And here, the defendants' access to the plaintiffs' four trade secrets led to GazY. Tam. The defendants made use of all four of the patent applications they filed. The plaintiffs established the essential similarity between the defendants' invention and their own.
30. Indeed, the defendants used their opening with an "antenna in Architecture X", and the plaintiffs used an antenna that differed in shape. Still, the plaintiffs showed that they had worked on an X-shaped antenna before the defendants, but decided to abandon its development. Prof. Seroussi was also exposed to this.
It is true that the plaintiffs did not specifically address this characteristic of the defendants' opening in the statement of claim, but this is because at the time of its filing, the defendants' patent application had not yet been published. After they learned that the defendants had used such an antenna in their application, they submitted to the court's expert a variety of documents proving that they had worked on developing it long before the defendants. Prof. Seroussi also made use of this knowledge, and in any case there is a fundamental similarity between the development of the plaintiffs and the development of the defendants. Therefore, the presumption of use of their secrets exists, in accordance with section 10 of the Commercial Torts Law.
31. Evidentially, while Mr. Ram's version was consistent and orderly, the defendants' version was found to be convoluted, elusive and unreliable. They refused to disclose their "independent" venture, did not present research and open procedures or relevant experiments, etc. Even the expert on behalf of the defendants, Dr. Luzzatto, admitted in his interrogation that he was not asked to make a comparison between the parties' ventures. The court-appointed expert sided with the plaintiffs' position, and hence the task of deciding the dispute between the parties is simple.
32. According to the plaintiffs, the defendants hid from the court's expert and the court critical evidence to prove their independent venture, and therefore the presumption of use in section 10 of the law was not contradicted . The chronology of the times reinforces the necessary conclusion that the defendants made use of their secrets. The lack of professional experience of the defendants in the field of terahertz reinforces this conclusion, and their use of the plaintiffs' draft press release also constitutes further reinforcement of the presumption of use.
- The defendants published the plaintiffs' secrets as their own independent secrets, and traded them for their personal benefit, including a benefit to their reputation. The publication was made without the consent of the owners of the secrets, i.e., the plaintiffs, in contravention of the contractual obligation set forth in clause 7 of the agreement between the parties, and contrary to the duty of trust between them. Therefore, the defendants were wronged by the tort of theft of a trade secret under section 6 of the Commercial Torts Law.
- The University and the Negev Society are also responsible for the theft of secrets. Thus, the Negev Company is the signatory to the agreement, and the defendants' patent application was filed in its name. As for the university's responsibility, the plaintiffs referred to the testimony of Prof. Seroussi according to which the project was developed and investigated within its framework. The plaintiffs argued that in our case, sections 2 and 13 of the Torts Ordinance [New Version] (hereinafter: the Torts Ordinance) apply, according to which the employer's liability arises for a tort tort committed by his employee. Therefore, the university should be held liable as Prof. Seroussi's employer. Seroussi's research was done with her knowledge and encouragement, and some of the publications were also made on her website and noted the connection of the research to the university.
- As for the assignment of rights to plaintiff No. 4, RW, it was done lawfully, and it does not drop the ground under the lawsuit, contrary to the defendants' position.
- Against the background of all this, the plaintiffs petitioned for declaratory relief that they are the owners of the intellectual property that is the subject of their invention, and for a permanent injunction that will prohibit the defendants from using it.
The main arguments of the defendants
- According to the defendants, the plaintiffs did not prove their claiMs. They refrained from conducting a technical comparison and scientific examination, and did not present their product either to the court or to an expert on its behalf. According to Mr. Ram's affidavit, which details precisely the documents to which Prof. Seroussi was exposed, it appears that the only document that contains technological information regarding the structure of the antenna is nothing more than an article by the scholar Park from 2017, which is in the public domain (noted in paragraph 14.1 of the first opinion, hereinafter: Park's article).
- In fact, all four secrets are inthe public domain, and in any case they have not been stolen. The court's expert admitted in his testimony that the theft of the first and fourth secrets had not been proven. Regarding the first secret, the resonance frequency of the coronavirus, it was even proven that there is no particular relevant frequency as claimed by the plaintiffs. In any case, the very idea of using terahertz frequencies to identify COVID-19 is in the public domain. As far as the fourth secret is concerned, not only was it proven that Prof. Seroussi did not use the aforementioned method of analysis at all, but that the presumed secret was conveyed to him by Dr. Wilenchik of Ben-Gurion University.
39. As for the third secret (the structure of the chip), the plaintiffs changed the façade when they added another secret beyond the four secrets, which is the X structure of the defendants' chip. The façade change was done after meeting with the expert. The plaintiffs defined the third secret in their amended statement of claim. They claimed the structure of a chip with "a pair of square resonators and a metal strip." The defendants formulated their defense in light of this definition, and suddenly the front was changed. The claim that the X structure of the defendants' chip is also theft of a trade secret amounts to a late and blatant change of façade. Therefore, the defendants could not cope with the expert's analysis on the matter. In any event, this secret is also in the public domain, and there is no evidence that was stolen from the plaintiffs.
40. As for the second secret, at the beginning of the process, when the application for injunctions was filed, the plaintiffs did not mention in their application the claim of a trade secret related to a breathing device or a breathalyzer. Only in the amended statement of claim did they mention that the second secret is the integration of a unique microelectronic chip into such a device. The emphasis was on integrating the chip into the device. Here, too, the façade has been changed, and now a trade secret is claimed in relation to the way in which the exhalation done to the device is tested. In any event, in this matter as well, no basis was presented for the theft of such a secret, and in fact the defendants' development is substantially different from the plaintiffs' opening with respect to this component.
41. More generally, it was argued that the expert opinion on behalf of the court had many flaws, and it should not be relied upon at all. The defendants reiterate their argument that the expert exceeded his authority, showed impartiality in favor of the plaintiffs, acted in an unprofessional manner, and therefore his opinion should be disqualified. Instead of focusing on those trade secrets as explicitly defined by the plaintiffs, he expanded the scope and dealt with "families of secrets." In doing so, he acted unfairly, taking an approach in favor of the plaintiffs, while harming the defendants' ability to defend themselves.
- From a legal standpoint, the lawsuit on the agenda is futile. The plaintiffs claimed that they had filed patent applications based on the trade secrets in dispute. Hence, these secrets have become public domain, since the patent application is supposed to include the details of the invention.
Given this state of affairs, the Supreme Court's judgment in Civil Appeal 6025/05 Merck & Co. Inc. v. Teva Pharmaceutical Industries in a Tax Appeal (published in the databases; 2011) (hereinafter: the Merck case). It was held that it is the patent law that establishes an exhaustive arrangement regarding the ability to restrict other parties from making use of the details of the invention, after the application for recognition of the patent has been filed and until it is decided. At this stage, commercial competition between the parties should not be restricted, by virtue of a branch of law that is external to patent law (such as the Commercial Torts Law ofthe present lawsuit). Therefore, the plaintiffs are silenced and prevented from arguing against the defendants by virtue of the Commercial Torts Law. This state of affairs undermines the entire claim.