Insights & News /  High Tech

Adv. Micky Barnea was one of nine experts from around the world who participated in Corporate LiveWire’s virtual roundtable on Technology, Media and Telecommunications in 2015. Micky discussed recent regulatory changes, key trends, and intellectual property in the media industry.

Barnea represented Bruker Nano, an American company traded on Nasdaq, in its USD 53 million acquisition of Jordan Valley Semiconductors. The acquisition positions Bruker to offer innovative solutions to complex challenges in nanotechnology research and semiconductor metrology. Adv. Simon Jaffa and Adv. Daniel Lorber advised the client on the transaction.

On July 29, 2015, the Knesset passed an amendment to the Encouragement of Industrial Research and Development Law. In Globes, Adv. Micky Barnea discusses the benefits of the amended law. Micky advises companies of all sizes across a range of industries, as well as venture capital funds, entrepreneurs, and Israeli and international investors in the technology and life sciences sectors.

Lishtot, an Israeli startup that has developed technology to detect water contamination in just two seconds, won the “Startup Open” competition. Its technology helps reduce the risks associated with drinking contaminated water. The event was held at Hansen House in Jerusalem. For the second consecutive year, Barnea was involved in the competition from the outset, alongside the Jerusalem Development Authority, JNext, the Jerusalem Municipality, the Prime Minister’s Office, the MIT Enterprise Forum of Israel, and other partners.

Israel’s thriving high-tech industry is supported by an ecosystem of companies at various stages of development, an extensive investor community and development centers operated by international companies. This ecosystem continues to attract global corporations to establish development centers in Israel, either by acquiring Israeli companies or as part of a broader strategy to build a local presence.

Despite the conflict in Gaza, 2014 was an extremely busy year for MA transactions in the Israeli high-tech market. Several partners at leading law firms, including Adv. Simon Jaffa, were interviewed by The Lawyer to review last year’s results and discuss the technology market.

Barnea represented UK-based Athena SCS Limited and its shareholders in the company’s sale to Nasdaq-listed NXP Semiconductors N.V. Athena is an independent developer of state-of-the-art smart card solutions for access control, enterprise applications, e-government, transportation, payments, and mobile applications.

Adv. Micky Barnea, our managing partner, and Koby Simana, CEO of IVC Online, gave a joint interview on financial trading platforms. Micky discussed the impact of new Israeli regulations governing trading platform operations, which will take effect on May 26, 2015.

Senior executives from a range of foreign exchange (FX) companies met with leading venture capital investors today in Tel Aviv at a conference hosted by Barnea and IVC. To read more, click here.

Adv. Micky Barnea, our managing partner, contributed an article to IVC’s annual high-tech publication. In the article, he argues that although online financial trading centers on financial instruments, innovation is essential to the success of companies in the sector. They should therefore be regarded as high-tech companies.

As part of our collaboration with starTAU, Tel Aviv University’s Entrepreneurship Center, our firm hosted a student delegation from Peru today. The event featured talks by Adv. Micky Barnea, our managing partner, and Lior Weizman, IBM’s Ecosystem Development Manager for Cloud, Startups and Academia.

Global Entrepreneurship Network Israel, Barnea Co., the Jerusalem Development Authority, JNext, the Jerusalem Municipality, the MIT Enterprise Forum - Israel, Israel Advanced Technology Industries, Made in Jerusalem and other leading high-tech organizations have joined forces to organize the second Startup Open Israel competition for early-stage startups. The winning Israeli company will receive a package of services worth thousands of shekels and automatically secure a place among the World’s Top 50 Most Promising Startups, known as the GEW50. Registration for Startup Open Israel 2015 is open until July 13, 2015. Following a thorough judging process, the final round will take place in Jerusalem on September 7, 2015, before an audience of entrepreneurs, executives, investors, researchers and government representatives.

Israeli corporate governance rules discourage technology companies from listing on the Tel Aviv Stock Exchange (TASE), but a few straightforward changes could help reverse this trend. Israel’s status as the "startup nation" is reflected in the many Israeli technology companies listed on US exchanges and in London. Yet the TASE has struggled to attract Israeli high-tech companies. While many technology companies prefer an acquisition to an initial public offering, even those that choose to go public often overlook the TASE, turning instead to international exchanges.

In 2010, the Committee for Compensation and Royalties issued a groundbreaking ruling on employees’ assignment to their employers of rights to “service inventions,” meaning inventions created in the course of employment. The Committee held that assigning an invention does not, by itself, constitute a waiver of the employee’s right to compensation under section 134 of the Patents Law, 1967. An employer could therefore own the rights to an employee’s invention yet still be required to pay the employee royalties for contributing to the company’s technology. The ruling sent shockwaves through Israel’s high-tech industry. Companies, prospective acquirers, and investors faced uncertainty over whether current and former employees might seek compensation for inventions developed during their employment. A subsequent decision appears to have clarified the position. On May 4, 2014, the Committee rejected a former employee’s claim for royalties, holding that the right to compensation for service inventions is not absolute and may be waived. It also found that a general waiver signed by the employee upon termination was sufficient to release the employer from the obligation to pay royalties, even though the waiver did not specifically refer to inventions or section 134 of the Patents Law. The decision indicates that an assignment of rights to service inventions, combined with a general release upon termination, may be sufficient to bar a subsequent claim for compensation. Nevertheless, employers would be prudent to include an express waiver of the right to compensation for service inventions in their employment agreements.

Following the successful launch of its MarginProbe System, which received premarket approval (PMA) from the FDA early last year, Dune Medical Devices Ltd. has completed the first stage of a two-stage USD 21 million equity financing. The initial closing raised USD 14 million, with a second tranche of USD 7 million expected to close by October 2014. Dune Medical Devices develops surgical devices and techniques that help surgeons optimize tissue excision in real time during oncology procedures. The company has offices in the United States and Israel.

Barnea, together with the Enterprise Forum and Israel Advanced Technology Industries, is pleased to sponsor the 2014 Startup Open competition, to be held on September 22 in Jerusalem. Startup Open is a competition featured during Global Entrepreneurship Week. Launched in 2010 as part of the Kauffman Foundation’s Global Entrepreneurship Week, it promotes and supports aspiring entrepreneurs. It is one of the world’s largest competitions for start-ups, attracting participants from 37 countries. The competition focuses on companies that have 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 for GEW Israel, at [email protected].

The Startup Open competition is underway, and the field has narrowed to seven finalists. Selected from nearly 100 entrants, the finalists will compete in the national final on September 22, 2014, in Jerusalem. Adv. Micky Barnea, our managing partner, said, “As part of our longstanding relationship with Israel’s entrepreneurial community, Barnea is proud to participate in the Startup Open competition. During the semi-final, we identified several promising and innovative ventures, and I look forward to selecting the winning start-up at the final. The wide range of business ideas and industries represented by the finalists reflects the talent and creativity of Israel’s start-up and high-tech sector.”

There is no doubt that Operation Protective Edge 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 Operation Protective Edge. 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 Operation Protective Edge 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, Adv. Micky Barnea, is the managing partner at Barnea Co.

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

In recent radio interviews, Micky Barnea stated that Israel’s high-tech sector has not been significantly affected by recent events. Listen to the full interview at Galatz.