Israel Desks - June Edition 2025

Welcome to the latest edition of IsraelDesks magazine. In a time of geopolitical turbulence and economic uncertainty, Israel’s legal and business sectors continue to demonstrate remarkable resilience and innovation. This special edition brings together insights from senior lawyers recognized as Leading Individuals in the 7th Israel Desks rankings, alongside contributions from global and Israeli firms that offer both strategic guidance and practical expertise on today’s most pressing challenges. Israel’s legal and business outlook in 2025 is defined by resilience, complexity, and renewed opportunity. Regional stabilization and the expansion of the Abraham Accords are poised to drive cross-sector investment, particularly in AI, defense, and life sciences. At the same time, tighter scrutiny on IP transfers and shifting U.S. trade policy are prompting clients to seek more strategic, cross-border legal guidance. Despite global M&A headwinds, Israel’s tech and Defense Tech ecosystems remain active, with landmark deals such as Google’s acquisition of Wiz highlighting the market’s continued strength and adaptability. Welcome to the latest edition of IsraelDesks magazine. Freshfields, DLA Piper, A&O Shearman, Davis Polk, Greenberg Traurig, and Bryan Cave Leighton Paisner share their perspectives on market trends, legal risks, and opportunities across M&A, tech, defense, regulation, and foreign investment. Alongside these views, we are proud to feature a collection of expert articles covering AI compliance, training, and copyright, tax, litigation, cross-border M&A, foreign investment and much more. Encouragingly, the number of Israel Desks worldwide has risen by 20% in the past five years, now totaling over 160 firms. Transactions are closing, capital is flowing, and strategic collaborations are deepening. Out of complexity comes clarity—and this edition reflects how legal foresight and cross-border cooperation are continuing to shape Israel’s business future. We hope you enjoy this issue. To contribute to future editions, please reach out—we’d love to hear from you. Lee Saunders Editor Leading Individuals in the Spotlight » IsraelDesks Q&A Leaders ................................................................................... 4 04 Recent Market Trends » ERM | Strategic Opportunities for Israeli Startups in Europe’s Expanding Defence Market ....... 50 » DLA PIPER | Top 10 State Tax Issues Affecting Israeli Companies with Operations in the U.S. .... 54 » PAUL HASTINGS | European Commission and AI: Guidelines on Prohibited Practices................... 62 » Irwin Mitchell | FDI in the UK: Opportunities and challenges for Israeli businesses ......................... 70 » PEARL COHEN | Harmonization of Israeli Patent Prosecution with Foreign Jurisdictions............... 74 » S.HOROWITZ | The Doctrine of Fair Use and training AI models - The Position of the U.S. Copyright Office v. The Position of the Israeli Ministry of Justice ............................................. 78 » ASSERSON | Security for Cost – a key tool for defendants....................................................... 84 » TAYLOR WESSING | Dealonomics – Inside the dynamics of global M&A ...................................... 88 » Greenberg Traurig | Don’t Kill the Exit Deal – Issues to consider as a Startup Founde ................ 92 » KOBRE & KIM |Propel Fuels Victory ...................................................................................... 96 Legally Israel 100 IsraelDesks League Tables » League Tables ................................................................................................. 12 » Individual Rankings........................................................................................... 26 » Editorial ....................................................................................................... 30 Table of Contents 12 50 4 Leading Individuals in the Spotlight IsraelDesks Q&A Leaders 5 As 2025 rolls on, what trends in Israel do you believe foreign clients should be watching closely? In this edition of IsraelDesks magazine, we turned to those lawyers ranked as Leading Individuals in our IsraelDesks rankings to help unpack the key questions facing foreign clients and investors with interests in Israel. Their perspectives are grounded in day-to-day client work and offer a practical lens on shifting dynamics—whether it’s the implications of US tariffs, the resilience of the Israeli tech ecosystem, growing interest in defense and AI sectors, or the legal complexities around IP transfers and cross-border deals. In a time of heightened geopolitical uncertainty and cautious deal-making, these voices help clarify where risks lie, where opportunities are emerging, and how international players can stay one step ahead. Adir Waldman, Freshfields: “When people hear ‘Israel’ today, their perceptions are often shaped by political views or the lens of their own communities – typically focusing on the war. With over 15 years of on-the-ground experience advising both local and international clients, we offer a more nuanced perspective of the realities here. Regional stabilization efforts – especially among a growing coalition of countries that prioritize economic development over ideological divisions – are poised to unlock significant business opportunities. These could produce spillover effects across sectors including aviation, tech, finance, and agriculture. We anticipate an increase in large-scale inbound investment into Israel is not a matter of if, but when. The timing will be impacted by a number of issues including the war in Gaza, regional geopolitics and internal policymaking.” Jeremy Lustman, DLA: “Israel is at forefront of the AI revolution. As AI continues to become more ubiquitous, I believe it is important for foreign clients to be following how various technologies are being subject to more scrutiny and regulation, and to ensure that they stay legally compliant. In addition, in light of what President Trump is doing geopolitically in the Middle East, both with respect to the war and more broadly vis-à-vis various 6 relationships across the broader region, I expect some movement that may facilitate the expansion of the Abraham Accords and Israeli connectivity to a number of new markets.” Lee Noyek, A&O Shearman: “First on the list is always the concern over transferring IP out of Israel. That concern has only heightened recently with, for example, Broadcom’s Israeli subsidiary facing a $70m tax demand over such a transfer out of the country. Such cases reinforce the rigorous approach to the transfer of IP, with courts and tax authorities closely examining the valuation, documentation, and economic substance of such transactions. Second is war related economic uncertainty. Whilst core sectors like Tech, Defense and Energy remain robust, the uncertainty created by this forever war make investors pause, especially first-time entrants to the market. Third, Israel is not immune to global trends. With M&A depressed since the beginning of 2022, we waited nearly three years for confidence to return. By the end of 2024, it seemed the market was finally turning the corner, with the US election initially providing the certainty needed to unlock the M&A market, and many expecting a deregulation-driven M&A boom in its wake. However, uncertainty surrounding trade policy—including over tariffs and resulting trade wars—has since had a dampening effect on markets and investor confidence more generally.” Michael Kaplan, Davis Polk: “The key trends will be the continuing military / political situation in Israel – although Israel has been very resilient through the current situation – and how US tariffs will impact Israel.“ Jonathan Morris, BCLP: “Israel is renowned as being a tech-hub so nonIsraeli clients should be continuing to watch closely the local tech scene for potential investment / M&A opportunities.” Adir Waldman, Freshfields: “Cybersecurity remains a key area of interest for both investors and acquirers – an enduring trend we expect to continue. Despite the challenges of operating as an Israeli company over the past three years, the startup ecosystem has proven remarkably resilient.” Which sectors currently present the biggest opportunities or the greatest risks for international investors or companies doing business with Israeli entities? 7 Joshua Kiernan, Latham & Watkins: “The Israeli tech industry remains, in some ways, sheltered from global macro environment fluctuations. Amazing tech will always be in demand. Provided there is a degree of market stability, we expect to see a significant increase in mergers and acquisitions within the Israeli high-tech sector in 2025. While the IPO market is experiencing a more gradual recovery, This we’re on the right trajectory, and 2026 is looking to be an excellent year for Israeli IPOs.” Lee Noyek, A&O Shearman: “Despite continued uncertainties, though, developments in technology, and the need for infrastructure to support them, and data to feed artificial intelligence models, will inevitably continue to spur M&A activity. Private equity firms have many assets that need to be sold, and much capital that needs to be deployed – so their ‘wait and see’ approach needs to end at some point. And, more generally, we have a strong M&A pipeline ahead of us once the markets settle.” Within Tech, Cyber M&A remains a bright spot. FinTech is always relevant within the Israeli ecosystem. That is both because of gravity making the stratospheric valuations of earlier on in the decade more realistic and also because the new US administration’s enthusiasm for crypto is driving value in that space. Global rearmament and Israel’s successful military campaign make Defense Tech an exciting new vertical, even if it is not yet at the level of other verticals in the Israeli Tech ecosystem. Israeli innovation in Life Sciences will continue to see demand from big pharma companies. That is without mention of AI, and AI driven growth, within every dimension of the Tech ecosystem. More broadly. Energy, Infrastructure and Renewables continue to offer opportunities and albeit there is uncertainty over how the new US administration will cut subsidies. The wider financial institutions sector in Israel remains relevant and we continue to see that sector being relevant both for international players in Israel and for Israeli institutions following their clients and seeking to diversify their portfolios.” Jeremy Lustman, DLA: “At the moment, I would say that the Defense Tech, AI, and life sciences sectors are providing the greatest opportunities for international investors and companies doing business with Israeli entities.” Jonathan Morris, BCLP: “Defense Tech and Cyber are likely to be very high up the list of sectors in which investors will be concentrating their focus when it comes to Israel. 8 T is for the much-talked about tariffs – what would you say right now? Adir Waldman, Freshfields:“Across industries, clients are seeking clarity on the implications of the evolving US tariff regime. Our team includes leading US trade and export control lawyers—among them, former officials from all recent administrations—who provide practical, forward-looking guidance to help clients navigate both compliance and commercial impact.” Jeremy Lustman, DLA: With respect to US tariffs specifically, that topic is not coming up too frequently, as it applies to companies selling actual products and shipping to the US, and less so to pure technology companies, which make up the majority of our clients. With that said, tariffs are just one component of broader US regulations that are affecting Israeli companies, whether it be executive orders, CFIUS, and increased scrutiny of national intelligence and trade; these are definitely areas that are impacting many more of our clients in significant ways.” Lee Noyek, A&O Shearman:“Interest rates (though still relatively high) came down meaningfully in North America and Europe last year, and seemed to be stabilizing, resulting in an improved financing climate. But, again, there is now a risk that increased tariffs may cause inflation to rise, leading to increased borrowing costs, which makes M&A less attractive to those taking on debt finance.” Michael Kaplan, Davis Polk:“Israel is very tech-heavy, and those companies are not very impacted by tariffs. Tech continues to be the most significant field of opportunity, including Cyber, AI and Crypto-related sectors. My sense is there aren’t Israeli AI entrants attracting international attention yet.” Jonathan Morris, BCLP: “Almost everyone is talking about US tariffs but very few have developed yet a clear strategy as to how to respond as there continues to be a significant degree of uncertainty surrounding them. For example, will the existing tariff levels be maintained or reduced following trade negotiations? Will they be extended to include services as well?” 9 How have recent geopolitical events impacted advice you’re giving to clients with Israelrelated interests? Adir Waldman, Freshfields: “The current war has given rise to a number of matters that have been keeping us busy—as you can imagine these matters are highly sensitive and require advice that goes beyond legal to reputational and strategic guidance.” Jeremy Lustman, DLA: “Truthfully, there has been very little impact. At the end of the day, industry here has almost always found a successful avenue that is outside of the geopolitical framework. Most international investors already include geopolitical upheaval in their underwriting when investing here, so it is definitely not a surprise. Investors are choosing to invest here, despite the geopolitical upheaval in the region.” Joey Shabot, Greenberg Traurig: “Recent geopolitical events have been influencing the type of advice we provide to clients who are either Israeli or have an interest in Israel. As noted, we are seeing deal flow in defense and defense-adjacent verticals. In addition, as ever, we emphasize preparedness across several critical areas. Changes in international tax and tariff regulations require us to closely monitor developments to optimize strategies and ensure compliance with new laws in the US and Europe. Stricter immigration policies mean we offer updated guidance on visa requirements and work permits to facilitate smooth transitions for personnel. Regulatory compliance has become more crucial, so we advise on the latest standards in data protection, anti-money laundering, and trade regulations to help clients establish robust frameworks. Additionally, we help clients develop law-related effective risk management strategies, including identifying potential risks and developing contingency plans to safeguard operations and investments.” Michael Kaplan, Davis Polk: “They haven’t really – other than that the market is volatile as a result, so clients should be ready for a window and nimble to jump through it.” 10 Jonathan Morris, BCLP: “Our role as lawyers is to support our clients navigate those geopolitical challenges and so our advice needs to be tailored accordingly.” Lee Noyek, A&O Shearman: “It’s easy to get blinded by the headlines in the US. We continue to stay close to our clients and make sure we are constantly available to navigate the polycrises affecting them. We are getting involved in deal making earlier, and staying involved after close. Indeed, in many ways, the global outlook is making the world bigger again for Israeli clients as they diversify away from the US and so the firm’s nearly 50 offices come into play.” Adir Waldman, Freshfields: “Over the past 12 months, we’ve advised on major inbound investments into Israel by Apple, CrowdStrike, and most notably, Google in its landmark acquisition of Wiz. These matters underscore our position as a truly global law firm, backed by a world-class team in the United States. Today, we represent the world’s leading tech companies on their most complex and sensitive transactions – both in the US and internationally.As our global practice continues to grow, we remain committed to supporting milestone deals in Israel’s tech ecosystem—just as we did with the GoogleWiz transaction.” Jeremy Lustman, DLA: “We have recently been helping our client, Fortissimo Capital, a leading Israeli private equity fund, navigate the US regulatory aspects of its publicly announced investment in 3D printing solutions company, Stratasys. Our US colleagues are at the forefront of the evolving federal regulatory landscape and have been able to provide Fortissimo with the proactive, strategic guidance it has needed in order to move this significant deal forward.” Joshua Kiernan, Latham & Watkins: “We are delighted to have recently advised CyberArk in its upsized US$1.1 billion convertible notes private offering. We also recently advised the underwriters on the blockbuster eToro What recent Israel-related matter best highlights your firm’s strengths in this area? 11 IPO, and on Elbit Systems’ public offering. Latham has got the resources of a truly global law firm, with an on-the-ground understanding of local markets and deep industry expertise, setting us apart in the IPO market.” Lee Noyek, A&O Shearman: “We are very active in the energy, infrastructure, renewables and projects field in Israel and for Israeli clients abroad. For example, we acted on the Delek Group’s recent transaction involving its subsidiary Ithaca Energy on the combination with ENI in the North Sea and have acted on all of the light rail projects with an international dimension in Israel.” Michael Kaplan, Davis Polk: “We have done a number of quick-to-market offerings for Israeli companies who were nimble, including Pagaya, Ormat and Oddity. All of these deals started shortly before launch, and we were able to move quickly and hit windows.” Jonathan Morris, BCLP: “It’s not easy picking out just one deal but it’s been a tremendous privilege advising iForex on their planned IPO on the Main Market of the London Stock Exchange – a great team effort involving multiple advisers in Israel, the UK and elsewhere.” 12 League Tables 13 1 Freshfields 18 2 Latham & Watkins 17 2 DLA Piper 17 3 Goodwin 16 3 Greenberg Traurig 16 4 White & Case 10 5 Bryan Cave Leighton Paisner 8 6 Bird & Bird 7 7 A&O Shearman 5 7 CMS 5 8 Taylor Wessing 4 9 Baker & McKenzie 3 9 Davis Polk 3 9 Paul Hastings 3 9 Skadden 3 10 Bersay 2 10 Carter Ledyard & Milburn 2 10 Royer Cooper Cohen Braunfeld 2 10 Squire Patton Boggs 2 11 Chapman and Cutler 1 11 Cleary Gottlieb 1 M&A Volume Elite Position Law Firm Volume 14 1 Latham & Watkins 10,551 17 2 White & Case 7,780 10 3 Freshfields 6,671 18 4 DLA Piper 3,665 17 5 A&O Shearman 2,750 5 6 Paul Hastings 1,505 3 7 Skadden 1,398 3 8 Greenberg Traurig 1,370 16 9 Davis Polk 647 3 10 Carter Ledyard & Milburn 143 2 M&A Value Position Law Firm Value ($M) Volume Elite 15 Capital Markets Volume 1 Greenberg Traurig 39 2 Freshfields 11 3 Bryan Cave Leighton Paisner 8 3 Chapman and Cutler 8 3 Latham & Watkins 8 4 A&O Shearman 7 4 White & Case 7 5 Carter Ledyard & Milburn 5 5 Paul Hastings 5 6 Davis Polk 4 6 Goodwin 4 6 Gowling WLG 4 6 Taylor Wessing 4 7 DLA Piper 2 7 Herrick Feinstein 2 8 Cleary Gottlieb 1 8 CMS 1 Position Law Firm Volume Elite 16 1 White & Case 10,017 7 2 Freshfields 5,493 11 3 A&O Shearman 4,136 7 4 Latham & Watkins 1,673 8 5 Taylor Wessing 1,526 4 6 Paul Hastings 968 5 7 Chapman and Cutler 904 8 8 Davis Polk 588 4 9 Greenberg Traurig 579 39 10 Gowling WLG 571 4 11 Goodwin 476 4 12 Herrick Feinstein 310 2 13 Carter Ledyard & Milburn 303 5 Capital Markets Value Elite Position Law Firm Value ($M) Volume 17 1 DLA Piper 37 2 Fox Rothschild 29 3 Herrick Feinstein 8 4 Charles Russell Speechlys 6 5 CMS 4 5 Wiggin and Dana 4 6 Bird & Bird 3 6 Bryan Cave Leighton Paisner 3 6 Taylor Wessing 3 7 Gowling WLG 2 Private Clients and Tax Elite Position Law Firm Volume 18 1 DLA Piper 104 2 Greenberg Traurig 83 3 Asserson 59 4 Squire Patton Boggs 17 5 Bryan Cave Leighton Paisner 15 6 CMS 12 7 Bersay 10 8 Bird & Bird 7 9 Fox Rothschild 5 10 Taylor Wessing 4 11 Gowling WLG 2 11 Wiggin and Dana 2 12 Carter Ledyard & Milburn 1 12 Paul Hastings 1 Employment Position Law Firm Volume Elite 19 Litigation and Arbitration 1 Asserson 46 2 Freshfields 41 3 DLA Piper 29 4 White & Case 23 5 Taylor Wessing 21 6 Greenberg Traurig 16 7 Bryan Cave Leighton Paisner 14 8 Zeichner Ellman & Krause 13 9 DAC Beachcroft 12 9 Pillsbury 12 10 Fox Rothschild 9 10 Kobre & Kim 9 11 CMS 8 12 Herrick Feinstein 5 13 Chapman 4 13 Squire Patton 4 14 Bird & Bird 3 15 A&O Shearman 1 15 Cleary Gottlieb 1 15 Paul Hastings 1 Position Law Firm Volume Elite 20 IP 1 Freshfields 16 1 Greenberg Traurig 16 2 DLA Piper 9 2 CMS 9 3 Bird & Bird 7 3 Goodwin 7 4 Fox Rothschild 6 4 Pillsbury 6 5 Taylor Wessing 3 6 Cleary Gottlieb 1 6 Carter Ledyard & Milburn 1 6 Gowling WLG 1 6 Wiggin and Dana 1 Position Law Firm Volume Elite 21 1 CMS 60 2 Pillsbury 45 3 Mathys Squire 34 4 Wiggin and Dana 18 5 Greenberg Traurig 17 6 DLA Piper 16 7 Fox Rothschild 7 8 Charles Russell Speechlys 6 9 Gowling WLG 5 10 Herrick Feinstein 3 11 Bird & Bird 2 11 Carter Ledyard & Milburn 2 11 Taylor Wessing 2 12 Bryan Cave Leighton Paisner 1 12 A&O Shearman 1 Patents and Trademarks Position Law Firm Volume Elite 22 1 Greenber Traurig 101 2 DLA Piper 84 3 Bird & Bird 20 4 Fox Rothschild 17 5 CMS 16 5 Squire Patton Boggs 16 5 Zeichner Ellman & Krause 16 6 Pillsbury 14 7 CMS 13 8 Goodwin 12 9 Freshfields 11 10 Wiggin and Dana 6 10 Taylor Wessing 6 11 A&O Shearman 3 12 Chapman and Cutler 2 13 Bersay 1 13 Carter Ledyard & Milburn 1 Hi-Tech Position Law Firm Volume Elite 23 1 DLA Piper 32 2 Baker & McKenzie 19 3 Zeichner Ellman & Krause 12 4 Freshfields 10 4 CMS 10 5 Bryan Cave Leighton Paisner 8 6 Taylor Wessing 7 7 Herrick Feinstein 6 7 Bird & Bird 6 7 Latham & Watkins 6 8 Chapman and Cutler 4 9 Greenberg Traurig 3 9 Pillsbury 3 10 Fox Rothschild 1 10 A&O 1 10 Paul Hastings 1 Banking & Finance Position Law Firm Volume Elite 24 1 Freshfields 9 2 CMS 8 3 DLA Piper 4 4 Bryan Cave Leighton Paisner 3 5 A&O Shearman 2 5 Wiggin and Dana 2 5 Taylor Wessing 2 6 Bersay 1 6 Pillsbury 1 Energy & Infrastructure Position Law Firm Volume Elite 25 1 Asserson 57 2 Greenberg Traurig 44 3 DLA Piper 20 4 Herrick Feinstein 15 5 Howard Kennedy 9 5 Taylor Wessing 9 6 Chapman and Cutler 8 7 Bryan Cave Leighton Paisner 6 8 Zeichner Ellman & Krause 5 9 CMS 4 10 Bird & Bird 1 10 Carter Ledyard & Milburn 1 10 Wiggin and Dana 1 Real Estate Position Law Firm Volume Elite 26 Individual Rankings 27 Prominent Ari Berman Pillsbury Colin Diamond Paul Hastings Josef Fuss Taylor Wessing Michael Friedman Chapman and Cutler Gary Emmanuel Greenberg Traurig Daniel Turgel White & Case Mark Selinger Greenberg Traurig Yossi Vebman Skadden Name Leading Louis Glass CMS Michael Kaplan Davis Polk Joshua Kiernan Latham & Watkins Jeremy Lustman DLA Piper Jonathan Morris Bryan Cave Leighton Paisner Lee Noyek A&O Shearman Joey Shabot Greenberg Traurig Adir Waldman Freshfields Bruckhaus Deringer Name Law Firm Name Law Firm 28 Recognized Guy Ben-Ami Carter Ledyard & Milburn Yariv Ben-Ari Herrick Feinstein Clarissa Coleman DAC Beachcroft Meira Ferziger Greenberg Traurig Odia Kagan Fox Rothschild Mayan Katz Goodwin Miriam Lampert Squire Patton Boggs Adam Meisels Bird & Bird Adam Snukal Greenberg Traurig Tali Sealman White & Case Daniel Rubel Zeichner Ellman & Krause Name Law Firm 29 Trevor Asserson Asserson Baruch Baigel Asserson Tom Beaudoin Goodwin Andrew Besser CMS Sarah Biser Fox Rothschild Hadie Cohen Asserson Susannah Fink Gowling WLG Adam Fleisher Cleary Gottlieb David Gitlin Royer Cooper Cohen Braunfeld Alexander Gold Charles Russell Speechlys Steven Glusband Carter Ledyard & Milburn Kenneth Henderson Bryan Cave Leighton Paisner Lee Hochbaum Davis Polk Daniel Ilan Cleary Gottlieb Steven Malech Wiggin and Dana Paul Miller Bryan Cave Leighton Paisner Nathan Renov Pillsbury Ziva Robertson Charles Russell Speechlys Anthony Rosen Bird & Bird Joel Rubinstein White & Case Jason Saltzman Gowling WLG Bill Schnoor Goodwin Lawrence Sternthal Greenberg Traurig Michael Sweet Fox Rothschild Notable Name Law Firm 30 Editorial 31 A&O Shearman Before its merger with Shearman & Sterling, Allen & Overy had been active in the Israeli market for more than 25 years. Following the transatlantic merger in May 2024, A&O Shearman continues to maintain one of the most formidable Israeli practices. The firm is ranked Elite in IsraelDesks in the Capital Markets (Value) category, bringing vast experience in corporate finance, strategic M&A, divestments, joint ventures, public takeovers, refinancings, and IPOs. The Israel Group is led by senior corporate lawyer Lee Noyek, who has overseen a series of confidential M&A transactions, frequently involving Israeli targets. The firm has been advising Israeli and international clients on high-level, crossborder transactions, projects, and strategic initiatives across multiple sectors. Despite a challenging 2024 for Israel, A&O Shearman represented Israel’s NeoGames in its acquisition by Aristocrat Leisure Limited of Australia, and also advised parent group, Delek on the USD940 million sell-down of a stake in Ithaca Energy, its UK-based oil and gas company, to Italian energy giant Eni. Visit: Israel Page Asserson Asserson, a UK law firm with a significant footprint in the Israeli market, operates from its Tel Aviv office, where approximately 80 lawyers qualified in the UK, U.S., and France provide legal expertise. Under the leadership of founder Trevor Asserson, the firm delivers specialized UK legal services to Israeli clients, with a strong focus on real estate, litigation, and employment law, in which the firm is ranked as an Elite firm in all three areas, taking first place in Litigation and Real Estate. As head of the Employment practice, Hadie Cohen is ranked in IsraelDesks, advising employers and employees on settlement agreements, the implications of TUPE, collective redundancies, and termination strategies. Rachel Shaw and Oliver Harris also play key roles in addressing employment-related matters for Israeli companies. Ranked in IsraelDesks, BaruchBaigel, Head of the Dispute Resolution practice, brings clients an extensive track record in high-profile UK High Court litigation, often representing Israeli clients or individuals based in Israel. Yisrael Hiller leads the U.S. Dispute Resolution division, offering expertise in contract, shareholder, and construction disputes. Elliot Lister is particularly active in litigation, with a strong emphasis on property disputes. Visit: Israel Page 32 Baker & McKenzie Baker & McKenzie has a strong track record advising on complex financial and corporate transactions in Israel, an Elite firm in the Banking & Finance category. In 2024, the team acted for 10 leading banks in Teva’s USD1.8 billion credit facility restructuring and covenant reset, as well as Bank Hapoalim International Division in multiple debt financings in the UK. Other clients include Fattal Hotels, eToro, Teddy Sagi Group, and many others. M&A and Capital Markets partner David Becker co-leads the Israel practice from London. Bersay French corporate law firm Bersay has operated a Tel Aviv office since 2008, enabling it to provide legal support within both French and Israeli legal systems. The firm advises Israeli companies on corporate, commercial, and regulatory matters in France and French-speaking regions of Africa and acts for clients across the technology, healthcare, and finance sectors. An M&A and corporate lawyer, Stéphanie Benmoussa-Molkhou has been advising Israeli clients on M&A transactions and employment matters throughout 2024. Bird & Bird Driven by London-based partners Adam Meisels and Frederique DupuisToubol, Bird & Bird’s Israel Group operates across the firm’s 31-office network with a team of over 30 lawyers. The group plays a pivotal role in transactions within Israel’s high-tech sector. Formerly based in Tel Aviv, Meisels specializes in venture capital and M&A, advising Israeli companies on international expansion while assisting global corporations with their Israeli operations. The firm also provides regulatory, competition, and compliance counsel to digital and communications clients, with Legal Director Anthony Rosen offering expertise on the sector’s evolving legal landscape. In 2024, Bird & Bird advised Metropolis on its acquisition of Oosto, an Israeli AI-powered security and video analytics provider, and continues to support Odysight.ai on intellectual property matters. Amsterdam-based partner TjibbeDouma represents Israeli clients, including Cardo Systems and Guesty, in patent and trade secret litigation across Dutch courts, the Unified Patent Court, and the European Patent Office. 33 The firm also advised Leumi UK on regulatory and financing matters, including a €35,800,000 million facility to Carra Hotel (Camden Place) Limited. Beyond corporate and financial transactions, Bird & Bird provides legal services in employment, regulatory compliance, and unfair dismissal claims. With a strong presence in cybersecurity, retail, life sciences, and fintech, the firm remains a key legal partner for Israeli businesses navigating global markets and international companies engaging with Israel’s innovation ecosystem. Visit: Israel Page Bryan Cave Leighton Paisner With a deep understanding of Israel’s business landscape and a representative office in Tel Aviv, Bryan Cave Leighton Paisner (BCLP) advises over 200 Israeli and Israel-related companies and financial institutions. Its clients range from public and private enterprises to startups in sectors such as technology, infrastructure, real estate, finance, pharmaceuticals, energy, and venture capital. The firm has made significant strides in M&A in 2024, advising Gilat Satellite Networks Ltd. on the English legal aspects of its definitive agreement to acquire Stellar Blu. It also guided Playtech plc in its proposed sale of Italian subsidiary Snaitech S.p.A. to Flutter Entertainment Holdings Ireland Limited. Beyond M&A, BCLP plays a vital role in capital markets, banking, employment, and litigation for Israeli clients. The firm provided UK securities guidance to Israeli companies and supported Galil Group, an Israeli engineering firm, in securing a USD 280 million EPC contract for a large-scale methane gas extraction project in Rwanda – set to strengthen Rwanda’s energy sector and economic development. Litigation partners Oran Gelb and GeorgeBurn have represented Israeli clients in high-stakes disputes, while employment specialists Catherine Turner and Rebecca Harding-Hill have delivered key UK and international employment guidance to Israeli clients. Propelling these efforts are a ranked trio: Jonathan Morris in London and Paul Miller in Tel Aviv, co-chairs of BCLP’s Israel Desk, alongside Ken Henderson in New York. Morris and Henderson led a global team in advising Outbrain on its huge acquisition of Teads, forming one of the largest openinternet advertising platforms. 34 Carter Ledyard & Milburn One of New York’s oldest law firms with a 170-year history, Carter Ledyard & Milburn (CLM) has represented Israel-based companies for over two decades in corporate, securities, and M&A matters. In 2024, the firm’s Israel practice was particularly active in M&A and capital markets transactions. CLM advised on private placements for TAT Technologies Ltd., an Israeli provider of thermal management and power solutions for the aerospace sector, and Odysight.ai, an Israeli company specializing in AI-driven predictive maintenance technology. The practice is led by Steven Glusband, co-chair of the firm’s Corporate department and chair of Securities, alongside Israel-born Guy Ben-Ami, who leads the firm’s Israeli Cross-Border practice and is licensed in both the U.S. and Israel. Both attorneys regularly represent Israeli businesses in complex cross-border transactions. CLM advised Gilat Satellite Networks Ltd., an Israeli satellite communications provider, on its agreement to acquire Stellar Blu Solutions LLC, a U.S.-based inflight connectivity company. CLM also acted for Matrix IT Ltd., a leading Israeli technology and IT services company, in three strategic acquisitions. Visit: Israel Page Chapman Cutler Chapman Cutler continues to provide a vital bridge for Israeli financial institutions and investors entering the U.S. market. Led by partner Michael Friedman, the firm’s Israel Practice acts as a key legal hub for Israeli financial institutions, investment funds, trustees, and law firms requiring U.S. counsel in finance and restructuring. Friedman also heads Chapman’s Special Situations and Restructuring Group. At the intersection of capital markets and restructuring, Chapman advised Israel-based Mishmeret Trust Company, Ltd. on multiple restructurings, including bonds issued by Zarasai Group Ltd., GFI Real Estate, and Mydas Real Estate Investments Ltd. Ken Marin, Co-Practice Group Leader of Chapman’s Asset Securitization Group, has led the firm’s work as U.S. counsel for Israelbased lenders in a range of loan transactions. Visit: Israel Page 35 Charles Russell Speechlys Real Estate partner Alexander Gold also heads the Israel Desk of Charles Russell Speechlys, which continues to impress in the rankings, particularly with regards to private wealth and intellectual property. The firm acts for private clients in Israel in relation to trusts, estates and more confidential affairs, while the team was also active in trademark applications for Israeli clients. Head of Brand Protection, Charlotte Duly has been advising Gottex Swimwear Brands Ltd., assessing trademark registrability in the UK and EU, filing applications, and securing registrations. She also represents KORRO AI Limited in trademark filings and a third-party opposition. London partner Ziva Robertson specializes in both contentious and non-contentious trust matters, offering structuring and succession planning advice to ultra-highnet-worth individuals and their businesses. Visit: Israel Page Cleary Gottlieb Headquartered in New York, global law firm Cleary Gottlieb is recognized for its recent work in M&A and capital markets. The firm’s Israel Group includes prominent capital markets lawyers, such as Adam Fleisher (New York), who has represented numerous Israeli clients in the industrial, defense and tech sectors, as well as David Gottlieb (London), who acts for a roster that has included major Israeli banks. Israeli clients also benefit from Daniel Ilan (New York), who leads the firm’s Global IP Group and brings his vast experience to an impressive clientele. In IP, David Herrington represented the plaintiff, Eternix Ltd., an Israeli software company, in a lawsuit alleging copyright infringement, trade secret misappropriation, and breach of contract in the U.S. District Court for the Western District of Wisconsin. CMS CMS stands among the few major European-focused law firms with senior equity partners based in Israel, offering a direct bridge for Israeli businesses expanding abroad and international investors entering the local market. For over 25 years, the firm has advised more than 100 Israeli clients on cross-border investments, transactions, and legal matters. 36 Long-standing ties to Israeli banks, leading startups, and corporate leaders enable CMS to provide strategic counsel on M&A, employment law, and disputes, supporting Israeli clients with overseas hires, executive departures, and IP matters. The firm took first place in Patents and Trademarks and was also ranked as Elite in the Energy field. Within the Israel group, Andrew Besser and Louis Glass are key figures. With over 25 years’ experience, Besser is a leading real estate finance partner, while Glass is a specialist in high-tech, heads CMS's TMT-sector M&A group, and is one of the few UK-focused M&A lawyers fluent in Hebrew. In 2024, CMS advised Israeli-founded maritime AI company Windward on its acquisition by U.S. equity firm FTV Capital and guided Israel-founded fintech Rapyd through its purchase of Dutch online payment provider PayU. DAC Beachcroft Israel remains a key jurisdiction for DAC Beachcroft, with 2024 marking a year of significant representation in high-stakes litigation and arbitration. The firm played a significant role in class actions, product liability, contract disputes, and pension and shareholder conflicts. London-based partners Clarissa Coleman, ChrisWilkes, and Ilana Gilbert led the charge in a range of confidential and complex proceedings involving Israeli parties. Davis Polk Davis Polk’s Israel Practice continues to play a critical role in the country's most significant transactions, leveraging a team of over 60 lawyers—many fluent in Hebrew and trained in Israeli law. Led by Michael Kaplan and Lee Hochbaum, the practice excels in M&A and capital markets, advising global clients on complex cross-border deals. The Israel Practice advised Sun Pharmaceutical, India’s largest pharmaceutical company, on its USD 347 million take-private acquisition of Taro Pharmaceutical, an Israeli developer of proprietary and off-patent drugs. It also represented Gallatin Point Capital in its USD 150 million acquisition of a 15% equity stake in Israel Discount Bank of New York, the largest Israeli-owned bank operating abroad. In capital markets, the team advised Pagaya Technologies Ltd., an Israeli fintech company listed on Nasdaq, on a USD 95 million public offering. Visit: Israel Page 37 DLA The global knowhow and resources of DLA ensure that it is regularly involved at the top end of the Israeli market. From the U.S. to Latin America, Europe to Asia, the firm’s Israel country group counts more than 100 lawyers and almost twice as many as Israeli clients. An Elite firm in M&A (Volume), HighTech, Litigation, and Real Estate, the firm took top spot in Private Client and Tax, Employment, and Banking. Under the leadership of Jeremy Lustman, DLA Piper’s Israel Group plays a leading role in high-profile cross-border transactions. The team also includes Jon Kenworthy, Co-Chair of Corporate, and Christopher Giordano, Chair of the U.S. M&A Group. Lustman and Giordano spearheaded the firm’s support for Israeli lead outside counsel in the USD 1.9 billion acquisition of Own Company by Salesforce. The group also advised Enercon Technologies, Ltd., an Israeli company, on the U.S. aspects of its USD 320 million sale to New Jersey-based Bel Fuse Inc. Jon Venick, a New York corporate partner, guided SolarEdge Technologies, an Israeli Nasdaq-listed company, in its equity investment in U.S. solar technology firm Ivy Energy. DLA Piper’s extensive work in technology transactions reinforces its leading position in the sector. The firm advised Israel’s Viola Credit Five Management 2015 Ltd. on a USD 500 million strategic joint venture with Cadma Capital Partners, an affiliate of Apollo Global Management. It also played a key role in employment and regulatory matters, assisting Israeli cybersecurity company CyberArk Ltd. with post-merger employee transfers and integration following its acquisition of Venafi. The transaction spanned multiple jurisdictions, including Australia, Bulgaria, Canada, and the UK, with Ute Krudewagen, Chair of the International Employment practice, at the helm. DLA Piper’s privacy and data security team continues to drive compliance for Israeli companies operating globally. The firm advised Israeli cybersecurity company BioCatch on data-sharing regulations for a network product across Argentina, Brazil, Chile, Colombia, Mexico, and Australia, including credit reporting requirements. Visit: Israel Page Fox Rothschild The Israel Practice Group at Fox Rothschild connects Israeli businesses with U.S. markets, providing legal support across technology, software, agriculture, healthcare, and medtech. In 2024, the firm was ranked as an Elite firm in Private Client and Tax in IsraelDesks. 38 Led by Michael Sweet, Odia Kagan, and Sarah Biser, the sizeable team operates from San Francisco, Philadelphia, and New York. The group is recognized in IsraelDesks for its advice on intellectual property and trademark issues, employment litigation, and data privacy, particularly GDPR compliance. It also assists Israeli families with estate planning, trusts, and tax matters. Matthew Kittay, Co-Chair of the M&A Group, counsels Israeli startups expanding into the U.S., focusing on corporate structuring, financing, and venture capital. Israel-based Biser represents contractors, developers, and architects in construction law and international arbitration, including major projects such as the Technion-Cornell partnership on Roosevelt Island, NYC. Visit: Israel Page Freshfields Bruckhaus Deringer Renowned as a leading force in the Israeli market, Freshfields' Israel Group excels across diverse fields including M&A (Volume), Energy, and IP in which the firm takes pole position in all, and is also an Elite firm in M&A and Capital Markets (Value), and Litigation. Headed by Managing Director Adir Waldman in Tel Aviv, the Freshfields Israel Focus Group provides Israeli businesses and international investors with direct access to top-tier legal counsel on cross-border transactions, financings, regulatory issues, and dispute resolution. Waldman spearheads a multijurisdictional team advising Israeli and foreign companies operating in Israel, with key figures including Taryn Zucker, a New York-based counsel specializing in capital markets, and Menachem Kaplan, a seasoned New York partner with deep ties to Israel. London-based partner David Boles adds strength in securities regulation, representing issuers and investment banks in major public offerings, such as the USD 1.6 billion IPO of Israeli SimilarWeb. The team played a pivotal role in significant 2024 transactions, including advising Aristocrat Leisure on its USD 1.2 billion all-cash acquisition of Israel’s NeoGames; Israeli-owned Leonardo Hotels on its EUR 400 million purchase of Zien Group’s Dutch hotel portfolio; and U.S. private equity firm Bow Street on its USD 1.6 billion investment in an Israeli real estate company. In banking, the team supported Bank Hapoalim in navigating Basel Relief for sales guarantees under French and German law and assisted Shikun & Binui in divesting from its Nigerian operations. 39 In IP, Freshfields represented SodaStream in patent and design enforcement actions across Europe and defended against false advertising and unfair competition claims. In litigation, the firm worked alongside Israeli counsel representing global tobacco giant JTI in class action proceedings, including Israel’s largest-ever class action lawsuit. Additionally, they defended Japanese company Takata against Israeli claims regarding alleged faulty airbag inflators. The Group’s work spans industries such as life sciences, technology, e-commerce, financial services, fintech, and consumer retail, underscoring Freshfields’ role in shaping complex legal landscapes in Israel and beyond. Goodwin Goodwin’s Israel Practice continues to play a pivotal role in major transactions involving Israeli companies and international investors. An Elite firm in M&A (Volume), in 2024 the firm advised Markforged on its USD 115 million acquisition by Nano Dimension Ltd., a leader in additive electronics and 3D printing technology headquartered in Israel. Technology partner Bill Schnoor (Boston and London) represented Rezonate, a cybersecurity cloud services provider based in Boston and Israel, in its sale to Silverfort, an Israeli company specializing in Unified Identity Protection. These transactions reinforce Goodwin’s position as a key legal partner for cross-border M&A in high-tech and cybersecurity. The firm also remains deeply engaged in Israel’s venture capital ecosystem and supports startups in cybersecurity, data & AI, fintech, and digital health, driving early-stage companies toward global growth. In real estate technology, partner Mayan Katz (New York) advised Colleen AI, an Israeli AI-driven real estate platform, on its sale to Entrata. He also represented Pharma Ltd., a late-clinical stage Israeli pharmaceutical company, in its definitive merger agreement with Hepion Pharmaceuticals, Inc., advancing research into Parkinson’s treatments. Another key figure in the team is Tom Beaudoin, who acted as U.S. counsel to Team8 on their recent closings of multiple funds totaling approximately USD500 million. Gowling WLG Co-led by London-based SusannahFink and Toronto-based JasonSaltzman, Gowling WLG's Israel Desk supports over 60 Israeli clients. The team includes more than 40 lawyers advising across multiple practice areas and is active in cross-border transactions, providing legal guidance to Israeli businesses navigating international markets. 40 In capital markets, Saltzman led private placements of units for Innocan Pharma Corporation, a pharmaceutical technology company headquartered in Israel. The company operates in two primary sectors: pharmaceuticals and consumer wellness. A key figure in Gowling’s Dubai office, Jon Parker works with Israeli life sciences companies on IP issues, enhancing the protection and commercialization of cutting-edge innovations in a rapidly evolving sector. Gowling WLG was formed from the merger of Canada-based Gowlings and UK-based Wragge Lawrence Graham & Co in February 2016, in the first multinational law firm merger co-led by a Canadian firm. Greenberg Traurig With a multidisciplinary office in Tel Aviv, Greenberg Traurig’s Israel Practice— comprising over 100 professionals—serves as a key gateway for Israeli businesses and entrepreneurs seeking global expansion, as well as for international clients looking to establish or grow their presence in Israel. This was backed up in the latest IsraelDesks rankings, which saw the Israel Practice take pole position in High-Tech, ranked an Elite firm in M&A (Volume) and in Capital Markets, storming clear in the volume table. The firm was also an Elite firm in Employment, Real Estate, and taking joint first position in IP. Greenberg Traurig’s Israel Practice operates under the leadership of Managing Shareholder Joey Shabot, who spearheads corporate transactions and commercial disputes involving Israeli entities. In 2024, he represented Wiwyn, a Taiwanese company, in its investment in ZutaCore, an Israeli innovator in direct-to-chip liquid cooling technology for data centers. He also advised Ibex, a U.S.-based ad-tech company, on a VC investment in Israeli startup Arya. Fort Lauderdale-based Bruce March led the counsel to Nano Dimension, an Israel-based leader in Additively Manufactured Electronics (AME), in its acquisitions of Desktop Metal and Markforged Holding Corporation. In capital markets, Gary Emmanuel and Mark Selinger advised Silexion Therapeutics Ltd., an Israeli clinical-stage biotechnology company specializing in oncology treatments, on its SPAC merger with Moringa Acquisition Corp. The team includes David Huberman, well versed in the U.S. IPOs of Israeli companies. They also counseled Gauzy Ltd., an Israeli company specializing in vision and light control technologies, in its USD 75 million Nasdaq IPO in June 2024, and represented OPKO Health Inc., a multinational biopharmaceutical 41 and diagnostics company, in the USD 230 million private offering of its Convertible Senior Notes. Led by Lawrence Sternthal in Tel Aviv, GT's International Real Estate group has played a key role in advising Israel’s institutional investors on overseas real estate investments. In employment law, Meira Ferziger leads a specialized practice assisting Israeli companies with U.S. and international employment matters and litigation, including aspects related to M&A and IPO transactions. On the IP front, Barry Schindler advised CropX, an Israeli agritech leader in digital agronomic solutions, on the IP aspects of its acquisition of U.S.- based EnGeniousAg. Adam Snukal is another key team member, advising on technology-driven matters across sectors including health care, fintech, cyber, adtech, entertainment, and aerospace. Visit: Israel Page Herrick Feinstein Anchored within this impressive New York-based law firm, Herrick Feinstein’s Israel practice serves as a key bridge between Israel and the U.S. The 18-lawyer group collaborates with leading Israeli law and accounting firms and is recognized in the IsraelDesks rankings for its broad scope, particularly in real estate, in which it is ranked an Elite firm, also performing well in other areas. Real Estate partner and Israel practice co-chair YarivBen-Ari advises lenders, developers, operators, and contractors on complex cross-border matters. Herrick Feinstein represented Bank Hapoalim B.M. in an intercreditor agreement for a senior and mezzanine loan in excess of USD 200 million for the construction of a mixed-use property in downtown Manhattan and the team also represented Leumi Partners Ltd., as mezzanine lender, in an aggregate construction financing facility of USD 123 million for a mixeduse development construction project in Brooklyn, with Jeffrey Kaufman advising. Other firm representations include representing Greystone Senior Debt BI, Ltd. in its USD 160 million Series A bond offering on the Tel Aviv Stock Exchange. The firm also enjoyed success in litigation, leading a victory for Inokim, an Israeli electric scooter manufacturer, and Best Buy, in a dispute with Inokim shareholders involving claims of licensing breaches and tortious interference. In October 2024, the New York Supreme Court dismissed all claims against 42 both companies. The firm is bolstered by Real Estate Chair and Executive Chair BelindaSchwartz and Tax Chair LouisTuchman, whose tax structuring drives successful transactions involving diverse clients. Tuchman, for example, advised Canada Global, an Israel-based public company, in acquiring Miami’s Aventura Corporate Center as part of a joint venture with Flow. Visit: Israel Page Howard Kennedy Howard Kennedy has built a strong reputation in advising Israeli clients, particularly in the energy and real estate sectors. Led by London partner Charles Maxwell, the team supports high-net-worth individuals, families, entrepreneurs, and corporations with legal matters across real estate, commercial transactions, and energy infrastructure. Howard Kennedy acts for Ashdod-headquartered Nofar Energy in its UK expansion, including the Cellarhead project, the country's largest planned battery energy storage development. With construction costs exceeding GBP 214 million, the project will provide approximately 700 megawatt hours of storage capacity, helping stabilize the electricity grid. Beyond energy, Howard Kennedy maintains a strong commercial real estate practice for Israeli clients, advising on acquisitions, disposals, lettings, and the financing of multi-use properties. Kobre & Kim Kobre & Kim holds a strong position in cross-border disputes and investigations, representing Israeli clients in litigation across the U.S., Europe, and Asia. The firm has acted for prominent Israel-based businessman with global ventures, and handles corporate disputes, criminal defense, and regulatory enforcement. JeremyBressman represents Middle East-based corporations and individuals in criminal and enforcement proceedings, often alongside civil litigation. In intellectual property disputes, San Francisco-based Michael Ng leads patent infringement cases for Israeli companies. With a litigation-focused approach, the firm navigates complex regulatory and commercial challenges across multiple jurisdictions. Visit: Israel Page 43 Latham & Watkins Latham & Watkins’ Israel Practice plays a pivotal role in high-value M&A and capital markets transactions, providing strategic counsel to Israeli clients navigating complex global deals. With a multinational team spanning key financial hubs, the firm is a dominant force in the Israeli market. Joshua Kiernan, based in London, is a central figure in this practice, regularly advising on landmark deals that reshape industries. The firm is an Elite firm in both M&A Volume and Value, as well as in Capital Markets (Value). In May 2024, Latham advised CyberArk Software Ltd., an Israeli cybersecurity firm specializing in identity security, on its USD 1.5 billion acquisition of Venafi, a U.S.-based leader in machine identity management. The firm also represented Permira, a global private equity firm, in its acquisition of a majority stake in BioCatch, an Israel-based biometrics company focused on digital fraud detection and financial crime prevention. Washington DC partners Brian Mangino and Elizabeth More led this transaction, propelling Permira’s expansion into advanced cybersecurity solutions. Latham also played a key role in capital markets transactions, acting as Issuer’s Counsel for CyberArk Software Ltd. and Ithaca Energy Inc. in separate share and bond issuances. Mathys & Squire A leading European intellectual property firm, Mathys & Squire has held a strong foothold in Israel since establishing its local team in 2011. The firm is an Elite firm in the Patents and Trademarks category, working directly with Israeli companies, individuals, and attorneys to secure patents and designs across multiple industries. Israeli clients also gain from the firm’s close collaboration with U.S. law firms, which frequently engage Mathys & Squire to handle their Israeli clients' European IP portfolios. London-based partner DaniKramer leads the Israel team, advising startups and multinational corporations on intellectual property strategy. A UK and European Patent and Design Attorney, he has developed extensive ties with Israeli patent attorneys and works directly with notable clients, including Mellanox (now Nvidia). Kramer collaborates closely with Munich partner Andreas Wietzke, a German Patent Attorney specializing in software, telecommunications, and medical devices, who has cultivated strong connections with Israeli patent firms and technology startups. In the life sciences and chemistry sector, London partner Anna Gregson provides counsel to Israeli universities and corporations on biotechnology and plant variety rights, reinforcing Mathys & Squire’s presence in Israel’s innovative landscape. 44 Paul Hastings Founded in 1951, Paul Hastings has expanded globally with a strong presence across Asia, Europe, Latin America, and the United States. In February 2024, the firm was boosted with the arrival of Colin Diamond, formerly with White & Case for more than 20 years. A partner in New York and co-chair of the firm’s Global Capital Markets, Diamond, along with partners David Ambler (Palo Alto) and Gil Savir (New York), plays a critical role in advising companies on complex transactions. Together, Diamond and Ambler advised Varonis Systems Inc., a New Yorkbased data security firm founded by Israeli entrepreneurs, in its USD 460 million private offering of 1.00% Convertible Senior Notes due 2029. They also represented BofA Securities, Inc., the underwriter for a secondary offering of ordinary shares in CyberArk Software Ltd., an Israeli cybersecurity company specializing in identity security solutions. Additionally, Paul Hastings advised Goldman Sachs & Co., as financial advisor to SAP SE, in the USD 1.5 billion acquisition of WalkMe Ltd., a San Franciscobased software-as-a-service provider that simplifies software adoption. WalkMe, originally founded in Israel, enhances business efficiency through digital adoption solutions. Visit: Israel Page Pillsbury Pillsbury’s Israel Practice leverages its capabilities across high-tech, life sciences, financial, and energy sectors, performing well in Litigation and High-Tech and earning an Elite ranking in Patents and Trademarks. The team provides strategic legal support to U.S. and Israeli companies, handling patent filings, trademark protection, and complex disputes. The firm also plays a critical role in crossborder transactions and regulatory matters, assisting clients in software, cryptocurrency, blockchain, mobile communication, and cybersecurity. Head of the practice and co-chair of Securities Litigation & Enforcement, Ari Berman specializes in commercial litigation, particularly in shareholder disputes and federal securities investigations. He has represented Teva Pharmaceuticals in M&A and insurance disputes for over a decade. NathanRenov, Deputy Head of the Israel Practice, focuses on patent portfolio development and intellectual property strategy for clients spanning multiple industries. 45 In 2024, Pillsbury strengthened its Israel-focused legal team with Justin Rubin (Senior Counsel, Washington, DC) and Laurence Lieberman (Partner, London). Rubin represents U.S. subsidiaries of Israel’s leading defense and homeland security contractors, supporting their expansion in the U.S. market, particularly with the Departments of Defense and Homeland Security. Lieberman handles commercial disputes for Israeli technology firms, with a growing focus on cryptocurrency litigation. Visit: Israel Page Royer Cooper Cohen Braunfeld With offices in Pennsylvania, New York, and Nashville, Royer Cooper Cohen Braunfeld (RCCB) has secured recognition in this year’s IsraelDesks rankings. The firm maintains strong commercial ties between Philadelphia and Tel Aviv, advising over 50 Israeli clients. Led by seasoned M&A attorney David Gitlin, a former president of the Philadelphia-Israel Chamber of Commerce, RCCB drives cross-border transactions that link Israeli innovation with U.S. markets. The firm represented Kafrit Industries (1993) Ltd., a global leader in masterbatch production for the plastics sector, in its USD 48 million acquisition of a U.S. family-owned company. Additionally, RCCB served as U.S. counsel to ProntoNLP, an Israeli provider of generative AI tools, in its sale to S&P Global Market Intelligence. These transactions highlight the firm’s role in advancing Israeli businesses into new markets and securing strategic partnerships that propel growth in key industries. Visit: Israel Page Skadden As one of the leading global law firms with an Israel focus, Skadden’s Israel Group has, for many decades, been advising Israeli companies doing business and raising capital outside Israel and advises non-Israeli companies and individuals doing business in Israel. In 2024, Skadden acted as U.S. counsel to Taro Pharmaceutical Industries Ltd.’s board special committee in connection with Sun Pharmaceutical 46 Industries Limited’s USD 348 million purchase of the remaining shares in Squire Taro that it did not already hold. Yossi Vebman leads the Israel practice. Patton Boggs Squire Patton Boggs’ Israel Desk consists of 33 professionals serving a broad Israeli client base, particularly in technology sectors such as fintech, cybersecurity, and smart transportation. The team is widely recognized for its work in employment law, providing strategic guidance on hiring overseas, share options, benefits, and data privacy. With over two decades of involvement in the Israeli market, Miriam Lampert advises Israeli corporations on UK employment law and also co-leads the Israeli Tech Parliament in London, a key networking platform for Israeli tech professionals. Beijing-based Sungbo Shim remains a rare resource in China for Israeli companies seeking legal counsel on employment and acquisitions. He recently advised on the Chinese aspects of an acquisition for an Israeli client. London senior associate WillSaunders has also been active in the employment field for Israeli clients over the past year. Taylor Wessing Taylor Wessing’s Israel Desk plays a key role in advising Israeli clients across high-tech, life sciences, healthcare, and real estate. In 2024, the firm was ranked as an Elite firm in the Capital Markets (Value) and Litigation in IsraelDesks. Fronted by London-based Josef Fuss, a recognized expert in venture capital and M&A, the team has deep connections to the Israeli market, offering legal services across corporate finance, banking, litigation, and intellectual property while collaborating with top Israeli law firms. With over 20 years’ experience in Israel, fluent Hebrew speakers, and a presence in Tel Aviv through Joshua Gertner, the firm is seen frequently in the high-tech, banking and real estate sectors. The firm was also involved in M&A and capital markets transactions featuring Israeli clients in the past year, as well as a raft of litigation and employment matters, in which London partner Helen Farr has been especially active. Visit: Israel Page White & Case White & Case has maintained a strong presence in Israel for decades, particularly in M&A and Capital Markets, in which it is an Elite firm in Value in both of them, 47 taking top spot in Capital Markets (Value). White & Case was also ranked an Elite firm in Litigation, representing Meta in global litigation, including international data protection, privacy, and intellectual property disputes in Israel. The group is hugely active across multiple industries in Israel, including high-tech, healthcare, clean-tech, real estate, energy, and financial services. In 2024, the Magic Circle firm has played a pivotal role in Israel’s capital markets, advising the State of Israel on its largest-ever international bond offering, at USD 8 billion. Beyond corporate transactions. The firm’s London and New York offices provide legal support on high-value transactions, including advising Jefferies as Sponsor and Financial Advisor to UK oil and gas producer Ithaca Energy in its USD 940 million combination with Eni’s UK upstream assets. The group is spearheaded by London-based Daniel Turgel, who, in 2024, advised Centerbridge Partners and Gallatin Point Capital on the sale of their shares in Israel’s Phoenix Holdings to Affinity Partners, a U.S. investment firm. Tali Sealman advises U.S. buyers on acquisitions of Israeli businesses and represents Israeli companies selling to U.S. investors. JoelRubinstein focuses on IPOs and SPAC transactions, frequently advising issuers, underwriters, and investors in Israel-related deals. Visit: Israel Page Wiggin and Dana Wiggin and Dana has reinforced its position in the IsraelDesks rankings with a team of 12 led by Steven Malech and Tahlia Townsend. Based in New York, Malech handles disputes involving family wealth and privately held businesses, while Townsend (Washington DC and Connecticut) represents Israeli clients in international trade compliance. The firm serves a diverse client base, from startups to publicly traded corporations, across defense, aerospace, software, and medical devices. Its Israel team has achieved strong results in patent prosecution. PierreYanney, Chair of the Patent Prosecution Group in New York, and Frank Duffin in Connecticut have driven patent applications for Israeli clients, strengthening the firm’s standing in intellectual property protection. Visit: Israel Page 48 ZEK Based in Manhattan, Zeichner Ellman & Krause LLP ("ZEK") has an Israel Desk spread across New York, New Jersey, Connecticut, Washington DC, as well as in a Tel Aviv office. ZEK was the very first law firm to be certified as a foreign attorney’s office by the Israel Bar Association. Daniel Rubel is the founder and co-head of the Israel practice group, which has performed well in the Banking category. Dispute Resolution partner Rubel acted in a dispute between American Foundation for Basic Research in Israel and the Israel Academy of Sciences and Humanities over the control of USD 17 million in assets designated for charitable purposes. Executive Partner Stuart Krause oversees U.S.-Israel commercial litigation across multiple states, representing the CEO of a major Israeli company in significant disputes. Senior litigator Bruce Goodman has defended Israeli publicly traded companies and executives in complex U.S. cases involving fraud, contract breaches, and fiduciary duty claims. Banking and real estate specialists Ethan Schlussel and Fred Umane facilitate mortgage and construction loans for Israeli lenders, reinforcing ZEK’s presence in financial transactions. Let us help improve the odds for your firm and your lawyers to earn the recognitions they deserve. Tier One Rankings has only one focus: to help you succeed with your directories and awards submissions. Services Contact us Submissions Outsourcing Submissions Editing Workshops Strategic Content Creation 50 Strategic Opportunities for Israeli Startups in Europe’s Expanding Defence Market Recent Market Trends 51 History often shifts quietly, through a parliamentary vote or a legislative amendment. Recently, such a shift occurred in Germany. The Bundestag approved a constitutional amendment allowing the government to invest hundreds of billions of euros in infrastructure and defence, bypassing the “debt brake” policy. This move is a strategic realignment, signalling Germany’s intent to strengthen its capabilities and seek cutting-edge technology amid geopolitical uncertainties. Ron Abelski, Partner Strategic Opportunities for Israeli Startups in Europe’s Expanding Defence Market 52 The Potential for Israeli Technology A pivotal question arises: Where does Israel fit into this transformation? Israel is home to numerous defence-tech companies, offering solutions like advanced drones, AI-driven systems, and cybersecurity. These technologies, developed in response to real-world challenges, are characterised by rapid development and field-proven effectiveness. Despite this, only a small fraction of Israeli companies have prioritised Europe as a strategic market. Addressing Historical Barriers For years, Europe was perceived as slow-moving, bureaucratic, and, most importantly, uninterested in defence innovation. That perception is now outdated. Challenges remain. European investment in Israeli high-tech has dropped to a six-year low. Factors include geopolitical instability, anti-Israel sentiment, regulatory constraints, and economic stagnation in key markets. These challenges underscore the need for a proactive strategy. Israeli entrepreneurs must recognise that Europe is now an open, well-funded market seeking technological solutions. A Strategic and Financial Necessity This is more than a business opportunity; it is a strategic necessity. The European Commission plans to bolster defence spending with €800 billion, plus €150 billion in loans for sector investments. Israel’s competitive edge lies in delivering real-time innovation, stress-tested in operational environments, with rapid deployment capabilities. This advantage extends over European competitors and global powerhouses like the United States and South Korea. European nations have committed over $1 trillion in additional defence spending. France is nearly doubling its defence budget, and Poland has allocated 4.7% of its GDP to defence. This demand for technology includes cybersecurity, communication systems, air defence, and digital maintenance solutions. A Market Seeking Solutions Europe is not looking for ideas, it seeks precise, ready-to-deploy solutions. It has capital, structured procurement frameworks, and openness to partnerships 53 but lacks the ability to develop cutting-edge solutions internally. European regulations offer advantages: transparency, predictability, and stability. Entrepreneurs who navigate the system gain a long-term competitive edge. The evolving landscape presents significant implications for mergers and acquisitions (M&A) between Europe, particularly Germany, and Israel. As European nations seek to enhance their technological capabilities, M&A transactions can serve as a strategic vehicle for acquiring Israeli innovation. This not only facilitates the transfer of cutting-edge technology but also strengthens bilateral ties. For Israeli companies, engaging in M&A with European counterparts offers access to new markets, capital, and resources, thereby accelerating growth and expansion. The alignment of strategic interests and the availability of substantial funding create a fertile ground for M&A activities, promising mutual benefits and a robust framework for collaboration. M&A transactions can also provide European companies with the agility and innovation inherent in Israeli tech firms, while Israeli companies can benefit from the established market presence and distribution networks of their European partners. This synergy can lead to enhanced competitiveness and a stronger position in the global market. The Time for Action When technology meets €1 trillion in funding, it is not merely another market opening, it is an entire continent redefining its security landscape. Will Israeli entrepreneurs seize the opportunity and position themselves as key players in shaping the future of European defence and security? The time to engage with Europe is now. This market is not emerging; it is already here. The only question is: Who will lead it? 54 Top 10 State Tax Issues Affecting Israeli Companies with Operations in the U.S. Recent Market Trends 55 Israeli companies face different and unique issues when operating in the U.S. compared to companies headquartered in the U.S.. While the most focus is on federal tax concerns, U.S. state and local taxes (“SALT”) have the potential to increase significantly the tax burden. SALT is truly a trap for the unwary because seemingly innocuous actions can give rise to substantial tax liabilities. For example, if a company fails to collect sales tax from its customer, the company’s obligation to pay such tax can continue to accrue indefinitely if it fails to file any sales tax returns, and the liability is based on gross taxable sales, not net taxable sales. Therefore, it is possible to conduct business at a loss and thus have no federal or state corporate income tax liability but still owe a substantial sales tax liability because of the company’s failure to collect and remit such tax. While this is just one example of state tax liabilities exceeding a federal tax liability, many more exist. David Pope Partner Naftali Z. Dembitzer Partner Top 10 State Tax Issues Affecting Israeli Companies with Operations in the U.S. 56 There are over 10,000 state and local taxing jurisdictions in the U.S with their own rules. This article addresses the “Top 10” SALT issues Israeli companies are likely to face when doing business in the U.S. 1. The Requisite Tax Connection or Nexus for SALT Where is my company required to file? Whether a company is required to file tax returns in a jurisdiction depends on whether the company has a sufficient jurisdictional connection (i.e., nexus) in the state. Historically, a physical presence (e.g., office or employee) was required. Nowadays, all that is needed is an economic presence for sales tax purposes and, in many states, for income tax purposes as well. Most people (including in Israel) have heard of the Wayfair case, which is a sales tax case that was decided by the U.S. Supreme Court. All states with a sales tax have now adopted “economic nexus,” looking to a fixed dollar amount of sales in the state to create nexus. While the thresholds differ in each state, most states will require a company to register with the state revenue collecting agency and collect sales tax on sales to customers in the state if the company has over $100K of sales to the state and/or 200 transactions in the state. For income taxes, some states will also look at the level of sales to determine if a company has a filing responsibility. 2. Optimizing Tax Structure to Reduce State Taxes A good defense will always beat a good offense. Companies should investigate different structuring options for establishing a U.S. parent, U.S. subsidiary or increasing its operations in the U.S. and, in particular, in which states to operate to minimize its income tax liability in a state or local tax jurisdiction. This can be extremely important for the Flip structure involving Israeli companies, whereby a U.S. domestic corporation now owns the former Israeli parent entity, which can lead to increased funding opportunities in theU.S. forthe start-up founders and provide other benefits. Any such SALT planning should consider whether the state requires combined reporting of all tax items of a parent-subsidiary or with its affiliates (which is similar, but not identical, with the federal consolidated return rules), or requires each entity to file a separate income tax return to report its own items of income, deductions and net operating losses. The location of the company’s operations in the U.S. could also be beneficial from its and its employees’ perspectives since several states do not impose a personal income tax, while some states do not impose a corporate income tax. 57 3. Sales and Use Tax imposed on Sales/Purchases of Products and Services Understanding your company’s facts to most accurately determine whether a sales tax liability exists. Sales taxes are probably the biggest SALT issue facing companies nowadays. This is because the sales tax laws were drafted at a time when people still bought books and bought those books at a store like Steimatzky. Now companies, especially technology companies, are selling all kinds of products and services online like SaaS/PaaS/IaaS -- and fewer purchases are being made in person at a brick and mortar store. The issue companies are facing is determining whether their products are taxable and having to do so in every state the company has nexus. It gets even more complicated because the definitions are not the same in each state. While two states may tax SaaS, the definition of SaaS may not be the same in both states. There is also an issue because companies often sell more than one product or service to a customer and not every product or service sold is taxable, but only one price is charged for the bundle of products and services. When this happens, companies have to determine if they have to charge tax on the entire amount of the sale. 4. Correcting Historical Tax Liabilities Whoops! How can we fix that mistake!? If a company has not gotten its sales tax filing and collection obligations in order, sales tax will haunt the company if/when it is raising its next round, it is a target for an acquisition, is planning to go public, or even if it is just audited. This is because sales tax becomes the company’s liability if it does not collect the tax from its customers. This point cannot be overstated. Sales tax is something that should be passed on to a customer. If it is not, it is a liability that continues to accrue, and which cannot be extinguished without payment. Since determining if there’s sales tax exposure is now part of the due diligence process for most U.S. investors and bankers, many companies that did not come to us when they first started doing business will come to us in anticipation of a funding round or an exit. We assist them with determining if there is exposure, how much the exposure is and how to best minimize the exposure. 58 The issue of historical liabilities is also relevant to income tax. However, it does not come up as often because many companies are either in loss positions or have losses available to offset income. With that said, there are certainly ways to address any historical income tax liability, along with other taxes where historical obligations may exist. 5. State Tax Credits and Incentives Having the state pay YOU to do business in their state. Many states welcome companies that create jobs and make substantial capital investment in the state. Often, they are willing to provide tax credits, property tax abatements, sales tax abatements and other incentives in exchange for the companies’ presence, employees, and investment in the state. If your company is looking to enter the U.S. market or expand into another state, the potential for such tax credits and incentives should not be overlooked and may be an important factor in choosing in which states to establish your presence or make capital investments. 6. SALT Corporate Income Taxes: Apportionment and Allocation How to slice a pizza so every state does not get the largest slice! You should consider if your company is apportioning income or allocating certain income to the correct state tax jurisdiction. This is important since, when a company has nexus for corporate income taxes with multiple states, each state vies for its slice of the federal taxable income pie! States can constitutionally impose their corporate income tax on apportioned net income or certain allocable receipts to the state. States use one or more of the following factors for purposes of such formulary apportionment: a. property factor (compares value of real and personal property owned or leased in the state to such property located everywhere) b. payroll factor (compares wages paid to employees located in the state to total wages paid to employees everywhere) c. sales factor (compares receipts from sales of tangible goods, from services and for specific types of income sourced to the state vs. total income from everywhere). States also differ on whether to source to the state or elsewhere income/fees earned from providing services based on (i) the cost/ place of performance in the state or (ii) market-based sourcing to the state in which the customer derives the benefit of such services. 59 Interestingly, apportionment should be considered even when choosing in which state to operate. As an example, if a company chooses to be based in a state with a three-factor apportionment formula, it will be penalized for being based in the state because property and payroll will be considered as part of the tax base compared to choosing a state that only looks to sales in the state for apportionment purposes. Apportionment is one of the most contested areas of tax and cannot be overlooked as an issue to consider. 7. State Conformity to Federal law, including income protected under a federal income tax treaty and treatment of foreign source income. Are states required to follow the same rules as the IRS in determining taxable income? If a foreign entity earns income that is exempt from U.S. federal income taxation, there is the question whether a state or locality will follow suit. Some states have specific legislation or guidance that provides if the state will or will not conform to the federal income tax laws. In particular, some states exempt income from corporate income tax if such income is exempt from U.S. federal income tax (i) under a federal income tax treaty or (ii) because the income is classified under the federal tax laws as not effectively connected with a trade or business of the foreign taxpayer in the U.S. (so called, nonECI). For other states, one must see whether the state corporate income tax rules adopt federal taxable income as the starting point for the state corporate income taxes, thus implicitly adopting a similar exemption from state corporate income taxes. In addition, states vary in their conformity to the special federal tax rules (GILTI, FDII, etc.) that were enacted into law in the TCJA 2017, as well as other principles of federal tax law applicable to special deductions (such as dividends) and net operating losses. 8. Public Law 86-272 A federal shield protecting certain sellers of tangible personal property from state income tax. Public Law 86-272 is a federal law that protects companies from being subject to a state’s corporate income tax if the only in-state activities relate the solicitation of sales of tangible personal property or related, de minimis activities. While the parameters of fitting in with this protection are relatively narrow, the impact could be substantial if the business activities are solely limited to the sale of tangible personal property. Recently, several states have tried to limit the scope of P.L. 86-272 protection (e.g., by issuing guidance that having cookies installed when visiting a website exceeds the 60 P.L. 86-272 protection). Moreover, some states (e.g., California) take the position that foreign companies are not afforded the protection of PL 86-272 altogether because the statute says “interstate” as opposed to activities between the U.S. and another country. To the extent your company solely sells tangible personal property, it is worth analyzing how to structure the business to take advantage of the protections of P.L. 86-272. 9. Miscellaneous Taxes With over 10,000 state and local taxing jurisdictions, the taxes and fees are almost countless! While our Top 10 has primarily focused on sales tax and corporate income tax, states impose many other taxes that should be considered when doing business in the U.S. While the list below is not exhaustive, common other taxes that businesses must be aware of include: a. Employment Tax – Employers must withhold a percentage of the employee’s wages in trust to be provided to the state. Employment taxes become difficult to comply with when there is a remote workforce because the states’ threshold to withhold income from the take home pay of employees vary, with virtually no uniformity across states. b. Real Estate Transfer Tax – a tax on the transfer of real property, with some states imposing the same or a similar tax on the transfer of a controlling interest in an entity that owns real property. c. Property Tax – An annual tax for owning property in the state. These taxes are based on the value of the property itself and the valuations are often subject to debate. There are also ad valorem taxation in states that is imposed based on the value of tangible personal property located in the state. d. Unincorporated Business Tax – Several localities impose a separate income tax on unincorporated entities. As an example, NYC imposes its Unincorporated Business Tax on non-incorporated entities doing business in the state. Complying with each locality’s rules can become complicated and make tax planning even more complex. e. State and Local Gross Receipts Taxes – Certain states (e.g., Ohio, Washington) and certain localities impose a gross receipts tax based on total revenue, but typically at a lower tax rate than an income tax. For example, San Francisco imposes its gross receipts taxes on all entities conducting business within the City. Gross receipts taxes are burdensome on businesses that have not yet generated taxable income because no 61 taxable income is needed to be subject to the tax. Understanding the nuances of gross receipts taxes can help companies reduce the tax burden. 10. Abandoned/Unclaimed Property Not quite a “tax”, but the requirement to give customer property back to the states for “safe keeping” While not technically a “tax,” most state rules for escheating (i.e., returning) abandoned and/or unclaimed property to the state operates in a similar manner. The main difference is the tax rate on unclaimed property is 100%. The purpose of these rules is to give abandoned property to the state after a prescribed dormancy period so that the rightful owner of such property can reclaim it at a later day directly from the state. Common items of unclaimed property include uncashed checks, unused gift cards, abandoned account payables, among other items. Most states look to the address of the potential claimant of the property for purposes of determining where such money should be escheated, but if the address of the claimant is not known or is in a foreign country, the property must be escheated to the state of incorporation of the entity that holds the unclaimed property. Complying with these requirements for a holder can be complex and. if not done properly, can result in significant amounts of interest and penalties imposed on the holder. Moreover, if an unclaimed property return is never filed, the statute of limitations does not begin to run and the historical liability can become material as the full value of the property must be returned to the state. There are also voluntary disclosure programs to address unclaimed property matters with the state. 62 European Commission and AI: Guidelines on Prohibited Practices Recent Market Trends 63 Israeli companies that make their solutions available in the European Union (EU) need to comply with new regulations that regulate the use of artificial intelligence (AI) in the EU. Failure to comply can result in significant financial penalties and requirements to cease making those solutions available until the violations are rectified. Overview The 2024 AI Act (Regulation (EU) 2024/1689) has been characterized by the European Commission (EC) as “the first-ever comprehensive legal framework on AI worldwide.” The Act creates a set of risk-based rules regarding specific uses of AI. European Commission and AI: Guidelines on Prohibited Practices | By: Camille Paulhac (Paris), Jason Raeburn (London), Amir Ghavi (New York) Israel Country Contacts: Colin Diamond and Gil Savir (New York) Jason Raeburn Partner Camille Paulhac Partner Amir Ghavi Partner 64 The Act came into effect on August 1, 2024 and will be fully enforceable in August 2026. Certain provisions (mostly prohibition on use) took on February 2, 2025. On February 4 and 6, 2025, the European Commission (EC) published guidelines on prohibited AI practices (here) and guidelines on AI system definition (here). At the same time, the EC withdrew its proposed AI liability directive (February 11, 2025). In this article we highlight the key prohibited practices under Article 5 of the AI Act, identify critical risks, offer actionable compliance insights and highlight enforcement mechanisms to help businesses remain ahead in this ever-evolving regulatory landscape. We also provide a quick reference to US developments as a counterpoint to the EU. Understanding the Scope of Prohibited AI Practices The AI Act defines four different levels of risk: 1. Unacceptable risk. Practices involving AI systems that are deemed to pose unacceptable risks on the basis that they are incompatible with fundamental rights and EU values are prohibited. 2. High risk. AI systems posing high risks to health, safety and fundamental rights can be placed on the market, put into service or used, subject to fulfilling certain requirements and obligations. 3. Limited risk. AI systems which are subject to transparency requirements (i.e., AI systems which perform autonomous tasks, are intended to interact directly with an individual or create content viewed by an individual, but which do not qualify as “high risk”). 4. Minimal risk. AI systems posing minimal to no risk are not regulated. Providers can adhere to voluntary codes of conduct The guidelines published by the EC on February 4, 2025, focus on the first category – practices involving unacceptable risk. Separate guidelines are expected for the second and third categories. Prohibited Practices The AI Act prohibits “manipulative, exploitative, social control or surveillance” AI-enabled practices, which by nature “violate fundamental rights and Union values.” Eight types of practices are identified, and sometimes illustrated by examples: 65 1. Harmful manipulation and deception: AI systems cannot deploy subliminal or deceptive techniques when they have the objective or the effect of materially distorting the behavior of a person or a group of persons. 2. Harmful exploitation of vulnerabilities: AI systems cannot exploit vulnerabilities inherent to certain individuals or groups of persons (e.g., age, disability, specific socio-economic situation) that make them particularly susceptible to manipulative and exploitative practices. 3. Social scoring: AI-enabled “social scoring” practices that assess or classify individuals or groups based on their social behavior or personal characteristics, and lead to detrimental or unfavorable treatment particularly when data comes from unrelated social contexts, are prohibited. 4. Individual risk assessment and prediction of criminal offences: AI systems cannot assess or predict the risk of a natural person committing a criminal offense based solely on profiling or personality traits and characteristics. 5. Untargeted scraping to develop facial recognition databases: AI systems that create or expand facial recognition databases through the untargeted scraping of facial images from the internet or closed-circuit television (CCTV) footage (including images from surveillance cameras operated in airports, streets, parks, etc.) are prohibited. 6. Emotion recognition: AI systems cannot infer emotions of individuals in the workplace and in educational institutions, except if intended for medical or safety reasons. Biometric categorization for certain “sensitive” characteristics: Biometric categorization systems that categorize individuals based on their biometric data to deduce or infer race, political opinions, trade union membership, religious or philosophical beliefs, sex life or sexual orientation are prohibited. 7. Real-Time Biometric Identification for law enforcement purposes: The use of Real-Time Biometric Identification (RBI) systems in public spaces for law enforcement purposes (subject to limited exceptions exhaustively set out in the AI Act) is not allowed. Responsible Actors The AI Act distinguishes five categories of operators in AI systems: providers, deployers, importers, distributors and product manufacturers. The guidelines only focus on providers (i.e., developers of AI systems) and deployers (i.e., users of AI systems). 66 Exclusions The AI Act does not cover: 1. National security and defense. AI systems exclusively used for military or national security purposes are excluded. 2. Judicial and law enforcement cooperation with third countries. Thirdcountry public authorities or international organizations using AI for law enforcement or judicial cooperation, as long as they protect individual rights, are excluded. 3. Research and development (R&D). Activities related to R&D on AI systems or models before market placement or before placement into service are excluded. 4. Personal nonprofessional activity. AI systems deployed in purely personal, nonprofessional contexts are excluded (e.g., home security systems). 5. AI systems released under free and open-source licenses. Opensource AI systems (unless displaying unacceptable risk, high risk or being subject to limited risk rules) are excluded. However, “dual-use” systems (e.g., systems designed for both civilian and military use) and testing in real-world conditions (i.e., temporary testing of an AI system in real-world conditions to assess and verify its conformity with the AI Act) are within the scope. Enforcement and Penalties Compliance with the AI Act will be overseen by 27 national market surveillance authorities designated by member states and the European data protection supervisor. Member states must designate their national market surveillance authority by August 2, 2025. Key enforcement measures include: 1. Fines (not applicable before August 2, 2025) — for providers and deployers, violations can result in penalties up to €35 million or 7% of annual worldwide turnover, whichever is higher. 2. Withdrawal of the AI system from the market. 3. Restriction of the AI system’s availability. 4. Corrective actions to ensure the AI system is compliant. 67 Challenges While a number of stakeholders have welcomed the AI Act and guidelines, viewing them as a step toward safeguarding fundamental rights in AI deployment, industry representatives have expressed concern that complying with this additional complex regulation will necessitate important resources and could stifle innovation and competitiveness. Comparison to U.S. Law – A Counterpoint Unlike the EU’s centralized approach, the U.S. has not enacted a unified federal AI law, and instead relies on sector-specific rules, voluntary frameworks, and state-level legislation that companies must navigate when entering the American market. Some state laws, including in Colorado and California, share some similarities with the EU AI Act. For example, the Colorado Artificial Intelligence Act (CAIA), which takes effect on February 1, 2026, applies to any “developer” or “deployer” doing business in Colorado whose AI system makes or is a substantial factor in making a “consequential decision” in areas such as employment, housing, financial services, healthcare, insurance, or legal services. The CAIA requires developers and deployers to exercise “reasonable care” to prevent algorithmic discrimination, conduct impact assessments, implement risk management programs, and provide disclosures to consumers and to the Colorado Attorney General. While its riskbased structure and impact assessment requirements resemble the EU AI Act’s framework for categorizing “high-risk” systems, Colorado’s law is narrower, with enforcement handled exclusively at the state level and without a private right of action. Both the CAIA and the EU AI Act aim to protect consumers from algorithmic discrimination and harms caused by AI systems, placing obligations on both developers and deployers, emphasizing transparency, accountability, user disclosures, and redress mechanisms for adverse decisions; however, the CAIA imposes some additional requirements, including mandated annual reviews of deployment of “high-risk” systems. By way of further example, the California Assembly Bill 2013 (CA AB 2013) which takes effect on January 1, 2026, algins with the EU AI Act’s emphasis on training data transparency. Specifically, Section 3111(a) of CA AB 2013 parallels Article 53(1)(d) of the EU AI Act by requiring developers of generative AI systems to publicly disclose detailed documentation about the datasets used for training. This includes information on the source and type of data, its copyright status, and whether it contains personal or synthetic data. Emerging state-level legislation such as the CAIA and California’s AB 2013 reflects a growing convergence in the U.S. with the EU’s regulatory approach in areas such as transparency, accountability, and protections against algorithmic discrimination. 68 Key Actionable Compliance Steps for Providers and Deployers 1. Risk assessment. Conduct thorough risk assessments of AI systems used, deployed and/or developed. 2. Internal audits. Establish internal controls and regular audits to verify compliance. 3. Training and awareness. Educate employees and stakeholders. 4. Responsible data governance. Ensure lawful collection, processing and storage of data, particularly biometric and sensitive personal data. 5. Responsible data personalization. Ensure that AI-driven personalization respects fairness principles and avoids exploiting vulnerabilities inherent to certain individuals. 6. Legal applicability assessment. Undertake an assessment of the different regimes that apply, including consideration of any international use and development of relevant AI systems, and where feasible, consider aligning your global compliance position with the most stringent applicable regime as a means of managing overall exposure. 69 IsraelDesks.com YOUR FIRST DESTINATION IN ISRAEL Israel Desks is the largest multimedia platform for international law firms to network with Israeli law firms and raise their profile in Israel’s legal market. LAW FIRM DIRECTORY Featuring international law firms with an Israel desk LEGALLY ISRAEL100 IsraelDesks league tables MEDIA CENTER News, Updates and Events LEGALLY ISRAEL Weekly news roundup from leading Israeli and international law firms IsraelDesks MAGAZINE Bi-monthly digital magazine LEGAL NETWORK Highly targeted distribution WEBINARS Hosting webinars through IsraelDesks platform 70 FDI in the UK: Opportunities and challenges for Israeli businesses Recent Market Trends 71 Israel is increasingly aligning its patent prosecution practices with major global jurisdictions, including the European Patent Office (EPO) and the United States (US). This alignment enables applicants to streamline their patent prosecution in Israel by harmonizing claims and petitioning for immediate allowance based on granted claims from leading jurisdictions (e.g., US, EP, Japan, Canada, Australia). Consistent with this trend, applicants are generally advised to petition for allowance in Israel based on corresponding foreign patents rather than prosecuting broader claims. Broader claims than those accepted in jurisdictions such as the US or EP often trigger challenging office actions and complicate potential opposition proceedings. Israeli examiners are explicitly instructed Debbie Serota Partner FDI in the UK: Opportunities and challenges for Israeli businesses 72 to consider foreign prosecution outcomes, and opposing parties commonly leverage differences between Israeli claims and those approved abroad during oppositions. Strategically deferring substantive examination in Israel offers significant advantages. Deferral allows adequate time for foreign patents to issue, enabling applicants to petition for allowance based on these granted claims before Israeli examination begins. This approach often results in immediate allowance, reducing the risk of extensive office actions recycled from foreign jurisdictions or more stringent examinations involving new citations. New citations introduced by Israeli examiners, especially those in languages such as Russian due to examiners’ proficiency, can complicate global patent strategies since they are disclosed to foreign examiners and third party opposers. Additionally, delaying prosecution helps postpone third-party oppositions, allowing applicants to address foreign oppositions, such as those at the EPO, prior to any Israeli opposition. Finally, upcoming initiatives at the Israeli Patent Office aim to further facilitate harmonization. Draft guidelines intend to clarify technical parameters, such as percentage identity for antibodies, aligning them more closely with foreign standards. Additional proposals aim to simplify prosecution, making petitions for allowance based on foreign applications easier by enabling claim amendments that conform to Israel-specific practices, such as the restriction on amended method-of-treatment claims. These measures will further promote harmonization with international patent practices. 73 If you are an International Law Firm with an Israel focus, IsraelDesks is your first destination Inform Israeli law firms about your events, clients updates and firm news Join IsraelDesks group on LinkedIn IsraelDesks.com to expand your network LEGAL MARKETING by SETTING THE BENCHMARK WWW.LEGALMARKETING.CO.IL [email protected] TEL: + 972-72-338-7595 FOLLOW US: 74 Harmonization of Israeli Patent Prosecution with Foreign Jurisdictions Recent Market Trends 75 Israel is increasingly aligning its patent prosecution practices with major global jurisdictions, including the European Patent Office (EPO) and the United States (US). This alignment enables applicants to streamline their patent prosecution in Israel by harmonizing claims and petitioning for immediate allowance based on granted claims from leading jurisdictions (e.g., US, EP, Japan, Canada, Australia). Consistent with this trend, applicants are generally advised to petition for allowance in Israel based on corresponding foreign patents rather than prosecuting broader claims. Broader claims than those accepted in jurisdictions such as the US or EP often trigger challenging office actions and complicate potential opposition proceedings. Israeli examiners are explicitly instructed Ephraim Heiliczer Partner Harmonization of Israeli Patent Prosecution with Foreign Jurisdictions 76 to consider foreign prosecution outcomes, and opposing parties commonly leverage differences between Israeli claims and those approved abroad during oppositions. Strategically deferring substantive examination in Israel offers significant advantages. Deferral allows adequate time for foreign patents to issue, enabling applicants to petition for allowance based on these granted claims before Israeli examination begins. This approach often results in immediate allowance, reducing the risk of extensive office actions recycled from foreign jurisdictions or more stringent examinations involving new citations. New citations introduced by Israeli examiners, especially those in languages such as Russian due to examiners’ proficiency, can complicate global patent strategies since they are disclosed to foreign examiners and third party opposers. Additionally, delaying prosecution helps postpone third-party oppositions, allowing applicants to address foreign oppositions, such as those at the EPO, prior to any Israeli opposition. Finally, upcoming initiatives at the Israeli Patent Office aim to further facilitate harmonization. Draft guidelines intend to clarify technical parameters, such as percentage identity for antibodies, aligning them more closely with foreign standards. Additional proposals aim to simplify prosecution, making petitions for allowance based on foreign applications easier by enabling claim amendments that conform to Israel-specific practices, such as the restriction on amended method-of-treatment claims. These measures will further promote harmonization with international patent practices. 77 78 The Doctrine of Fair Use and training AI models - The Position of the U.S. Copyright Office v. The Position of the Israeli Ministry of Justice Recent Market Trends 79 Ran Vogel Partner The effectiveness of an AI system is largely determined by the scope, variety, and quality of the data it processes during the training phase. AI models are trained on vast datasets, which frequently include content protected by copyright. This practice raises a central legal question: does the use of copyrighted works for machine learning (ML) purposes require the consent of the rights holders? On one side of the debate, creators and copyright owners maintain that such use constitutes infringement and must be subject to authorization. On the other, advocates of open access liken ML to human learning, contending that unrestricted access to information is essential for innovation and technological progress. The Doctrine of Fair Use and training AI models - The Position of the U.S. Copyright Office v. The Position of the Israeli Ministry of Justice 80 In May 2025, the U.S. Copyright Office released a groundbreaking - albeit non-binding and pre-publication version - report examining whether the use of copyrighted works to train generative artificial intelligence (AI) models may qualify as “fair use” under U.S. law. Similarly, in December 2022, the Israeli Ministry of Justice issued a non-binding legal opinion titled “Uses of Copyrighted Content for Machine Learning,” which explored the permissibility of such practices under Israeli copyright law. These reports address a critical and foundational issue for AI developers, copyright holders, and policymakers alike: whether, and under what conditions, the use of protected works for ML constitute lawful use. Together, the U.S. and Israeli opinions exemplify two distinct legal and policy approaches to the use of copyrighted content in the training of AI systems, highlighting the global divergence in regulatory outlooks on this emerging issue. The recent U.S. Copyright Office report and the Israeli Ministry of Justice opinion represents a significant step toward establishing a regulatory framework to address this issue, representing the first substantive governmental effort in the United States and Israel to grapple with the legal implications of using copyrighted works in AI training. What Is the “Fair Use” Exception? In general, the fair use doctrine seeks to balance copyright protection with freedom of expression, innovation, and research. It allows certain uses of protected works without the rights holder’s permission. Fair use typically covers purposes such as self-education, research, criticism, commentary, and journalism. Courts evaluate several factors to determine whether a use is fair, including: • The purpose and character of the use; • The nature of the original work; • The amount and substantiality of the portion used in relation to the work as a whole; • The effect of the use on the market value of the original work. As part of that analysis, courts may also consider whether the use is “transformative” that is, whether it adds new meaning, context, or purpose to the original work (e.g., parody, academic analysis, or critical commentary). If the new work serves a different function than the original, it may qualify as fair use. 81 Key Findings of the Israeli Ministry of Justice Opinion Examining first the Israeli perspective, which takes a more permissive approach,, the Ministry of Justice opinion emphasizes Israel’s prominent position as a global leader in AI innovation underscores the importance of clarifying the copyright implications of Training practices. Addressing the legal uncertainties in this area has the potential to significantly accelerate innovation and bolster the competitive advantage of Israeli enterprises engaged in both ML development and content creation. Israeli copyright law currently offers no explicit guidance on whether the use of copyrighted works to train AI systems constitutes infringement, creating what the Opinion describes as a significant obstacle to the advancement of the AI SECTOR and hampers the growth of the ML industry—without delivering corresponding benefits to rights holders. Furthermore, the absence of legal clarity complicates rights enforcement and creates a regulatory grey area that affects all stakeholders across the ecosystem. According to the Opinion, and subject to certain exceptions, the use of copyrighted materials for ML training is generally permissible under existing Israeli legal doctrines. Specifically: • Fair use is likely to apply to most ML-related uses, given the transformative nature of the training process and its minimal impact on the original market for the work. • Incidental use may be relevant in cases where copyrighted content is not the central focus but is included as part of a broader dataset. • Transient use doctrines may provide protection where copyrighted materials are not stored or retained following the completion of the training phase. These conclusions are broadly consistent with emerging legal interpretations in other jurisdictions, which increasingly acknowledge the legitimacy of using copyrighted works in the context of AI training—provided certain conditions are met. Nonetheless, the Opinion sets out important limitations. Notably, the proposed safe harbor does not extend to cases where a ML dataset is composed entirely of works by a single author, particularly where the intent is to replicate or compete directly in that author’s market. 82 Moreover, the scope of the Opinion is limited to the input stage of the ML process. It does not address the legal status of AI-generated outputs, which may, in certain circumstances, constitute infringement, even if the use of copyrighted materials during the training phase is deemed lawful. In sum, the Israeli Ministry of Justice Opinion seeks to offer a coherent framework that facilitates responsible innovation in ML and AI development, while safeguarding the underlying principles of copyright law and preserving incentives for creative production. Nonetheless, this Opinion delineates important limitations. For instance, the safe harbor it proposes would not extend to scenarios where an ML dataset is composed entirely of a single author’s works for the purpose of replicating and competing with that author’s market. Furthermore, this Opinion is confined to the input stage of the ML process; it does not address the legal status of AI-generated outputs, which may in some instances be infringing even if the training process itself is lawful. In sum, this Opinion seeks to offer a coherent framework that facilitates responsible innovation in ML and AI development, while safeguarding the underlying principles of copyright law and preserving incentives for creative production. To distill the practical implications of the U.S. Copyright Office’s findings, the following section outlines its five main takeaways: Key Findings of the USA Copyright Office Report Similar to the Opinion issued by the Israeli Ministry of Justice, the U.S. Copyright Office Report examines whether the widespread use of copyrighted works for training AI systems can be justified under the fair use doctrine. However, in contrast to the Israeli approach, the Copyright Office ultimately rejects the notion that training AI systems is inherently transformative. The Report characterizes the analogy between machine learning and human learning as fundamentally flawed. It further notes that while non-commercial uses, such as academic or research-driven activities, may qualify as fair use, commercial uses designed to generate AI outputs that replicate or closely resemble protected works are unlikely to fall within the scope of the exception. The Report also underscores the significance of one of the key fair use factors: the effect of the use on the potential market for the original work. If AIgenerated content serves as a substitute for the original or undermines market 83 demand, such use is particularly problematic from a copyright standpoint. This position is consistent with the U.S. court’s reasoning in Westlaw v. ROSS, which emphasized the commercial harm caused when generative AI tools replicate the function or value of protected content. Five Key Takeaways from the Report 1. AI Training Is Not Inherently Transformative The Report emphasizes that the use of copyrighted works for training AI models is not automatically considered transformative. Each case must be evaluated on its specific facts and context. 2. Commercial Use Raises Significant Concerns Training conducted with commercial intent—particularly when the resulting outputs closely resemble the original works—is unlikely to qualify as fair use under existing legal standards. 3. Market Harm Is a Central Consideration Uses that diminish or substitute the market for the original work weigh heavily against a finding of fair use. The potential for economic harm to rights holders is a key factor in the analysis. 4. Unauthorized Use of Protected Works Is Not Neutral The Report rejects the view that large-scale scraping of copyrighted content for AI training is legally neutral, cautioning that such practices may give rise to copyright infringement. 5. Call for Legislative and Judicial Clarification Recognizing the complexity and evolving nature of the issue, the Copyright Office urges both legislators and courts to provide clearer guidance on the lawful boundaries of using copyrighted content in AI training, rather than allowing regulatory uncertainty to persist. Conclusion The contrasting approaches taken by the Israeli Ministry of Justice and the U.S. Copyright Office reflect a broader global tension between fostering innovation and protecting intellectual property rights in the age of AI. While Israel’s position leans toward enabling ML development under existing legal frameworks, the U.S. stance emphasizes caution, particularly in commercial contexts where market harm is likely. As AI systems become increasingly integral to economic and cultural life, striking a clear, balanced, and internationally coherent legal framework will be essential. Legal certainty in this domain is not only vital for protecting rights holders but also for ensuring that AI innovation continues to thrive in a responsible and equitable manner. 84 Security for Cost – a key tool for defendants Recent Market Trends 85 This is the first article in our series on security for costs in English litigation and arbitration. Future articles in the series will compare and contrast the factors relevant to applications for security for costs in English litigation and international arbitration. For individuals or companies defending litigation or international arbitration proceedings in England, there are procedural steps you can take to protect your position. Security for costs is one key example, as it minimises the risk that you or the company will be left out of pocket for your legal expenses if you successfully defend the claim. Security for Cost – a key tool for defendants Baruch Baigel Head of Dispute Resolution Noam Greenberger Senior Associate 86 What is security for costs? An order for security for costs requires a claimant to provide security for the defendant’s actual and/or reasonably anticipated costs of the litigation or arbitration. This can prevent a positive court or arbitration result from turning into a pyrrhic victory. The value of a costs order made in your favour can quickly become worthless if it turns out that the claimant has no means to pay it. The grounds to obtain an order for security for costs Applications for security for costs in English civil proceedings are governed by the Civil Procedure Rules. Arbitration proceedings are subject to the rules of arbitration institutions or tribunals, which often give arbitrators significant flexibility to manage procedural matters such as security for costs. There are, however,some grounds common to both arbitration and litigation proceedings which can give a court or tribunal the power to make an order for security for costs. Often, the pertinent grounds for a security of costs order are either that: 1. The claimant is an impecunious or insolvent company which will be unable to pay the defendant’s costs of the proceedings if ordered to do so; or 2. The claimant has taken steps that would make enforcing an adverse costs order difficult, either by transferring or dissipating assets. Timing is everything It’s important to stress that timing is of the essence when it comes to a security for costs application. While it is advisable for an application to be made promptly and early on in proceedings, it should be made when information is known about the parties’ respective positions on the issues in dispute. This is because the court or tribunal is likely to assess whether the claim and defence are being advanced in good faith and have reasonable prima facie prospects of success. Lateness in making an application can be a reason for an order for security to be refused. Even if security is ordered to be paid, the court or tribunal may reduce the amount ordered due to the delay. To maximise the prospects and impact of a successful application, it is imperative for it to be considered as soon as possible after the claim is served or if the claimant’s financial circumstances deteriorate during the proceedings. 87 The form of security Should the court or tribunal deem it appropriate to award security for costs, it has a wide discretion in deciding the amount and type of security. Security can take the form of a guarantee from a parent company or bank, or payment into the court or arbitral institution. An order for security of costs will usually require the claimant to provide the security within a reasonable time and can be ordered to be provided in stages as the proceedings progress. What happens if an order for security for costs is not complied with? Should an order for security not be complied with, the claim can be stayed (i.e., suspended) pending compliance. The claim may also be struck out or dismissed if security from the claimant is not provided. The bottom line An application for security for costs is an important step to be considered in litigation or arbitration proceedings. An order for security for costs may discourage the claimant from proceeding with the claim and can provide defendants with protection from being left out of pocket. At Asserson, we have significant experience assisting clients to obtain orders for security for costs. Asserson is an English law firm with offices in Tel Aviv, London and Manchester. Our team comprises 15 partners and over 75 lawyers who have worked at the highest levels of world class law firms and global companies. 88 Dealonomics – Inside the dynamics of global M&A Recent Market Trends 89 Inside the dynamics of global M&A From overlooked risks to emerging growth drivers Cross-border mergers and acquisitions (M&A) are a powerful force for innovation, productivity and growth — both for individual businesses and national economies. Despite rising geopolitical uncertainty and the shadow of global trade tensions, companies continue to pursue international deals to access new markets, capabilities and talent. To better understand the impact of global M&A, we surveyed 850 dealmakers and analysed 896 cross-border transactions completed between 2018 and 2024. The result is a clear view of the key ingredients for successful deals — and the value they create for companies and countries alike. 90 91 92 Don’t Kill the Exit Deal – Issues to consider as a Startup Founder Recent Market Trends 93 Joey Shabot Shareholder Don’t Kill the Exit Deal – Issues to consider as a Startup Founder The current environment in the global high-tech industry, particularly in Israel, is challenging. Many startups are struggling to raise their desired amount of funding, and some are even facing difficulties raising any funds at all. Despite the challenges of wartime, Israel’s high-tech market is showing definite signs of renewed stability and investor confidence. A question on every founder’s mind is: When will the M&A market return to its previous level of activity? While no one knows for sure, there are steps you can take today to maximize your chances of success when buyers come Don’t Kill the Exit Deal – Issues to consider as a Startup Founder 94 knocking. As a lawyer who has overseen dozens of deals, here are a few considerations from a buyer’s point of view. Some founders make critical mistakes early on. In some cases, these mistakes can cause headaches in the future, particularly when the company enters a sale process. Here are a few things to be aware of from the point of view of a potential buyer: Israeli Innovation Authority (IIA) Some entrepreneurs seek funding from the Israeli Innovation Authority, usually during the early stages of the company’s life. This is a great way to receive funding without dilution, and it helps entrepreneurs significantly. However, entrepreneurs should know that one of the IIA’s demands for funding is that the technology produced from R&D supported by the IIA must remain in Israel. Consequently, when a company wants to acquire a startup and move its R&D center and IP to the US or elsewhere, it must pay the IIA an exit fine. These penalties can reach substantial sums and have even killed planned acquisitions that suddenly became too expensive for the buyer. Be Careful of Promises Promises can backfire. For example, in a case we worked on, a young startup promised one of its employees that, in addition to a base salary, he would receive 10% of the total acquisition amount if the company were acquired. This guarantee almost caused the whole deal to fall apart and required a lot of extra work to find a solution that satisfied all parties involved. Creative Tax Structures May Kill a Deal Young startups, and indeed any individuals, consult with tax experts to improve their tax plans. While doing this is important, it’s crucial to remember that some tax decisions that seem brilliant at the time may jeopardize a future deal. For example, a target company one client was interested in acquiring took an aggressive and creative stance on tax withholding matters, forcing the buyer to take corrective action and ultimately costing a lot of money. Timeline Although it may seem like a quick process to an outsider, a sale process takes time—an average of at least four months from the beginning of marketing the company, negotiating with suitors, to the final signing and closing. Large corporations also have internal processes that take time, with numerous 95 departments working in parallel and scrutinizing the deal. Try not to rush the process; communicate openly and respect the other party’s timing requirements. Exclusivity A point that many entrepreneurs are not familiar with is the issue of exclusivity. Typically, when the acquirer signs a non-binding term sheet, they request that the target company sign an exclusivity clause, which states that the company cannot negotiate with any other buyer for a specified period. It is crucial to ensure that this clause remains within the norm, usually between 35-45 days, and to be careful not to inadvertently agree to longer periods, such as 90 days. One possible solution is to find a middle ground, with extensions based on deal progress of the deal, so you are not locked in longer than necessary. The stage at which the exclusivity period ends is a significant milestone in the negotiation process; by then, the acquirer has already invested considerable resources in the process and will be concerned that you might return to the market to find another buyer, which could serve as leverage for the acquired company. Insurance Until not very long ago, the buy-side usually demanded the acquired company leave a percentage (often 10%) of the proceeds received in escrow, just in case something came up in the future that breached the terms of the acquisition and caused damage to the buyer. Today, it is common to buy an insurance policy for the deal at a relatively modest cost, allowing acquirees to benefit from the entire amount paid as part of the acquisition, while the buyer is covered in case of future surprises. Running a startup is a challenging endeavor that demands constant decisionmaking, rapid adaptation, and a relentless focus on growth. The fast-paced nature of startups often means that founders and their teams need to respond to immediate needs and opportunities. It is crucial to periodically pause and reflect on whether your short-term decisions align with your long-term goals. Taking the time to evaluate your strategic direction ensures that you are not just reacting to immediate pressures but are also building a sustainable foundation for future success. This reflection can help identify potential misalignments and allow you to course-correct before small issues become significant problems. Ultimately, the ability to navigate the present while keeping an eye on the future is what distinguishes successful startups from those that falter. 96 Propel Fuels Victory Recent Market Trends 97 Michael Ng and Daniel Zaheer of Kobre & Kim are lead counsel for Propel Fuels, Inc, a renewable fuels startup that recently won a $604.9 million verdict following a five-week jury trial in California against oil major Phillips 66. Their victory was the largest trade secret verdict in the last three years and the fifth-largest verdict of any kind in the last year, and the court is now considering additional exemplary damages that may treble the award. We spoke with the two trial lawyers about the case and potential lessons for Israeli companies. Michael Ng Lawyer Daniel Zaheer Lawyer Propel Fuels Victory 98 First off, what was this case about? Michael Ng: This case grew out of an unconsummated M&A deal, namely, the proposed acquisition of our client, Propel Fuels, by the oil major Phillips 66. Propel was an early innovator in the retail sale of renewable fuels for the consumer vehicle market. It approached Phillips 66 about a potential deal that would allow deployment of Propel’s proven strategies across Phillips 66’s much larger network, and the companies engaged in 11 months of due diligence before Phillips 66 terminated the deal. The next business day, Phillips 66 told regulators it was getting into the business for the first time, and then quickly launched what has become a multibillion-dollar strategy. Daniel Zaheer: This is, unfortunately, the kind of story we hear about all the time. A larger company obtains confidential information developed by a smaller innovator, and then improperly uses that information to copy the business. Here, we were able to get justice for our clients after a long battle and difficult trial against a top law firm, and the case is still going. Are there lessons for Israeli companies? Michael Ng: Many Israeli companies are innovators, and many are looking to do deals with larger, more established incumbents in larger markets in the US, Asia or Europe. Those can be risky, especially when they are joint ventures, acquisitions, or other types of collaborations that require disclosing key confidential information. While caution is warranted, effective working relationships often require the free flow of information. So it’s impossible to keep innovation under lock and key. So Israeli companies should be careful to make sure they have NDAs and other legal protections in place. But those don’t necessarily keep deals from going bad—they just give the innovator options if that happens. Daniel Zaheer: And our case shows that when innovators stand up for themselves, they can win. One thing we really liked about this case is that we knew that the story our client had to tell would resonate with jurors. It’s human nature to be offended when those who put in the hard work are exploited, and it was great to give our clients their literal day in court. How can Israeli clients use the US legal system to help them? Michael Ng: Well, the US courts are not shy about adjudicating disputes, and for trade secret claims in particular they’ve said that US courts can hear 99 cases that involve conduct almost entirely outside the US so long as it has some nexus with the country. Specifically, courts have ruled that the federal Defend Trade Secrets Act applies so long at least one “act in furtherance of the misappropriation” takes place in the US. That’s very broad—and what it means is that Israeli companies can bring suits in US federal court for trade secret claims that happen mostly in Israel or somewhere else so long as that minimal “act in furtherance” took place in the US. Daniel Zaheer: I’d also add that US courts have powerful tools for discovery, and don’t require a lot of the pre-suit evidence gathering that courts in other countries require. That means plaintiffs can get into court quickly and then use those tools to get evidence of wrongdoing. In addition to the courts, the US International Trade Commission has other powerful remedies for enforcing US IP laws—including both patent infringement and trade secret misappropriation. Those include barring importation of infringing goods into the US market, and they can be imposed after fairly speedy investigations and trials. Michael Ng: That evidence-gathering works both ways, though. It means that claimants need to be prepared to produce their own documents, and make their own witnesses available to give testimony in depositions. That can take a lot of work, and requires close coordination between the business and legal teams. That’s part of why our firm has invested in our office in Tel Aviv—to give us a team on the ground that can work with clients, read documents in Hebrew or English, and generally coordinate what can be complicated proceedings.