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Israeli Finance Minister Yair Lapid and his German counterpart, Wolfgang Schäuble, signed a revised tax treaty in Berlin on August 21, 2014. The convention, which was last amended in 1977, has been adapted to make it correspond to modern international tax law and current economic relations between Israel and Germany.

Israel’s conflict with Hamas-controlled Gaza is escalating. The conflict broke out on July 8, when Israel launched "Operation Protective Edge" in response to Hamas launching rockets toward Israel. Is this still a place where lawyers can do international business?

In the last interviews on the radio given by Micky Barnea, he stated that the Israeli high tech hasn't been influenced significantly by the recent event. Listen to the full interview at Galatz.

Barnea represented Spirent Communications PLC., a leading communications technology company, traded on the London Stock Exchange, and its Israel subsidiary, in the purchase of Radvision’s and Avaya’s Technology Business Unit for approximately USD 25 million. 

Corporate Live wire held a roundtable with seven experts from around the world to discuss the latest changes and developments in capital markets in each expert's respective jurisdiction. To read more, please click here

The firm represented AVGOL Industries 1953 Ltd. in their issuance of a new series of debentures (Series C) in the amount of NIS 502 million. This is one of the largest financing rounds made this year on the Tel Aviv Stock Exchange and its aims are to replace existing financial debt, and to finance ongoing investment activities and operations of the Company. AVGOL Industries is a global technology company, a world leader in the development, manufacture, and marketing of nonwoven fabrics, especially diapers and hygiene products, and its customers include large companies such as Procter Gamble and Kimberly-Clark. The Company's shares are traded on the Tel Aviv 100 index. To read more, please click here

There is no doubt that the Protective Edge Operation has had a material adverse impact on economic activities in Israel. The rocket attacks on communities in southern and central Israel reduced dramatically the revenues of businesses, hurt the tourism and vacation industries, and forced many companies to cope with absences of employees who were called up for active reserve duty. Business as usual? Nevertheless, it appears that the Israeli high-tech industry proceeded more or less with business as usual, as if high-tech is the “steadfast cliff” of the local economy. Even during last month, when the inferno in Gaza was at its worst and Israel found itself subject to venomous criticism throughout the world, the robust international activities in the Israel technological sector continued. International merger and acquisition transactions of Israeli technology companies did not stop and public offerings of Israeli high-tech companies on NASDAQ continued. One should not misconstrue the continuing global activities by Israeli high-tech companies as a reflection of support of the Israeli government’s policy in Gaza or as recognition of its right to protect itself from the barrage of Hamas rockets. The factor driving this activity is, first and foremost, the robust demand for Israeli technology, a demand that is hardly affected by political considerations. There are two additional factors that contribute to the Israeli high-tech industry’s imperviousness to the impact of the events of the Protective Edge Operation. One factor is the fact that the majority of the commercial activities by Israeli high-tech companies is not in the local market. Though, in many instances, the development is located in Israel, the target markets and the vast majority of the sales are global. Therefore, the drop in the local demands has no material impact on the business activities of Israeli technology companies. The second factor, which is more complex and fragile, is the sense that the fighting in Gaza is not creating a substantive threat to Israel’s security. As long as it is evident that the threat to personal safety in central Israel is marginal, if not negligible, the technology sector can project a sense of “business as usual”. The operation of the Iron Dome systems reinforces this sense of security. Nevertheless, one must take into account that this sense of security could be extremely fragile. The temporary halting of flights to Israel by foreign companies, as a result of a rocket falling in Yehud, provided clear evidence as to how quickly the situation could change. There was a good reason for the intensive political efforts to resume flights. Were it not for the decision to resume air travel with Israel within 24 hours, it is doubtful whether the atmosphere of normalcy could have been sustained. For anyone who needs a reminder of the possible correlation between personal safety and routine activity in the technology sector, one merely needs to recall the period of the Second Intifada. At the beginning of the 2000s, the suicide attacks caused visitors from overseas to stay away from Israel. Even though the technology sector was also suffering from the impact of the technology bubble burst during those same years, one cannot disregard the impact of the security threat on the recession that also hit the Israeli high-tech industry at that time. In light of this, while we can look with pride and some amazement at the continuing business activity in the Israeli technology sector, we must keep in mind that it is never impervious. The continuation of the Protective Edge Operation or an expansion of the military operations into central Israel is liable to have a material adverse impact on the high-tech industry as well. The author, Michael Barnea, is the Managing partner at Barnea Co.

StartUp Open competition for start-ups is underway and companies are narrowing down. From near to hundred companies, which entered the competition, the judges have selected seven finalists to move forward and partake in the final event of the national competition that will take place on September 22nd , 2014 in Jerusalem. Michael Barnea, Managing Partner from Barnea Co, said, "As part of our long standing relationship with the Israeli entrepreneurial community, Barnea is proud to be a part of this  StartUp Open competition.  At the semi-final we identified a number of promising and innovative ventures and I am looking forward to pick out the winning start up at the finals. The wide spectrum of business ideas and industries represented by the final candidates are the talented and creative Israel start-up and hi-tech industry."

Barnea’s litigation team represented a client before the Supreme Court in a precedent setting landmark appeal concerning fundamental obligations under Israel's securities law and tort law. The Supreme Court overturned the rulings of the District Court and accepted our firm’s position that a duty of care does not exist between shareholders of a company, which were found jointly guilty in violating securities laws.

During the International Labor and Employment Law Committee Midyear Meeting in Tel Aviv, the Committee asked a panel of leading attorneys, which included Marie Tsion. The panel dealt with women in a global practice and the challenges they face. To read more, please click here

Barnea together with the Enterprise Forum, Israel Advanced Technology Industries,  is pleased to sponsor the 2014 StartUp Open Competition to be held on 22 September in Jerusalem. StartUp Open is a competition featured during Global Entreperneurship Week. The competition was originally launched as part of the Kauffman Foundation Global Entrepreneurship Week in 2010 and has since been a leader in the promotion and nourishment of aspiring entrepreneurs. StartUp Open is one of the world's largest competitions for startup companies and boasts participation from 37 countries. The start-up competition focuses on companies that made significant progress between November 25, 2013 (Global Entrepreneurship Week 2013) and November 16, 2014 (Global Entrepreneurship Week 2014). For further information, please contact: Gil Shourka, National Coordinator GEW – Israel. Email: [email protected]

Following the successful launch of MarginProbe System, which received Pre-Market Approval (PMA) from the FDA early last year, Dune Medical Devices Ltd. has successfully completed the first of a two stage USD21 million equity financing. The initial closing was completed for USD14 million with a second tranche of USD7 million to be completed by October 2014. Dune Medical Devices develops surgical devices and techniques for real-time, intra-operative optimization of excisions in surgical oncology procedures.Dune Medical Devices has offices in the U.S. and in Israel.

In 2010, the Committee for Compensation and Royalties made a “revolutionary” ruling regarding the assignment by employees to their employers of rights to "service inventions" – i.e. inventions created in the course of employment. The Committee held that the assignment of an invention does not automatically amount to a waiver of the employee's right to receive compensation for such invention under section 134 of the Patents Law (1967). Although the employer would be the owner of a patent invented by an employee, it may still be compelled to pay the employee royalties for their contribution to the company's technology. This ruling sent proverbial shockwaves through the Israeli high tech industry. Companies, potential acquirers and investors struggled with assessing the risk as to whether employees, both past and present, would now seek compensation for the work they had performed for their employers. In a recent decision the situation appears to have been clarified. On 4 May 2014, the same Committee appears to have revised its position, when it rejected a claim for royalties by a former employee. The Committee ruled that an employee's right to compensation for "service inventions" is not absolute and such right may be waived. The Committee also found that a general waiver signed by the employee upon his termination was sufficient to relieve the employer from the requirement to pay royalties – even if such waiver did not make specific reference to inventions or to section 134 of the Patents Law. According to this latest decision by the Committee, an assignment of rights of "service inventions" together with a general release upon termination would now be sufficient to ensure that the employer will have no further liability to employees who have contributed to inventions. Nevertheless, it would still be prudent to include an express waiver of rights to royalties for "service inventions" in all employment agreements.

About a month ago, the Israeli High Court of Justice deliberated a case petitioning the court to order the Minister of Finance and the Director of the Israeli Tax Authority to impose value added tax on multinational companies, such as Google and Facebook, arguing that they are providing services and selling goods in Israel via the internet, without being required to pay VAT, which gives them an unfair advantage over Israeli competitors. The petitioner pleaded that the multinational corporations are conducting extensive business activities in Israel, which include, inter alia, marketing and communications in Hebrew with Israeli customers and payment in Israeli currency. The petitioner also argued against the “location of the server” criteria that the Israeli Tax Authority is using in order to ascertain whether a transaction via the internet is executed in Israel. The court dismissed the petition and stated that it is premature, given that the VAT authorities are drafting a circular on the said subject, which is expected to be released soon. The dismissal of the petition does not conclude one way or the other the issue of VAT liability, as this issue will surely be the subject of legal proceedings in the future. Nevertheless, the question of tax liability is only one aspect of internet activities. There are many issues, including slander, consumer protection, gambling, forex, pharmaceuticals, protection of privacy and copyrights, which are arising in relation to internet activity. In relation to all of these, the fundamental question is which legal system will determine whether any given action is legal or not. Of course, these issues are not unique to Israel, and significant progress has been made, and some judicial rulings on these questions have already been issued, in various countries.

Micky Barnea was interviewed by Globes, an online newspaper, regarding the firms recent activity and achievements.

Barnea and Co.'s MA and Kibbutz Sector departments recently represented Polycad plastic products Shefayim (POLYCAD INDUSTRIES (1989) LTD ) during a transaction to sell its holdings to Bram Industries Ltd., a public company in the plastic industry. Polycad held about 30% of the shares, which it  acquired 3 years ago, and was a partner in the nucleus of control of the company, along with the Bramley family. The transaction involved the sale by Polycad of all its shares to corporations controlled by the Bramley family, for a total of NIS 20 million, ending its involvement with Bram industries.

The unending struggle of keeping the net neutrality will determine how internet suppliers treat online content. In the meantime, Netflix is not satisfied .

המאבק הבלתי נגמר המתקיים בימים אלו בארצות הברית על נייטרליות הרשת הוא בין הניסיון לאזן בין הזכות לתחרות הוגנת לבין מניעת עומס על התשתיות. ד"ר דותן ברוך סוקר את המאבק המתרחש בין המצדדים בעיקרון הנייטרליות ברשת לבין המתנגדים ליישומו ללא הגבלות כלשהן.

Zohar Lande, Senior Partner and head of Litigation department, was interviewed by Channel 10 News re the Cadbury Anti-Trust litigation.