Category Archives: Patents

The interplay of science and design, or, when designers, engineers and medics meet

Interdisciplinary collaborations can yield creative and inventive concepts and technologies that never would have been brought to life without such collaborative efforts. Indeed, the history of science and technology is abundant with examples of collaborative endeavors.In recent decades, inter- and cross-disciplinary collaborations reached out to new players in the research and development game – the designers. These new R&D collaborators have been warmly embraced by both academy (e.g. MediaLab at MIT, Wyss Laboratories at Harvard, D-School at Stanford, Imperial College and the Royal College of Art in London) and industry (including corporate behemoths such as Google, Philips, Microsoft and others around the globe).

One recent groundbreaking product stemming from a diverse team of medical doctors, designers and engineers is GyroGlove. This innovative glove was recently named a Millennial Trailblazer and promises to “restore independence and quality of life” to people suffering from Parkinson’s, Essential Tremor, and more. 

Inspired by aerospace technology, the concept of the glove couples gyroscopes to the hand of the user and instantaneously stabilizes the user’s tremor. With wearable technologies occupying a growing part of our lives, from allowing us to operate our phones through a wristwatch, to searching and reviewing information in hands free format, the thin and light weight characteristics of the GyroGlove technology will not stand out as out of the ordinary, to the person needing to wear said glove. As the glove has to respond in real time to wearer’s tremors, the challenge for engineers was clear but so was and still is the challenge for designers: how does one design a wearable tech that will incorporate the underlying complex electronic and mechanical components and yet remain a product that will not be cumbersome and be of real assistance to users without reducing their quality of life.

The technology has been said to be patent pending (not yet published) but might not be the first of its kind. Some have pointed out that attempts to patent similar inventions have been previously made, e.g. in US5,058,5711. It will be interesting to follow up and observe how and to what extent this technology will be protected. We believe that beyond patent protection, a comprehensive design protection will be essential to protect the glove’s aesthetic features.

Author: Dr. Maya Shmailov, Patent Attorney

 1 This has recently been pointed out by a commentator in an article on this subject; 

see – http://www.extremetech.com/extreme/221368-mit-engineers-create-glove-that-mitigates-hand-tremors-from-parkinsons

science_and_design_v2

Glamorous Inventor: Hedy Lamarr (November 09, 1914-January 19, 2000)

Hedy Lamarr, accredited with the statement “Any girl can be glamorous. All you have to do is stand still and look stupid”, was one of the most glamorous and beautiful women of her time. Yet, she did not stand still and was anything but stupid. 

Ms. Lamarr, born Hedwig Eva Maria Kiesler was one of the most acclaimed actresses of her time.  Commemorating her 101th birthday, and as celebrated by last weeks’ Google Doodle, we should remember her not only as an actress but also as a remarkable inventor.   

Lamarr, the glamorous Hollywood actress was a co-inventor, together with avant-garde composer and pianist George Antheil (July 1900-February 1959), of the frequency-hopping spread spectrum (FHSS) method, which led the way to modern wireless communication protocols utilized in GPS and CDMA cellular telephony.  The invention was the result of Lamarr’s interest in torpedoes (perhaps due to her first husband, Austrian military arms merchant) and was intended to prevent Nazi blocking signals from radio-controlled torpedoes. Although the invention was not utilized at the time, a US patent 2292387 titled “Secret Communication System” was granted in 1942 to the duo and the two were inducted to the US National Inventors Hall of Fame. 

It is interesting to note how the two inventors, with no technical background, each drew on their own experiences and interests to devise the system subject of the patent.

Happy Birthday Hedy Lamarr!

Author: Dr. Maya Smailov, Patent Attorney

 

Israel Patent Office (ILPO) Publishes 2014 Filing Data

The Israel Patent Office (“ILPO”) recently released the English version of its 2014 Annual Report (the “Report”). The Report highlights trends in domestic patent, design, and trademark filings, while also discussing relevant developments in the ILPO’s internal operations as well as its relationships with examining offices abroad. The Report provides some interesting insights into the state of intellectual property protection in Israel, and helps shed some light on what applicants can expect during the application process going forward.

Last month, the Israel Patent Office (“ILPO”) announced publication of the English version of its 2014 Annual Report (the “Report”). The Report discusses the ILPO’s patent, design, and trademark activities during the year and highlights some noteworthy trends in recent filing activity. This article provides a summary of some of the key data and insights from the Report.

General Observations

In general, the Report reflects renewed growth in intellectual property protection within Israel’s borders, as well as the ILPO’s efforts to streamline many of its search, filing and examination processes. For example, while patent filings and granted patent applications both increased from 2013 (the first increase since 2010), the ILPO shortened overall examination time when considering both first and second examinations. The pendency period for design applications also decreased – from 15 months down to 12. With regard to trademarks, the ILPO reported a significant increase in the number of filings designating Israel as the country of origin without noting either an increase or decrease in examination time.

Enhancement of Israel’s Position in the International IP Framework

In addition to filing data, the Report also highlights important steps the ILPO took in 2014 to further enhance its relationships with other examining offices across the globe. At the beginning of the year, the ILPO signed an agreement with the U.S. Patent and Trademark Office (“USPTO”) that allows U.S. patent applicants to designate the ILPO as an international searching authority. By the end of the year, the ILPO had begun reviewing U.S. applications. In September, the ILPO signed a similar agreement with the National Intellectual Property Center of Georgia, SAKPATENTI.

During 2014, the ILPO also began activating Patent Prosecution Highway (“PPH”) agreements with the patent offices in China, South Korea, and Spain – following PPH agreements previously executed with Denmark, Finland, Japan, and the U.S. These PPH agreements provide for expedited processing of international patent applications while reducing prosecution costs for applications. You can read more about the PPH in this resource from the USPTO.

The ILPO also played a role in the founding of a pilot program designed to further simplify and improve the global patent offices’ existing PPH arrangements.

Highlights from the Report’s Filing and Examination Data

With regard to filings and examinations, the following are some of the most noteworthy data and statistics from the Report:

Patent Filings and Examinations

Comparing 2014 to 2013, total patent filings increased by a modest one and a half percent, while the number of applications granted increased by roughly eight percent. The Report cites the addition of new patent examiners to the ILPO’s ranks as the reason behind the increase in patent grants. As a result, we may continue to see increased numbers when the ILPO releases its data for 2015 and subsequent years. This is good news for Israeli patent applicants, as this also means an overall reduction in the patent prosecution timeline.

Biotechnology applications continue to see the longest prosecution periods (34 months on average, down from 37 months in 2013), while applications for mechanics, electronics,  information technology, and medical devices enjoy the shortest wait times (22 months on average in 2014, down from 23.3).

Design Filings and Examinations

Design applications also increased in 2014 after seeing the sharpest drop-off in a decade the previous year. The number of designs registered during the year nearly doubled from 2013 – jumping from 658 to 1,286. This significantly closed the gap between open applications and registered designs, and the ILPO attributes this improvement to both increased staffing and new efficiencies in its design examination procedures. Seven of the top 10 design applicants in terms of volume in 2014 were domestic companies, and two-thirds of all design applications submitted to the ILPO during the year came from Israeli applicants.

Trademark Filings and Examinations

While overall trademark filings remained fairly steady from the prior year, 2014 was a busy year for the ILPO in terms of trademark application activity.  This was due in large part to the Office’s continued adjustment to the Madrid Protocol. Prior to joining the Madrid protocol in 2010, the ILPO only accepted one class of trademark applications. With trademark applicants now able to file under multiple classes, the ILPO’s trademark department is coping with significantly more volume than in previous years. Fortunately, prosecution time does not appear to be suffering as a result.

More than 25 percent of all trademark applications in 2014 originated in Israel, with just over 21 percent originating in the United States. No other country was responsible for more than seven percent of the ILPO’s trademark applications.

Reinhold Cohn Group | Israel Intellectual Property Attorneys

The intellectual property attorneys at Reinhold Cohn Group provide patent, design, and trademark prosecution services for individuals and companies in Israel and worldwide. The firm provides experienced legal representation for licensing and other intellectual property-related matters as well. To speak with an attorney at our offices in Jerusalem or Tel-Aviv, please contact us today.

Another Israel Patent Application Revived More Than Three Years After Abandonment

Section 21A of the Israel Patents Law establishes a twelve-month timeframe for patent applicants to seek revival of abandoned applications. However, under Section 164, this window can be expanded upon a showing of “reasonable cause.” Two recent decisions from the Patent Office shed light on some of the circumstances that can justify revival of a patent application after an extended period of abandonment. However, due to the fact-based nature of the Patent Office’s decisions and limitations imposed on the applicants’ rights in each case, new patent applicants should remain mindful of their deadlines when seeking patent protection in Israel.

Under the Israel Patents Law, patent applications that have been abandoned can be revived under certain, limited circumstances. This is consistent with laws in the United States, Europe, and other jurisdictions around the globe.

In most cases, the Israel Patents Law requires applicants to apply for reinstatement within 12 months of the date of abandonment. However, when warranted by the facts surrounding the abandonment, this time period can be extended substantially. This is evidenced by a recent decision of the Israel Patent Office allowing for reinstatement of a patent application more than three years after being deemed abandoned.

Patent Office Approves Revival of Abandoned Application After Three Years Due to Inventors’ Health Issues

The general rule regarding revival of abandoned applications is found in Section 21A of the Patents Law. Section 21A provides that the Patent Office may reconsider a refusal to register based on abandonment if the applicant files for reconsideration within 12 months of the date of abandonment. However, under Section 164, the Patent Office can extend this time period (along with the majority of time periods prescribed by the Patents Law), if there is “reasonable cause for doing so.”

In a recent decision, a Deputy Commissioner of the Patent Office relied on Section 164 in allowing reinstatement of an application more than three years after its abandonment. The patent at issue was Application No. 194015, for a heat insulating material. Following the applicants’ failure to respond to the Patent Office’s Notice Prior to Examination, the application was deemed abandoned in May 2012. Roughly three years later, the applicants – and the inheritors of one of the inventors who had passed away – sought to have the application reinstated. As justification for the extensive period of abandonment, the applicants cited the death of one of the co-applicants as well as a serious illness suffered by another.

The Deputy Commissioner accepted the applicants’ petition for reinstatement, finding the applicants’ justification to be “reasonable cause” for extending the permissible time period under Section 21A. However, the decision carries two important caveats:

  • The Deputy Commissioner’s decision to allow reinstatement after such a significant period of time was based, in part, on the absence of any third-party applicants seeking to oppose the reinstatement.
  • The Deputy Commissioner also ruled that the reinstated application should not be enforceable against any third-party inventors who utilized the subject patent prior to the date of reinstatement.

Thus, while the applicants’ personal circumstances carried significant weight – enough weight, in fact, to allow for application of a statutory exception – the Patent Office’s decision still clearly placed significant emphasis on the rights of intervening applicants and inventors.

Precedent for Revival After an Extended Period of Abandonment

Interestingly, this is not the only recent example of a patent application being revived after a three-year hiatus. In 2009, an application filed by ICOS Corporation, an apparent affiliated entity of Eli Lilly and company, was deemed abandoned due to failure to respond to an Office Action. However, the facts showed that the failure was not due to a delay on the part of the applicant, but rather due to the Patent Office sending the Office Action to the wrong address. The applicant filed for reinstatement in November 2012, and in October 2013 the Patent Office approved the request for examination of the abandoned application.

However, here too, the approval was not without its limitations. Asserting that the applicant’s Agent of Record still shared partial responsibility for the extensive period of abandonment, the Deputy Commissioner granted a non-transferable license to third parties that had already utilized the patent.

Prosecuting Patent Applications to Avoid Abandonment

While the applicants in these two cases were successful in using unique circumstances to overcome the default twelve-month limitation on seeking revival abandoned applications, inventors should not rely on special exceptions. Inventors with patent applications pending before the Israel Patent Office should be mindful of the typical timeframes in patent prosecutions, and act responsively in order to avoid the risk of abandonment.

Speak with a Patent Attorney at Reinhold Cohn Group

Reinhold Cohn Group’s team of experienced patent attorneys represents clients in patent prosecutions worldwide. To learn more about seeking patent protection in Israel and other countries around the globe, please contact us today.

Insights from WIPO’s Madrid, Hague, and PCT 2015 Yearly Reviews

The World Intellectual Property Organization (WIPO) is an agency of the United Nations that counts 188 nations among its members and administers numerous international treaties relating to the protection and enforcement of intellectual property rights worldwide. Among these treaties are the Patent Cooperation Treaty (PCT), the Madrid Protocol for trademarks, and the Hague Agreement for industrial designs. Recently, WIPO released its Yearly Reviews with data pertaining to filings under each of these treaties. In this article, we take a look at some key insights from WIPO’s 2015 Yearly Reviews, and briefly examine Israel’s stature in the worldwide intellectual property landscape.

Each year, the World Intellectual Property Organization (WIPO) releases a series of reports highlighting statistics and developments in the world of global intellectual property. Recently, WIPO released its “Yearly Reviews” covering trademarks, industrial designs, and patents under the Madrid System, the Hague System, and the Patent Cooperation Treaty (PCT), respectively. When viewed together, these three Yearly Reviews shed light on some interesting insights for intellectual property owners in Israel and worldwide.

Key Statistics from WIPO’s 2015 Yearly Reviews

As we have come to expect, WIPO’s Yearly Reviews are loaded with statistics. Some of the most noteworthy figures from this year’s reports include:

  • Intellectual property owners are seeking protection at record rates. Trademark filings under the Madrid System reached a record high in 2014, climbing 2.3 percent and marking the fifth consecutive year of growth in the number of filings. By contrast, industrial design applications were down 2.2 percent in 2014, although the total number of applied-for designs actually grew by 9.6 percent. Patent filings fell in the middle, with a 4.5 percent increase in filings year-over-year from2013 to 2014. 
  • The countries with the highest numbers of filings remained largely the same, though several nations appear to be up and coming. As in previous years, the United States was among the nations with the largest numbers of filings in all three areas. Likewise, China and Japan continue to be strong in patent filings, though Japan actually saw its first decrease in patent filings since 1992. Germany overtook Switzerland as the largest user of the Hague System for industrial design registrations, and countries as varied as the United Kingdom, Saudi Arabia, and Mexico all saw upticks in the number of filings originating from within their borders. 
  • Computer technology and pharmaceutical companies continue to pursue high numbers of filings. With respect to trademark filings, marks for computer hardware and software accounted for more than nine percent of all applications – the largest share of any class. For the first time, computer technology also became the field with the largest number of patent applications under the PCT. Across all three classes of intellectual property – trademarks, designs, and patents – pharmaceutical-related applications continued to make up a significant portion of the total filings as well.

Israel is Among the Top 15 Countries for PCT Patent Applications, Top 20 for Trademark Designations

Israel ranked fourteenth among PCT member nations in the total number of patent filings in 2014. While patent filings continue to be dominated by the U.S., China, Japan, and the European Patent Office, the nations ranking ninth through fifteenth were separated by just 1,070 applications. Among the top 15, Israel was one of 12 nations to see an increase in PCT patent filings in 2014.

With respect to trademark registration filings under the Madrid System, Israel ranks nineteenth in total designations worldwide. However, Israeli designations were down slightly (1.2 percent) in 2014. Last year, Israel saw just one industrial design registration under the Hague System.

What WIPO’s Yearly Reviews Mean for Intellectual Property Owners in Israel

WIPO’s 2015 Yearly Reviews contain numerous other noteworthy points as well. For example, with respect to patent filings under the PCT, just the top 50 applicants account for nearly 18 percent of all filings worldwide. However, filing numbers among individual inventors continue to be strong as well, with roughly 25 percent of Israel’s PCT applications being filed on behalf of individuals.

Overall, it is clear that the number of intellectual property owners seeking international protection for their intangible assets is on the rise. Perhaps now more than ever, trademark owners, industrial designers, and inventors need to be taking proactive measures to protect their rights and avoid infringing the rights of others.

Download WIPO’s Yearly Reviews

You can use these links to download WIPO’s 2015 Yearly Reviews:

Reinhold Cohn Group | Over 80 Years of IP Excellence

The attorneys at Reinhold Cohn Group represent inventors, entrepreneurs, and companies of all sizes in intellectual property matters in Israel and worldwide. To discuss what protection measures may be appropriate for your intangible assets, please contact us today.

Data Source: WIPO Statistics Database

U.S. Federal Circuit Expands Liability for “Divided” Patent Infringement

On August 13, 2015, the U.S. Court of Appeals for the Federal Circuit issued an important decision strengthening the protections afforded to patent owners in the United States. In Akamai Technologies, Inc. v. Limelight Networks, Inc., the Federal Circuit established a new legal framework that expands the scope of activities giving rise to liability under the theory of “divided infringement.” It also noted that future factual scenarios may warrant even further expansion of attribution-based patent infringement liability.

The United States Court of Appeals for the Federal Circuit issued a unanimous decision on August 13, 2015 that departs from precedent in order to expand the scope of activities that can give rise to claims for patent infringement. As a result of the Court’s decision, online service providers and others are cautioned to carefully examine their products and services for potential infringement issues that did not previously exist under U.S. law.

Background: Akamai Technologies, Inc. v. Limelight Networks, Inc.

The case in question involved a patented technology for delivering content over the Internet. In 2006, the patent owner, Akamai Technologies, Inc., filed suit against Limelight Networks, Inc. alleging that Limelight’s software infringed its patent, U.S. Patent Number 6,108,703 (the “‘703 Patent”). Although Limelight’s software – standing alone – did not perform all of the necessary steps for infringement, actions taken by Limelight’s customers using Limelight’s software completed the final necessary step. As a result, Akamai claimed that Limelight was infringing the ‘703 Patent under the theory of “divided infringement.”

While the jury in the underlying district court action found in favor of Akamai, the district court judge eventually granted Limelight’s motion for reconsideration. This decision was based upon existing Federal Circuit precedent suggesting that Limelight’s software did not give rise to patent infringement liability as a matter of law. After the case made its way to the U.S. Supreme Court, the Federal Circuit found itself with the opportunity to expand the divided infringement doctrine.

Divided Infringement Before and After Akamai Technologies

Divided Infringement Before Akamai Technologies: Agency, Contracts, and Joint Enterprises

Under existing U.S. federal case law, one party could be held liable for activities undertaken in concert with another if, “the acts of [the second party were] attributable to the other such that a single entity is responsible for the infringement.” This theory, known as “divided infringement,” contemplated two specific sets of circumstances: (i) where the first entity “directs or controls” the second entity’s performance; and, (ii) where the entities are acting together in a “joint enterprise.”

In order to prove that a defendant “directs or controls” another party for purposes of establishing liability, prior to Akamai Technologies, plaintiffs had two options. They could establish direction and control through either:

  • An agency relationship; or,
  • A contractual relationship.

Both of these tests are derived from – though as the Federal Circuited noted in Akamai Technologies, not directly analogous to – the general common law theory of vicarious liability. In short, where all steps required for infringement could be attributed to a single party, even where that party did not take all of the necessary steps itself, it could be held fully liable under the “directs or controls” test  for divided patent infringement.

Divided Infringement After Akamai Technologies: the New “Conditioned Upon” Test

In Akamai Technologies, Inc. v. Limelight Networks, Inc., the Federal Circuit expressly expanded the “directs or controls” standard to include a third possible scenario: where the liable party “conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.”

Limelight’s relationship with its customers was not sufficient to impute infringement based upon the existing vicarious liability-based tests. However, applying the new test, the Court held that Limelight could be held liable as a result of its customers taking the final step to infringe the ‘703 Patent. Citing Limelight’s terms of service and the intended functionality of the company’s software, the Court held that customers’ performance of the final step necessary to infringe Akamai Technologies’ patent was a condition to their use of Limelight’s content delivery network. As a result, Limelight was liable for divided infringement.

Lessons for Companies that Borrow from Patented Technologies

While Akamai Technologies involved software developed and licensed by an online service provider, it is clear that the Court’s new “conditioned upon” test has the potential to be broadly applied. In fact, noting that it was establishing a “legal framework,” the Court specifically acknowledged that other new factual scenarios may, “warrant attributing others’ performance of method steps to a single actor.” As a result, companies that rely upon patented technologies should be particularly wary of running afoul of the Federal Circuit’s expanded standard.

Contact a Patent Attorney at Reinhold Cohn Group

Founded in 1934, Reinhold Cohn Group is Israel’s most well-established law firm in the field of intellectual property. If you have a question about patent rights in Israel or abroad, please contact one of our attorneys to discuss your situation today.

EPO Annual Report Highlights New Trends in European Patent Filings and Registrations

Each year, the European Patent Office (EPO) releases an Annual Report that highlights key statistics and indicators from the prior year’s patent activity. As the executive arm of the European Patent Organization, the EPO is tasked with providing a uniform procedure for inventors to obtain patent protection in the Organization’s member states throughout Europe.

While Israel is not a member state of the European Patent Organization, activity at the EPO is still worth Israeli companies’ and inventors’ attention for a number of key reasons. Most significantly:

  • European patent activity may be an indicator of overall trends in the region, impacting Israeli firm’s patent strategies.
  • Israeli firms with an international presence need to be cognizant of potentially-competing patent activity in their target markets abroad.
  • International companies’ patent filings with the EPO may signal their intent for pursuing patent protection in Israel and the Middle East.

With these considerations in mind, we will examine some of the most notable data from the EPO’s most recent Annual Report. You can also read our recent discussion of the IP5’s 2014 Annual Report on worldwide patent activity here.

European Patent Filings are on the Rise

From 2010 to 2014, total European patent filings increased from almost 236,000 annually to more than 274,000 per year. This includes direct European applications as well as applications filed under the Patent Cooperation Treaty (PCT), which allows companies and inventors to seek simultaneous protection in 148 countries – including Israel – worldwide.

Of the applications filed, 115,959 received examination, and 64,613 applicants received European patent certificates in 2014. Just over 3,000 patent applications, roughly 1.1 percent, were opposed.

Medical Technology and I.T. Continue to See the Highest Volume

Based on the EPO’s classifications, medical technology continues to see the largest number of patent filings in Europe, with 11,124 applications representing a 3.2 percent increase year-over-year. However, grouping digital communication and computer technology together, these categories saw a combined 19,887 applications, with filings in each category rising 6.6 percent and 7.8 percent, respectively.

Biotechnology saw the sharpest increase in filings, at 12.1 percent. The only categories to see decreases in application numbers were:

  • Organic fine chemistry (down 1.3 percent);
  • Engines, pumps and turbines (down 3.2 percent); and
  • Pharmaceuticals (down 5.4 percent).

Perhaps unsurprisingly, the nine of the 10 companies with the largest number of patent filings in 2014 were in the digital communications and computer technology industries. However, these nine firms still combined to file just over 15,000 applications – less than six percent of the total filings in 2014.

Israel Ranks Sixths Among Non-EPO Member States in European Patent Filings

Among non-EPO member states, Israel ranked sixth globally in terms of European patent filings in 2014. Israeli firms made a strong showing that allowed the country to come in behind only the U.S., Japan, China, Korea and Canada, narrowly edging out Australia and India.

The top six non-EPO countries remained unchanged between 2013 and 2014, though the number of patent applications originating from Israel actually dropped by a modest 1.1 percent.

What Can Israeli Investors Learn from the EPO’s Annual Report?

Combined with the Ministry of Finance’s recently-proposed tax break for companies that transfer foreign patents into Israel, the 2014 EPO Annual Report represents favorable news for Israel-based companies and Israel as a whole. While the major players in major industries continue to dominate patent filings, there clearly is room for regional and entrepreneurial companies to stake their claim to patent rights abroad. If the proposed tax break brings more patent filers to Israel, we may see the country further climb the ranks of non-EPO member states claiming patent rights on the European continent.

Speak with a Patent Attorney at Reinhold Cohn Group

As the largest intellectual property law firm in Israel, Reinhold Cohn Group represents companies and entrepreneurs in patent matters worldwide. If you would like to speak with one of our attorneys, please contact us today.

Proposed Tax Break Would Encourage Transfers of Foreign IP into Israel

Following two years of efforts by the Ministry of Finance to examine opportunities for further encouraging companies to operate in Israel, a committee tasked with proposing changes to the Law for the Encouragement of Capital Investments has recommended a new tax break for companies that transfer intellectual property (IP) into the country. If adopted, the tax break will represent a significant incentive for companies to transfer foreign-registered IP into Israel, while also generating potentially billions of dollars in additional revenue for the Israeli government.

Andorn Committee Proposes Five Percent Tax on IP-Related Revenue

The committee, led by the former Ministry of Finance director general Yael Andorn, is proposing a reduced tax rate of five percent on revenue generated from transferred patents and other forms of intellectual property. In order to receive the tax break, in addition to transferring foreign IP rights into Israel, companies would need to satisfy certain conditions. As proposed by the committee, these conditions would include:

  • Involvement of the imported intellectual property in domestic manufacturing,
  • A commitment to meet certain employment thresholds, and
  • Increased domestic production volume.

The proposed tax break would represent a substantial savings for companies operating in Israel using intellectual property assets developed internationally: The tax rate on royalties and other revenue generated from non-domestic intellectual property currently stands at 26.5 percent.

This means that, on an IP asset that generates $1 billion of revenue per year, the owner would stand to potentially save in excess of $200 million in annual tax burden under the Andorn Committee’s proposed amendment. However, given the widely-held belief that the current economic disincentives are keeping this business out of Israel, the proposed tax break – in theory at least – appears poised to increase tax revenue to the government.

About Israel’s Law for the Encouragement of Capital Investments

As amended in 2011, the Law for the Encouragement of Capital Investments (LECI) provides tax and other financial incentives to industrial export companies that maintain physical locations in Israel. These companies often rely on patents and other proprietary processes and information, which themselves can become significant assets and sources of income. With its investment incentives, the LECI seeks to bring these IP assets into Israel in order to foster additional domestic growth and innovation.

However, work remains to be done. Issues with the current legislative framework have been highlighted by recent events, such as Google’s purchase and subsequent re-domestication of Waze to a jurisdiction with more business-friendly tax laws. As well-stated by a source involved in the Andorn Committee’s efforts, “IP registration creates roots and an anchor in the country of registration, and makes the company’s business activity in that country far more difficult to shift.” With the committee’s proposed change to the LECI, more companies may find it advantageous to move into – rather than out of – Israel.

Prior Efforts to Promote Domestic Investments in Innovation

The government has undertaken other efforts in the past to promote domestic development and registration of intellectual property. These efforts include obtaining membership in the Organization for Economic Co-operation and Development (OECD) in 2011, and adopting international standards in order to facilitate more-efficient patent searches and examinations. If the legislature amends the LECI in accordance with the Andorn Committee’s recommendations, businesses will have yet another reason to focus their development efforts here in Israel.

Reinhold Cohn Group | Over 80 Years of IP Excellence

The attorneys at Reinhold Cohn Group provide experienced and strategic representation for international and domestic intellectual property matters in Israel. For additional information, please contact us today.

Highlights from the IP5’s Annual Report on Patents

Styled the IP5, the world’s five largest patent offices – the European Patent Office (EPO), the United States Patent and Trademark Office (USPTO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), and the State Intellectual Property Office of the People’s Republic of China (SIPO) – come together on an annual basis to compile a detailed report on patent statistics from their collective jurisdictions. Comprising 89% of all patent applications and 90% of registered patents worldwide, the report provides valuable insight into the state of patent protection on a global scale.

This article highlights some of the noteworthy information from the IP5’s most-recent report, which was issued in December 2014 and contains data for 2012 and 2013. You can download the full report from the IP5’s website.

Patent Application Statistics

Worldwide, patent applications have seen a steady increase year-over-year. In 2013, the IP5 received 2.1 million patent applications, representing an eleven percent (11%) increase from 2012. The IP5 granted nearly one million patents – a four percent (4%) increase from 2012. Contrast this with the data from ten years ago, when the IP5 received just 1.4 million applications.

Of the total filings with the IP5, more than half are sent to the USPTO and SIPO, while nearly half of all applications originated from China or Japan in 2012. The IP5 received just over 150,000 applications from countries outside of their jurisdictions worldwide. China saw the greatest year-over-year increase, increasing its number of filings by 28% from 2011 to 2012.

Patented Technologies

While the number of patent families (applications filed in more than one IP5 jurisdiction) also continues to rise, interestingly, we do see some variations between the technologies most-frequently patented in different geographic areas. For example, nearly half of all applications filed with the USPTO were for electrical engineering patents.  Telecommunications, digital communication and computer technology applications were the most frequently filed. This also appeared to be the general trend worldwide.

However, the electrical engineering categories represented just a quarter of the filings in Japan, where chemistry patent applications were predominant (thirty percent (30%)). Instruments and mechanical engineering tended to be the less-popular categories, with “other” technologies (such as furniture and games) representing just six percent (6%) to eleven percent (11%) of applications across all jurisdictions.

Takeaways for Patent Applicants

These statistics shed light on some important lessons that can be gleaned from the IP5’s report:

  • The patent application process is consistently becoming more and more competitive as application numbers climb across the globe.
  • As a result of these increasing numbers, the IP5 offices are looking for ways to reduce the length of the examination process. The JPO and KIPO both reduced their initial examination periods in 2013, and the USPTO continues to promote its Track One prioritized examination process.
  • As one would expect, digital and Internet-related technologies continue to be at the forefront of innovation.

Speak with a Patent Attorney at Reinhold Cohn Group

Reinhold Cohn Group attorneys prosecute patent applications in Israel and worldwide. Read about our patent practice to learn more.