Patent reform is on the way

Further to an agreement concluded with the US Trade Commission on 18th February 2010, the Israeli government is in the process of finalising an amendment to the Patent Law. The agreement has resulted in the removal of Israel from the blacklist of countries that fail to protect copyright adequately and enabled Israel to join the Organisation for Economic Cooperation and Development. According to the amendment, Israeli applications will publish 18 months after the filing or priority date, as in most Western countries.

At present, the full version of Israeli applications publish only after allowance of the application by the Patent Office. Since this publication is significantly later than the publication of applications in most Western countries, potential infringers can review the publication of corresponding applications in other countries and infringe the Israeli application until it is allowed by the Israeli Patent Office – and no remedy is available to the patentee to stop this or to receive damages for this period. In addition, a pre-grant opposition procedure is available in Israel, enabling infringers to enjoy a few more years of "remedy-free" infringement.

In Merck v Teva (19th May 2011) the Israeli Supreme Court ruled that the patentee also has no right to any other remedy (eg, unfair enrichment) if patent protection is available. Accordingly, owners of Israeli patents have no remedies against infringement of their applications until they are finally issued. This leaves patentees frustrated.

The debate over the final version of the amendment has been influenced by generic pharmaceutical companies, which are interested in such interim infringement without remedies. The Israeli government, which is concerned about drug prices, generally supports their position. However, leading Israeli high-tech companies are taking the opposite stance, pressing for remedies to be available as early as possible in the process.

The amendment will include a remedy for the infringement of patent claims applicable from the date of publication until the actual issue of the patent. It has yet to be decided whether such remedy will be subject to a notice from the patent owner or subject to changes to the published claims.

The amendment is expected to cover third-party submissions during prosecution, which are currently not possible in Israel due to non-publication until allowance. Expedited examination on the request of a third party may also be included.

The discord between the opinions of the generic pharmaceutical companies and those of high-tech industry has caused delays in finalising the amendment. However, the final amendment is expected to be published, approved and made law before the elections in September 2012.