Legal Update: Hi-Tech, Technology & Venture Capital – June 2017

New Rules Published By The Israeli Innovation Authority

In May 2017, the Israeli Innovation Authority (the successor of the Office of Chief Scientist), a division of the Israeli Ministry of Economy and Industry (the "Innovation Authority"), issued new rules¹ becoming applicable to Israeli companies that receive grants from the Innovation Authority ("Funded Companies"). The rules, which become effective on July 1, 2017 (the "Effective Date"), relate to the know-how developed and obtained by Funded Companies using grants received from the Innovation Authority ("Funded IP").

In summary, the new rules focus on three significant issues:

• Licensing of Funded IP Outside Israel. The new rules establish a general framework for licensing of Funded IP outside Israel, a matter that was not clearly addressed in existing regulations. Under the new rules, following the Effective Date, the Innovation Authority will have the authority to permit a Funded Company to license