2018 Annual Report Table of Contents

Opening by the Minister of Justice 8 Opening by the Director General of the Ministry of Justice 9 Opening by Director of the Israel Patent Office 10 ILPO Activity in the Field of Patents 12  Patent Applications Data 13  Reducing Examination Duration and Pendency 19  Extension Orders Data 25

ILPO Activity under the PCT 26  The ILPO’s Activity as Receiving Office 26  The ILPO’s Activity as International Searching and Examining Authority 29  International Search and Examination Reports 32 ILPO Activity in the field of Trademarks 34  Examination Data 34  Israel’s International Profile in the Field of Trademarks 42 ILPO Activity in the field of Designs 44  Examination Data 45  Israel’s International Profile in the Field of Designs 54 ILPO Activity in the Legal Department 55  Legal proceedings in the ILPO 56  Appeals 58 Human Resource Department 60 Logistics and Finance Department 64 Quality Assurance Field 67 Head of Research and Information Field 69

The description in this Annual Report is not meant to provide an exhaustive review of the law; it does not amount to legal advice or presents a binding opinion on behalf of the ILPO regarding its policy. The purpose of the description is to provide the reader a general idea only regarding the ILPO roles and the legislation by which it acts. As such, the description is general and highly simplified. It should not serve as basis for reliance for any commercial or other legal purpose. List of Charts ILPO Activity in the Field of Patents Chart 01 Number of Patent Applications including Applications 13 Claiming Priority filed to the ILPO, 2014–2018 Chart 02 Israeli Applicants vs. Foreign Applicants, 2014-2018 14 Chart 03 Patent Applications filed in the ILPO in 2018 - by Country of 15 Origin Chart 04 Patents Granted, 2014–2018 16 Chart 05 Patents Granted in 2018 - by Country of Origin 16 Chart 06 Patent Applications by Fields, 2014–2018 18 Chart 07 Examination of National Applications in 2018 - by 18 Departments Chart 08 Examinations between 2014 and 2018 - by Departments 19 Chart 09 Fast-Track Applications Examined in 2018 19 Chart 10 On the Spot and Green Applications Examined by Fields, 20 2014–2018

Chart 11 Average Pendency (months) for First Examination, 2014– 20 2018 Chart 12 Average of Total Examination Time (months) of Patent 21 Applications, 2014–2018 – by Departments Chart 13 Average Pendency (months) for Continued Examination, 21 2014–2018 Chart 14 Average Time (months) from Application Submission to 22 Examination Conclusion Chart 15 Accelerated Examination of Applications by Regulation 35, 22 2014–2018 Chart 16 Divisional Applications according to Section 24 of the Patents 23 Law, 2014–2018 - by Departments Chart 17 Applications for which Notice prior to Refusal was sent - by 23 Departments, 2015–2018 Chart 18 Patent Applications Refused, Withdrawn by Applicants or 24 Abandoned, 2014-2018 (Before and After Examination) - - 2- ILPO Activity under the PCT in 2018 Chart 19 Approved Requests for Delay of Examination, 2014–2018, 24 following the Entry into Force of Commissioner Circular 05/2011

Chart 20 Applications Accepted according to Section 17(c) of the 25 Patents Law vs. Total Applications Accepted, 2014–2018 Chart 21 PCT Applications filed in 2017 - by Receiving Office (Israel 26 ranks 12) Chart 22 PCT Applications filed in 2017 - by Country of Origin (Israel 27 ranks 14) Chart 23 PCT Applications Submission 2008 - 2018 by Country of 27 Origin and Israeli Receiving Office Chart 24 Timeliness in Transmitting PCT Applications to the 28 International Bureau by Receiving Office in 2017 Chart 25 Examination of International Applications in 2018 - by 29 Departments Chart 26 Designation of the International Searching Authorities by 29 Israeli Applicants, 2014–2018 Chart 27 Designation of the Israeli Searching Authority by US 30 Applicants Chart 28 Timeliness of the Israeli International Searching Authority in 30 Transmitting Search Reports (ISR) to the International Bureau (IB) in 2017 Chart 29 Timeliness of International Publication with ISR for 2017, 31 percentage Chart 30 Timeliness of the Israeli International Examining Authority in 31 Transmitting Examination Reports to the International Bureau (IB) in 2017 Chart 31 Distribution of International Search Reports by Years 32

Chart 32 Distribution of International Examination Reports by Years 32 ILPO Activity in the field of Trademarks Chart 33 Trademark Applications filed and Trademarks Registered, 34 2014–2018

- - 3- Chart 34 New Applications and Classes filed for Registration and 35 Classes Registered, 2014–2018 Chart 35 Top Ten Countries of Origin for Trademark Applications in 36 Israel in 2018 (percentages) Chart 36 Trademarks Applications in 2018 - by Classes 37 Chart 37 International Applications filed through Israel as Country of 38 Origin, 2014–2018 Chart 38 National and International Applications Closed, 2014–2018 38 Chart 39 Israeli Applicants vs. Foreign Applicants, 2014–2018 39 Chart 40 Rate of Trademarks Granted to Israeli Applicants vs. Foreign 39 Applicants, 2014–2018 Chart 41 Classes Examined in First and Second Examination, 2014– 40 2018 Chart 42 Pendency for First Examination, Second Examination and 40 Total Examination Time, 2014–2018 Chart 43 Accelerated Examinations vs. Total Applications, 2014–2018 41

Chart 44 Trademarks and Classes in Force in Israel, 2014–2018 41 Chart 45 Designation of International Applications filed in accordance 42 with the Madrid Protocol in 2018 - by Countries Chart 46 Designation of International Applications Filed in accordance 43 with the Madrid Protocol in 2018 - by Countries of Origin ILPO Activity in the field of Designs Chart 47 Designs Applications vs. Registered Designs, 2014–2018 45

Chart 48 Pendency for First Examination vs. Number of Applications 45 for Registration, 2014–2018 Chart 49 Pendency for First Examination and Average Total 46 Examination Duration (from Beginning of First Examination to Publication), 2014–2018 Chart 50 Applications filed in 2018 - by Classes 46 Chart 51 Top Ten Countries of Origin for Design Applications in Israel 47 in 2018 (percentages) Chart 52 First Examinations vs. Continued Examinations, 2008-2018 47

- - 4- Chart 53 Designs Registered following First Examination or Continued 48 Examination, 2011-2018 Chart 54 Design Applications Not Registered, 2008-2018 48 Chart 55 Trends Relating to the Duration of Designs, 2008-2018 49 Chart 56 Design Applications filed in 2017 - by Countries 54 Chart 57 Designs Registered in 2017 - by Countries 54 ILPO Activity in the Legal Department Chart 58 Appeals filed in 2014–2018 to the District Court on 58 Decisions of the Commissioner of Patents, the Vice Commissioner and the IP Adjudicator Chart 59 Results of Appeals Issued in 2014-2018 by the District Court 59 over Decisions of the Commissioner of Patents, the Vice Commissioner and the IP Adjudicator ILPO Activity in the Human Resource Department Chart 60 ILPO Structure in 2018 62

Chart 61 Segmentation of ILPO Employees by Profession 63 Chart 62 Segmentation of ILPO Employees by Education 63 ILPO Activity in the Logistics Department Chart 63 Patent Department - Distribution of Revenues from Fees 65 2017-2018 Chart 64 PCT Department - Distribution of Revenues from Fees 2017- 65 2018 Chart 65 Trademarks Department - Distribution of Revenues from Fees 66 2017-2018 Chart 66 Designs Department - Distribution of Revenues from Fees 66 2017-2018

- - 5- List of Tables Table 1 Leading Israeli Applicants in Filing Patent Applications in 14 2018 Table 2 Leading Foreign Applicants in filing Patent Applications in 15 2018 Table 3 Leading Israeli Applicants in Patent Registration in 2018 17 Table 4 Leading Foreign Applicants in Patent Registration in 2018 17 Table 5 Extension Order Applications and Extension Orders Granted, 25 2014-2018 ILPO Activity under the PCT in 2018 Table 6 Leading Applicants in Filing PCT Applications in 2018 at the 28 ILPO as the Receiving Office ILPO Activity in the field of Trademarks Table 7 Leading Applicants in Filing Trademark Applications in 2018 36 Table 8 Leading Applicants in Trademarks Registered in 2018 37 ILPO Activity in the field of Designs Table 9 Applications filed and Designs Registered in 2018 - by 49 Classes Table 10 Leading Israeli Applicants in Designs Applications in 2018. 51 Table 11 Leading Foreign Applicants in Designs Applications in 2018 52 Table 12 Leading Israeli Applicants in Designs Registration in 2018 52 Table 13 Leading Foreign Applicants in Designs Registration in 2018 53 ILPO Activity in the Legal Department Table 14 Legal Proceedings Filed, 2014-2018 56 Table 15 Legal Proceedings Closed, 2014-2018 57 Table 16 Pending Legal Proceedings at the end of 2018 58 Table 17 Motions for Leave to Appeal filed to the Supreme Court, 59 2016-2018 ILPO Activity in the Logistics Department Table 18 ILPO Income and Expenses, 2018 64

- - 6- Opening Address by Minister of Justice

I respectfully present to you the 2018 data in summary of the Israel Patent Office work year. In 2018, Israel celebrated 70 years of independence. 70 years of growth, progress and innovation. During these years we witnessed growing prosperity in many areas. We hope that these years will be a landmark in our continued existence and achievements. The ILPO is responsible for intellectual property rights registration in Israel. These rights concern patents, trademarks and designs touching on every aspect of our lives - pharmaceuticals, security, high-tech, food and even toys. The current report, like the previous ones, is part of the process of increasing transparency in all Government Ministries, transparency which is the corner stone of every democratic regime. Government transparency creates trust among the public, in light of our understanding of the Ministry’s various activities. We believe that exposing information enables the public to actively participate and influence, when presented with the relevant data. The ILPO started as a small office with only a few dozen examiners dealing with local applications only. Today, the ILPO raises the banner of the frontend of technology and employs about 200 employees, most of whom are patent examiners that also examine international applications in various fields. As a result, the ILPO stands in the international arena, collaborating with international bodies to promote and improve the service given to its customers. I have no doubt that in the coming years, the ILPO will continue to soar to new heights and bring honor to Israel in the field of intellectual property.

Amir Ohana Minister of Justice

- - 7- Opening Address by Director General, Ministry of Justice

As in every year, I am pleased to write a preface to the annual report of the ILPO at the Ministry of Justice. The ILPO is a unique unit whose activity is accurately measured, enabling transparency in presentation of the data to the public, lesson-learning and constant improvement in efficiency. The ILPO as a professional unit responsible for intellectual property rights registration and protection in Israel has a central role in promoting innovation, entrepreneurship and creation. It is one of the Ministry of Justice’s units that have a key role in advancing and developing the Israeli market and promoting the State economy, which substantially relies on technological innovation. Given its important role, the ILPO must retain its position as a global leader with respect to protection of intellectual property and make sure to perform processes increasing its efficiency and quality assurance. This report ensures an understanding of the data regarding the extensive activity of the ILPO, specifically its international activity and the global services it provides in the patent field to applicants in Israel and around the world. Alongside the detailed information on ILPO activity regarding the examination and registration of patents, data is provided on trademark examination and registration, and for the first time since the entry into force of the new Designs Law - data regarding the examination and registration of designs. The report further provides information on central projects the ILPO executed in the past year. Inter alia, the ILPO dealt with the development and training of the human capital, and over the year, 15 new patent examiners were certified after a two-year period of training and internship. Simultaneously, procedures to recruit new cadets who will allow the ILPO to continue improving its services to its Israeli and global customers, have begun. The creation of diverse, expert and professional human capital is a significant challenge of the ILPO, and the Ministry’s administration supports the ILPO in the creation of career courses and employment terms to match its unique character. In addition, as part of exercising the Ministry’s main goal - reinforcing the public trust - this year the ILPO renewed a years-long tradition of “going down to the field” and holding meetings with the customer public: patent attorneys and lawyers representing the applicants. The insights learned in these meetings will be integrated in the ILPO’s work, and their implementation will be made public in the coming year, together with the publication of a new Customer Service Charter, which will obligate the Patents Department to fixed standards of applications examination times. I wish to use this opportunity to thanks the ILPO and its employees on their excellent work under the leadership of the ILPO Director, Adv. and patent attorney Ofir Alon. Amy Palmor Director General - - 8- Opening Address by ILPO Director

In 2018 we saw a rise in the number of applications to register intellectual property rights in Israel in the fields of patents and trademarks. As the report demonstrates, this year also the ILPO examiners performed a record number of first examinations in all fields. Along with the increase in the number of first examinations, a lot of effort was put into making the examination proceedings effective, and that the applicant public and the general public would be provided with certainty regarding intellectual property in Israel at the earliest possible time. Over the past two years, first examination pendency in the Trademarks Department was halved, and at the end of 2018 stood at eight months (compared to 16 months in the beginning of 2017). We expect that at the end of 2019, trademark applicants in Israel will receive the first examination report within three months from submission. Ten new cadets were recruited in the Patents Department, who following their training, will help reduce pendency in the department. In the computing field, we finished making the required adjustments for the Designs Law’s entry into effect, and development of the computer systems required to enter the Hague Agreement began. Adjustments were also made to enable joining the DAS system (Digital Access Service) of WIPO. Using DAS, priority documents are electronically deposited and can be accessed from patent offices worldwide that take part in the system. Following Israel’s joining of the Hague Agreement and the DAS system, these two new services will be made available to the public during H1 2019. In addition, the development of a new internal system for patent examiners was completed and its assimilation began. This system structures the composing of examination reports and should ensure more uniform examination reports among all examiners and contribute to better examination quality. In the field of legislation, together with the Ministry of Justice Counseling and Legislation Department, preparation of the Designs Regulations was complete and they were signed by the Minister of Justice in January 2019. In 2019 we expect to see significant improvements and changes to the ILPO work. In the field of computing, an effort will be made to facilitate accessibility to information found in the ILPO systems by developing the Patents Department’s view and search website, and developing “smart logs” for the Patents and Trademarks Departments, much like the log launched in the Designs Department in 2018. In the field of manpower, about 20 new cadets will be recruited to the Patents Department, and the training for the cadets recruited in 2018 will continue. A - - 01- new position will be manned in the ILPO, “Head of Patents Quality Assurance Field”, who will be charged with safeguarding and improving the quality of examinations. The ILPO considers making intellectual property knowledge accessible to innovation professionals in Israel specifically, and to the public in general, to be an important part of its role. In this regard, the ILPO departments will hold training sessions and lectures to the public to deepen the understanding of these subjects in the public. In the field of legislation, there is a need to make various amendments to the Patents Law and Regulations, including in regard to objection proceedings and various other sections. Processes to promote the relevant amendments will begin, while considering various amendment alternatives and public participation. Understanding that AI and big data technologies will become, within the foreseeable future, vital tools in the work of every patent office, helping reduce pendencies and improve the examination quality, the ILPO actively seeks to integrate such tools in its work and we hope to achieve this goal in the coming years. The ILPO employees and management are responsible for the extensive activity and the numerous accomplishments reflected in this report. I thank them for their willingness to take on every challenge and mission, and their ability to successfully complete every project. I also wish to thank Ms. Yael Faina, ILPO International Relations Director, who is responsible for producing this report. To conclude, I wish to thank the Minister of Justice, Mr. Amir Ohana, and the Ministry of Justice Director General, Ms. Amy Palmor, for their continued support of the ILPO. Without such support, these accomplishments would not have been possible

Ofir Alon Israel Patent Office Director Commissioner of Patents, Designs and Trademarks

- - 00- ILPO Activity in the field of Patents

In 2018, as in previous years, the Patents Department successfully met the goals set for it by the Goals and Outputs Committee and examined over 10,100 new applications. In 2018, 5,812 Israeli applications were examined in first examination and 1,406 applications in the framework of the international searching authority. In addition, 7,000 continued examinations took place. 29% of the Israeli applications, which were initially submitted in Israel were examined in the fast track. This figure points to the trust the Israeli public has in the initial opinion of the ILPO examiners. At the end of 2018 the average pendency for first examination was 30 months, a slight 2% increase compared to last year. The average examination duration from beginning to end decreased from 21.5 months to 19 months. In 2018 ten new cadets were recruited to the ILPO, and their vetting and training process underwent significant changes, such as the development of search skills, analyzing search results when examining accelerated applications and international applications that designate the ILPO as an international searching and examining authority, developing argument-writing skills in response to submitted applications and training for meetings with inventors and their attorneys. 15 of the cadets recruited in 2016 were certified as examiners after concluding the internship and successfully passing the final test. Parallelly, in June, the examiners employed in the ILPO as contractors concluded their work. The working guidelines regarding the examination of claims for biological mechanisms and drugs for new sub-populations, section 7(2) and the examination of priority laws, were updated. This year, the ILPO renewed a years-old tradition of meeting with the public, and held three events, according to the various fields of interest, in which the public met with the patent attorneys representing the applicants. The insights and conclusions from the meetings will be integrated in working guidelines that will be made public in 2019. In the computer systems field, a new system for management of the examination process for patent applications was introduced. Among the material advantages of the system is the obligation to refer to the examination’s compliance with the requirements of the relevant Law and Regulations sections, quality assurance of examination reports by team leaders before they are sent to the applicants, and uniformity of examination

- - 01- reports thanks to a construed language pool in the system, leading to reasoned arguments. As in previous years, this year also the WIPO interns’ seminar was held. The seminar dealt with aspects of life-sciences patent applications examination. Alongside the WIPO interns, examiners from different patent offices worldwide participated in the course, including France, Austria and South Korea, who shared the knowledge and common practices of their countries. In 2019 the Department is due for substantial changes, including intake of 17 new examiners, splitting teams in the physics, mechanics and electronics field and creating two new teams in electro-optics and mechanics. As all ILPO departments, as of this year the Department will make an undertaking to the public by a Service Level Agreement to provide services within defined timeframes in the central services provided by the Department.

A. Patent Application Data Chart | 1 Number of Patent Applications including Applications Claiming Priority filed to the ILPO, 2014–2018 Applications first filed in Israel Applications Claiming Priority Right

There appears to be a constant increase in the number of new applications submitted in Israel. For the past three years, the ILPO has been in a process of intaking new cadets to cope with this trend. 272 applications were examined in the fast track, constituting approximately 30% of all first applications filed in Israel. According to Commissioner Circular 034/2017. - - 02- Chart | 2 Israeli Applicants vs. Foreign Applicants, 2014-2018

Applications filed by Israeli applicants Applications filed by Foreign applicants

Patent Applica- Table | 1 Applicant Name tions filed in 2018 Leading Israeli Applicants in filing Patent Biosense Webster (Israel) Ltd. 127 Israel Aerospace Industries Applications in 2018 35 Ltd. Yeda Research and Develop- 18 ment Company Ltd. Elta Systems Ltd. 16 ISCAR Ltd. 15 Keter Plastic Ltd. 12 Corephotonics Ltd. 11 Private applicant 10 Private applicant 10 Private applicant 10

- - 03- Patent Applica- Applicant Name Table | 2 tions filed in 2018 Leading Foreign Applicants in filing Patent PHILIP MORRIS PRODUCTS S.A. 160 Applications in 2018 MAGIC LEAP, INC. 70 KLA-TENCOR CORPORATION 61 NOVARTIS AG 55 RAYTHEON COMPANY 51 FACEBOOK, INC. 51 GENENTECH, INC. 47 F. HOFFMANN-LA ROCHE AG 41 BASF SE 38

ASML NETHERLANDS B.V. 37

Chart | 3 Patent Applications filed in the ILPO in 2018 - by Country of Origin

Total applications: 6427 Patent app. Under Paris Con. / no priority Total patent applications*: PCT app. National stage Israel 1,204 028 Total PCT applications: 6,159 19686  Patent applications - applications first filed in Israel or claiming priority by virtue of the Paris Convention. 825 1 09345 008 1 1 478 2 4 410 357 35 015 085

Other Korea China Japan IB Israel EPO USA

- - 04- Chart | 4 Patents Granted, 2014–2018

Chart | 5 Patents Granted in 2018 - by Country of Origin 09510 Total patents granted: 4,107 PCT app. National stage Following patent applications*: 564 Israel granted Following PCT applications: 3,543 Patent app. Paris Con. / no priority granted  Patent applications - applications first filed in Israel or claiming priority by virtue of the Paris Convention 634

328 287 177 115 016 60 0 15 40 8 74 1 1 1 Other Korea China Japan IB Israel EPO USA

- - 05- Number of Pa- Table | 3 Applicant Name tents in 2018 Leading Israeli Applicants in Patent Registration in Biosense Webster (Israel) Ltd. 66 Israel Aerospace Industries Ltd. 19 2018 ISCAR Ltd. 18 Yissum Research & Develop- ment Company of the Hebrew 12 University in Jerusalem Ltd. Elta Systems Ltd. 11 Yeda Research and Develop- 11 ment Company Ltd. Technion Research & Develop- 10 ment Foundation Ltd. Elbit Systems Ltd. 8 Verint Systems Ltd. 7 Private applicant 7

Number of Pa- Table | 4 Applicant Name tents in 2018 Leading Foreign Applicants in Patent FACEBOOK, INC. 62 Registration in 2018 RAYTHEON COMPANY 50 DOW AGROSCIENCES LLC 45 QUALCOMM INCORPORATED 38 BASF SE 30 REGENERON PHARMACEUTICALS, INC. 28 F. HOFFMANN-LA ROCHE AG 26 NESTEC S.A. 24 NOVARTIS AG 24 PHILIP MORRIS PRODUCTS S.A. 21

- - 06- Chart | 6 Patent Applications by Fields, 2014–2018

H

G

F

E

D

C

B

A

Much like last year, most applications were filed in the field of life sciences (A- Human Necessities) and within this field - the largest increase was found in the field of medical devices. Chart | 7 Examination of National Applications1 in 2018 - by Departments Continued Examinations First Examinations 09801 19122 09720 09181 09183 09335 09776 09305

Biotechnology Chemistry Mechanics, IT and Electronics Medical and Physics Devices (1) Data relating to examination of PCT applications is presented in the chapter dealing with the PCT convention - - 07- Chart | 8 Examinations between 2014 and 2018 - by Departments Biotechnology Computers, Communication, Electronics, Medical devices Mechanics Chemistry, pharmacy

First national examinations Cont. national examinations

Chart | 9 Fast-Track Applications Examined in 2018

Accelerated PPH Examinations Examinations Applications according to & Green Section 17(c) Applications to the Patents Law

- - 08- Chart | 10 On the Spot and Green Applications Examined by Fields, 2014–2018

Biotechnology Chemistry, pharmacy Mechanics, Electronics and Physics Computers, Communication, Electronics, Medical devices

Chart | 11 Average Pendency (months) for First Examination, 2014–2018

IT and Medical devices Mechanics, Electronics and Physics Chemistry and Pharma Biotechnology Average

The average pendency has been stable for the past five years and we anticipate that as of the coming year we will see a shortening of pendency due to the conclusion of training for the cadets recruited in 2016.

- - 11- Chart | 12 Average of Total Examination Time (months) of Patent Applications, 2014–2018 – by Departments

Biotechnology Mechanics, Electronics and Physics Chemistry and Pharma IT and Medical devices Average

Total examination time was measured from the first examination start date until the conclusion of examination rounds (ending with acceptance or refusal). The data does not include the time required to deliberate an opposition, if filed after acceptance. The decrease in average examination time mostly results from the continued assimilation of the reorganization in the ILPO, in the framework of which all team leader positions in the Patent Department were staffed and the number of correspondences between the examiner and the applicant was reduced to three only, followed by sending a “notice prior to refusal” to the applicant.

Chart | 13 Average Pendency (months) for Continued Examination, 2014–2018

- - 10- Average pendency for continued examination has met the goal set by the Goals and Evaluation Committee, according to which the continued examination pendency should not exceed six months. We invite the public to follow the continued examinations status using a designated module in the ILPO website http://www.justice.gov.il/Units/RashamHaptentim/Units/patent/DochBchinot/ Pages/default_.aspx

Chart | 14 Average Time (months) from Application Submission to Examination Conclusion

Chart | 15 Accelerated Examination of Applications by Regulation 35, 2014–2018

Accelerated Examination based on Accelerated Examination Accelerated Examination based PPH arrangement on a "Green Application"

Except for green applications, it appears that each year, increased use is made of fast rack examination procedures - - 11- Chart | 16 Divisional Applications according to Section 24 of the Patents Law, 2014–2018 - by Departments

8102 8102 8102 8102 8102

IT and Medical Mechanics, Electronics Biotechnology Chemistry and devices and Physics Pharma

Chart | 17 Applications for which Notice prior to Refusal was sent - by Departments, 2015–2018

Biotechnology Chemistry, Pharmacy Mechanics, Electronics IT and Medical devices and Physics - - 12- Chart | 18 Patent Applications Refused, Withdrawn by Applicants or Abandoned, 2014-2018 (Before and After Examination)

Refused applications Applications withdrawn by applicants Applications abandoned by applicants Abandoned applications are those in which the applicant chooses not to respond to one of the ILPO notices. Lacking an answer and after notice is sent by the ILPO to the applicant or its attorney - the application is closed.

Chart | 19 Approved Requests for Delay of Examination, 2014–2018, following the Entry into Force of Commissioner Circular 05/2011

Rate of delays of Examination out of the applications for which a response was received in accordance with Article 18 The abovementioned relates to a delay of examination according to Commissioner Circular 35/2017, according to which the examination may be delayed only after the applicant complies with the requirements of Section 18 of the Law. This year also, the data indicates that the applicants do not use this mechanism often, but rather prefer to start examination as soon as possible. - - 13- Chart | 20 Applications Accepted according to Section 17(c) of the Patents Law vs. Total Applications Accepted, 2014–2018

The rate of applications accepted according to Section 17(c) of the Law remains stable over the years. This indicates that the large majority of applicants prefer an ordinary examination under Section 17(a) of the Law. Patent Extension Orders Below is data regarding patent extension order applications from recent years. The data reflects the number of patent extension orders applications filed in a certain year and the number of extension orders granted during that year. We can see the increase in the number of applications submitted after amending the Patents Law with respect to extension orders in 2014. In the past two years the number of applications submitted sank. Note that the number of extension orders does not overlap the applications filed. Extension order applications undergo examination and are later published for public opposition. During that timeframe, it is possible that refused applications will be deliberated by the Commissioner, in a proceeding to appeal an examiner’s decision, or that accepted applications will be deliberated by the Commissioner in a proceeding to oppose an extension order application. There are also applications published for opposition according to Section 64E (e)(1) of the Patents Law, and no extension order is granted on their account until extension orders are granted for “parallel” patents in other countries.

Extension Order Extension Year Table | 5 Applications Filed Orders Granted Extension Order Applications and Extension 2014 32 15 Orders Granted, 2014- 2015 24 20 2018 2016 31 5

2017 14 16

2018 13 13 - - 14- ILPO's Activity under the PCT

The ILPO’s Activity as Receiving Office (RO/IL) In 2018 we saw a slight increase in international applications filing. In 2018, 1,436 international applications were submitted to the ILPO by Israeli applicants in its activity as receiving office, compared to 1,417 international applications in 2017. 99.3% of the applications were submitted online. The ILPO’s Activity as International Searching and Examining Authority (ISA/IPEA/IL) In 2018, much like in 2017, 65% of the applicants (compared to 62% in 2015 and 64% in 2016) designated the Israeli International Searching and Examining Authority. The others designated the US and European searching and examining authorities. Except for the applications filed with the Israeli receiving office, 127 applications of Israelis, which were filed with the WIPO International Bureau in Geneva in 2017, designated the ILPO as the International Searching and Examining Authority. In addition, 288 international searching applications were received from US applicants. Issuance of International Search and Examination Reports In 2018 the ILPO examiners in the Patents Department issued 1,334 international search reports and 73 international examination reports, compared to 1,422 search reports and 104 examination reports in 2017. A WIPO survey indicates that the Israeli applicants are the biggest users of the PCT mechanism, and in 2016 Israel led the table of the top-20 countries in PCT applications filing versus local applications. A. The ILPO’s Activity as Receiving Office: Chart | 21 PCT Applications Filed in 2017 - by Receiving Office (Israel ranks 12)

The chart demonstrates that in 2017 Israel continued the upwards trend and ranks 12 in the world out of 152 states! - - 15- Chart | 22 PCT Applications filed in 2017 - by Country of Origin (Israel ranks 14)

Israel

 Chart taken from WIPO report: Patent Cooperation Treaty Yearly Review, 2018- The International Patent System

Chart | 23 PCT Applications Submission 2008-2018 by Country of Origin and Israeli Receiving Office

App. by country of origin - Israel App. in Israeli receiving office

We can see a gap between the number of applications filed in the Israeli receiving office and the number of applications filed by Israelis in general. Some of the gap originates from Israeli applicants who are partners in applications with applicants from other countries, and a small number of applications are still submitted by Israelis to the International Bureau of Geneva. - - 16- Table | 6 Leading Applicants in Filing PCT Applications in 2018 with ILPO as Receiving Office

Applications Rank Applicant during 2018

0 TECHNION RESEARCH & DEVELOPMENT 22

8 YISSUM RESEARCH DEVELOPMENT COMPANY OF 24

4 YEDA RESEARCH AND DEVELOPMENT CO. LTD 42 2 RAMOT AT TEL-AVIV UNIVERSITY LTD. 40 2 ISCAR LTD. 82 2 ISRAEL AEROSPACE INDUSTRIES LTD. 88 2 STRATASYS LTD. 81

B. G. NEGEV TECHNOLOGIES AND 2 04 APPLICATIONS LTD., AT BEN-GURION

2 ELBIT SYSTEMS LTD. 04 01 BAR-ILAN UNIVERSITY 08

The top Israeli applicants are intellectual property commercialization companies of universities - the Technion, the Hebrew University, the Weizmann Institute and Tel Aviv University. ISCAR - Production and Marketing of Tools and Advanced Metalworking Solutions is fifth, followed by Israel Aerospace Industries, STRATASYS dealing with 3D printers, Ben Gurion University, Elbit, and Bar Ilan University closing the top-ten.

Chart | 24 Timeliness in Transmitting PCT Applications to the International Bureau by Receiving Office in 2017

- - 17-  Chart taken from WIPO report: Patent Cooperation Treaty Yearly Review, 2018- The International Patent System 99.7% of the international applications filed in the Israeli receiving office were transferred to the WIPO International Bureau within the required timeframe, up to 4 weeks leading Israel to the 4th place worldwide B. Activity as International Searching and Examining Authority (ISA/IPEA/IL) Chart | 25 Examination of International Applications in 2018 by Departments

Biotechnology Chemistry Mechanics, IT and Electronics Medical Chart | 26 and Physics devices Designation of the International Search Authorities by Israeli Applicants, 2014-2018

USPTO ILPO EPO

2018 was the seventh year of activity of the Israeli Searching and Examining Authority. The Chart demonstrates that 65% of applicants choose for the search to be conducted by the Israeli Searching Authority. This figure is indicative of the high level of trust the applicants have in the level and quality of the Israeli examination. - - 18- Chart | 27 Designation of the Israeli Searching Authority by US Applicants

It is important to stress that the Israeli Searching Authority limits the number of US applications to 100 per quarter. Also, as pendencies are long in relation to the examination of national applications, the ILPO does not actively encourage, at this time, designating Israel as the Searching Authority by US applicants. Chart | 28 Timeliness of the Israeli International Searching Authority in Transmitting Search Reports (ISR) to the International Bureau (IB) in 2017

 Chart taken from WIPO report: Patent Cooperation Treaty Yearly Review, 2018- The International Patent System We can see that almost 95% of the international search reports were duly transmitted to the International Bureau (three months after receiving the international search application), timeliness that precedes the schedules of the US or European search authorities with which the Israeli authority competes. - - 21- Chart | 29 Timeliness of International Publication with ISR for 2017, percentage

 Chart taken from WIPO report: Patent Cooperation Treaty Yearly Review, 2017- The International Patent System This chart demonstrates that 99.6% of the international applications, for which a search in Israel was conducted, were published with the international search report issued by the Israeli Searching Authority. This figure places Israel 3rd among all authorities in the world.

Chart | 30 Timeliness of the Israeli International Examining Authority in Transmitting Examination Reports to the International Bureau (IB) in 2017

 Chart taken from WIPO report: Patent Cooperation Treaty Yearly Review, 2017- The International Patent System We can see that approximately 60% of international examination reports were duly transferred to the International Bureau(within 28 months of the priority date). - - 20- C. International Search and Examination Reports Chart | 31 Distribution of International Search Reports by Years ISRs

We can see that in recent years the Israeli Searching Authority produces over 1300 search and opinion reports each year.

Chart | 32

Distribution of International Examination Reports by Years IPRPs

We can see increased and educated use of the option to make a for a demand for examination (Chapter II). During the demand for examination

- - 21- stage, a reasoned letter may be submitted, and parts of the international application may be amended in order to overcome the objections raised in the searching report and in the opinion. At this stage it is possible to communicate with the examiner in an attempt to reach a clean and positive final report before entering the national stage.

- - 22- ILPO Activity in the Field of Trademarks

In 2018, 10,686 applications in 21,405 classes were submitted, which is about the same as the previous year. The Department examiners examined 27,576 classes, beyond the goal set to the department by the ILPO Goals and Outputs Committee, which was 26,640. First examination pendency was reduced from roughly 12 months in the beginning of the year to only seven months at its end thanks to the additional manpower in the Department, computing adjustments and working guidelines. In 2018 about 26,000 inquiries were submitted to the Department through its online website. In the beginning of the year a new inquiry option was added to the Department website, to enter an address for notices for customs purposes. As a result, the address for customs purposes was updated for almost 5,000 registered trademarks. In 2019 we will continue to act to reduce pendencies and upgrade the Department’s online submission website to make it friendlier and easier to use Examination Data Chart | 33 Trademark Applications Filed and Trademarks Registered, 2014–2018

National Applications International Applications Total Applications Total Registrations - - 23- Stability was kept in the numbers of national and international applications filed in 2018. On the other hand, the number of trademarks registered increased substantially, thanks to the sharp increase in the number of applications examined in 2017 and 2018.

It should be kept in mind that until September 2010, only single-class applications were filed to the ILPO. As of September 2010, when Israel started operating in the framework of the Madrid Protocol for filing international trademark applications, multi-class applications may be filed. Therefore, this chart does not fully express the increase in the Department’s work scopes. For a better understanding, see the next chart, presenting data on the number of classes filed and registered.

Chart | 34 New Applications and Classes Filed for Registration and Classes Registered, 2014–2018

New Applications Classes New Applications Classes Registered Trademarks

We can see a slight increase in the number of classes filed (3.7%) and a sharp increase in the number of classes registered, in light of the great increase in the Department’s output.

- - 24- Chart | 35 Top Ten Countries of Origin for Trademark Applications in Israel in 2018 (percentages) China 7.1% Germany 7.2%

United States 20.9% France 4.9%

Switzerland 4.9% Countries of Origin for T r a d e m a r k Italy 4.1% Applications in Israel in 2018 United Kingdom 3.2% (percentages) Japan 2.8% Spain 1.7% Israel 24.4%

Other Countries 18.2%

Data was taken according to the address of the application owner. We can see that Israeli applicants filed about one quarter of the applications, followed by US applicants.

Table | 7 Leading Applicants in Filing Trademarks Applications in 2018

Number of Number of Client National International Total Applications Applications 1 Apple Inc. 27 61 88 2 Novartis AG 50 5 55 3 Sanrio Company, Ltd. 54 0 54 4 Johnson & Johnson 44 1 45 5 Philip Morris Products S.A. 15 28 43 6 SAMSUNG ELECTRONICS CO., LTD. 3 38 41 7 dōTERRA Holdings, LLC 35 0 35 8 LG ELECTRONICS INC. 29 0 29 9 Chevron Intellectual Property LLC 26 0 26 10 Amazon Technologies, Inc. 24 1 25

- - 25- Table | 8 Leading Applicants in Trademarks Registered in 2018

Number of Number of Client National International Total Applications Applications 1 Apple Inc. 60 49 109 2 Johnson & Johnson 100 2 102 3 GILEAD SCIENCES IRELAND UC 16 70 86 4 Abercrombie & Fitch Europe Sagl 0 72 72 5 Philip Morris Products S.A. 13 51 64 6 Novartis AG 58 5 63 7 HUAWEI TECHNOLOGIES CO., LTD. 3 58 61 8 ZPC FLIS spółka jawna 0 48 48 9 (canceled) Apple Inc. 44 0 44 10 Bayer Intellectual Property GmbH 11 26 37

Chart | 36 Trademarks Applications in 2018 - by Classes Trademarks Classification List

- - 26- Class 9 has been the leading class during the past decade in trademark registration applications. This class includes goods such as Computer and Software Products and Electrical and Scientific Products, etc. In 2018, class 9 was requested for registration in 2,518 applications, i.e. 24% of applications filed. The leading classes behind class 9 are class 35 (Advertising, Business and Retail Services), class 42 (Computer and Software Services and Scientific Services), class 5 (pharmaceutical products) and class 41 (Education and Entertainment Services).

Chart | 37 International Applications filed through Israel as Country of Origin, 2014–2018

The Madrid system enables international trademark registration and maintenance in member countries, collectively, by using a single form, paying a single fee, in a relatively efficient and simple manner, significantly saving on costs of registration and maintenance. In 2018 the upwards trend in the number of Israeli companies choosing to protect their trademark abroad via the Madrid Protocol and file an international application following a national Israeli application continued.

Chart | 38 National and International Applications Closed, 2014–2018 International Applications National Applications

- - 27- This Chart presents the number of applications closed during examination due to no response, the client’s request, closing notice from the international authority or the decision of a Commissioner/Adjudicator. At the same time, 290 national applications and 18 international applications were restored. Lacking the applicant’s response, national applications are fully closed, while international applications are closed only with respect to the refused goods or services. Notice regarding the closure of international applications from the international office may be received following the client’s request to close the file, or once the basic application in the origin country has been closed during the five dependency years. In 2018, 6,610 registered trademarks were deleted due to failure to pay renewal fee. Chart | 39 Israeli Applicants vs. Foreign Applicants, 2014–2018

Applications filed by Israeli applicants Applications filed by Foreign applicants Chart | 40 Rate of Trademarks granted to Israeli Applicants vs. Foreign Applicants, 2014–2018

Trademarks Granted to Israeli Trademarks Granted to Israeli applicants applicants - - 28- Chart | 41 Classes examined in First and Second Examination, 2014–2018

First Examinations Second Examinations

In light of the rise in first examinations in 2017–2018, substantial effort had to be invested in performing second examinations, and therefore a new increase in the number of second examinations was observed.

Chart | 42 Pendency for First Examination, Second Examination and Total Examination Time, 2014–2018 Pendency for First Examinations (Months) Pendency for Second Examinations (Months) Total time from moment of filing to acceptance for registration (Months)

The first examination pendency has substantially decreased due to the increased number of examiners and a special effort to reduce it. This decrease also substantially decreased the total time from application filing until acceptance for publication.

- - 31- Chart | 43 Accelerated Examinations vs. Total Applications, 2014–2018

Immediate Examinations Examined Applications

Chart | 44 Trademarks and Classes in Force in Israel, 2014–2018

Trademarks in force Classes

- - 30- ILPO international profile in the field of trademarks Chart | 45 Designation of International Applications filed in accordance with the Madrid Protocol in 2018 - by Countries

From: WIPO IP Statistics Data Center

- - 31- Chart | 46 Designation of International Applications Filed in accordance with the Madrid Protocol in 2018 - by Countries of Origin

From: WIPO IP Statistics Data Center

- - 32- ILPO Activity in the field of Designs

The central development in the Designs Department in 2018 was the entry into effect of the Designs Law 5777-2017. As of the Law’s entry into effect and until the end of the year, 566 design applications were filed, compared to 1122 design applications filed before the Law’s entry into effect. Examination of new design registration applications will begin in the course of 2019. In 2018, final preparations were made to develop the ability to work with the Designs Law, including concluding the work on the Designs Regulations; concluding specifications and development of the information systems and adjusting them to meet the requirements of the Law; developing the adjustments of the online filing site and the designs search site for the requirements of the Designs Law and continuing to learn the changes deriving from the Law and their implementation in the Department. Over the year, the search capabilities of the designs search website were upgraded and expanded. As part of the changes made, the Designs Journal of August 2018 was published instead of the old Designs Journal once a week each Thursday, automatically using a designated application. The Designs Journal includes the entire relevant information regarding designs that has been made publishable , including filed designs registration applications and photos of the designs filed. The Journal publishes the information made public during the week preceding the publication date and enables viewing the visual description of the design and viewing additional information including the extract and file documents. In addition, the Journal enables to sort the information and present it under the following subjects: applications filed, registrations, renewals, expirations, terminations, cancellations and erasures, amendments to the register and legal proceedings, and also to search by applicant name, class and application number. In addition, we continued preparations for the execution of the Hague Agreement, expected in 2019 and its entry into effect in Israel three months later. Also, specification and development of the departmental information systems began and their adjustment to working with the Hague Protocol. The average pendency for examination has increased to five and a half months due to temporary reduction of the human resources in the Department, directing resources to the preparations for the entry into effect of the Designs Law and preparations for entering the Hague Agreement. The Department is doing its best to reduce pendency during 2019. As noted above, we anticipate that in the coming work year Israel will execute the Hague Agreement so that three months later, still in 2019, international applications may be submitted through the arrangement. We hope all actions performed help and benefit the applicants. - - 33- Examination Data Chart | 47 Designs Applications vs. Registered Designs, 2014–2018

Design Applications Registered Designs

In 2018, 1688 design registration applications were filed. Until the entry into effect of the Designs Law on August 7, 2018, 1122 design registration applications were filed. From the day of the Designs Law entry into effect of the, 566 design registration applications were filed. Over the year, 1019 design registration applications were examined. Examination of new design registration applications will begin in 2019.We stress that this Chart provides information regarding the volume of activity during 2018 and does not examine the number of designs registered out of the total applications filed. For example, in 2016 1,866 design registration applications were filed. Out of which, 1472 designs were registered and 394 designs refused.

Chart | 48 Pendency for First Examination vs. Number of Registration Applications, 2014–2018

Design Applications Average Pendency Time for Design First Examination (in Days) - - 34- This Chart shows the ratio between the examination pendency and the number of applications submitted. We can see that the lower the pendency – the more applications are submitted. This information demonstrates the importance with which the applicants view the Department’s rapidity of response. Chart | 49 Pendency for First Examination and Average Total Examination Duration (from Beginning of First Examination to Publication), 2014–2018

Average Pendency Time for Design First Examination (in Months) Average of Total Examination Time (in Months)

In 2018 the average pendency for examination has increased to five and a half months due to temporary reduction of the manpower in the Department, directing resources to the preparations for the entry into effect of the Designs Law and preparations for entering the Hague Agreement. The Department does its best to reduce pendency during 2019. Chart | 50 Applications Filed in 2018 - by Classes

We can see that in recent years the classes with the largest number of applications are class 25, class 12, class 6, and class 9. This is the second year in a row in which we see an increase in the number of class 14 applications submitted. This increase originates mostly from the increase in quantity of screen displays and icons filed for registration. List of classes. - - 35- Chart | 51 Top Ten Countries of Origin for Design Applications in Israel in 2018 (percentages)

France 12% Sweden 1% Switzerland 2% United States 9% Italy 3% Japan 1% China 1% Germany 3% United Kingdom 4% Brazil 1% Luxembourg 1%

Design Applications in Israel in 2018 Israel 62% (percentages)

Unlike in the other departments, the vast majority of design registration applications are filed by Israeli applicants. We assume that following the execution of the Hague Agreement the percentage of foreign applicants will increase since use of the Hague mechanism makes it easier for them to file applications in Israel.

Chart | 52 First Examinations vs. Continued Examinations, 2014-2018

No. of First Examinations No. of Continued Examinations - - 36- Continued examinations are all the examinations made in the registration application beyond the first examination. An application may not include a continued examination or include one or more continued examinations. The average continued examination pendency is seven days. In recent years the number of first examinations exceeds the number of continued examinations.

Chart | 53 Designs Registered following First Examination or Continued Examination, 2014-2018

Designs granted following Continued Examination Designs granted following First Examination

After several years of constant rise in the rate of applications registered after first examination, in recent years the rate between the number of designs registered after first examination and the number of designs registered after continued examination has remained stable. This can be attributed to the expansion of the information provided to the public through the ILPO website manuals and the publishing of working guidelines. Clearly, raising the transparency level has improved the quality of applications filed and examined.

Chart | 54 Design Applications Not Registered, 2014-2018

- - 37- The extraordinary number of applications not registered in 2015 originates from an amendment of the Designs Regulations (Amendment) 5774-2014, which have entered into force on July 1, 2014. A detailed explanation of this amendment and its effect can be found in the 2016 Annual Report.

Chart | 55 Trends Relating to the Duration of Designs, 2014-2018

Designs which were renewed for a second period Designs which were renewed for a third period Designs which were renewed for a fourth period

As of August 7, 2017, the publication date of the Designs Law 5777-2017, designs can be renewed for a fourth period of 18 years. In 2018, 90 designs were renewed for fourth period

Table | 9 Applications filed and Designs Registered in 2018 - by Classes

Applications Foreign Classification from Israel Applications Filed Registered Filed Registered 0 Unknown 2 0 0 0 1 Foodstuffs 2 0 0 0 2 Articles of clothing and haberdashery 52 31 13 9 Travel goods, cases, parasols and personal 3 31 29 12 2 belongings, not elsewhere specified 4 Brushware 4 4 38 23 Textile piece goods, artificial and natural sheet 5 5 7 8 7 material

- - 38- 6 Furnishing 116 41 18 9 7 Household goods, not elsewhere specified 52 77 14 14 8 Tools and hardware 70 25 32 20 Packages and containers for the transport or 9 64 22 59 39 handling of goods Clocks and watches and other measuring 10 instruments, checking and signaling 5 3 13 0 instruments 11 Articles of adornment 76 35 29 14 12 Means of transport or hoisting 23 18 162 44 Equipment for production, distribution or 13 7 7 8 15 transformation of electricity Recording, telecommunication or data 14 114 83 45 29 processing equipment 15 Machines, not elsewhere specified 1 6 145 2 Photographic, cinematographic and optical 16 5 0 9 3 apparatus 17 Musical instruments 2 2 0 0 18 Printing and office machinery 1 0 1 2 Stationery and office equipment, artists' and 19 8 7 1 0 teaching materials 20 Sales and advertising equipment, signs 7 2 6 2 21 Games, toys, tents and sports goods 52 38 26 10 Arms, Pyrotechnic articles, Articles for hunting, 22 9 1 14 7 fishing and pest killing Fluid distribution equipment, sanitary, heating, 23 ventilation and air-conditioning equipment, 26 18 18 31 solid fuel 24 Medical and laboratory equipment 15 8 66 48 25 Building units and construction elements 180 132 8 4 26 Lighting apparatus 16 22 34 2 27 Tobacco and smokers' supplies 2 1 25 10 Pharmaceutical and cosmetic products, toilet 28 20 4 16 29 articles and apparatus Devices and equipment against fire hazards, 29 1 6 6 4 for accident prevention and for rescue 30 Articles for the care and handling of animals 2 4 0 0 Machines and appliances for preparing food 31 7 2 7 4 or drink, not elsewhere specified Total 977 635 702 383 - - 41- Note that in addition to the above data, due to a mistake in application submission data, a country of origin was not identified in nine applications. In general, mistaken filing data are handled prior to registration.

Table | 10 Leading Israeli Applicants in Designs Applications in 2018.

Applications filed in Applicant Name 2018 Klil Industries Ltd. 77 Shaham I. Arika & Sons. Ltd. 33 Life Style Carpets Ltd. 24 Dorit Klein. 17 Hagalil Profiles Ltd. 14 Extal Ltd. 13 Ototo Design Ltd. 11 Dolev Plastics - Agricultural Cooperative Ltd. 11 Peleg Design Ltd. 11 Shoket Aluminum Ltd. 11 Private applicant 11 Arik Ben Simchon (1993) Ltd. 10 Naot Shoes Agricultural Cooperative for 10 Business Ltd. Global Marketing Enterprise (GME) Ltd. 9 Private applicant 9 Private applicant 9 Avner’s Collection Ltd. 8 The Stanley Works Israel Ltd. 8 Rav Bariach (08) Industries Ltd. 8 Private applicant 8

The table presents the top-ten Israeli applicants in designs applications in 2018. - - 40- Table | 11 Leading Foreign Applicants in Designs Applications in 2018.

Applications filed in Applicant Name 2018 PSA AUTOMOBILES SA 133 CURVER LUXEMBOURG SARL 21 FURNIPART 20 H. STERN COMERCIO E INDUSTRIA S.A. 18 FERRARI S.P.A 17 SCANIA CV AB 15 Chanel 12 1ST DEFENCE INDUSTRIES LTD. 10 Merck KGaA 10 GENTEX CORPORATION 9 Reckitt Benckiser (Brands) Limited 9

The table presents the top-ten foreign applicants in designs applications in 2018.

Table | 12 Leading Israeli Applicants in Designs Registration in 2018

Applications filed in Applicant Name 2018 Pepper (Leumi group) 64 Klil Industries Ltd. 50 Dorit Judaica Ltd. 26 Dashab 9000 Ltd. 25 Naot Shoes Agricultural Cooperative for 16 Business Ltd. Peleg Design Ltd. 12 Ototo Design Ltd. 11 Keter Plastic Ltd. 11 Levi Truck Strauss (1993) Ltd. 9 Shaham I. Arika & Sons. Ltd. 9

- - 41- Global LCS Ltd. 8 Hagalil Profiles Ltd. 8 Moshe Friedel 8 Avner’s Collection Ltd. 7 Open Art Ltd. 7 Aluwinner Systems Ltd. 7 Exclusive Lighting and Furniture Ltd. 7 Biosense Webster (Israel) Ltd. 7 Global Marketing Enterprise (GME) Ltd. 7 The Stanley Works Israel Ltd. 7

The Table presents the top-ten Israeli applicants in designs registration in 2018

Applications Applicant Name Table | 13 filed in 2018 Leading Foreign DYSON TECHNOLOGY LIMITED 33 Applicants in Designs PHILIP MORRIS PRODUCTS S.A. 25 Registration in 2018 CURVER LUXEMBOURG SARL 19 VICTAULIC COMPANY 18 The Table presents LLUMINA, INC. 17 the top-ten foreign SCANIA CV AB 17 applicants in MAN TRUCK & BUS AG 16 designs registration in 2018 Reckitt Benckiser (Brands) Limited 13 FURNIPART 10 1ST DEFENCE INDUSTRIES LTD. 7 BTICINO S.P.A 7 GENTEX CORPORATION 7 KIMBERLY-CLARK WORLDWIDE, INC. 7 Smiths Medical ASD, Inc. 7 GUANGDONG MIDEA KITCHEN APPLIANCES 6 MANUFACTURING CO., LTD Illumina Cambridge Limited 6 MIDEA GROUP CO., LTD. 6 SOCIETE DES PRODUITS NESTLE S.A. 6

- - 42- ILPO International Profile in the Field of Designs Chart | 56 Design Applications Filed in 2017 - by Countries

m theoFr OWIP eitbswe tps://wwht tats/pst/iin.wipow3. lueavultesRIpsStats

Chart | 57 Designs Registered in 2017 - by Countries

From the WIPO website https://www3.wipo.int/ipstats/ IpsStatsResultvalue

- - 43- ILPO Activity in the Legal Department

The Legal Department deals in initiating legislation, handling proceedings before the Commissioner, the Vice Commissioner and the Intellectual Property Adjudicator, providing current legal support to all ILPO departments and answering questions by the public relating to the Commissioner Circulars. The ILPO Legal Department includes the Commissioner, Vice Commissioner the IP Adjudicator, a legal adviser, two legal assistants and interns. In November 2018 the Adjudicator retired and her position will be manned in 2019. Legislation Initiatives At the end of 2018 the process for installing the Designs Regulations was concluded and they were published in the Official Gazette on January 22, 2019. The Regulations were prepared in the ILPO together with Counseling and Legislation and are result of a public consultation process. The innovative arrangements in the Regulations include a maximal expenses table outlining the Commissioner’s discretion in the proceedings before him when ruling expenses for the parties. In addition, the Commissioner’s authority to refer the parties to mediation was set and he may validate a mediation agreement if no public interest is harmed by it, such as the integrity of the register. At the same time, during 2018 the process for authoring the Designs Regulations for the Implementation of the Hague Agreement concerning International Registrations of Industrial Designs started. The installation of these Regulations will concluded at the beginning of 2019 in order to allow Israel to join the Hague Agreement. At the end of 2018 the Nice classification classes list in the Trademarks Regulations 1940 were adjusted to the amendments decided by the classification work group acting under the WIPO, in which Israel too is a partner. In addition, classification lists of products in the Designs Regulations were adjusted to the amendments decided by the Locarno classification work group acting under the WIPO. Israel is not a member of the Locarno Agreement but there exists a correspondence between the addendums to the regulations regulating the designs classes and subclasses and those prescribed under the Agreement. Proceedings A substantial part of the Department’s resources are dedicated to handling judicial and quasi-judicial proceedings taking place at the ILPO. In 2018 we saw a decrease in the number of patent grant opposition proceedings initiated during the year (a 33% decrease). On the other hand, we saw substantial increase in the number of trademark registration opposition proceedings (a 92% increase,) so that the total activity of the Department in this field increased – during 2018 a total of 314 new proceedings were initiated compared to 259 in 2017. - - 44- A. Legal proceedings in the ILPO Table | 14 Legal Proceedings Filed, 2014-2018 Patents

Year Opposition Opposition Application Ex-parte App. to Opposition App. to Opposition Total to amend to cancel proceeding name to grant of cancel or to renew specification inventor extension change patent order extension order period 2014 50 3 30 1 1 85 2015 38 5 21 64 2016 49 10 39 1 1 100 2017 42 1 5 20 3 71 2018 28 2 20 1 51

Trademarks

Year Competing Opposition Ex-parte Register Total app. proceeding deletion / cancelation / amendment 2014 16 86 27 24 153 2015 24 81 15 40 160 2016 13 101 28 36 178 2017 20 71 32 53 176 2018 12 163 64 40 252

Designs Compensation and Royalty Committee

Year Application to Ex-parte Total Year Motion to set Cancel proceeding compensation and royalties 2014 2 3 5 2014 6 2015 2 10 12 2015 1 2016 1 13 14 2016 2 2017 1 10 11 2017 1 2018 2 5 7 2018 4

- - 45- Table | 15 Legal Proceedings Closed, 2014-2018 Patents

Year Opposition Application Ex-parte App. to Service Opposition Opposition Total to cancel proceeding name invention to grant of to renew inventor - other extension patent order 2014 41 5 34 1 2 83 2015 45 5 22 1 74 2016 40 7 31 1 2 1 82 2017 64 5 29 1 4 102 2018 41 6 23 1 71

Trademarks

Year Competing Opposition Ex-parte Register Total app. proceeding deletion / cancelation / amendment 2014 19 78 21 27 145 2015 19 95 19 21 154 2016 20 81 22 31 154 2017 20 90 46 45 201 2018 8 107 31 41 187

Designs Compensation and Royalty Committee

Year Application to Ex-parte Total Year Motion to set Cancel proceeding compensation and royalties 2014 1 3 4 2014 1 2015 1 7 8 2015 4 2016 3 9 12 2016 2 2017 1 12 13 2017 6 2018 2 13 15 2018 4

- - 46- Table | 16 Outstanding Legal Proceedings at the end of 2018 Patents

Opposition Opposition to Applicatio Ex-parte Opposition to App. to Total amend n to proceeding grant of cancel or specification Cancel extension amend order extension order period 18 0 2 4 0 1 25 Trademarks

Competing app. Opposition Ex-parte Register deletion / Total proceeding cancelation / amendment 9 79 34 24 164

Designs Compensation and Royalty Committee

Application to Ex-parte Total Motion to set Cancel proceeding compensation and royalties 0 0 0 0

B. Appeals Chart | 58 Appeals filed in 2014–2018 to the District Court on Decisions of the Commissioner of Patents, the Vice Commissioner and the IP Adjudicator

Data on appeals and leaves to appeal to which the Commissioner is not a party are reported by the parties and therefore, underreporting is possible. - - 47- Chart | 59 Results of Appeals Issued in 2014-2018 by the District Court over Decisions of the Commissioner of Patents, the Vice Commissioner and the IP Adjudicator

Granted / partially granted Denied *other

Data on appeals and leaves to appeal to which the Commissioner is not a party are reported by the parties and therefore, underreporting is possible.

”Other” - appeals dismissed without prejudice / case closed in compromise / case returned for renewed deliberation / appellant requested to withdraw appeal

Table | 17 Motions for Leave to Appeal filed to the Supreme Court, 2016-2018

Year Number of Leave to Appeal Number of Decisions/ Motions filed to the Supreme Judgments Handed Down Court 2016 3 2 2017 6 4 2018 1 4

Data on appeals and Leaves to appeal to which the Commissioner is not a party are reported by the parties and therefore, underreporting is possible.

- - 48- Human Resource Department

The Human Resource and Training Department at the ILPO acts to exhausts the rights and duties of employees. It also deals with welfare and social services in accordance with the Civil Service Bylaws. The Branch is responsible for all human resources activities, commencing with employee intake and until their retirement, and also for enriching the human capital and manpower improvement with the purpose of creating a pleasant, challenging and fruitful work environment. The Branch is responsible for establishing an annual training program for all ILPO employees. The program is created by identifying the needs of the various ILPO units and formulating an expanded work plan for the ILPO employees. The ILPO acts as a learning organization. As such, it focuses on retaining, expanding and deepening the professional knowledge of its employees. These are achieved by training and professional development courses, skills development, general enrichment (including courses to improve English proficiency to all ILPO employees), developing a learning organizational culture and more, expressing values of professionalism that will lead to the achievement of the organizational goals.

Main Tasks for 2019:

 Locating and recruiting 17 cadets, their placement and intake and developing professional manpower following the decision of the “Committee for Determining ILPO Goals”.  The new cadets will be paired with specifically-trained mentors with the goal of training them at the highest possible level, which is required for their certification as patent examiners.  “Toolbox” course for mentors.  Internal course for cadets.  Improving and expanding offsite work. Affirmative Action Positions in the ILPO:  20 individuals from minority groups  1 Ethiopian Jew  3 individuals with disabilities

- - 51- Training Goals for 2019:

 Constructing professional courses and providing professional knowledge in the various scientific fields.  Encouraging creative thinking and innovative processes.  Intensifying the connections between employees in cross-organization positions.  Peer learning and creating knowledge and inspiration teams in the various courses.  Developing management teams, enriching the current management staff and creating a uniform language.  Reinforcing the organizational culture, collaboration and creativity. The Unit’s vision is to act reliably and transparently on the basis of providing high-quality services to employees, while constantly re-organizing and innovating.

- - 50- officer Admin Human student Human

Resources Resources Resources Resources

and training and training Team

Chemistry Chemistry Legal Budget Admin. & Admin. Assistants Director of Director

Team

Pharmaceutics Pharmaceutics team team Legal Admin- Advisor manager istration Director of of Director Examiners Trademarks Trademarks Department Trademarks Trademarks Department

Legal Legal

Team Team Department

PCT PCT Biotechnology Biotechnology Admin- Admin- istration istration Director of of Director Examiners Department

Deputy Deputy Patents Patents Library Officer Patents Patents Judicial Judicial Director of of Director Director of of Director

Department Department Physics Team Physics

(ILPO)

Admin. Admin- Patents istration Director of Director

Teams

Electronics Electronics Mechanics & Mechanics

Director of the Israel Patent Office Office Patent Israel the Director of Designs Designs Interns Admin- istration Director of of Director

Department Examiners

Medical Medical Devices Team Devices

Officer Officer Judicial Judicial al Affairs Affairs al

Internation

of the ILPO of the

Deputy Director Deputy

Team

Quality Patents Register Manager Computers and Computers Communications Communications

Manager & Database & Database Information Information

Officer Analytics Analytics

Research & Research

Chart | 60 in2018 Structure ILPO

- - 51- Chart | 61 Segmentation of ILPO Employees by Profession

Employees Employees Jurists PCT Design Trademark Patent with with social Examiners Examiners Examiners Examiners administrative sciences ranks and humanities ranks

Chart | 62 Segmentation of ILPO Employees by Education

B.A

Master’s Degree

Ph.D - - 52- Logistics and Finance Department

The ILPO acts as an executive agency by virtue of Government Resolution 4722 dated March 5, 2006. This means on the organizational level, that the ILPO’s expenses depend on its income. The entire ILPO revenue originates from fees. The source of most of the ILPO’s revenue is its activity in the field of trademarks and patents. A growing revenue field is PCT activity which, alongside international applications filing fees includes revenue from fees paid for the international searching and examining activity conducted by the ILPO. The 2017 state budget sets the ILPO budget at approximately ILS 68 million. This year the ILPO adhered to its budget. Most of the ILPO expenses are composed of salaries to its employees, while the majority of the remaining budget is dedicated to operation expenses, namely, investment in information and computer systems and current purchasing. (*Note that the data was collected at the end of March 2019. The data does not constitute a confirmed report and rely on the integration of information from several internal government systems on the said date).

Table | 18 ILPO Income and Expenses, 2018

Revenue 2018 Revenue from patent fees 46,759,787 Revenue from trademarks fees 56,578,297 Revenue from PCT fees 5 , 4 9 2 , 4 0 0 Revenue from designs fees 1 , 1 1 2 , 8 6 7 Total revenue 109,943,351

Expenses 2018 Manpower and temporary -35,476,000 employment Operation expenses (Procurement, computing, -20,191,670 courses) Housing expenses - 6,000 ,000 Total expenses -61,667,670

- - 53- Chart | 63 Patent Department - Distribution of Revenues from Fees 2017-2018

Other App. Grant Initial re- Second Thrid renew- Fourth re- Last renewal 20 years Patent reg. fee under newal (up to renewal (7- al (11-14 newal (15- (19-20 yrs.) renewal app. Submis- Reg. 52 6 yrs.) 10 yrs.) yrs.) 18 yrs.) sion

280248224 480228222 482428222 280448228 282208222 282218242 282188222 2008202 0882208124

288228022 882228284 480828002 282228222 284288222 281188440 282248220 2228842 0482228202 05 - 045 - 025 - 25 - 25 015 - 45 - 415 25

Chart | 64 PCT Department - Distribution of Revenues from Fees 2017-2018

Priority Transmittal Search Fee- ISA Late Preliminary Search Fee - Document Fee IL(US&IL Additional Payment Fee Examining IL Fee applicants via fee Fee WIPO) 25,456 769,808 1,620,247 17,601 19,389 137,304 3,164,965 28,810 774,341 1,424,024 28,200 6,293 119,336 3,111,396 13% 1% -12% 60% -68% -13% 10% - - 54- Chart | 65 Trademarks Department - Distribution of Revenues from Fees 2017-2018

Other Objection Accelerated Register ns Searches National National New interna- app. examination changes trademark applications tional appli- renewal cations and trademark renewal 2228222 0208282 2228022 080048222 4288822 2208222 0288048212 0182228182 0282228222

2228420 8218222 081218242 081248288 4218142 2028121 8182428222 0880248002 0282288022

- - 05 225 815 - 25 25 - 025 25 005 25

Chart | 66 Designs Department - Distribution of Revenues from Fees 2017-2018

Other 4th period 3rd period 2nd period Minus old desgin Administrative Design filing renewal renewal renewal app. date ext.

218222 808422 0428201 8228821 0048220 228028 2228002

228841 228820 0288828 8088128 228222 218248 2818422 20% 313% 3% -13% -47% -12% 16%

- - 55- Quality Assurance Field

The ILPO considers the quality of service to be a vital component and mean for improving the service given to those who seek legal protection on intellectual property through registration of patents, designs, trademarks and appellations of origin. The level of quality is maintained through mandatory working guidelines and directives, internal control over working procedures, quality of service monitoring and measurement and initiating improvement processes. As a condition for joining the prestigious club of international searching and examining authorities on behalf of WIPO, the ILPO needed a certified quality system. During 2010-2016 the ILPO was certified for quality standard of service ISO 9001(2008), and during the years 2017-2018 certified for quality standard of service ISO 9001(20015) According to the standard requirements, each year the Israeli Standards Institute conducts a certification test. Entry to the quality system increased the awareness to the importance of the quality of management and excellence in the ILPO and encourages a constant process of performance enhancement. ISO certification created many changes in the ILPO departments and activity: 1. Performing quality assurance to the ILPO “products”: control over examination reports in all departments, control on changes in registers and data improvement. 2. Writing and publication of work directives to the public for all ILPO departments and activities. Internal working guidelines were composed and a customer satisfaction survey takes place. ISO certification placed the ILPO activity - the service to applicants, to all Israeli and foreign customers in all ILPO departments and activities - at high international standards, as are practiced in corresponding international searching and examining authorities. ILPO representatives participate in international WIPO meet-ups that concern promotion of quality.

- - 56- Current activities in the quality system 1. Current update of the quality procedures and work directives in all ILPO departments. 2. At least 5% control on the ILPO “products” in all ILPO departments and activities. 3. Regular training sessions for all ILPO employees. 4. Conducting an annual customer satisfaction survey. 5. Conducting an annual ILPO employee satisfaction survey. 6. Holding periodical meetings (open to the public) with attorneys and patent attorneys in the ILPO activity areas. 7. Handling customer inquiries/complaints. 8. Taking preventative and/or corrective actions when needed. 9. SWOT (Strengths, Weaknesses, Opportunities & Threats) evaluation according to the ISO requirements. 10. Conducing internal quality tests in all ILPO departments and activities. 11. Conducting a certification test to the quality system by an external certifying body (the Israeli Standards Institute). 12. Participation in the WIPO quality forum.

- - 57- Head of Research and Information Field

In 2018 the Head of Research and Information Field position in the ILPO was manned. The Head of Research and Information Field helps decision-making in the ILPO by collecting and analyzing relevant information and research. The activity of the Head of Research and Information Field relates to the following areas: A. Strategic planning Every organization requires a plan to set its path according to measureable goals and objectives, determined out of consideration of the factors that affect the organization’s activity. The annual work plans are derived from the strategic plan. In 2018 a thinking process took place in the ILPO that included: 1. Identifying and mapping out trends and changes in Israel and abroad that have the potential to impact the field of intellectual property. 2. Status report of the various ILPO departments. 3. Mapping out the challenges and tasks of various patent offices worldwide and the ILPO specifically. According to these points, the main tasks of the ILPO work plan for 2019 were defined. B. Follow-up on new technologies and their impact In the past five years we witness significant technological developments in many fields, the most prominent being 3D printing, Internet of Things, AI and machine learning. These developments will greatly change the world as we know it. One of the main tasks of the Head of Research and Information Field is to learn the scope of the various technological developments and their impact on intellectual property, so as to make sure the relevant legislation, policies and procedures of the ILPO are prepared to answer these issues and adjust them if needed. Intellectual property protection has global characteristics, and therefore it is important that the ILPO is in line in this area, or at least aware of the differences between the ILPO activity and procedures and those of other patent offices worldwide. For that purpose, the Head of Research and Information Field acts to create connections and work interfaces with various units in patent offices worldwide.

- - 58- C. Patent applications analysis Last year, use of the PARSIL2 system for managing the examination procedure started in the Patents Department. This system expands the information available for patent applications to every patent application. This expansion enables reaching information that did not previously exist, analyzing it and pointing to changes to improve and increase the ILPO work efficiency in the operational and material level. D. Creating connections with entities outside the ILPO In order to reach information from resources that are not public domain, the Head of Research and Information Field acts to form connections with academic researchers. The Head of Field also initiates unmediated meet- ups with the applicants, their attorneys and stakeholders in the various ILPO activity fields. This engagement enabled receiving various insights, such as the manner in which the services provided by the patent offices affect the public and what could be changed to increase public satisfaction from the services provided.

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