By Adv. Yehuda Neubauer, Adv. Hadar Avital, P.A. Lawrence Hoffman
Israel’s laws for protection of intellectual property are quite modern by world standards. Its trademark ordinance was updated in 2010, its copyright law was updated in 2011, and its patent law was updated in 2014. On 7 August 2017, a completely new and ultramodern design protection law, which will become effective on 7 August 2018, was published after being approved by the Israeli parliament. Until then, registration and protection of designs will be according to the existing law, the original version of which dates back to 1924 (but which has been amended several times).
Good design can be an enormously important factor in the success of a product as compared to one of similar functionality but with a less appealing design. And as in the case of almost any other kind of intellectual property, success brings all the copiers out of the woodwork. The new law will provide strong protection and everyone involved in the field of industrial design needs to be aware of what it entails.
The new law finds much of its inspiration in the European Design Registration System. Let’s take a look at some of the important new features compared to the old law. As we go, we will also note changes between the draft bill as originally introduced, and its final version.
Duration of Protection:
Under new Chapter 39, the term of protection is for a total of 25 years, subject to periodic renewal fees, the amount and timing of which will be determined at a later time. Under the old law, the term of protection was five years, but two five year renewals were available. However, new Chapter 12 introduced §33(3a) into the old law, which provides an additional three year extension bringing the maximum term up to 18 years. The additional renewal period applies to registrations in force on the publication date of the new law, and also to ones that have expired but are still within the 3 months period during which revival is possible.
Requirements for Protectability:
Under new Chapter 3, a protectable design must possess novelty and individual character. As stated in new Chapter 6, the requirement for novelty is absolute. Publication of the same or an insignificantly different design anywhere in the world will defeat novelty. Previously, only designs published in Israel could defeat novelty.
New Chapter 7 defines “individual character” as “a general impression . . . on the informed user . . . different than [that] created by a prior design”. Applications are examined for compliance with substantive as well as formal requirements, so examiners will consider both the novelty and individual character requirements in the first instance. Of course, it can be raised again if the validity of the registration is challenged later in litigation proceedings. Under the old law, the corresponding requirement was “originality”. The Supreme Court defined this as it “relates to the method of implementing known elements in a different manner from previously in the same area”.
It seems that the requirements for individual character and originality are equally subjective. However, its intended meaning is stated in the law and will provide some guidance for examiners and judges when the requirement needs to be addressed.
New Examination Guidelines:
Associated with the patent and trademark laws are sets of Examination Guidelines. Such Guidelines do not yet exist for the new design law, but may be expected to be published for public review by the IPO in the near future.
Grace Period for Disclosure:
New Chapter 9 provides an important grace period for disclosure by the owner or a third party who obtained information on the design from the proprietor, lawfully or unlawfully. The grace period is 12 months prior to the owner’s application filing date in Israel, or a priority date based on an initial filing elsewhere. This effectively allows the owner to register a design under the new law for designs made public during the 12 month period following the effective date of the new law. (As stated in new § 113(1), designs that were published before the effective date of the new law are subject to the old law). Of course, the grace period does not apply to prior art which would otherwise destroy novelty.
Changes in What is Protectable:
There are two significant changes. New Chapter 1 uses the term “products” to identify the subject matter to which the law applies, rather than “articles” as under the old law. That alone may seem insignificant, but “product” is intended to be more inclusive and is defined as “including . . . graphic symbols and screen displays”. As under the old law, “sets of Chapters” and “packaging” are also protectable.
Note, however, that the definition excludes “typefaces and computer programs”. Computer programs were never protectable as designs. As to typefaces, there was an intention to include them in the scope of the new law which reflected in the first draft bill. Eventually, the draft bill was amended to bring these under the protection of copyright law.
Publication of Applications:
New Chapter 22 provides for publication of applications “as soon as possible after filing”. However, a six month delay may be requested. Previously, publication did not take place until two years after registration.
Test for Infringement:
For registered designs, to prove infringement, the owner must demonstrate that the overall impression of the accused design is not different from the overall impression created by the protected design. Proof of actual copying is not required.
Damages and Other Remedies:
The owner’s right to prove actual damages is unchanged. However, an important alternative remedy has been created by new Chapter 75A which provides for statutory damages of up to ILS 100,000 for each act of infringement. This is a valuable remedy since actual damages are often difficult to prove with sufficient precision to persuade a court.
In determining the amount of statutory damages to be awarded, new Chapter 75B authorizes a court to consider factors such the scope of infringement, the severity of the infringement, and the actual damage caused to the plaintiff, as assessed by the court.
Other powerful new remedies have also been created. For example, new §77(a)(1) provides that a court may order transfer of ownership of the infringing goods to the owner of the design (subject to possibly requiring payment for the goods) or destruction of the goods and under §77(a)(2), the court may give orders with regard to additional assets predominantly used in the production of the infringing goods, possibly including means of production utilized to produce the infringing goods.
Another remedy created by new Chapter 110 allows the owner of a registered design to request Customs Administration to detain suspected infringing goods being imported for commercial purposes.
Design Infringement Has Been Criminalized:
Another notable feature of the new law is Chapter 92 which makes intentional copying or importation for commercial purposes of a registered design a criminal offense punishable by a fine of up to ILS 226,000 (or ILS 452,000, if the offense was made by a corporation). New Chapter 93 requires corporate officers to supervise and implement measures to avoid the offense. Not adhering to the Chapter 93 requirement may result in a personal fine of up to 29,200 NIS.
Protection of Unregistered Designs:
New Chapter 4 provides limited protection for unregistered designs. Such protection is available for products offered for sale or commercially distributed in Israel (including through the internet) within six months of the design first being made public in Israel or abroad. Per new Chapter 65, the non-renewable term of protection is three years after publication.
In contrast to registered designs, however, there must be actual copying. Under new Chapter 61, infringement occurs only if there is exact copying of the design or copying of the design with a variation that still creates an overall impression that is not different from the overall impression created by the protected design.
Also, under Chapter 68, infringement is deemed to occur even without actual copying if the design owner gives appropriate notice of his unregistered rights.
The remedies available to the owners of registered and unregistered designs are largely the same. However, an important exception is that exclusion by the Customs Administration is not available to owners of unregistered designs.
The Hague Convention:
Israel is adherent most of the international treaties regarding standards for intellectual property and facilitating the filing of applications in multiple countries. A notable exception at this time is the Hague Convention that facilitates obtaining design protection in multiple countries, in the EU and in the member countries of African Intellectual Property Organization.
It is not within the scope of this discussion to analyze the Hague procedures. It will be sufficient to note that the process begins with filing an international application which is examined for formalities only. The application is then subject to substantive examination and the rights accorded to the owner as provided for under the laws of the countries or regions in which the applicant desires protection.
It is the intent of Israel to become adherent to the Hague system, and new Chapter 8 provides for this by making the process of obtaining international protection simpler and less costly for Israeli designers and for foreign designers who wish to protect their designs in Israel. Chapter 8 will become effective when Israel actually ratifies the Hague Convention.