Foreign Filing Licenses: Focus on Requirements of Indian Patent Office

In the current climate within a first-to-file patent system, it is often desirable to file a patent application as quickly as possible. However, it is important to check whether any foreign filing licenses are required before an application is filed because there may be serious consequences for an inventor and/or applicant if a foreign filing license requirement is overlooked. Although the criteria for foreign filing licenses varies between countries, in general the policy rationale behind foreign filing licenses is the same and seeks to ensure that a patent application does not include any information that is detrimental to national security before it is filed in another country. In several countries, including the United States and China, the need for a foreign filing license is based on where the inventive concept originated. The need for a foreign filing license also frequently depends upon the citizenship of the inventor(s). A summary of each country’s criteria may be found at the World Intellectual Property Office website.

India is unique in that The Patents Act of India (hereinafter “the Patents Act”) requires that all residents of India must first file a patent application in India, or obtain a foreign filing license.¹ Residency, rather than citizenship, is all that is required and where the inventive concept originated does not matter. Further, unlike in the U.S. where a foreign filing license is not required if filing a patent application under the PCT with the U.S. receiving office, filing a patent application under the PCT with the Indian receiving office still requires a foreign filing license prior to filing the PCT application with the Indian receiving office.² Section 39 of the Patents Act sets forth the requirement, and reads as follows with emphasis added:

39. Residents not to apply for patents outside India without prior permission
(1) No person resident in India shall, except under the authority of a written permit sought in the manner prescribed and granted by or on behalf of the Controller, make or cause to be made any application outside India for the grant of a patent for an invention unless—
(a) an application for a patent for the same invention has been made in India, not less than six weeks before the application outside India; and
(b) either no direction has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.
(2) The Controller shall dispose of every such application within such period as may be prescribed: Provided that if the invention is relevant for defense purpose or atomic energy, the Controller shall not grant permit without the prior consent of the Central Government.
(3) This section shall not apply in relation to an invention for which an application for protection has first been filed in a country outside India by a person resident outside India.

Thus, the requirement to first file in India applies to persons “resident in India” but does not apply to persons “resident outside India.” Unfortunately, the Patents Act does not set forth a definition of “resident” and there is no judicial precedent as of yet on this issue. To determine whether an inventor is a resident of India, two other statutes of Indian law may be looked to for guidance. In particular, the Indian Income Tax Act and the Foreign Exchange Maintenance Act both include definitions of “resident in India”, each of which is reproduced below.

According to Section 6 of the Indian Income Tax Act, an individual is said to be resident in India if:

(1) An individual is said to be resident in India in any previous year, if he—
(a) is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or
(b) [***]
(c) having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.
(2) A Hindu undivided family, firm or other association of persons is said to be resident in India in any previous year in every case except where during that year the control and management of its affairs is situated wholly outside India.
According to Section 2(v) of the Foreign Exchange Maintenance Act (FEMA) of 1999, the term resident is defined as:
(i) a person residing in India for more than one hundred and eighty-two days during the course of the preceding financial year but does not include—
(A) a person who has gone out of India or who stays outside India, in either case—
(a) for or on taking up employment outside India, or
(b) for carrying on outside India a business or vocation outside India, or
(c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than—
(a) for or on taking up employment in India, or
(b) for carrying on in India a business or vocation in India, or
(c) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;
(ii) any person or body corporate registered or incorporated in India,
(iii) an office, branch or agency in India owned or controlled by a person resident outside India,
(iv) an office, branch or agency outside India owned or controlled by a person resident in India.

Although it is unclear whether these definitions of resident apply to the Patents Act, they may provide guidance when considering whether a foreign filing license from the Indian Patent Office is required prior to filing in a country other than India. If Section 39 applies and a foreign filing license is not obtained prior to filing outside of India, there may be serious consequences for the inventors and/or applicants. The possible consequences include imprisonment for up to two years and/or a fine³, and further any pending or granted Indian patent applications that may subsequently be filed on the invention may become abandoned or revoked.⁴ Thus, the inventor(s) and applicant(s) may not later seek patent protection in India for the invention if the foreign filing license requirement of Section 39 is overlooked.

In practice, it is believed that the residency information provided in the first filed application and/or subsequent applications is generally utilized by the Indian Patent Office to determine whether an inventor is an Indian resident. For applications that are to be first filed outside of India and include a named inventor with residency and/or citizenship information that includes India, a patent practitioner should determine whether a foreign filing license is required as soon as possible in the application preparation process. A request for a foreign filing license must include a brief description of the invention to help the Indian Patent Office determine the subject matter of the invention,⁵ but such description need not be a fully drafted patent application. The Indian Patent Office typically responds to the foreign filing license request within 21 days.⁶ Thus, a request for the foreign filing license that is filed relatively early in the application preparation process will minimize any delay caused by the foreign filing license requirement.

1 Section 39 of The Patents Act, 1970.
2 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.
3 Section 118 of The Patents Act, 1970.
4 Section 40 of The Patents Act, 1970.
5 Rule 71 and Form 25 of The Patent Rules, 2003.
6 Rule 71 of The Patent Rules, 2003.