9 - Israel

Summary

Israeli law, in general, is based on the principles of English common law, in which an injunction is perceived as a form of equitable, discretionary relief.¹ Historically, injunctive relief was granted based on discretionary criteria, including the irreparable injury rule (in the absence of an injunction, the plaintiff would be caused an irreparable injury, which could not be compensated for by monetary relief); the balance of hardships between the plaintiff and defendant (known also as the “balance of convenience”); and the clean hands rule (equitable relief is only granted if the plaintiff acted in a decent and moral manner, disclosing the relevant facts).² Another important criterion was the public interest.³

A. Injunctive Relief in Israeli Law: An Overview

1. Injunction as Equitable Relief

Israeli law, in general, is based on the principles of English common law, in which an injunction is perceived as a form of equitable, discretionary relief.¹ Historically, injunctive relief was granted based on discretionary criteria, including the irreparable injury rule (in the absence of an injunction, the plaintiff would be caused an irreparable injury, which could not be compensated for by monetary relief); the balance of hardships between the plaintiff and defendant (known also as the “balance of convenience”); and the clean hands rule (equitable relief is only granted if the plaintiff acted in a decent and moral manner, disclosing the relevant facts).² Another important criterion was the public interest.³

In many common law countries, including Israel, these equitable considerations have survived with respect to temporary injunctions, where they are known as the four-factor test,⁴ but they have become only a rhetoric with respect to final injunctions.⁵ Nevertheless, according to Israeli law, both temporary and permanent injunctions, at least de jure, are subject to the courts’ discretion. Under section 75 of the Courts Act 1984, any court, ruling in a civil law matter, is authorized to grant an injunction and any other remedy as it deems appropriate under the circumstances. The Civil Law Procedure Regulations (1984) anchors the Israeli version of the four-factors test with respect to temporary remedies: Under section 362 of the Regulations, in granting temporary remedies a court should take into consideration, inter alia, these factors: the injury to the plaintiff if the remedy were not to be granted as opposed to the injury to the defendant if the remedy were to be granted, as well as injury that may be caused to a possessor or third party; whether the application was submitted in good faith, if it is justified and appropriate to grant the remedy, and if the remedy is proportionate.⁶ The enforcement of injunction, as all other court orders, is based on the Court Contempt Ordinance, setting the authority to enforce obedience to court orders by fines and imprisonment.⁷

2. Property Rights and Tort Law Remedies

Injunctions in the field of intellectual property law raise complex questions regarding the relationship between the nature and scope of property rights and the protection over proprietary interests through tort law and other remedial means. In a nutshell, under Israeli law, property rights are set by laws such as land, chattels or intellectual property laws, but the protection of ownership and possession over assets is determined, inter alia, by tort law. For example, while land law defines ownership of land, the injury to land by trespass is a tort civil wrong. The tension between the proprietary nature of a right and its protection, inter alia, by tort civil wrongs is reflected in the realm of remedies, because the framework for the grant of remedies is set in tort law, which addresses uniformly all remedies, without differentiation between civil wrongs aimed at protecting ownership and possession, such as trespass, and other civil wrongs, such as negligence. The question, therefore, is whether there are policy considerations supporting differentiation of remedies in cases involving property rights in contrast to other civil wrongs and, in addition, the question of what exactly is the meaning of the notion of “property right” in Israeli law.⁸ In a long series of decisions, the Israeli judiciary has consistently categorized various intellectual property rights as “property rights.”⁹ Therefore, the discourse over remedies in the intellectual property realm is inevitably driven into the comprehensive perceptions of the legal meaning of property rights and its consequences.¹⁰ More specifically, in land law, property rights are perceived under Israeli law as “robust,” which confers their owner an almost absolute prerogative to control the protected asset. For instance, in the landmark decision Roker v. Solomon,¹¹ the Supreme Court held that although remedies, in general, are always subject to the court’s discretion, the injunctive force underlies the basic essence of a property right, and therefore as a matter of principle an owner of a property right should not be deprived of the injunctive prerogative. In this case, the question was whether a landowner in a condominium could insist on preventing a neighbor from using and occupying a section of a shared area on the premises, and whether such action could be characterized as an abusive misuse of a property right. The Supreme Court ruled that a landowner, having a property right, is usually entitled to injunctive relief, and the insistence on enforcing an entitled remedy could not be ruled as a lack of good faith or abusive misuse of a right.¹² Though property rights are not absolute, the Supreme Court concluded, injunctive remedies would rarely be deprived.¹³ In the following sections of this chapter, it will be demonstrated that this rigid perception of the scope of property rights has percolated into intellectual property case law.

Moreover, the perception of entitlement to injunctive relief, deriving from the classification of intellectual property rights as property rights, should be settled with another classification – that of intellectual property infringement claims as being part of the broad legal field of tort law.¹⁴ In other words, while intellectual property rights are classified as “property rights,” the legal framework for the grant of remedies when such rights are infringed is tort law. The challenge is significant considering section 74 to the Torts Ordinance (New Version),¹⁵ according to which the court should not grant an injunction in cases where the injury or damage to the plaintiff is small and could be evaluated monetarily and offset by compensation, and when granting the injunction would be abusive to the defendant. However, the court may grant monetary relief in lieu of the injunction. The question, therefore, is which of the two perceptions prevails in intellectual property actions – the rigid proprietary perception of an (almost) absolute entitlement to an injunction or rather the tort law perception of a balance of interests and a cost–benefit analysis regarding injunctions? In the following, Israeli courts’ approach to patent law actions are examined. It generally appears that the proprietary perception is governing; however, some mild exceptions will be presented.

B. Injunctive Relief in Israeli Patent Law

1. The Patents Act

Under section 183(a) of the Patents Act – 1967 (the “Patents Act”),¹⁶ a plaintiff is “entitled to relief by way of an injunction and damages.” Namely, a permanent injunction is perceived as the major remedy that follows from the patent right, conferring exclusivity over prevention of use of the protected invention.¹⁷ However, as explained in the previous section, the granting of injunctive relief is subject to the court’s discretion, being an equitable remedy in essence. Therefore, the use of the term “entitled” may denote a presumption according to which the grant of injunction is the default remedy once infringement has been proven, and the court should express a solid reasoning why, upon the specific facts of the case, it is justified to deny the grant of the junctive relief. In that sense, section 183(a) of the Patents Act does not present a lex specialis to the general rule, which acknowledges courts’ full discretion to grant or to refuse to grant equitable remedies.

The explanatory part of the Patents Act Bill, dated 1965, is rather laconic in the sections concerning remedies.¹⁸ The only explanation given is as follows: “Thus far, the only substantial law governing claims of patent infringement is British common law. It is proposed to set comprehensive rules with respect to jurisdiction, the power to file an infringement lawsuit, exceptions and defense claims, and remedies. All these are new sections.”¹⁹ There is not much we can learn from the Patents Act Bill, except that it is proposed to codify British common law rules and not necessarily deviate from them. The term “entitled” in section 183(a) of the Patents Act should not, therefore, be interpreted as overruling the general British common law tradition with respect to courts’ discretion in granting injunctive relief.

The common law legacy preceding the Patents Act was acknowledged anew by the early Israeli Supreme Court decision in the case of American Cyanamid Company NY USA v. Lepetit SPT,²⁰ which discussed a patent owner’s petition to amend the claims of an already registered patent. Justice H. Cohn, handing down the decision, ruled that the Israeli Supreme Court is free to adopt British common law rules as it deems fit. Furthermore, remedies are subject to courts’ discretion, and could be denied on the basis of delay or unclean hands. Courts’ “discretion” means weighing the conflicting interests at stake and presenting the reasons that justify the refusal to grant remedies that the court is authorized to grant.²¹

The question, therefore, is whether the Israeli judiciary applies its vested, inherent discretion in matters of injunction in patent cases, and if yes, how.

It should be noted that compulsory license schemes are set out in chapter 7 of the Patents Act and include a compulsory license for cases of misuse of a monopoly,²² and a compulsory license for dependent patent.²³ The terms for the grant of a compulsory license by the Patent Registrar are specified in detail. Chapter 7 was amended in 1999 in order to comply with the TRIPs requirement.²⁴ Compulsory licenses based on misuse of a monopoly are occasionally granted, but a compulsory license for a dependent patent has not been reported thus far, to the best of our knowledge.²⁵

2. Court Decisions

a. Supreme Court

According to Israeli law, patent cases are heard at the District Court (of the relevant jurisdiction) in the first instance, and therefore appeals upon the courts’ decisions are directly filed at the Supreme Court, at the second instance. Under a judicial system in which the Supreme Court serves as the appellate instance, there is a relatively high volume of Supreme Court patent cases.²⁶ Most Supreme Court cases focus on routine patent litigation questions, including the initial qualification of patent registration, validity of the registered patent, interpretation of the patent claims, and inspection of the alleged infringing acts. In cases concluding that the patent was infringed, the Supreme Court approves the injunction order, whether preliminary or permanent, issued by the lower instance. There are no Supreme Court decisions discussing up-front the question whether it is proper, under the circumstances, to deny the grant of permanent injunctive relief, yet as will be presented in the following sections the traces of some hidden flexibilities may nevertheless be found. Moreover, the decisions are focused on the material questions of patent law; the injunctive remedial consequences, in contrast with the monetary remedial consequences, are left with no in-depth reasoning.²⁷ In other words, final injunctions are generally approved de facto by the Supreme Court on an automatic basis, albeit a few mild exceptions could be sketched. The Supreme Court functions as an appellate instance, therefore it can either uphold or reverse the determination of the District Court concerning the patent validity and infringement. However, the operative part of the decision concerning the injunction is viewed as if it is merely a technical matter, which does not merit a normative evaluation. District courts’ decisions reflect the same view. In that sense, Supreme Court approach echoes in District Court approach, and vice versa.

Moreover, the characteristics of the parties involved in patent cases seem to be irrelevant: the parties in Israeli patent litigation are both multinational corporations, particularly pharmaceutical companies, and local corporations and individuals; however, we have not found evidence concerning a linkage between that factor and courts’ discretion regarding injunctions. Furthermore, there is no special rule exempting the state. In fact, in one of the seminal decisions handed down by the Supreme Court – discussing a patented invention of combat pilot’s helmet – a final injunction was issued against the state.²⁸

Nevertheless, there are a few slight exceptions, relating to specific situations. The most prominent decision by the Supreme Court, denying the grant of an injunctive relief, relates to the interim period, in which a patent application is still pending (i.e. the “pendency period”). Under section 179 of the Patents Act, an action for infringement can be brought only after the patent has been granted. Once a patent is granted, the court may grant relief for pre-grant infringement. Namely, during the patent pendency period, no remedies may be granted, and only post-grant actions are possible, yet the compensation would be evaluated on a retroactive basis as well. In 2011, the Supreme Court handed down a seminal decision in the case of Merck & Co. Inc. et al. v. Teva Pharmaceutical Industries Ltd et al.,²⁹ ruling that section 179 represents an exhaustive rule, prohibiting the grant of injunctive relief (whether temporary or final) during the patent pendency period. Such a rule applies to other legal mechanisms as well, including the Unjust Enrichment Law, which cannot circumvent the Patents Act provisions. The Supreme Court’s reasoning was based on the complex balance of interests reflected by the Patents Act, which takes into consideration both the need to protect inventors’ incentives and the public interest in free markets. According to this ruling, the Patents Act equilibrium of interests is clear: The exclusive proprietary power of the patent right begins only after the grant of the patent. The intertwined relation of intellectual property law and unjust enrichment law in Israel will be further discussed in Section C.

Another mild exception, reflecting a not completely automatic approach to permanent injunctions, relates to orders for stay, which seek to temporarily suspend the execution of the lower court injunctive order until the decision in the appeal is made (i.e. “stay order”). In the case of Neka Chemicals (1952) LTD and others v. Sano Industries Bruno LTD,³⁰ the Supreme Court held that while the general rule is that there is no reason to grant a stay order with respect to ordinary injunctions granted by lower courts in patent cases – since otherwise the plaintiff’s injury may increase – there is a justification to suspend the delivery up (seizure) order of the infringing products in the case at stake. The reason for such an exception was that delivery up (seizure) orders may injure the defendant’s reputation, beyond the direct monetary injury in case the appeal is upheld, and it would be very hard to retroactively evaluate the reputational damages. In contrast, if the appeal is rejected, the plaintiff will be fully compensated for their loss. Therefore, a stay order was issued in part. This decision nevertheless reflects a reasoning that underlies temporary injunctions, weighing harm to the parties as part of the equitable discretion.

A third case, representing somewhat of a deviation from the automatic approach for granting injunctions, is the 1971 decision in the case of Trisol LTD v. Moses Kobobi.³¹ This decision concerns pre-Patents Act events that occurred in the 1950s and 1960s relating to an allegedly permitted use of a patented invention. Based on severe delay in filing the action, which was decided on the basis of laches, alleged misrepresentation of approval of use and alleged implied license, the Supreme Court ruled that there was no basis for granting an injunction, particularly since at the time the decision was handed down the patent had already expired. Though exceptional, this decision may signal the court’s early approach of applying equitable considerations concerning delay with respect to permanent injunctions as well. Yet it could not be ignored that since the patent had already expired at the time of ruling, the court could not grant an injunctive relief. Moreover, the Supreme Court explicitly ruled that delay, in principle, does not deprive a patent owner from their right,³² but in cases where delay is accompanied by an implied equitable license which is based on the plaintiff’s behavior, the patent infringement claim should be entirely rejected. As explained in Section A, with respect to temporary injunctions, Israeli law preserves the British common law legacy, according to which courts apply full discretion on the matter, based on the various traditional factors. Patent law decisions follow these lines.³³ Many Supreme Court decisions foster this legacy,³⁴ and moreover stress the general rule according to which the appellate instance would not overrule the factual basis underlying the lower court decision to grant or refuse to grant temporary injunction.³⁵

b. District Court

In almost all District Courts decisions, once a patent infringement is determined, a final injunction is granted upon request.³⁶ Namely, the lower courts’ approach to final injunctions is predominantly an automatic one as well. The rare cases in which injunction was not granted although the court held that the patent was infringed do not reflect an exception to the automatic approach on the matter, but rather were based on a specific factual situation in which the grant of injunction was irrelevant. For example, in two cases, the court held that the patent was infringed, but nevertheless because at the time the decision was handed down the patent had already expired no injunction could be granted and the only remedy left for the plaintiff was a monetary one.³⁷ Other examples relate to cases in which injunction was not requested due to various factual circumstances.³⁸ In contrast, temporary injunctions are subject to close inspection, and courts consider the traditional factors: the balance of convenience, the irreparable harm rule, and equitable considerations of clean hands and laches.³⁹

The specific phrasing of injunctive orders is usually included within the court’s final decision, and there is no special form for such remedy. The common phrases used are very short, and there is no evidence for flexibilities in the texts. For example, the phrasing of one of the earliest injunctions granted in Israel, in 1952, was (non-official translation): “I order the two defendants and each one of them, to refrain from infringing patent Exhibit 1, directly or indirectly, whether by themselves, by their providers, agents and in general.”⁴⁰ A later phrasing would typically include more specific prohibited acts, such as the following order granted in 2004 (non-official translation): “The defendants and any one in their behalf will refrain from any commercial act, including acquisition, production, advertising, distribution, marketing, sale, supply and/or offer of the product protected by Israeli patent number 88373, without the plaintiff’s in-advance approval in writing.”⁴¹ In some cases, the plaintiff is requested to submit separately a phrasing of the injunction for the approval of the court, and in such cases the final injunction is not open to the public.

c. Flexibilities within the Interpretation of Substantive Law

While the Israeli judiciary perceives final injunctions as an automatic outcome to the determination of patent infringement, it nevertheless applies profound discretion as to substantive patent questions involving interpretation of the Patents Act and of the patent claims. The courts have stressed in a long line of decisions that patent cases always entail the application of judicial discretion with respect to substantive issues, such as the qualification of the registered patent and the interpretation of the patent claims, in light of the balance of interests underlying patent law.⁴² In other words, in clear contrast to the question of granting injunctions, when determining substantive conclusions, Israeli courts demonstrate great flexibility.

Since there is such a significant difference between the judiciary’s rigid approach to final injunctions and its broad, inherent discretion applied with respect to other legal questions arising in patent cases, we should ask whether there are hidden flexibilities concerning final injunctions as well.

A possible phenomenon, proposed here, could be that since the perception of patent cases is binary and a patent was either infringed (and therefore its owner is entitled to an injunction) or there was no patent infringement at all, then in the specific cases in which we could have expected a midway conclusion where despite the finding of patent infringement the granting of an injunction was not justified, the court nevertheless ruled that there was no patent infringement. Namely, the extreme binary way patent law is operated may lead, de facto, to the shifting of all the judicial flexibilities to the substantive part of the decision, discussing the infringement. Thus, the proposed hypothesis is that in “gray area” cases, to avoid the ill-consequences of final injunction affecting the public interest at large, the court may rule that there was no infringement at all.⁴³

A possible evidentiary basis which may, somewhat, support such a proposition is the finding of this project, which reviewed located final decisions of Israeli district courts (first-instance courts) discussing inter partes patent infringement lawsuits in the years 1950–2019.⁴⁴ Out of seventy courts’ final decisions, in thirty-one cases the lawsuit succeeded, namely the court ruled that the patent was valid and was infringed (in full or in part), and therefore injunction was granted upon request. This finding represents a ratio of 44 percent success in patent lawsuits reaching a court’s final decision, which should be understood as a non-accurate ratio, considering many unknown variables, such as the number of patent cases settled outside court (especially after interim proceedings), the number of patent cases resolved in arbitration and other alternative dispute resolutions methods, and other reasons for the cancelation of lawsuits.⁴⁵ Nevertheless, this finding is remarkable, considering the general average ratio of success in civil lawsuits reaching a final decision in Israeli courts, which is much higher.⁴⁶ How can such a gap be explained? One possible explanation is that courts are aware of the gap between the vast legal flexibilities with respect to questions of patent validity and infringement in contrast to the rigid approach with respect to injunctions. And, since the determination in patent cases has a profound impact on the public interest, although the conflict is between private parties, courts may be drawn to entirely reject lawsuits to avoid far-reaching negative consequences of an injunction that may harm the public interest. In other words, the nature of patent litigation, involving the public interest, in contrast to “ordinary” inter partes civil lawsuits, may generate a different approach.⁴⁷

A few Israeli cases could fit within such a proposition. A putative example is the case of Tzhori and Sons Industries LTD and others v. “Regba” Communal Agricultural Village LTD,⁴⁸ in which the court had to interpret section 50 of the Patents Act, according to which, if the invention is a process then the scope of the patent covers the “direct product” of the process as well. In this case, the invention concerned the process of cutting a surface (such as marble or stone) that allows for a sink to be installed into the surface in such a manner that the sink and the working surface create a flat platform. The invention related to the cutting process and (implicitly) to the installation of compatible sinks. The question was whether the compatible sink falls within section 50 of the Patents Act, as being a “direct product” of the patented process. The defendant imported and sold compatible sinks without the plaintiff’s approval, and therefore competed on the same market. The installation of the imported compatible sinks was done by various freelancers.

It should be noted that these kinds of situations are known in design law as the “must fit/must match” problem, in which the protected design right may give rise to claims of exclusivity over secondary market products (i.e. aftermarket products), such as printers and cartridges, or machines and technological devices and spare parts.⁴⁹ The “must fit/must match” problem, however, may be relevant in patents law as well, and has given rise to complex questions concerning the limits of intellectual property monopolist rights vis-à-vis free competition.⁵⁰ The District Court in Tzhori held that the compatible sink is a direct product of the patented process, since, at least in some periods, it could be installed into surfaces only if they were cut by the patented process. The District Court Judge explicitly explained that considering free competition, not all compatible sinks should fall within the monopoly’s scope, but rather only those that would possibly be installed by the patented process. Moreover, the court was aware of the fact that the installation of the compatible sinks was done by third parties – the freelance installers – and the defendant had no control over their acts. During the hearings the defendant had developed its own process for installation of compatible sinks, which was approved by the court as non-infringing. Therefore, a final injunction was ordered, referring only to sinks that were aimed to be installed by the patented process and not by other newly developed methods.⁵¹ On appeal, the Supreme Court reversed the decision, holding that the direct product of the cutting process was only the aperture (i.e. the opening) in the surface, while the compatible sink was a “later” product. The defendant imported and sold the compatible sinks, yet the customer was responsible for the installation of the sink they bought, and the installation was done by third parties for whose acts the defendant was not liable. The Supreme Court rejected the application of the joint tortfeasors doctrine in this case and ruled that the doctrine of contributory infringement was not yet adopted in Israeli patent law. Therefore, the Supreme Court clarified that even if the installation done by third parties was a patent infringement, considering a broad interpretation of the patent, the defendant could not be held liable for such infringing acts since was merely importing the sinks.⁵² It should be noted that one year later, in a different case, the Supreme Court did adopt the doctrine of contributory infringement in patent law.⁵³ Moreover, the Supreme Court reasoning in the Tzhori case was that the Patents Act is subject to interpretation according to the law’s initial purpose, and a balance of competing interests should exist: the need to set limits to the monopoly of the patent right which may limit the freedom of occupation and of competition, versus the proprietary interests of patent owners and the public interest in incentivizing the development of inventions.⁵⁴ Therefore, the Supreme Court concluded that the defendant did not infringe the patent, and consequently the injunction was revoked. Without discussing the issue of “direct products” and the proper rule for compatible parts, it is clear that the Supreme Court was concerned by the closure of the relevant market to competition, and thus it determined that there was no infringement at all. However, this was, potentially, an appropriate case in which even if the court had concluded that the patent was infringed – since the patent could have been interpreted as including the process of installation and the importation of compatible sinks could have been concluded as contributory – the court could have justified the denial of an injunction as being a far-reaching remedy under the circumstances, which would disproportionally close the market. Such result could have been justified particularly considering the defendant’s contributory liability.

C. Injunctive Relief in Patent Subject-Matter Cases Based on Unjust Enrichment Law

In 1979, the Unjust Enrichment Act was enacted in Israel, based on continental principles.⁵⁵ The Act establishes the grounds for monetary restitution; however, it was developed extensively in Israeli case law as a basis for a cause of action as well, particularly in intellectual property subject-matter cases which did not qualify for a fully fledged intellectual property right. Moreover, in a District Court decision of 1989, it was held that unjust enrichment may serve as grounds for granting final injunction, and not only for restitution. The Supreme Court further developed the principle of unjust enrichment as a vehicle for claims in situations in which products were copied, but there was no infringement of any other established intellectual property right.⁵⁶

In 1998, a seminal decision was handed down by the Supreme Court in the case of ASIR,⁵⁷ which concerned an industrial design that had not been registered and an invention for which no patent had been registered. The question was whether copying these unregistered products created grounds for a claim of unjust enrichment (which, as mentioned in Section C, entitles the plaintiff to both monetary restitution and injunctive relief). It should be noted that until the new Designs Act was enacted in 2017, there was no established, unregistered design right under Israeli law. The Supreme Court considered the principal question of whether intellectual property is regulated exclusively by the established intellectual property rights, such as patents and designs, or if it may be protected by other legal means. The majority ruled that unjust enrichment may serve as an independent cause of action in cases featuring an “additional element,” variously referred to as “unfair competition” or “unfairness.”⁵⁸

In the aftermath of the ASIR ruling, there have been further cases in which claims based on unjust enrichment were accepted, even though no design had been registered.⁵⁹ The injunctions in these cases were occasionally non-perpetual and limited to a certain period. The ASIR ruling did not discuss the time period of injunctions, but the Supreme Court referred to this issue in later decisions. For instance, a Supreme Court decision that followed one of the cases discussed in the ASIR holding, ruled that the monetary remedies should be limited in a way that would reflect eight years of protection over the non-registered design, and that this period already included the injunction that had been granted by the District Court for a limited time.⁶⁰ The Supreme Court explained that granting remedies in cases based on unjust enrichment is complex, since, on the one hand, there is no fully fledged (intellectual) property right and, on the other hand, the plaintiff’s interest that their design would not be copied justifies protection.⁶¹ Therefore, various factors should be considered in tailoring the adequate remedy, including the behavior, intentions and good faith of the infringer, the investment in the design and the reason the design was not registered. The Supreme Court further emphasized that injunction is an equitable remedy which is subject to the court’s discretion.⁶² In another case, the Supreme Court stressed that considering the proper balance of interests underlying intellectual property laws, between incentivizing creators and allowing free competition, there is no justification to grant perpetual injunction based on unjust enrichment, and the time period should not exceed the term of protection over a registered design. This conclusion was supported by the fact that no explanation was given for the non-registration of the design.⁶³ However, twenty years after the ASIR ruling’s legacy was applied extensively in the area of design law, the new Designs Act enacted in 2017 foreclosed the possibility to use unjust enrichment as a cause of action in cases of design infringement, since an explicit provision states the exclusivity of the Designs Act over protection of both registered and non-registered designs.⁶⁴

In the area of patents, nevertheless, the courts are more cautious in their application of the ASIR ruling. For example, in a case where no patent had been registered for a medicine, the District Court dismissed a claim of copying based on unjust enrichment.⁶⁵ Moreover, as discussed above, the Supreme Court ruled that the Patents Act unequivocally determines that the use of invention cannot be prevented during the pendency period of a patent application, and that this rule cannot be circumvented on the grounds of unjust enrichment. In explaining its decision, the Supreme Court stated that the Patents Act has established a delicate balance of interests that should not be interfered with, and that in the current case the law should be viewed as exhaustive and exclusive.⁶⁶

D. Analogies from Close Legal Areas: Copyright and Plant Breeders’ Right Law

1. Analogies from Copyright Law

The most significant development concerning discretionary final injunctions in the field of intellectual property law concerns an explicit authorization in the new Israeli Copyright Act (enacted in 2007) not to grant injunctive relief. Section 53 of the Copyright Act 2007 provides that: “In an action for copyright infringement the claimant shall be entitled to injunctive relief, unless the court finds that there are reasons which justify not doing so.”

According to legislative history, the original Copyright Act Bill included only a general section according to which “infringement of copyright is a civil wrong and the provisions of the Torts Ordinance shall apply.”⁶⁷ This section is currently included under section 52 of the Copyright Act. The explanatory part of the bill clarified that without prejudice to the proprietary nature of the copyright, the general appropriate framework for remedies in case of infringement is tort law.⁶⁸ During parliamentary committee discussions, there was an outcry over this section and the possibility that it may hinder the nature of copyright as a property right. In particular, the fear was that such a section may give rise to claims based on section 74 of the Torts Ordinance anchoring the rule that injunctions are subject to various equitable considerations headed by the balance of convenience. As a compromise, the current section 53 was added, clarifying that entitlement to an injunction is the general default.⁶⁹ During the final vote in parliament, the committee chair explained that injunctive relief may be denied based on prevailing public interest, such as freedom-of-expression and freedom-of-occupation considerations.⁷⁰ These considerations, and other appropriate circumstances for denying injunctive relief, were reviewed in Israeli scholarly literature.⁷¹ Yet, after thirteen years, there is still very scant reference to section 53 of the Copyright Act by the judiciary; in fact, courts maintain the automatic approach to final injunctions in the copyright realm as well.⁷²

The few court decisions referring to section 53 of the Copyright Act reflect a very cautions and mild change of approach. For instance, the Supreme Court noted only in obiter dictum that where a photographic work of historical importance is concerned, the owner of the work may not be entitled to an injunction and may only receive damages for the infringement.⁷³ In some cases, lower courts were conflicted with the possibility of granting injunction. For example, in one case the District Court considered denying an injunctive relief due to the plaintiff’s failure to conduct themselves in good faith and their contributory fault; however, it eventually granted the injunction since the proprietary nature of the copyright should have prevailed in its view.⁷⁴ In another case, the District Court held that a temporary injunction against the broadcast of a television series should be denied since a final injunction would be rejected as well, as (except from the fact it was not requested) under the circumstances freedom of expression and the public’s interest in access to the protected content prevails.⁷⁵ Following this later decision, a Magistrate’s Court ruling explained the refusal to grant temporary injunction against the broadcast of a documentary film due to the high likelihood that the court would deny a final injunction in this case as well, since freedom of expression and the public’s interest in access to the film at stake might prevail.⁷⁶ In other words, in these two latter cases, lower courts refused to grant temporary injunctions, as occasionally happens, yet the only change of approach lay in the reasons for such denial which referred to a potential justified denial of the final injunction in the future. Finally, recently, the District Court refused to grant an injunctive relief, stressing it was an unapplicable remedy under the specific circumstances, yet with no reference to section 53 and without elaborating on the matter.⁷⁷

2. Analogies from the Plant Breeders’ Right Law

Another analogy is taken from a very close legal area – the protection of plant breeds. The Plant Breeders’ Rights Act (1973) regulates the established, registered plant breeders’ right in Israel. This intellectual property right is governed by legal principles akin to those underlying patent law. Moreover, the wording of section 65 of the Plants Breeders’ Rights Act is the same as that of section 183 of the Patent Act, according to which in case of infringement the plaintiff is “entitled” to injunctive relief. Thus, when the courts concluded that a plant breeder’s right was infringed, its owner was automatically entitled to injunctive relief.

However, in a single and rare Supreme Court decision, in the case of Florist De Kwakel v. Baruch Hajaj, handed down in 2013,⁷⁸ the scope and nature of the entitlement to injunctive relief in the Plant Breeder’s Rights Act was discussed. The Supreme Court eventually granted a limited injunction, therefore most of the discussion is obiter dictum. However, since it reflects the first thorough analysis by the Supreme Court of the issue of discretionary permanent injunctions, it has a significant importance. Justice Hanan Meltzer, delivering the opinion of the court, opened by reviewing the adoption of the British common law tradition with respect to equitable remedies, headed by injunctive relief, into Israeli law, and that de facto this tradition is applied only with respect to interim injunctions. Nevertheless, Justice Meltzer emphasized that despite the decisive wordings of section 65 of the Plant Breeder’s Rights Act and section 183 of the Patent Act, there is an inherent vested discretion to the court in matters of injunctions. Such court’s general discretionary power could be concluded from both section 75 of the Courts Act, according to which courts are authorized to grant such remedies as are proper under the circumstances, and from section 74 of the Torts Ordinance, according to which injunctive relief is subject to the balance-of-convenience principle. Furthermore, Justice Meltzer stressed that, according to the principle of interpreting various pieces of legislation in a harmonious way, section 53 of the new Copyright Act (clarifying that courts’ discretion in granting final injunctions is vested) should be taken into consideration while interpreting the parallel sections on other intellectual property laws, being close legal subject matter. Justice Meltzer specified a few potential reasons for denying injunctive relief that are discussed in the literature,⁷⁹ including resolving severe market failures, promoting free competition, and striking a proper balance of interests aimed at promoting access to work. Justice Meltzer added that the court may deny injunctive relief in extreme and rare cases of misuse of right where the plaintiff’s lack of good faith was apparent and abusive – or, alternatively, in de minims cases. Nevertheless, under the specific circumstances, such exceptions did not arise – even though the initial use at stake was under license, a later cancelation of it and the insistence of the right owner on putting an end to the licensed use could not be perceived as abusive or misuse of right, nor as a de minims infringement (inter alia, based on the Roker v. Solomon holding). The Supreme Court also rejected the claim of balance of convenience at stake, since it may hinder the propriety nature of the intellectual property right.

The final ruling of the Supreme Court in the case of Florist De Kwakel v. Baruch Hajaj was that a final injunction should be granted only to a limited scope of acts that are a clear and direct infringement of the core of the plant breeder’s right, in order not to hinder competition and the defendant’s right to conduct his business freely (i.e. freedom of occupation).

It should be noted that there was no “follow-up” to the Florist De Kwakel v. Baruch Hajaj ruling, in the sense that no other court ruling took its legacy a step further.

E. Conclusions

Litigation concerning patent infringement is held between private parties, but its results have major impact on the public at large. The monopolistic nature of patents affects free competition, freedom of occupation and innovation, and it touches individuals’ quality of life, especially when it comes to pharmaceuticals. Therefore, patent law needs to balance various competing interests: on the one hand, the public interest by granting patent rights to incentivize innovation and, on the other hand, the public interest by minimizing the negative consequences stemming from the patent monopoly. Israeli patent law incorporates vast legal mechanisms that allow discretion in pursuit of the appropriate balance, from the initial stage of the patent registration to the final stage of patent enforcement by court. In all these stages, patent law uses legal measures that are subject to interpretation according to the underlying rationale of patent law. However, when it comes to the very last stage of the judicial process in court, the approach changes sharply – the Israeli judiciary grants final injunctions on an almost automatic basis, as if these were merely a technical matter. Therefore, equitable considerations and the public interest are not a major factor in granting final injunctions, in contrast to temporary injunctions which are still governed by equitable principles. This approach stems from the classification of patents as property rights. Property rights are perceived under Israeli law as “robust” rights that incorporate the injunctive power. While some mild exceptions to this approach have been reported, it nevertheless seems that the governing approach to final injunctions is rigid. A proposed hypothesis is that this rigid approach may lead courts to entirely reject patent infringement claims considering the negative consequences of an injunction. The Israeli patent system has much to gain from expanding the discretion of courts regarding final injunctions as well, since such discretion could serve as an additional, powerful legal means for balancing competing interests in an appropriate and wise manner. The rigid view of patent right as a property right may be relaxed by a complementary perception, according to which patent infringement claims are subject to the flexible equitable and tort law principles regarding injunctions.