Join The Conversation With Mishpacha's Weekly Newsletter

Inside Israel: Should the IDF Cash In?

Tzippy Yarom

Many of Israel’s high-tech billionaires and multimillionaires owe their success to their IDF training. Should the IDF get a cut of the profits?

Wednesday, October 18, 2017

 Mishpacha image


M any of Israel’s high-tech billionaires and multimillionaires owe their success to the knowledge, tools, and training they received in the IDF. When these tycoons cash in by selling their companies, should the IDF get a cut of the profits, reducing the taxpayer’s share of Israel’s defense burden? And should the government pass a tougher law protecting IDF intellectual property (IP) from being misused?

These questions arise periodically where entrepreneurs who cut their teeth in the IDF’s prestigious 8200 intelligence unit commercialize their intellectual property, export their products and technology, and then reap a bonanza when they “exit,” selling their firm for mega-millions. Prime examples of companies whose top execs trained in Unit 8200 are Checkpoint, Verint Systems, and Nice Systems, with market values on NASDAQ of $18.3 billion, $2.59 billion, and $4.84 billion respectively.

By law, the IDF retains rights to all intellectual property its soldiers develop while in the service, and requires soldiers to sign nondisclosure agreements. The gray areas occur mainly in the cybersecurity and software fields, when a former soldier doesn’t exactly plagiarize his knowledge but “adapts” it for the commercial market.

The September 25 acquisition of Israeli start-up Gigya by German software giant SAP catapulted this issue back into the public discourse, with pundits and academics weighing in on whether the army has rights on the intellectual property (IP) developed under its auspices.

The Pros

“Israel has some compelling reasons to exert [more] control and oversight of its IP,” said Dr. Shmuel Even, a military and strategic affairs analyst at the Institute for National Security Studies, who investigated the subject in collaboration with Professor Yesha Sivan.

Even says the strategic importance of managing IP cannot be overstated, and that the IDF must keep tighter control of what’s being done with its IP, by whom, and under what conditions. “Military IP can be used for civilian needs and then converted back to military use and fall into the wrong hands,” Even warns.

Managing military IP would necessitate adoption of a model similar to that used by universities, which own all rights to IP and have patent and copyright policies to codify their IP management. For example, Yissum, the technology transfer company formed by Hebrew University, earn as much as $60 million per year from royalties from more than 80 start-up companies it has spun off.

The Cons

Even and Yesha acknowledge that a new law with tighter bureaucratic regulations on IP would dampen innovation, discouraging would-be entrepreneurs and investors from creating start-ups in the fields of research and development (R&D) and security. They admit that if tougher laws were already in place, Israel’s high tech might not have developed to where it is today.

Tougher laws could also increase unemployment. One of every ten Israeli workers is employed in high tech or research and development jobs. The IDF is the hand that feeds this crucial component of the Israeli economy. “The army is proud of the role it plays in Israel’s economy,” Even asserts. (Excerpted from Mishpacha, Issue 681)

Related Stories

The Rose Report: The Curse of Mohammed Dahlan

Binyamin Rose

If Israeli politics borders on the inexplicable, Palestinian politics is downright irrational

Global View: A New Israel in the Middle East?

Gershon Burstyn

The Iraqi Kurds are part of a 30-million-plus Kurdish population spread over the heart of the Middle...

Endnote: Someday We’ll Change the Words Again

Riki Goldstein

What is it about the song that makes it so great and we never get tired of it? There are so many son...

Share this page with a friend. Fill in the information below, and we'll email your friend a link to this page on your behalf.

Your name
Your email address
You friend's name
Your friend's email address
Please type the characters you see in the image into the box provided.

Evolution vs. Revolution
Shoshana Friedman I call it the “what happened to my magazine?” response
Up, Up, and Away
Rabbi Moshe Grylak What a fraught subject Eretz Yisrael is, to this day
Where Do You Come From?
Yonoson Rosenblum Could they be IDF officers with no Jewish knowledge?
Heaven Help Us
Eytan Kobre Writing about anti-Semitism should rouse, not soothe
Work/Life Solutions with Chedva Kleinhandler
Moe Mernick “Failures are our compass to success”
An Un-Scientific Survey
Rabbi Emanuel Feldman Are Jerusalemites unfriendly? Not necessarily
Out of Anger
Jacob L. Freedman How Angry Lawyer was finally able to calm down
5 Things You Didn’t Know about…Yitzy Bald
Riki Goldstein He composed his first melody at eight years old
When the Floodgates of Song Open, You’re Never Too Old
Riki Goldstein Chazzan Pinchas Wolf was unknown until three years ago
Who Helped Advance These Popular Entertainers?
Riki Goldstein Unsung deeds that boosted performers into the limelight
Your Task? Ask
Faigy Peritzman A tangible legacy I want to pass on to my children
Are You There?
Sarah Chana Radcliffe Emotional withdrawal makes others feel lonely, abandoned
A Peace of a Whole
Rebbetzin Debbie Greenblatt Love shalom more than you love being right
Seminary Applications
Rabbi Zecharya Greenwald, as told to Ariella Schiller It’s just as hard for seminaries to reject you