【By Pervin R. Taleyarkhan, Stephen Yang, Ashwani Balayan, Peter A. van Essen, and Phung-Ha Nguyen,Published in Landslide, Vol. 12, No. 4, March/April 2020, by the American Bar Association】
With the rapid pace at which technology is advancing and the ease of communication among parties residing across the globe, our world has become a whole lot smaller than it was even a decade ago. As a result, companies’ operations are expanding on global scales. Research and product development collaborations are increasing across country borders, as are partnerships and other co-development opportunities. These global collaborations can result in amazing innovations. In all the excitement and quest to protect the innovation with a patent application, practitioners and patent applicants often do not consider the timing, or even the need, for satisfying a very key aspect of the patent application filing process: the foreign filing license.
What Is a Foreign Filing License?
A foreign filing license represents permission from a particular country’s patent office for an applicant to seek patent protection in a country outside of the inventor’s or invention’s country. According to the World Intellectual Property Organization (WIPO), there are currently known filing restrictions in 29 of the Patent Cooperation Treaty (PCT) contracting states.1 The policy reasons for requiring a foreign filing license are typically aimed at preventing exportation of information affecting national security. As stated by WIPO: “In most cases, you are considered to have permission to file with another [patent office] if either you have filed an application for the same invention at the relevant national [patent office] a certain amount of time previously (which varies from [patent office] to [patent office]) and have not received a security notice stating that you should not file elsewhere, or if you have explicitly requested and been granted permission.”2 But the specific requirements for foreign filing licenses vary and may even conflict from country to country. For example, one country’s laws may require a foreign filing license if the application includes an inventor who is a resident of that country, while another country may only require the foreign filing license if the invention was made in that country, regardless of the inventor’s residency or citizenship status.
With the increase in global collaborations, compliance with these varying rules can add complexities to managing the patent application drafting and filing strategies. The requirements for a foreign filing license most commonly include factors such as where the invention was created and the citizenship and nationality of the inventor(s). Penalties for noncompliance can range from invalidation of any resulting patents, fines, and in some cases imprisonment. Following is a summary of the foreign filing license requirements for countries in which patent application filing, especially those resulting from collaborations, tends to be common: the United States, China, India, and select countries in Europe.
Foreign Filing Licenses Needed for Inventions Made in the Country
In the U.S., the need for a foreign filing license is based on where the inventive activity occurred, regardless of the nationality of the inventor.3 However, a foreign filing license can be granted retroactively if the filing abroad occurred “through error and the application does not disclose an invention within the scope of section 181,” i.e., the application does not contain subject matter that may be detrimental to national security.4 If an applicant fails to obtain a foreign filing license for an invention made in the U.S., then that applicant will not be able to obtain a patent on that invention in the U.S.5 Further, if a patent has already issued but without properly obtaining a foreign filing license, such patent will be invalidated “unless the failure to procure such license was through error, and the patent does not disclose subject matter within the scope of section 181.”6 In addition to invalidation, if the subject matter of the patent application was ordered to be kept secret pursuant to 35 U.S.C. § 181 but is published or disclosed, and if those who caused such publication or disclosure are found to have willfully done so, a fine of up to $10,000 and/or imprisonment for up to two years may be imposed.7
A patent application can be filed in another country’s patent office if any of the following occurs: (1) at least six months have passed after filing the patent application with the U.S. Patent and Trademark Office (USPTO) and the subject matter sought to be patented is not subject to a secrecy order under 37 C.F.R. § 5.2; (2) a foreign filing license is granted in the filing receipt received after filing the patent application; or (3) a separate petition for an expedited foreign filing license is granted.8 An expedited foreign filing license can be used when: the filing receipt has not yet been issued or did not include a foreign filing license; there is no corresponding U.S. patent application filing; there is additional subject matter to that which has already been licensed; or expedited handling is requested.9 Note that a patent applicant wishing to file a patent application under the PCT with the USPTO as the receiving office does not have to request a foreign filing license from the U.S. prior to filing in such a manner.10
China’s foreign filing license requirements are also based on where the inventive activity occurred. Specifically, Article 20 of the Chinese Patent Law prescribes that where any individual or entity intends to file an application for patent abroad for any invention or utility model developed in China, it shall request from the China National Intellectual Property Administration (CNIPA) a confidential examination in advance,11 which is a process similar to the foreign filing license provisions in the U.S. This means that if a patent application (other than a design application in China) in a foreign jurisdiction is desired, a confidential examination must be undertaken before any filing outside of China is done. The foreign filing license requirement in China does not apply to designs developed in China. No confidential examination from CNIPA is required for design applications to be filed in a foreign jurisdiction.
In determining whether Article 20 applies to a particular application, the inventor’s or applicant’s nationality or residence is not relevant; where the invention or utility model is developed is the only relevant factor. For example, the Chinese foreign filing license requirement must be met if a U.S. citizen makes an invention during his or her visit to China. In contrast, the Chinese foreign filing license requirement is not applicable if a Chinese citizen makes an invention during his or her visit to the U.S. Contrary to the previous version of the Chinese Patent Law, it is no longer an absolute requirement for an applicant to file first in China for an invention or a utility model developed in China. However, before any filing outside of China is made, confidential examination must be requested and approval must be obtained from CNIPA.
The penalty for violating this provision is that no patent shall be granted in China for that invention or utility model. Violation of this provision is a ground for both rejection during the preliminary or substantive examination procedures and invalidation during the post-grant invalidation procedure. In addition, administrative sanctions or criminal charges may apply if an applicant violates the foreign filing license requirement as prescribed in Article 20 and divulges national secrets by applying for a patent in a foreign country.12
According to Rule 8 of the Implementing Regulations of the Chinese Patent Law, an applicant could choose to request a foreign filing license in three ways: (1) file a separate request for a foreign filing license with CNIPA, without or before filing a patent application in China; (2) file a request for a foreign filing license at the time of or after filing a Chinese patent application; or (3) filing a PCT application with CNIPA as the receiving office.13 In practice, the length of time to obtain the foreign filing license is usually significantly shorter than what is prescribed in the regulations. If an applicant filed a request for a foreign filing license when it filed its Chinese patent application, the applicant likely will receive the foreign filing license when it receives the filing receipt for its Chinese patent application.
If an applicant files a separate request for a foreign filing license, the applicant should submit the detailed technical solution of the invention or utility model to CNIPA in the Chinese language. In other words, even if the applicant has no interest in getting a Chinese patent, it must prepare a Chinese version of the invention or utility model. If the applicant files a request for a foreign filing license when or after filing a Chinese patent application, no separate disclosure of technical details is required. Filing a PCT international application with CNIPA as the receiving office is deemed as simultaneously filing a request for a foreign filing license. However, it should be noted that a Chinese applicant is also entitled to file a PCT application with the PCT International Bureau of WIPO. In this case, in order to meet the foreign filing license requirement in China, a separate request for a foreign filing license must be filed with CNIPA disclosing the technical details in the Chinese language, and approval must be obtained before the applicant files with the PCT International Bureau.
According to Rule 9 of the Implementing Regulations, if CNIPA finds there is a possibility that the invention or utility model relates to national security or vital interest and needs to be kept secret, it will issue a notification informing the applicant to hold off filing abroad.14 An applicant can proceed to file in a foreign country if it does not receive such a notification within four months from filing the request for a foreign filing license.15 If such a notification is issued by CNIPA, the applicant can proceed to file in a foreign country if it does not receive CNIPA’s decision on the foreign filing license within six months from filing the request for a foreign filing license.16 For a PCT application, if examiners find that the application should be kept secret, a notification is issued within three months from the date of filing informing the applicant that the application will not be handled as an international application and the international phase is terminated.
In the case where an inventor from China developed part of an invention covered in the claims of a continuation patent application filed in the U.S. and the inventive part is developed outside of China, no foreign filing license from CNIPA is needed. But if the inventive contribution covered in the continuation patent application is developed in China, then a foreign filing license from CNIPA is needed. In this case, the applicant should apply for the foreign filing license from CNIPA before the continuation patent application is filed in the U.S. Theoretically, from the U.S. perspective, a foreign filing license from the USPTO is no longer needed, as a foreign filing license for the other parts of the invention in the parent application should have been obtained from the initial filing receipt. However, as the actual circumstances could be much more complicated, it is strongly recommended to apply for a new foreign filing license from the USPTO for the continuation application as well.
Other nations also have foreign filing license requirements that are dependent on where the inventive activity occurred, including Armenia, Cyprus, Kazakhstan, Norway, Spain, Sweden, and Russia. In Norway and Sweden, “the requirement for a foreign filing license only applies to patent applications including disclosure that may be of interest for national defense or security (or military applications, in particular).”17 In Kazakhstan, “submission to foreign countries of an application for an invention created in Kazakhstan may be carried out three months after the date of submission of the application to the patent office or earlier, after completion of the review in relation to whether the application includes state secrets.”18 Note that some countries’ rules on foreign filing licenses may also have provisions, like in the U.S., that permit a priority patent application filing outside that country if certain requirements are met. So it is all the more important to consult practitioners licensed to practice before the patent offices in these countries before proceeding.
Foreign Filing Licenses Needed for All Residents: India
In India, similar to the spirit of many other countries, the purpose of the foreign filing license requirement is to avoid publication of inventions and patent application specifications that contain information that is prejudicial to defense systems of India.19 But contrary to the U.S. and other countries listed above, the Patents Act of India requires a first filing in India for all residents of India, regardless of where the invention occurred.20
So for applications with listed inventors who are residents of India wanting to file for patent protection outside of India, there are two options: (1) file in India first, wait for six weeks, and if no objections, file outside India; or (2) before filing elsewhere, request a separate foreign filing license in India.21 Since “resident of India” is not defined under the Patents Act, for practical purposes it is presumed that a resident of India is one who qualifies as a “tax resident” of India. A person is a tax resident of India in a particular financial year if: (1) the person stayed in India for 182 days or more in the relevant financial year; or (2) the person stayed in India for 60 days or more in the relevant financial year and 365 days or more in the past four financial years.22
Similar to the U.S., there are penalties for failure to comply with the above requirements or the secrecy directions, including: (1) any corresponding patent application that is filed in India will be deemed abandoned, or if an Indian patent is granted, it may be revoked;23 and (2) imprisonment up to two years and/or a fine.24
Unlike in the U.S., where a separate foreign filing license is not required if filing a patent application under the PCT with the U.S. receiving office, in India, filing a patent application under the PCT (even with the Indian receiving office) will still require a separate foreign filing license prior to filing.25
The application for a foreign filing license involves the submission of a description of the invention sought to be patented. The Indian Patent Office is under a statutory obligation to dispose of a request for a foreign filing license within 21 days from the date of the request (except in cases where the invention pertains to defense or atomic energy).26 While there is no statutory provision to expedite the grant of license, it typically takes between three days and two weeks for the grant of a foreign filing license, assuming all relevant documents and information are provided up front along with the request. To avoid the possibility of delays in the grant of license (usually owing to office actions for lack of sufficient disclosure or other formal deficiencies), it is recommended to file the request up front with as much detail in the specification and as many accompanying drawings as possible, along with all other formal papers such as a power of attorney from the inventor(s) or applicant(s) as appropriate. It is possible to file a single request and obtain a single order of grant of license with respect to multiple inventors for the same invention. But once a request is filed or a license is granted, it is not possible to add or remove inventors in the request. It should also be noted that the requirement of applying for and obtaining a foreign filing license is not applicable for design registrations filed in India under the Designs Act.27
As a practical matter, one may wonder whether the use of the provisional patent application (which is common in U.S. practice to preserve patent rights when faced with a situation of imminent public disclosure) would be an acceptable filing since U.S. provisional patent applications are themselves not immediately made publicly available. However, even a U.S. provisional patent application filing listing an Indian resident as an inventor would be a violation of the Indian patent laws if a foreign filing license was not acquired prior to the U.S. filing. The fact that U.S. provisional patent applications do not publish does not matter. The application is still considered a filing outside of India and thus is subject to the requirement for first obtaining an Indian foreign filing license.
When Foreign Filing License Requirements Conflict: Netherlands and Other European Countries
The Netherlands and many other European countries have varying requirements for obtaining the equivalent of foreign filing licenses, and some European countries have none at all.28 The difficulty thus is that in Europe these requirements are all national law and not harmonized. In fact, one can run into a situation where it is impossible to file because inventors have different nationalities or places of residence and the laws of these nations or places of residence are conflicting. For example, the Netherlands Patent Act covers “maintenance of secrecy of the contents of patent applications.”29 Specifically, Article 40 provides that if the invention may be relevant to national security, this will be made known to the applicant within three months from the date of filing of the application.30 If an application is indeed considered relevant, it becomes a “secret application” and will not be published. France, on the other hand, requires a foreign filing license for inventions done “by natural or legal persons having a residence or principal place of business in France.”31 In France, an applicant can either file a French application or send the draft application to the French government (ministry of defense) and ask for a foreign filing license. This requires waiting several days, and then the applicant can file, for instance, a European application. Optionally, a patent attorney can prepare the French patent application and ask the French applicant to file it in his or her own name in order to establish a (French) priority right.
The penalties can vary just as much as the basic requirements for the foreign filing license. In the Netherlands, there is no penalty in patent law for not obtaining a foreign filling license prior to filing outside of the Netherlands. Penalties may exist under other areas of law, for instance national security law, but the authors are not aware of such provisions.
Inconsistencies can make it difficult to strategize patent acquisitions. A well-known “catch-22” relates to an invention made by a Greek inventor who invented in France for a French company. According to Greek patent law, the Greek inventor should file in Greece first. According to French law, a patent application for an invention done in France requires a foreign filing license. The best solution in that case seems to be to request a foreign filing license in France based on the final version of the (not yet) filed patent application. Upon receipt of the French foreign filing license, a Greek patent application can be filed. The same problem may occur, for instance, with Italian and Spanish inventors. For such complex situations, there is no practical solution. Article 75(2) of the European Patent Convention relates to such national security issues, giving contracting states a right to prescribe national filing in case of potential national security issues.32 In this respect, when the rules of two or more states require the same application to be filed first with their national patent offices, the applicant should make the first filing with the least lenient state, and apply for a foreign filing license from the most lenient state.33 In view of the ever-increasing prevalence of international research teams and collaborations, it seems that national legislations on both a European and global scale may need an update.
Know Your Inventors, Where Inventive Activity Occurred, and Where Patent Protection Is Desired
Given the varying rules and requirements for obtaining foreign filing licenses in key regions in which an applicant may wish to exercise patent rights, it is crucial to understand for each country: (1) what options are available for obtaining a foreign filing license; and (2) what exactly is prohibited in the foreign filing license provisions in each country, and ensure no activity is conducted that violates the requirements of any country. While outside the scope of this article, other issues that ensue from the various requirements and factors that affect a patent acquisition strategy include: compliance with remuneration guidelines, ownership issues, and inventorship determinations.34
Where there are inventions developed in multiple regions or countries, it is prudent to comply with the foreign filing license requirements of all the jurisdictions. In the case of conflicting requirements, discuss with the applicant which countries are essential. Based on that assessment, select a country of first filing. Moreover, creative strategies may be pursued. For example, in the U.S. it is possible to obtain a foreign filing license without filing a patent application. Thus, an applicant could fulfill both countries’ requirements by first obtaining a foreign filing license in the U.S. without filing a U.S. patent application, and then obtaining a foreign filing license in China before filing any application in another country. In this way, both countries’ foreign filing license requirements are met.
In the case where the invention is developed in only one country, and assuming the inventor’s country of residency does not have a conflicting law, filing a quick patent application in that country and requesting a foreign filing license at the time of application may be an option. If the invention is developed by inventors in multiple countries, it is important to consider which country is the top priority in terms of getting the invention protected. At the time of filing the patent application, an application for a foreign filing license in other applicable countries should be requested. In this particular situation, filing applications in multiple countries on the same day is not advisable because this may violate the foreign filing license requirements in one or more countries (e.g., foreign patent applications are filed before a foreign filing license is granted in any country). Another possibility is to file a PCT application in a country’s receiving office. However, once again the feasibility of this option depends on the specific provisions in all the relevant countries. For example, in China a PCT application by itself is considered as a request for a foreign filing license, but only if it is filed with CNIPA as the receiving office (similar to the U.S.).
Also, it is important to define and finalize the scope of the invention to be covered in an application before proceeding to the filing strategies, because a change in the scope of the invention later on may also change the inventor listing, and by then it may be too late to obtain all relevant foreign filing licenses or the violation of some country’s requirements may have already occurred.
Therefore, keeping close tabs on the (1) inventorship, (2) region(s) of invention conception, and (3) importance of the invention to your client-applicant in a particular region are critical steps to streamline global patent acquisition strategies.
1. International Applications and National Security Considerations, World Intell. Prop. Org., https://www.wipo.int/pct/en/texts/nat_sec.html (last visited Feb. 14, 2020); see also Prigya Arora, Foreign Filing License Requirement, IIPRD (Aug. 30, 2017), https://www.iiprd.com/foreign-filing-license-requirement.
2. International Applications and National Security Considerations, supra note 1.
3. 35 U.S.C. § 184.
4. Id. § 184(a).
5. Id. § 185.
7. Id. § 186.
8. U.S. Patent & Trademark Office, Manual of Patent Examining Procedure (MPEP) § 140 (9th ed. Rev. 07.2015, Nov. 2015).
10. Id. § 1832.
11. Patent Law of the People’s Republic of China (promulgated by the Standing Comm. Nat’l People’s Cong., Mar. 12, 1984, effective Oct. 1, 2009), art. 20, https://www.wipo.int/edocs/lexdocs/laws/en/cn/cn028en.pdf.
12. Id. arts. 70–71.
13. Implementing Regulations of the Patent Law of the People’s Republic of China (promulgated by the St. Council of the People’s Republic of China, June 15, 2001, effective Feb. 1, 2010), r. 8, https://www.wipo.int/edocs/lexdocs/laws/en/cn/cn078en.pdf.
14. Id. r. 9.
17. Ryan Cagle, Beware of Foreign Filing License Requirements, IPWatchdog (June 12, 2019), https://www.ipwatchdog.com/2019/06/12/beware-foreign-filing-license-requirements/id=110332 (emphasis added) (citing International Applications and National Security Considerations, supra note 1).
19. See Patents Act, No. 39 of 1970, India Code § 35, https://wipolex.wipo.int/en/text/295102.
20. Id. § 39.
22. Income-Tax Act, No. 43 of 1962, India Code § 6, https://www.incometaxindia.gov.in/Pages/acts/income-tax-act.aspx.
23. Patents Act, No. 39 of 1970, India Code § 40.
24. Id. § 118.
25. Joginder Singh, A Practical Guide to Deal with Foreign Filing Permission Requirement in India, Lexology (Sept. 18, 2018), https://www.lexology.com/library/detail.aspx?g=20748c3a-30d8-4091-951d-a6cd4fb9cfee.
26. Lisa L. Mueller, Part 3—Foreign Filing Restrictions and Licenses in India, Nat’l L. Rev. (Jan. 29, 2016), https://www.natlawreview.com/article/part-3-foreign-filing-restrictions-and-licenses-india.
27. See generally Designs Act, No. 16 of 2000, India Code, https://indiacode.nic.in/bitstream/123456789/1917/1/200016.pdf.
28. See generally International Applications and National Security Considerations, supra note 1 (listing all the PCT member states that have some sort of known filing restrictions for reasons of national security).
29. Rijksoctrooiwet [Patent Act], arts. 40–46, Stb. 1995 (Neth.), https://www.ivir.nl/syscontent/pdfs/163.pdf.
30. Id. art. 40.
31. Code de la propriété intellectuelle [Intellectual Property Code] art. L614-18 (Fr.), https://www.wipo.int/edocs/lexdocs/laws/en/fr/fr467en.pdf.
32. Convention on the Grant of European Patents, art. 75(2), Oct. 5, 1973, 1065 U.N.T.S. 199, https://www.epo.org/law-practice/legal-texts/html/epc/2016/e/EPC_conv_20180401_en_20181012.pdf.
33. See Derk Visser, The Annotated European Patent Convention (25th ed. 2017).
34. See, e.g., Sarah Matheson et al., Working Guidelines: Q244 Inventorship of Multinational Inventions, AIPPI (2015), https://aippi.org/wp-content/uploads/committees/244/WG244English.pdf.