Intellectual
Property Protection of Computer Software in Israel
Prepared by L. Marc Zell, Adv. and Keith Shaw, Adv., Zell & Co., Jerusalem and Tel Aviv,
An Affiliate of the FANDZ International Law Group.
PATENTABILITY OF COMPUTER SOFTWARE IN ISRAEL
Introduction
Until recently, the Israeli courts had never countenanced the protection
of computer programs, or algorithms, or any other type of software, by
way of the granting of a patent. Rather, the accepted way of protecting
such matters was by way of the law of copyright, in keeping with the then
current approach in many other jurisdictions. The basis for this approach
was the thinking that computer programs, or algorithms, were intellectual
creations with no concrete manifestation, and thus most appropriately
protected by the legal concept created for the precise purpose of protecting
rights in non-physical matters, namely copyright. Patents, it was thought,
were more appropriate form of protection for those creations which had
a technical or physical existence. Thus, in Rosenthal -v- The Registrar
of Patents and Trademarks, CA 501/80, the Tel Aviv District Court confirmed
the Registrar’s decision that an invention the basis of which was
programs or calculations was not suitable for patent registration under
section 3 of the Patent Law 1967.
Section 3 provides as follows: “An invention, whether a product
or a process, which is new, useful and capable of industrial or agricultural
application, and which involves an inventive step, is a patentable invention.”
“An inventive step” is defined in Section 5 as “a step
to which an average individual does not appear obvious in the light of
the information published prior to the date of application.
There can be little doubt of the inventive aspect inherent in computer
software, nor, in most cases, of its applicability. However, in order
to fit within the definition of section 3, computer software would have
to be classified as either a “product or a process”. As product
would appear to be intended to relate to objects created with a physical
form, the matter therefore turns on the possible interpretation which
can be placed on the word “process”.
In Rosenthal, the court accepted and adopted the interpretation of the
Registrar, who defined “process” as “the concrete treatment
of particular material in order to change its form or its state”.
Since the program which was the subject matter of the case did not change
the structure of the computer but only caused it to carry out calculations
and to create and transfer data, the request to register it as a patent
was denied. This decision, notwithstanding that it was a finding of a
lower court, remained the leading case on the subject until 1994.
United Technologies Corporation -v- The Registrar of Patents and Trademarks
The chance to consider section 3 was presented to the District Court
once again, this time in Jerusalem, in the United Technologies case (unreported).
Here, the plaintiff (“UTC”) was appealing a decision of the
Registrar to follow the decision in Rosenthal, and thus reject a patent
application for “a system to control the flow and supply of fuel
to a helicopter engine during flight.” The rejection was on the grounds
that the novel element in the application was a computer program and thus
not capable of patent protection.
UTC’s claim was that their invention was a system of control made
up of a number of methods of doing so, and thus the application was in
respect of the entire apparatus, being one system made up of a number
of secondary systems. This system would collect data, analyze it and produce
results, which would be expressed in a change in the flow of fuel to the
helicopter engine. The system included physical elements and a control
unit.
There was no argument that the physical elements of the system were not
new. Rather, the novel element of the system was the computer program
which organized the system so as to maximize the efficiency of the fuel
use. As UTC themselves stated: “..all novelty is in programming the
digital fuel control (or other computer) to perform the functions..”
The central question was therefore as follows: could a software-related
invention, in other words an invention one part of which was a computer
program, be patentable? Or, more specifically, could an invention the
main novelty of which was the program (given that the other elements were
already known) be capable of registration as a patent in accordance with
section 3?
Judge Brenner referred first to the Registrar’s grounds for rejection
of the application. These were based on the assertion that in a claim
for a patent which is made up of already known elements and new elements,
the new element must pass the section 3 test on its own. If it does not
do so, for example because it is only a “thought process”, then,
the Registrar had claimed, the invention is not capable of registration,
as thought processes are not entitled to protection of themselves. The
registrar had then referred specifically to the Rosenthal decision and
its definition of “process”, as set out above.
Judge Brenner rejected the Registrar’s interpretation, and accepted
instead UTC’s wider interpretation of section 3. He noted that the
section makes no specific reference to computer programs, and stated as
follows:
“The appellant’s claim is in respect of the apparatus, which
contains a number of components. I accept the claim that the apparatus
must be considered as one - the already known physical elements together
with the program, the role of which is to control the system..”
He continued:
“The appropriate test is whether the system as a whole fulfills
the legal requirement. The patent was requested in respect of the new
combination of the program with the pre-existing physical components,
and not in respect of the program itself. There is an interaction between
the program and the physical elements, such that each without the other
would have no effect as to the saving of fuel.
“The requirement that the change in form or state must be reflected
in the physical thing itself seems to me unduly limited and restricted.
In my view, it is possible to view the changes in the flow of fuel to
the engine, with the aim of saving fuel, and in respect of which there
is no argument, as a ‘process’ as required by section 3.
“The ‘process’ must, at the end of the day, cause a particular
result which in itself is new and represents a technological advance.
There is no need to require that the computer program change the physical
structure - rather it is enough that the program changes the fuel requirements,
as that is the final result...It is definitely possible to state that
these changes are as the result of a ‘process' as defined in section
3.”
There is undoubtedly a departure here from the previous narrow interpretation
of the section adopted in Rosenthal, and a clear acceptance that ‘process’
can include a system where the only new element is a computer program.
However, what the decision does not say is that computer programs are
patentable in and of themselves. Indeed, the judge went on specifically
to state as follows:
“However, all are in agreement that “thought processes “
or “stages of calculation”, and even complete computer programs,
of themselves, are not capable of registration as patents. Rather, only
a system of which only one of its components is a computer program, and
which does not just constitute a calculation process, will be registrable.”
The correct test is not, therefore, whether the program itself is patentable,
as it has clearly been expressed that this is not so. Instead, one must
examine whether the system as a whole produces a new kind of result, and
thus fulfills the definition of “process” as stated by Judge
Brenner.
Conclusion
In terms of the patentability or otherwise of computer software in Israel,
the decision in United Technologies is not conclusive, since, as stated,
it does not extend so far as to confirm patentable status on computer
programs in their own right. What can be said, though, is that it perhaps
brings Israel closer to the current conceptual norms in the legal systems
of the USA and Europe, wherein recognition is given to the patentability
of computer software, and as such represents a first step in that direction.
There is, however, one other important factor which must be considered
in evaluating just how significant a step the decision represents. As
stated, both the decision itself, and the decisions to which it refers,
are only of the District Court, and to date the question at hand has yet
to go before the Supreme Court. Under Israeli law, it is specifically
provided that decisions of the District Court do not bind, but only guide,
lower courts (section 20 of Basic Law: the Judiciary). While the decision
will therefore guide the Registrar of Patents and Trademarks, as his status
is as that of the lower instance Magistrates Court, it is of no effect
as a binding precedent, and, as stated, such a precedent will not be established
until the Supreme Court has the opportunity to deal with the issue, or
until the Knesset (the Israeli parliament) clarifies the matter by legislation).
COPYRIGHT PROTECTION OF COMPUTER SOFTWARE IN ISRAEL
Introduction
We have dealt above with the question of whether computer programs are
capable of patent protection in Israel. We now consider the protection
offered to computer software by way of copyright.
Until 1995, the legal system in Israel suffered from the same lacuna
afflicting many other legal systems around the world - namely, that the
pace of technological development was outstripping the ability of the
legislative authorities to keep pace with it. Now, with the enactment
of the Computer Law 1995 (“the Law”), the Israeli legal system
has a law dealing specifically with the particular and novel problems
produced by and affecting computer software.
The Law firstly defines key terms such as “computer”, “computer
material”, “program”, “information" and “output”.
It then creates new criminal offenses and new torts, and also enacts certain
amendments in the fields of criminal evidence and procedure.
Key definitions
“computer material”:
program or information
“information”
data, signs, ideas or instructions (excluding programs) expressed in
computer language, and stored in a computer or by some other method,
provided that such data, signs, ideas or instructions are not designed
for use only in a computer capable only of carrying out arithmetical
calculations.
“program”
a collection of instructions expressed in computer language, capable
of causing the computer to carry out a task or an action, and which
is formed, expressed or designated by way of electronic, electromagnetic,
electrochemical, electro-optic or other methods, or which is part of
the computer in any way, all provided that such data, signs, ideas or
instructions are not designed for use only in a computer capable only
of carrying out arithmetical calculations.
Criminal offenses
The Law creates the following offenses:
a) Disruption or interference with computer or computer materials. Unlawful
interference with the proper operation of a computer of disruption of
its use carries a penalty of three years’ imprisonment.
b) False information or output. Someone who transfers to or stores in
a computer false information, or who carries out an action in order to
produce false information or output, or who writes, transfers or stores
a program with the aim that the use thereof will produce false information
or output, is liable to five years’ imprisonment.
c) Unlawful entry into computer material. Unlawful entry into computer
material through connection with, or entry into, or operation of a computer
carries a penalty of three years’ imprisonment (unless permitted
by the Secret Monitoring Law 1979 (this law deals with the powers granted
to security authorities to facilitate the conduct of investigations.))
d) Unlawful entry into computer material for the purpose of committing
any other offense carries a penalty of five years’ imprisonment.
e) Computer viruses. Someone who creates a program capable of causing
disruption or interference to a computer or to computer material with
the intention of unlawfully so doing is liable to three years’ imprisonment.
Transferring such a virus to another computer with the requisite intention
carries a penalty of five years’ imprisonment.
Torts
The Law provides that certain acts will constitute torts under the Civil
Wrongs Ordinance. These are as follows:
a) Unlawful interference with a computer or with computer material in
any way, including by way of theft of computer material.
b) Unlawful deletion, alteration or other disruption of computer material
In any such claim, the burden of proof will be on the defendant to prove
that the act was lawful, which is a departure from the normal rule. However,
in order to obtain damages, the plaintiff must prove that the damage suffered
was as a result of the defendant’s negligence or that the damages
were caused intentionally by the defendant.
The remainder of the law deals with amendments to the law of evidence
(admissibility of computer records) and the law relating to search and
seizure (a court order is required to search computer material).
Copyright protection
Israeli copyright law is based on the British Copyright Act of 1911 and
the Copyright Ordinance 1924. Copyright subsists in any work which is
original and is either a literary, artistic, dramatic or musical work.
By a 1988 amendment of the 1911 Act, “literary work” was defined
to include computer software.
Copyright is created automatically by creation of the work and no formal
action is necessary to obtain the right.
The author of the work is entitled to the exclusive right to produce
or reproduce the work in any material form, to publish it, and to convert
the work from one form to another. The first owner of the copyright is
the author of the work, and he may assign the copyright in the work in
writing for the whole copyright or any part thereof (contents, location,
term). He may also grant licenses for the use of the copyright. The copyright
in a work created by an employee created during and as a result of his
employment belongs to the employer.
The term of copyright under Israeli law is the lifetime of the author
plus 70 years.
Israel is a member of the Berne Convention in its Brussels version, and
accordingly the courts extend to foreign owners of copyright whose rights
have been infringed in Israel the same protection as is extended to Israeli
nationals.
In order to sustain an action for copyright infringement, the plaintiff
must show that the defendant has infringed his copyright by performing
an act to which the owner of the copyright is exclusively entitled, in
relation to all or a substantial part of the work, without his permission.
Fair dealing in the work for the purpose of learning, research, criticism
or reporting in the press is not considered copyright infringement.
If successful, the plaintiff will obtain an injunction, and damages as
caused by the infringement. If damage cannot be proved, he is entitled
to statutory damages at the discretion of the court, which currently stand
at between NIS 10,000 and 20,000 ($3,000 - 6,000) for each infringement.
In the alternative, the owner of the copyright may ask for an accounting
of profits.
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