ISRAEL Law and Practice Contributed by: David Gilat and Matan Kovacs, Gilat, Bareket & Co, Reinhold Cohn Group
The Patents Law limits this right only to the busi - ness owner. In other words, this right “cannot be transferred, devolved or transmitted by inherit- ance, except together with the business in which that invention was used” (Section 64). Exhaustion Exhaustion could be raised as a defence to an infringement action, however the metes and bounds of such a defence has not been resolved, especially in cases where an exclusive licensee is recorded on the register. In the latter situa - tion, there is a likelihood that the defence will not be recognised. The matter is not adequately resolved by case law. Licence A defendant in a patent infringement claim may argue that they were allowed to carry out the allegedly infringing act as licensees. The suc - cess of such a defence would likely depend on whether or not the licence agreement in ques - tion was breached: if the licensee had exploited the patent in breach of the terms of the licence (eg, field of use limitations), their acts might con - stitute both patent infringement and breach of contract. However, breaches that are not related to the actual use of the patented invention (eg, failure to pay royalties under the agreement) will probably give rise just to contractual causes of action, as long as the licence agreement is not duly cancelled. Compulsory Licence While the Patents Law empowers the Patents Registrar to issue a compulsory licence subject to the satisfaction of statutory criteria, such a licence would only allow the exploitation of a given invention after it is issued and not retro - spectively. It so follows that while an infringer may seek a compulsory licence immediately after the claim against them was submitted,
doing so ought not serve as a defence against past infringements. Additional Exceptions The Patents Law also provides for a number of additional exceptions to infringement. Under Section 180, “the exploitation of a pat - ented product which was validly forfeited to the State shall not constitute infringement”. Under Section 181(1), the use of a patented invention in the body or accessories of a vessel regis - tered in a member state of the WTO other than Israel “exclusively for the needs of the vessel” while the vessel is “temporarily or incidentally in Israel’s territorial waters” shall not constitute infringement. Similarly, the use of a patented invention in the construction or operation of an aircraft or land vehicle registered in a WTO state other than Israel, or their accessories, while they are “temporarily or incidentally in Israel” shall not constitute infringement (Section 181(2)). 1.16 Stays and Relevance of Parallel Proceedings In general, Israeli courts follow the doctrine of lis alibi pendens, according to which the same issue would not be simultaneously heard in two different instances in Israel. When it comes to patent infringement cases, a court hearing an infringement claim may stay the proceedings pending the Patent Office’s decision in a motion for revocation if such was already pending when the action was first filed. It is also possible for the defendant to file a motion for revocation after the infringement claim was filed. In such a case, the court will decide whether validity issues will be heard by the Patent Office or by the court, and the court may also stay the infringement proceedings pending a decision by the Patent Office.
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