This article was published in the US-Israel Legal Review 2023 book “Israel’s Economy: Turbulence and Hope in Dark Times.”
The year 2023 was remarkable for Israel in terms of economic development, with a positive outlook for normalization with Saudia. However, on the 7th of October, Hamas carried out a brutal attack on Israel's civilian population, causing a sudden and devastating halt to the country's progress. The attack resulted in the tragic loss of 1,400 lives, while hundreds were taken hostage. The conflict is a significant event that profoundly impacts the region's political and social landscape and will leave an enduring legacy that will continue to shape the area's future.
The war that took place in Israel happened at a time when the country was making significant advancements in the field of artificial intelligence, whose contribution to the military efforts is substantial. This highlighted the technological accomplishments of Israel's military industries as well as many start-up companies in the field. The war, and before it, internal political turmoil that had been brewing for a while, took away the focus from everyday legislative efforts. The warfare also resulted in an almost standstill of the courts during the initial phases of the war. The courts could only hear urgent cases, which meant that the crop of rulings on intellectual property was limited.
The war has far-reaching and positive implications for Israel's AI industry because it sped up the development of AI tools for military purposes and highlighted to the world Israel’s superior ability in this field. The military sector is expected to grow substantially due to the demonstration of its capabilities and the development of military products proven in the field.
Patents: the focus on AI
Throughout the year, due to other legislative concerns, there was a lack of focus on intellectual property (IP) legislation. This included the much-anticipated creation of an Israeli provisional-type patent application, which patent practitioners have eagerly awaited. However, after an initial enthusiastic push for this legislation by the ILPTO, with the encouragement of most patent practitioners, its fate remains uncertain, leaving many in the industry wondering what the future holds.
Despite the slow-down in court rulings due to the war, one decision of the Registrar of Patents stands out. In March, the Israeli Patent Office (ILPTO) issued a long-awaited administrative decision regarding the eligibility of an Artificial Intelligence (“AI”) computing system to serve as an “inventor” under the Israeli patent law. The opinion ruled that AI is not eligible to be an inventor under the present legal framework. In this ruling, the ILPTO aligned itself with nearly all jurisdictions that have considered the question to date. The ILPTO’s decision reflected its interest in applying a uniform policy on unsettled patent law matters. In addition, the rejection of AI-powered applications worldwide reflects the technological and legal reality that, at present, inventions generated with the assistance of AI are correctly attributed to human inventors.
The ruling addressed two Israeli patent applications filed in August 2019 by Dr. Stephen Thaler. The applications were purportedly invented by his AI software program, DABUS (widely known as the “DABUS” case in other countries, notably the US, the UK, the EPO, and Australia).
In analyzing the legal issues presented by the designation of DABUS as the inventor, the ILPTO considered two intertwined issues: 1) Can artificial intelligence be considered an “inventor” under the patent statute? 2) Can a party acquire rights to file a patent application from an artificial intelligence?
Concerning the first question, the ILPTO determined that, under the Israeli patent statute, the term “inventor” is limited to human beings. The ILPTO based this conclusion on its analysis of the statute's plain language, informed by dictionary definitions and everyday usage.
Regarding the second question, the ILPTO determined that an Applicant’s right to file a patent application must derive from an “inventor,” and there is no legal way to acquire the rights to file a patent application from an entity that is not an “inventor.”
The United States, the United Kingdom, the European Patent Office, and Australia all had concluded that the patents could not be granted for the above reasons. The ILPTO’s refusal to break with the rest of the world was wholly expected and is indeed typical of its general approach to the development of patent law. Indeed, the ILPTO’s relative delay in issuing this decision on a case that has been pending for nearly four years allowed it to present the issue as settled in international practice.
While perhaps, as the Israeli Patent Office decision notes, the time may come in which courts will have to address the question of “what human involvement is required for a person to be considered as an inventor in an invention made with the aid of a machine,” we do not foresee that time arriving in the near future. Until then, we will continue to celebrate and promote inventions made by our clients, human inventors, utilizing all tools and resources at their disposal.
Israel's patent landscape in 2023
Throughout 2023, Israel's patent landscape remained relatively stable with no significant changes, among other things, for the above reasons. However, the growth in AI-powered inventions observed in the previous year continued and even accelerated, fueling innovation in the country. This growth is attributed to the increased investment in AI research and development by both the public and private sectors.
In addition to AI, local start-ups and established companies continued to emphasize innovation in foodtech, agritech, and environmentally friendly inventions. This focus on these sectors is due to the rapidly changing global landscape, with more consumers looking to adopt sustainable, eco-friendly solutions and the various governmental and other programs that incentivize research in the field.
Despite the lack of notable changes, the patent landscape in Israel remains highly competitive, with companies and start-ups constantly seeking to differentiate themselves and protect their intellectual property. As such, the country continues to attract significant investment in research and innovation, solidifying its position as a leader in technology and innovation.
Copyright Matters during wartime
Much attention is paid nowadays in Israel to copyright issues arising from the extended use of social networks (such as WhatsApp, Facebook, Twitter, TikTok, etc.). The general public in Israel is not sufficiently aware of the legal consequences of using copyrighted material such as photographs, video clips, illustrations, and other content. The present-day conflict has led to a situation where many individuals feel justified in using online content for purposes they consider just and righteous, such as fighting against disinformation during wartime. This has caused a significant amount of confusion among the general public. While some may believe this is an acceptable course of action, it has resulted in a surge of copyright infringement disputes. These disputes are often resolved at the warning letter phase, wherein the individuals involved are cautioned against using copyrighted material without permission and sometimes agree to a small payment. In many cases, this is a sufficient deterrent, and the matter is resolved amicably. However, there are some instances where the issue escalates, and legal action is taken to protect the rights of the copyright holder.
In Israel, the concept of fair use is taken seriously and given due attention. The country's legal system strives to strike a balance between protecting the rights of copyright owners and allowing for the use of copyrighted material when it is necessary for public interest and freedom of expression. This means that it may be permissible under Israeli law in situations where the use of copyrighted material serves the greater good, such as in educational, research, or journalistic contexts. Nonetheless, this does not mean that individuals have a free pass to use copyrighted material without seeking permission or adhering to the relevant legal provisions. Instead, the Israeli legal system aims to ensure that fair use is implemented in a responsible and reasonable manner that benefits all parties involved.
Impact of Technological Innovation on Intellectual Property
The swift pace of technological advancements in the military sector has created unique challenges for protecting intellectual property rights. The need to quickly integrate new inventions into military operations has led to frequent conflicts between the desire for prompt implementation and the necessity of providing adequate patent protection. Finding a balance between these two objectives requires creative and innovative solutions.
The issue of intellectual property rights in the military sector has become increasingly important in recent years. It is particularly challenging because of the need to maintain a competitive advantage in the face of constantly evolving technology. Rapid advancements in fields such as artificial intelligence, robotics, and cybersecurity have made it essential for military organizations to stay ahead of the curve. Israeli patent practitioners have grappled with many such situations in 2023.
Challenges and Controversies
We discussed the Israeli ruling regarding DABUS above. This ruling highlights the pressing challenges the patent system faces currently and in the future. It is worth noting that the ILPTO's delay in issuing a decision on this case, which had been pending for almost four years, allowed them to present the issue as settled in international practice. However, it is essential to understand that this decision does not necessarily settle the debate, as various questions remain unanswered regarding the patentability of inventions made by AI systems. This is a major issue for both Israeli companies and patent attorneys because AI has become a significant active sector, such that Israel is a recognized leader in the field. It can be expected that much pressure will be applied to the Israeli Patent Office and the courts in the near future to lead the development of doctrines in AI patents instead of aligning themselves with rulings rendered in other countries.
In the present context, there is indeed a legal lacuna for the protection of inventions generated by AI. Still, we do not doubt that patent law would adapt with time in a reasoned and appropriate manner to meet the challenge.
IP services in Israel during wartime
Amid the current situation, it is worth noting that while some firms are managing to function normally by providing Intellectual Property (IP) services with no significant disruptions, many others are grappling with an array of challenges that are impeding their ability to carry out their work effectively. For instance, some employees have been summoned to serve in the army, while others have been forced to vacate their homes due to the areas where they reside being located in war zones. These unforeseen developments have profoundly impacted their workflow and productivity, making it difficult for them to deliver their IP services on time.
Fortunately, some firms like us have already established remote working infrastructure since 2020, which has allowed their employees to work from home, complying with the movement restrictions imposed due to the COVID-19 pandemic. This has helped them to continue providing services without any significant disruptions. Remote working has become the norm, and many companies embrace it as a long-term solution. However, it has also presented new challenges that must be addressed to ensure that employees can work efficiently from home.
Overall, the situation has been challenging for many businesses, and they have had to adapt rapidly to keep up with the changes. Firms that established remote working infrastructures have been better equipped to deal with the challenges and have continued providing their services without significant disruptions.
The Israeli Patent and Trademark Office (ILPTO) has taken a proactive and commendable approach to ensure that all applicants can file and examine patent, trademark, and PCT applications without any interruption or delay. Despite the unprecedented challenges posed by the COVID-19 pandemic and the subsequent war, the ILPTO has successfully adapted to the situation and upgraded its systems to meet the needs of the applicants. As a result, the Patent and Trademark Office now operates in a modernized way. The examiners, who previously had to work at the office in Jerusalem, can now work from home and only need to visit the ILPTO building occasionally. This change has not only ensured the safety and well-being of the staff but has also made the entire process more efficient and convenient for the applicants. Hearings are now routinely held via Zoom link, which has become the staple meeting method. However, in cases where witnesses must be cross-examined, hearings are still conducted in person. By implementing the necessary adjustments, the ILPTO has made it possible for all applicants to receive the required services without any delays or disruptions. The ILPTO is a critical element in the development of the country’s IP, and its flexible operation has been a crucial step in facilitating and promoting innovation and creativity in Israel and supporting the country's economic growth and development in difficult times such as the COVID-19 pandemic and wartime.
Thanks to the ILPTO's efforts, applicants can now easily and conveniently file and receive examinations for their patent, trademark, and PCT applications, ensuring that their intellectual property rights are protected and upheld. The ILPTO continues to monitor the situation and update its procedures accordingly to ensure applicants receive the best possible service.
Developments and Future Directions in Israeli IP for 2024
The battlefield is a critical testing ground for advanced ammunition and defense systems, which offers unique opportunities to assess their effectiveness and identify necessary improvements. It allows military forces to evaluate the performance of weapons and systems in real-world situations and learn from their experiences to enhance their capabilities. In this regard, we anticipate significant innovation efforts in 2024, focusing on developing AI-based systems, defense, and surveillance technologies. AI-based systems are expected to play a crucial role in the future of warfare, as they can augment human decision-making and provide real-time insights into the battlefield. These systems can analyze vast amounts of data, detect patterns, and make predictions to support commanders in making informed decisions. They can also learn from past experiences and adapt to changing situations, which makes them invaluable assets in modern warfare.
Defense and surveillance systems are also likely to see significant innovation in 2024, with the development of more advanced technologies, as well as unmanned aerial vehicles (UAVs) and ground-based robots. These systems can provide situational awareness and help identify potential threats before they become real dangers. They can also assist in gathering intelligence and conducting reconnaissance missions, which are critical aspects of modern warfare. Examples of these developments are already known, such as the use of small tactical drones to precede ground forces and detect dangers such as booby-trapped buildings.
Furthermore, cyber security is expected to remain a significant area of innovation in the coming years, focusing on defensive and offensive capabilities. Defensive cyber security systems are designed to protect military networks and systems from cyber attacks, while offensive cyber capabilities are used to disrupt or disable enemy networks and systems. Also, in this area, much like in the AI arena, Israel is at the forefront of technology. As such, we can expect to see significant investment in developing advanced cybersecurity technologies to support military operations and protect civilian infrastructures in the future.
The foodtech and agritech industries in Israel are mainly concentrated in the periphery zones, which include the northern and southern areas. These regions have experienced a temporary decline in population due to various factors, particularly security concerns. Consequently, the emerging fields of food technology and agrotechnology will likely face challenges when it comes to research and development in 2024.
To mitigate these challenges, industry stakeholders need to develop innovative solutions to support R&D in these regions. This could involve attracting talent, investing in infrastructure, and incentivizing companies to establish their operations in these areas. By doing so, Israel's foodtech and agritech industries can continue to grow and thrive despite the mentioned challenges.
Looking to the future
In 2023, Israel experienced a tumultuous year marked by several significant challenges. One of the most pressing issues was the internal political turmoil that arose due to proposed changes in the legal system. This created a great deal of tension and uncertainty, as people were unsure how these changes would affect their lives and the country's future. Fortunately, that tension is behind us for now and has left no long-term damage. At the same time, Israel is also engaged in an ongoing war against terror, which greatly unified the country.
Despite these challenges, Israeli entrepreneurs and inventors remained undaunted. They continued to be creative and innovative, coming up with new ideas and solutions to their problems. This resilience is a hallmark of the Israeli spirit and has been evident since the very first day the state of Israel was established.
Looking to the future, Israel will undoubtedly continue to be a leading startup nation. The country has a long history of fostering innovation and entrepreneurship, and a wealth of talent and expertise will continue to drive its success in the years to come. While there may be more challenges ahead, Israelis can take comfort in the fact that they have proven time and time again that they have what it takes to overcome them.
