After a long legislative process, on July 26, 2017 the Knesset (the Israeli Parliament) passed the Designs Law, which purpose is to modernize and update the legislative system that regulated the protection of industrial designs in Israel: the Patent and Designs Ordinance from 1924.
While reforming the dated law with respect to protection of industrial designs, the legislator took the opportunity and incorporated into the Designs Law significant amendments concerning other intellectual property laws. Particularly, concerning remedies awarded to a right holder due to infringement of his rights. As will be detailed below, some of these remedies also affect third parties who were not embroiled in the infringement.
Remedies in a Claim for Infringement of Copyrights, Design, Registered Appellation of Origin, Geographical Indication or Integrated Circuit
With respect to copyright, appellations of origin, geographical indication, integrated circuit or a design (that was published, registered or an application for its registration was submitted before the Designs Law entered into effect), the amendment augmented the court's powers with respect to the remedies it may award to the plaintiff following a finding that the defendant infringed the plaintiff's rights:
- The court is authorized to order that action shall be taken in connection with goods that have been found to be infringing, in order to avoid any harm to the right holder, including the transfer of ownership of the goods to the plaintiff or destruction of the goods. It should be noted, that if the court orders the transfer of the goods to the plaintiff, it may also impose payment obligation on the plaintiff in this regard.
- According to the new amendments, the court's authority is not limited only to the infringing goods, but it also applies to additional assets predominantly used in the production of the infringing goods, in order to prevent the continuance of the infringement or additional future infringements. This is a far reaching remedy that, under certain circumstances, may possibly apply also to the means of production utilized to produce the infringing goods.
- With respect to designs, appellations of origin, geographical indications and integrated circuits - but excluding copyrights – the court has the power to order the destruction or transfer of ownership to the plaintiff of infringing goods owned by third parties who did not infringe the plaintiff's right themselves. However, this remedy is subject to Section 34 of the Sale Law – 1968 ("Market Overt", which allows the transfer of ownership to the buyer of a movable asset, not owned by the seller, when the sale was made during the seller's regular course of business, by a seller who engages in sale of assets of the kind of the asset sold, and the buyer purchased the asset and took possession thereof in good faith).
It should be noted, that during the deliberation of the proposed designs bill, the legislator sought to amend also the Patents Law, and grant the court the same powers with respect to patent infringement proceedings. After the proposed bill was already approved by the Economic Affairs Committee, the Health Minister requested to reconvene the committee, and amend the provision adding these remedies to the Patents Law. The reason for the request was the possible harm to the public health, to access to medicines and to factories manufacturing medicines. Since the different government offices did not reach an agreed upon version, the government requested to delete the remedies section from the Patents Law, and the Economic Affairs Committee accede to this request.
Deletion of Section 182(b) from the Patents Law, 5727-1967
As part of the legislation of the Designs Law, Section 182(b) of the Patents Law was deleted. This section provides that an invalidity defense claim to a patent infringement suit, does not expire.
During the deliberation of the bill, the representatives of the Ministry of Justice clarified that this deletion does not change the existing law and there is no limitation for defense claims, including against the validity of a patent during patent infringement suits. Initially, a provision similar to Section 182(b) of the Patents Law was included in the proposed designs bill. Following additional examination, the Ministry of Justice reached the conclusion that this provision is unnecessary since defense claim is not subject to limitation. Therefore, they requested to delete this provision from the proposed designs bill. At the same time, and based on the same grounds, it was decided to delete Section 182(b) from the Patents Law, which as previously mentioned, was the inspiration for the same provision in the proposed designs bill.