Written by Yoav Alkalay and Ephraim Zachary Heiliczer
The recent $200 million contract signed between Israel’s Ministry of Defense and Elbit Systems, involving the provision of advanced air defense systems powered by high-energy lasers, is a testament to Israel’s technological prowess. The foundation of this success lies in the robust ecosystem created by leading corporations like Elbit, Rafael, and Israel Aerospace Industries (IAI). These organizations have accumulated decades of expertise, resources, and experience, fostering a fertile ground for Defense Tech startups to thrive and leverage Israel’s unique capabilities.
In the shadow of the war over the past year, the Defense Tech sector has witnessed a surge in new startups, driven by the urgent need for innovative solutions on the battlefield and in national defense. Traditionally dominated by large corporations and governments, the industry is now experiencing rapid momentum. The recent war has underscored the critical need for cutting-edge technologies to address evolving security threats. As the adage goes, “Necessity is the mother of invention.”
Defense companies contribute not only infrastructure and expertise but also critical knowledge regarding the processes required for successful product development and commercialization. A pivotal aspect of these processes is the protection of IP. Ensuring robust IP safeguards is vital for defense companies operating globally, as it secures technological uniqueness in an increasingly competitive international market.
While domestic challenges have spurred the rapid development of Defense Tech, most Israeli startups aim to expand globally. Success in the international market hinges on strong IP protection, which protects proprietary concepts from theft or infringement by competitors. Proper execution of patent applications, both in Israel and abroad, is essential. Additionally, the defense sector demands rigorous protection of trade secrets and IP, especially in dealings with repeat players and during tender processes. This often involves employing oppositions, patent invalidation actions, and infringment claims to safeguard innovation.
Israeli startups face unique legal requirements under Israeli Patent Law. For example, patents in the defense sector must either receive approval from the Ministry of Defense or be filed initially in Israel. If no response is received within six months, applications may be submitted in other jurisdictions. This framework emphasizes the importance of strategic planning for startups before entering international markets.
Startups must address more than just patent registration. Objections to patents filed in Israel often come from international corporations seeking to block Israeli companies’ patents. A common strategy involves conducting global due diligence to ensure the innovation does not infringe on existing patents or already marketed solutions.
Geopolitical tensions also pose challenges. Restrictions in countries like France and the UK have complicated potential collaborations and market expansion efforts. For instance, Israeli companies faced exclusion from the Eurosatory and Euronaval exhibitions due to French sanctions—a ban that was only lifted after legal intervention.
Meanwhile, the ongoing Russia-Ukraine war has amplified demand for advanced defense technologies, intensifying competition in the global arms industry.
Given these challenges, Israeli Defense Tech entrepreneurs must adopt a strategic approach and establish a robust legal foundation to protect their patents and comply with regulatory requirements. With the right tools and knowledge, innovators can transform their breakthroughs into valuable, enduring assets that solidify Israel’s position as a global leader in defense technology.
