Debt Collection

Can a creditor in Israel seize a debtor's trademark, patent, or other intellectual property?

Yes. Registered intellectual property is property like any other, and the Execution Law 5727-1967 lets a judgment creditor attach it and have it sold. An attachment over a patent is noted in the Patents Register and one over a trademark in the Trade Marks Register, both kept by the Israel Patent Office. Realizing the asset normally means asking the Execution Office Registrar to appoint a receiver who can license or sell the right. Moral rights in a copyright work are personal under Section 45 of the Copyright Law 5768-2007 and cannot be taken.

The Execution Office can attach any proprietary right belonging to the debtor, and Israeli practice has long applied that to registered industrial property. The Patents Law 5727-1967 treats a patent as transferable property and requires transactions in it to be recorded in the register to bind third parties, which is why the attachment is registered rather than merely served. The Trade Marks Ordinance [New Version] 5732-1972 works the same way for marks. Economic rights in copyright are transferable under the Copyright Law 5768-2007 and can therefore be reached, although the author's moral rights stay with the author. Where the debtor is a company, a charge over its intellectual property is registered with the Companies Registrar.

A foreign creditor chasing an Israeli technology business often finds the registered rights are the only asset with real value, and registering the attachment alone can be decisive, because it blocks a sale or a licensing round until the debt is dealt with. Selling the right is the harder half. A receiver has to value an asset with no obvious market, deal with existing licensees, and satisfy the Registrar that the price is reasonable, which is why these files run for months. Attaching the royalty stream in the hands of a licensee is often quicker than attaching the underlying right. The general rules on attachment orders in Israel govern the application itself.

⚖ In Practice
  • Governing law: Execution Law 5727-1967; Patents Law 5727-1967; Trade Marks Ordinance [New Version] 5732-1972; Copyright Law 5768-2007, Section 45 (moral rights are not transferable)
  • Competent authority: the Execution Office (Lishkat HaHotzaa LaPoal), with the attachment recorded at the Israel Patent Office (Reshut HaPatentim, HaMidgamim VeSimanei HaMis'char)
  • Fees: opening an Execution Office file costs roughly 0.5% to 1% of the debt claimed, and a receiver is paid a percentage of the realization set by the Registrar
  • Timeline: the attachment can be registered within days of the order, while a sale through a receiver commonly takes 6 to 18 months
  • Out of reach: moral rights in a copyright work, and unregistered know-how or trade secrets that have no register to attach against
  • Faster alternative: attach the royalties payable by an existing licensee, which is a third-party attachment rather than a sale of the right

From the full guide: Asset Attachment Orders in Israel (Tzav Ikul): A Complete Guide


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Get a Free Consultation with Adv. Eli ShimonyPrepared under the direction of Adv. Eli Shimony, Eli Shimony Law Office · Editorial policy

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