Israeli Patent Office Issues Landmark Decision on Design Rights: Cotton Candy Machine Case Sets Critical Precedent

The Israeli Patent Office (ILPTO) has recently delivered a significant ruling by invalidating two registered designs (Case Nos. 63960 and 63961) related to cotton candy machines, establishing a crucial precedent for design protection in Israel. The decision addresses fundamental aspects of design ownership, prior disclosure, and the interplay between patent and design rights.

The case centered on an Israeli company that imported cotton candy machines manufactured by a Chinese entity. The Israeli company had filed multiple design registrations with the ILPTO for these machines, despite lacking explicit design rights transfer from the Chinese manufacturer. The registration attempts were ultimately deemed invalid due to two primary factors: improper ownership claims and prior public disclosure.

The ILPTO's decision emphasizes that mere commercial distribution rights do not automatically confer design ownership. Under the Israeli Design Law, ownership encompasses multiple layers, distinguishing between original designers, service designers (employees creating for employers), commissioning entities, and assignees. The ruling clarifies that importers must secure explicit written assignments of design rights before pursuing registration.

The Israeli company's reliance on a general import agreement, which lacked specific provisions for design rights transfer, proved insufficient for establishing legitimate ownership. This highlights the critical necessity for comprehensive documentation of intellectual property rights transfers in commercial agreements.

The decision provides important clarification regarding Israel's 12-month grace period under the 2017 Design Law. While this provision allows design registration within twelve months of public disclosure, it applies exclusively when the disclosure originates from the legitimate rights holder. The ruling establishes that third-party disclosures, whether during or before the grace period, invalidate this protection.

A particularly noteworthy aspect of the decision addresses the role of social media in prior art considerations. The ILPTO determined that even restricted-access social media posts, specifically referencing WeChat's Moments feature, constitute public disclosure if at least one person outside the applicant's control could access the content. This interpretation significantly expands the scope of what constitutes prior art in the digital age.

The decision draws a clear distinction between patent and design rights. Possession of a patent for a machine's functionality does not automatically grant rights to the design aspects of products manufactured by that machine. The ruling emphasizes that functional and aesthetic protections must be secured separately through appropriate intellectual property channels.

While the ruling primarily focused on ownership and novelty grounds, it raised important questions about good faith in design applications. The decision suggests that future cases may place greater emphasis on applicant conduct, particularly regarding disclosure of relevant information during the registration process.

The ruling establishes several critical requirements for successful design protection in Israel:

1. Explicit documentation of design rights transfers through formal assignments

2. Comprehensive prior art searches including digital platforms and social media

3. Clear separation between functional patent rights and aesthetic design protection

4. Careful timing of applications relative to any public disclosures

This decision significantly impacts design protection strategies in Israel, particularly for companies involved in international trade and manufacturing relationships. It underscores the importance of securing proper documentation of intellectual property rights transfers and conducting thorough due diligence before pursuing design registrations.

For businesses operating in Israel's market, the ruling necessitates a review of existing intellectual property portfolios and commercial agreements to ensure adequate protection of design rights and compliance with ILPTO requirements. The decision marks a significant development in Israeli design law jurisprudence, providing clear guidelines for future applications and enforcement strategies.