The cabinet today approved the changes to the Encouragement of Industrial Research and Development Law (1984), as agreed upon by the Chief Scientist of the Ministry of Industry, Trade and Labor and the Ministry of Industry, Trade and Labor. The amendments will enable the export of intellectual property (IP) developed with funding from the Chief Scientist of the Ministry of Industry, Trade and Labor in return for higher than usual royalties.
To date, this form of IP export was a criminal offense, except in specially permitted cases. Serono-InterPharm was granted this special permission in 1993-1997 by then-chief scientists CEO Yehoshua (Shuki) Gleitman, and Dr. Orna Berry, in return for an exchange of know-how that imported IP to Israel.
Chief Scientist Dr. Eli Opper said at today's meeting, "Serono's decision to halt InterPharm's activity in Israel, regardless of the question currently under examination of the legality of IP export, urgently raises an existing problem, which is: How do we attract international firms to set up research and development and manufacturing centers in Israel.
"We're not doing anyone any favors. It is in the state's supreme interest to attract this sort of investment, via R&D, taxation, a very good investment law, and other benefits. In its current condition, Israel is not attractive enough.
"The fact is that not one biotech or pharma company has established something here, and it's not for lack of trying on our part. On the contrary, we set it as our goal, and met with senior company executives, but no one wanted to operate here."
The government decision will enable the export of know-how and intellectual property developed with assistance from the Office of the Chief Scientist (OCS). An amendment was needed to maximize investment value and efficiency for international investors in Israel, who generally transfer know-how between divisions, and transfer production based on such know-how.
Published by Globes [online] - www.globes.co.il - on Sunday, September 26, 2004