ISRAEL Law and Practice Contributed by: David Gilat and Matan Kovacs, Gilat, Bareket & Co, Reinhold Cohn Group
In addition, Section 183(c) of the Patents Law provides that if an infringement was commit - ted after the patentee or its exclusive licensee warned the infringer, the court may order the infringer to pay punitive damages in an amount that will not exceed the damages adjudicated by the court, thus enabling the adjudication of double damages. In general, damages accrue from the time when the infringement commenced. However, Section 179 of the Patents Law provides that damages may only be adjudicated from the time the pat - ent application was published under Section 16A of the Patents Law (namely, 18 months from the priority date), with such damages being capped at reasonable royalties until the applica - tion was published for oppositions, from which the regular rate of damages provided for in Sec - tion 183 of the Patents Law shall apply. However, those reasonable royalties shall not be awarded unless the court finds that the exploitation in question constitutes an infringement of the pat - ent as granted and that the invention claimed in the patent stage is substantively identical to the invention claimed in the application published under Section 16A. The court may add interest and linkage to any sum it adjudicates as damages, from any date it deems fit (but not earlier than when the cause of action came to be) until the date on which the damages are to be paid (usually within 30 days of the judgment). If the damages are not timely paid, a much higher and compounding arrears interest will apply. Damages for Revoked Injunctions If an interlocutory injunction is either revoked or limited in scope, the enjoined party can turn to the guarantees provided by the applicant – in rem and in personam both – to obtain compen -
sation for damages sustained. The defendant may base its claim on the doctrine of the unjust enrichment made by the plaintiff due to its exclu - sive position in the market, during the prelimi - nary injunction term. Procedurally, this can be done either by coun - terclaiming (if the period to do so has not yet lapsed) or by filing a new independent claim. The defendant will need to prove their damages – usually, the profits they have lost during the period they were enjoined – on the basis of fac - tors such as anticipated market share, antici - pated sale price for the defendant’s product and average profit margin. The defendant may seek to disgorge the plaintiff of those profits they obtained by virtue of any exclusivity afforded to them by the interlocutory injunction since revoked. Third parties are unable to seek damages over a revoked injunction, though they could theoreti - cally attempt to seek disgorgement if they were charged a premium as a result of the plaintiff’s de facto exclusivity mentioned above. 5.5 Legal Costs Under Chapter 18 of the CPR (Regulations 151– 157), the prevailing party is entitled to recover its actual legal costs, with consideration being given to the results of the proceedings, the resources required, and the conduct of the par - ties. As a result, Israeli courts are instructed to adjudicate fair and reasonable legal costs at the conclusion of the proceedings unless they have found that there are extraordinary reasons not to do so. Where attorney’s fees are concerned, the courts are instructed not to go below the minimum rates set by the Israeli Bar Association (unless
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