Indian law mandates residents to adhere to the foreign filing license provisions outlined in Section 39 of the Patents Act of 1970, which states that patent applications must be filed in India before seeking protection in other countries. It is important to note that when either the applicants or inventors are Indian residents, obtaining a Foreign Filing License (FFL) from the Indian Patent Office is advisable to reduce the risk of potential challenges in the future.
The primary objective of the Foreign Filing License (FFL) is to assess patent applications for sensitive technological information or subject matter, thereby preventing the unauthorized export of valuable knowledge to foreign countries. The FFL aids the Indian Patent Office and the government in identifying sensitive subjects related to defence or atomic energy. Once it is verified that disclosing the details of the invention to a foreign entity presents no issues, the Indian Patent Office generally grants the Foreign Filing License within 21 days of receiving the application.
Statutory provisions (Section 39 & Rule 71 of The Patent Act, 1970 (as amended))
Section 39 of the Indian Patent Act, 1970, outlines the requirements for obtaining a foreign filing license. A person resident in India must seek written permission to apply for a patent outside India. However, if the person has applied for the same patent in India six weeks prior to the foreign application, permission is not required.
The Controller is mandated to process each application within 21 days (as per Rule 71 of the Patent Rules, 2003). Additionally, permission will not be granted if the invention pertains to defence or atomic energy without the central government’s prior consent.
Violating Section 39 can result in imprisonment for up to two years, along with potential fines (see Section 118).
Whether this provision pertain only to an Indian applicant?
According to Section 39(1) of the Patents Act, which states “make or cause to be made,” if the applicant for a foreign patent is not an Indian resident but the inventors are, this clause may imply that the inventors have facilitated the foreign application. Moreover, if there are multiple applicants or inventors, current patent practice in India necessitates obtaining an FFL if even one of them is an Indian resident.
Given the lack of judicial precedent in these scenarios and the streamlined, time-bound process for obtaining an FFL in India, it is prudent to secure an FFL before filing any application in a foreign country
Who qualifies as a ‘resident’ of India?
In the timely pursuit of filing patent applications across various jurisdictions, determining whether an entity (legal or natural) qualifies as a resident of India is essential. Notably, the Indian Patents Act does not clarify this determination, other legislations such as Income Tax Act and the Foreign Exchange Management Act (FEMA) where the term is defined may be referenced.
Section 6 of the Income Tax Act defines residency criteria as follows: “An individual is considered a resident if they have lived in India for 182 days or more in the previous year, or if they have resided in India for more than 365 days in the preceding year and at least 60 days in the current year. A company is deemed a resident if it is an Indian company or if its management is based in India.”
Similarly, Section 2(v) of FEMA defines a “resident in India” as “someone who has lived in India for more than 182 days during the preceding financial year, with specific exclusions for individuals working or residing outside India under certain conditions.”
It is crucial to recognize the ambiguity surrounding which definition of residency takes precedence, as the Income Tax Act is often cited for this purpose. This determination can become particularly contentious for individuals and entities with cross-border activities, especially in the realm of patent law. As non-compliance with Section 39 can result in serious penalties, including up to two years of imprisonment or fines (as outlined in Section 118 of the Indian Patents Act, 1970), along with the potential abandonment or revocation of relevant patent applications, in cases of uncertainty regarding residency status, it is advisable to apply for a Foreign Filing License (FFL) to mitigate the risk of penalties and complications.
Summarization of cases when Section 39 of the Patents Act is applicable:
- When the applicant or inventor is a resident of India.
- When the applicant chooses not to file a patent application in India before applying outside the country.
- When the applicant is an Indian resident, a patent application has been filed in India, but the six-week waiting period has not yet expired
When Can You Skip the FFL Hustle?
- When the applicant as well as the inventor is not a resident of India, and/or the invention was created outside the country.
- If the applicant/inventor is a resident of India who filed a patent application in India six weeks before filing a patent application in another jurisdiction.
While the law clearly establishes the FFL requirement for primary patents, the following precedent helps clarify whether an FFL is also necessary for a Continuation-in-Part (CIP) application filed abroad, even when the original or parent patent application was initially filed in India.
The Selfdot Technologies Case: Decoding the FFL Conundrum for CIP and Patent of Addition Applications
The Madras High Court in Selfdot Technologies (OPC) Pvt. Ltd. v. Controller General of Patents, Designs & Trademarks provided judicial clarity on the requirement for a Foreign Filing License (FFL) under Section 39 of the Patents Act. The case addressed whether an FFL is needed when filing a Continuation-in-Part (CIP) application in the U.S. or a Patent of Addition in any foreign jurisdiction, even when the original patent application was filed in India. The Court ruled that both CIP applications and Patents of Addition, which involve additional disclosures, require separate FFLs, regardless of the parent application’s jurisdiction. This decision highlighted the broader scope of the 2005 amendment to Section 39, which expanded the FFL requirement to all fields of invention. While the appellant’s failure to obtain an FFL was considered a technical oversight, the ruling underscores the importance of strict compliance with FFL regulations and sets a precedent for more rigorous scrutiny in future patent filings.
In conclusion, the Foreign Filing License (FFL) provision under Section 39 of the Patents Act, 1970, plays a crucial role in safeguarding national security by regulating the international dissemination of critical inventions. This provision mandates that Indian residents seek government approval before filing patents abroad, especially in sensitive fields such as defense and atomic energy. Non-compliance with these regulations can lead to significant penalties, highlighting the importance of adhering to the FFL requirements. Additionally, an FFL is necessary when submitting a Continuation-in-Part (CIP) application in the United States or a Patent of Addition in any foreign jurisdiction, as established by the Selfdot Technologies case.
