Legal framework

In Israel, the relevant national and international legislation is:

  • the Patents and Designs Ordinance 1924;
  • the Designs Regulations 1925;
  • the Unjust Enrichment Law 1979;
  • the Commercial Torts Law 1999;
  • the Consumer Protection Law 1981; and
  • the Designs Bill.

At the time of writing, the Ministry of Justice is working on a new design law to replace the ordinance and regulations, which recently passed the first of three votes required for it to be enacted. The main purpose of the Designs Bill is to adapt the current legislation to new technological developments. While the Designs Bill proposes various amendments that would bring Israeli design law into line with EU legislation, the main change is a new option to protect unregistered designs according to a pre-determined set of criteria. Further, the Designs Bill proposes a grace period in certain circumstances providing that the owner of the design can still register a design even if it was published in the 12 months preceding the registration. In addition, the Designs Bill extends the protection period of registered designs from 15 years to 25 years and clarifies that new elements can obtain design protection (eg, new and unique fonts, icons, packaging and a combination of elements meant to form a single composed product).

Unregistered designs

According to the Patents and Designs Ordinance and the Designs Regulations, there is no protection for unregistered design rights in Israel.

Notwithstanding this, it may be possible to obtain protection for an unregistered design based on the tort of passing off. Passing off is established if it can be proven that the product’s get-up has gained goodwill in the market which is associated with the manufacturer and that the potentially infringing product may be confusingly similar to the original product.

Further, under certain circumstances the owner of the originally designed product can obtain the requested protection based on the unjust enrichment cause of action. In the Supreme Court’s precedential decision (MCA 5768/94, 5614/95, 933/96, ASIR Import Export and Distribution Ltd v Accessories and Commodity Goods Forum Ltd, SIP 42(4) 289), the court held that in order to be successful under this course of action, the severity of the circumstances of the matter must be proven. In addition, the following factors will be examined in order to decide whether the unregistered mark is eligible for protection:

  • the level of novelty of the product;
  • the time elapsed since it was first marketed;
  • the scope and level of imitation (whether the original product is copied in full or only in part); and
  • the amount of resources invested in the development of the design of the original product.

As indicated above, the Designs Bill may change the existing legal environment (in order to clarify it and strengthen public certainty as to the existence and scope of design protection) by allowing protection for unregistered designs for three years (compared to the current 15-year protection period for registered designs) and negating the use of the passing off and unjust enrichment causes of action.

Registered designs

Who can apply?

A design application can be filed by an individual, a number of individuals or a company. The application may be filed directly in the name of the owner. Indicating the designer’s name in the application is optional.

What can and cannot be protected?

According to Section 2 of the Patents and Designs Ordinance, the definition of a ‘design’ is the figure lines, shape, pattern or decoration that is visually noticeable on the end product. A design may be registered with respect to any industrial product that has a shape, form or decoration which is dominantly visible in the final product.

No provisions in the regulations or ordinance deal with the treatment of spare parts. According to the ordinance, a design is granted for the unique shape or form of a product, which cannot be dictated by functional features. The shape and design of spare parts are generally dictated by their purpose and the requirement to ‘fit’ in the final product, and as such may not be protected under design law.

Therefore, whether spare parts can be protected by design law should be reviewed on a case-by-case basis.

Costs

The official fee for filing one application for one design in Israel is $125. The official fee for filing and registering one application for a set of articles bearing a common design is approximately $185.

Procedures

Application process

In order to file and register a design in Israel, the design should be novel and original, and not previously published in Israel. A recent registrar’s circular, which was issued based on a court ruling, states that the design examiner may cite against the novelty of a requested design designs that have been publicly published online before the filing date of the requested design application or its priority date (if any). Therefore, the examiner may also search and cite against a proposed application prior art that appears in the search results of foreign patent offices.

A design application should include an article or product bearing one design or a set of articles bearing one design. A ‘set of articles’ is defined as a similar group of items that are sold together or intended to be used together, and that bear an identical design.

A design application should include a set of drawings or computer-generated images in duplicate, depicting the article bearing the design from all angles, including a perspective view.

At present, there is no option to defer publication; however, the design itself is not published until two years after registration. That said, third parties may request a search with respect to registered designs that have not yet been published.

An original power of attorney is required, as well as a certified copy of a priority document (if applicable). The power of attorney and priority document may be filed within three months of issuance of a notice of missing parts. Extensions of time are available on payment of official fees.

Electronic filing is not available in Israel. However, this feature is currently under development with the Patent Office and may become available in the upcoming year.

Examinations and appeals procedure

Upon filing, the application undergoes a procedural examination within a few weeks and the Patent Office subsequently issues a filing receipt. If there are any missing documents or incomplete information, the Patent Office will issue, together with the filing receipt, a notice of missing parts requesting the relevant documentation/information.

The application will undergo substantive examination within 12 to 15 months of the filing date. If an office action is issued, it must be responded to within three months. Extensions of time are available on payment of official fees.

Registration

Once the examination stage is concluded, the examiner will issue a notice of allowance and the application will proceed to registration. A certificate of registration is then issued. Since June 2014, no publication fee is required.

The application is valid for five years from the application date and may be renewed for two additional five-year terms, up to 15 years in total.

The registered design is published two years after the date of registration.

Opposition

No oppositions are available.

Removal from register

A third party may file a cancellation request with the Patent Office against a registered design at any time on the grounds that the design was published before its filing date and/or that it was unoriginal at that time. The party requesting cancellation bears the burden of proving that the design was previously published and/or if it was not original enough at the time that it was filed. Cancellation is also possible in case of a typographical error. Any other attempt to cancel or revoke a design must be filed with the district court.

Enforcement

Design infringement litigation generally follows the basic procedures of general Israeli litigation. On average, a design infringement case takes between one and three years. This does not include appeals, which may take between one and two years. Claims relating to designs are generally filed with the district courts. However, if the monetary value of the disputed goods is relatively low and there is no request for injunctive relief, the claim should be filed with a magistrates court. Appeals against magistrates court decisions are filed with the district courts. District court decisions may be appealed to the Supreme Court.

Remedies

A preliminary injunction is the most common remedy granted to the owner of a registered IP right, while unregistered IP rights (eg, an unregistered design) usually will not enjoy interim protection. A preliminary injunction may be issued if the rights holder can provide proof of cause, demonstrate to the court the urgency of the matter at hand and provide a bank guarantee. The court usually holds a comprehensive hearing to consider the case at hand. Similarly, permanent injunctions may be granted within the framework of the lawsuit.

An Anton Piller order is a seizure order under which the court empowers a party (usually the plaintiff) to enter the premises of a third party to search for and seize evidence (usually of infringement).

Monetary damages awards are relatively small compared to those available in other Organisation for Economic Cooperation and Development member states. An award of damages generally requires proof of infringement and damages, or at least a reasonable estimate. In assessing the amount of monetary damages, a court may require the plaintiff to prove actual damages. However, the court’s final award will not necessarily be bound by the proof of actual damages provided by the plaintiff.

The courts routinely award damages without having to prove actual damages, based on the Commercial Torts Law. According to this law, compensation may be awarded without having to prove actual damages. However, this type of compensation is limited to NIS100,000 (approximately $26,000) per infringement. Further, while in a fairly recent decision the Supreme Court generally stated that in light of the uniqueness of IP rights, misappropriation of these (including design rights) warrants the award of damages without having to prove actual damages, no binding decision was made regarding a plaintiff’s ability to receive compensation without proof of damages with respect to design infringement.

A court may order the defendant to provide the plaintiff with a complete audit of its accounts with respect to its infringing activities.

The courts generally award expenses to the prevailing party in litigation. However, costs are subject to caps set by regulation and rarely amount to more than 25% of the actual legal fees incurred.

A design owner may also demand that the infringer transfer the infringing goods to it or destroy all of the infringing goods.

Timeframe

As in other civil matters, there is no set timeframe for the resolution of an enforcement action for either registered or unregistered rights. However, while civil litigation in Israel can sometimes be resolved within two years, it usually extends to three to four years, and in extenuating circumstances can even take five years (excluding appeal proceedings).

Ownership changes and rights transfers

Design rights may be assigned, transferred, licensed, subjected to lien or conveyed via any other lawful provision. In order to record an assignment with the Patent Office, an originally signed assignment or a certified copy thereof signed by the assignor is required. If the owner is represented by an agent, a suitable power of attorney on behalf of the assignee is required.

In order to record a licensee, an original or certified copy of the licence agreement is required for filing. An original power of attorney signed by the licensee is also required for filing.

Related rights

There may be some overlap between design rights and trademark rights with respect to three-dimensional (3D) trademarks filed for actual products or their packaging.

Generally, a product or its packaging is protected by design law and/or patent law, depending on the type of protection sought. However, if certain criteria are fulfilled, 3D marks may be accepted for registration and subsequently protected under trademark law.

The 2003 Supreme Court ruling in August Storck KG v Alfa Intuit Food Products Ltd, which dealt with 3D trademarks, comprehensively addressed the issue of whether 3D images should be protected under trademark law, as opposed to design or patent law. The ruling distinguished:

  • 3D trademarks that function merely as trademarks in commerce;
  • 3D trademarks that depict the actual product; and
  • 3D trademarks that depict the packaging of a product.

The decision set down specific criteria that would allow for the registration of each version as a 3D trademark, including use as a trademark, establishment of secondary meaning, lack of aesthetic/functional character and unique nature.

However, even if these criteria are met, there is no guarantee that the registrar will allow the registration of a 3D trademark and additional concerns may be taken into consideration. Each case is different and is reviewed on its own merits, since the registration of such marks affords, on the fulfilment of certain requirements, unlimited protection and a monopoly which may affect future market competition.

In a registrar’s decision dealing with a trademark application for a 3D image of the CROCS product for shoes, the registrar agreed to allow registration, concluding that the mark had acquired distinctive character and lacked functional purpose.

However, such an application can be granted only in unique circumstances. Many other 3D applications for packaging, including the Head & Shoulders shampoo bottle, have been refused.

Dor Cohen-Zedek, Yossi Markovich

This article first appeared in World Trademark Review. For further information please visit www.worldtrademarkreview.com.