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Foreign filing license - A must know requirement

By Suraj Singh Attri

At times an applicant, i.e., a company or an individual may decide to file a patent application directly in a foreign country or as an international application under PCT other than in India, without first filing a patent application in India due to various reasons. For instance, the applicant may first file the patent application in the foreign country due to less or no market potential in India, invention being considered as a non-patentable subject matter in India and presence of R&D teams working together in more than one country. The applicant or inventors in such cases may require a Foreign Filing License (FFL) from the Indian Patent Office.      

What is an FFL?      

When an inventor or a company, who is a resident in India, desires to file a patent application first in a country other than India, it is necessary to obtain an FFL from the Indian Patent Office. The FFL requirement allows Indian authorities to monitor all inventions, and in particular, defence or atomic energy related inventions in national interest.

What does the statute say?

The statutory provision for FFL requirement in the Patents Act, 1970 (‘the Act’) was first introduced by the Patents (Amendment)  Act, 2002, and was later amended in the year 2005. Section 39 of the Act is the relevant  provision. It reads:
 “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has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.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 defence 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.”
              

As per Section 39, an FFL is required only if the person who makes a patent application or causes another to make a patent application is a resident in India at the time of filing the application. Residential status alone is relevant and nationality of the person is not relevant. The term “resident” is however not defined in the Act. The only statute that refers to residential status is the Indian Income-tax Act, 1961.

According to Section 6 of the Income-tax Act, an individual is said to be resident in India if:
(i)   he is in that year (referred to as previous year, which commences from 1st April of a year and ends on 31st March of the next year) been in India for a period or periods amounting in all to 182 days or more; or
(ii)   he has within the preceding four years (April-March years) been in India for period or periods in all amounting to 365 days or more and for 60 days or more in that year.
 Every Indian company (registered under Companies Act, 1956) and every other company the control and management of whose affairs was situated wholly within India in that previous year is a resident of India.      

There is no indication in the Patents Act as to whether the above definition will apply and there are no judicial precedents on this issue. In the absence of any other guideline it is very likely that if the question comes up, the courts may adopt the above definition. In such a case, the residential status is likely to be determined by applying the above rules, treating the financial year in which the application is made as the previous year.    

The Controller ordinarily disposes of an FFL request within 21 days from the date of filing the FFL request [Rule 71, The Patent Rules, 2003].    

FFL Requirements      

For filing a request for an FFL, a brief description of the invention is required. The brief description should sufficiently cover the invention and the underlying inventive concept known to the applicant at the time of making a request for the FFL. Generally, one may need to have the following documents to file a request for the FFL: 
  • Name(s), address(es) and nationality of the inventor(s) who are ‘resident in India’. 
  • Power of Attorney (POA) from the inventor(s) or the applicant who are resident in India, where a patent agent is appointed to represent them.
  • Title of the invention with disclosure including drawings, if any 
  • Names of the co-inventors who are not resident in India.
  • Name and address of the Applicant, in case rights have been assigned to an applicant. 
  • The name of the country/countries in which the application is expected to be filed. 
  • Reason for making such application.      

Implications of contravention of Section 39  

In case, a resident  in India fails to obtain the FFL before filing the application in a foreign country then as per Sections 40 and 118 of the Act, subsequent Indian application that the applicant may file, may be rejected besides being liable for penalty. Section 39 of the Act is, thus, very important since MNCs have set up a number of R&D centers in India and a number of inventions arising out of the R&D centers may be filed first in a foreign country.    

[The author is an Associate in the IPR Division, Lakshmikumaran & Sridharan, India]
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