ISRAEL Law and Practice Contributed by: Eran Bareket, Reinhold Cohn Group
parties who petitioned for a compulsory licence, provided that the motion was filed after the later of either three years from the grant of the patent or four years from the application date. Examples of the misuse of monopoly power include: • when all the demand for the product is not satisfied in Israel on reasonable terms; • when the conditions attached by the patentee to the supply of the product or to the grant of a licence are not fair under the circumstanc- es, do not take account of the public interest and arise essentially out of the existence of the patent; • when exploitation of the invention by way of production in Israel is impossible or restricted by the importation of the product; or • when a patentee refuses to grant a licence for a local producer on reasonable terms. Upon request, the Registrar may also grant a compulsory licence, for medical purposes, for either a patented product that can be used as a medicine or a patented process for the produc- tion of a medicine. Compulsory licence to exploit an earlier patent If a patented invention cannot be exploited with- out infringing an earlier patent, then the Registrar may grant a licence to exploit the earlier inven- tion to the extent necessary, and under the con- ditions that the later invention serves a different industrial purpose and that it shows a consider- able advance over the earlier invention. Antitrust Law and Patents Section 49(b) of the Patents Act expressly pro- vides that the grant of a patent does not allow the patentee to unlawfully exploit the invention
in a manner that breaches any other enactment. As such, even though there are no special provi- sions in the Patents Act regarding the incidence of the Antitrust Law, one must keep in mind that there might be a liability in accordance with the Antitrust Law regarding misuse of rights. Specifically, in the Unipharm v Sanofi case, it was held that the patent applicant, Sanofi, misled the ILPTO and breached its duty of dis- closure since it filed a PCT application which claimed priority over an application containing an erroneous example. Sanofi was also found to have continued to demand priority even though it knew about the error and did not include suf- ficient details concerning the reason for the error and the circumstances. This judgment creates, by way of judicial legisla- tion, a new cause of action under the doctrine of unjust enrichment, for misleading the ILPTO. It allows a private competitor to bring a suit against an innovative pharmaceutical company (that was found to have improperly prosecuted a patent application), seeking accounting and disgorgement of its profits as a punitive meas- ure, without regard to the damage to that private competitor. The judgment dealt with liability under two dif- ferent causes – unjust enrichment and violation of competition law. According to the majority opinion, the grounds for unjust enrichment arise even though the established misleading act did not constitute a breach of the statutory clause of duty of disclose. The court held that for unjust enrichment cause of action to apply the plaintiff must prove intent to mislead and causality. The remedy is restitution (disgorgement of profits) in an amount to be determined according to the court’s discretion. It was also held in relation to bad faith and intent to mislead, that there is no
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