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Application of Market Overt to Copyright Infringement

September 11, 2005

In Microsoft v Appliker Computer Marketing Ltd. the District Court in Tel Aviv ruled that the doctrine of Market Overt does and should not apply to instances where intellectual property rights have been infringed. Accordingly, the Honorable Judge Binyamini presiding over the case ruled that Microsoft has an absolute right to prevent reproduction and distribution of the infringed copies of its Microsoft Windows program.

Appliker argued that according to the Market Overt rule, the purchaser of the program should get a good title to it when such was acquired free of any burden and in good faith, even if the program later turned out to be an illegal copy.

Although the factual finding of the Court showed that Appliker was well aware of the infringing nature of the programs it purchased, and was sufficient to dismiss Appliker’s defense, Judge Binyamini decided to address the general question of the applicability of the Market Overt doctrine in cases of intellectual property infringement.

The court ruled that the Claimant does not have to show that the Defendant knew that the copies in his possession were infringing copies. As with other intellectual property rights, the primary exclusive rights may be asserted against the Defendant who honestly believed that he purchased an original copy or the right to rightfully reproduce the work, thus preventing the buyer from acquiring a good title to an infringed copy of the program, even if it was acquired in good faith.

Judge Binyamini ruled that Market Overt does not apply to cases where there was an infringement of Intellectual property rights. The conclusion in this case was therefore that Microsoft had an absolute protection by copyright laws, and Appliker’s defense claims were rejected.


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