiring originate from the plaintiff.
Iron Swords War
The ILPTO is well aware that the exceptional circumstances created by the war make regular activity difficult and, therefore, makes it easier for the rights holders to be granted extensions of terms, and is receptive to requests for the postponement of hearing dates.
Furthermore, in the event that the rights owner does not meet the deadline set by the ILPTO and according to law, the circumstances of the war itself can be relied upon as a reason for retrospectively extending the deadline. Of course, each extension petition will be examined on its merits, depending on the circumstances, and the liberal approach of the ILPTO in this respect should not be viewed as a license not to act.
It should also be noted that the ILPTO does not have the authority to waive official fees; therefore, any extension must be accompanied by the payment of an extension fee.
It is important to clarify that the ILPTO does not have the authority to extend certain deadlines (e.g., the term for filing a Notice of Opposition), and even under the current circumstances, those deadlines must be met.
By: Dr. Kfir Luzzatto, president, and Lilach Luzzatto Shukrun, Partner, The Luzzatto Group