Exporting Patent Rights: Trends in Foreign Inventors Patenting in the US
With the quick advancement of technology and the ease of contact among parties located all over the world, our world has shrunk significantly from even a decade ago. Collaborations in research and product development, as well as partnerships and other co-development opportunities, are growing beyond national borders.
Patents have a positive impact on competition by facilitating market access and business formation. They may also be a necessary prerequisite for entrepreneurs to get money from venture capitalists, as evidenced by the ability of tiny businesses to exercise their rights in front of larger corporations. Furthermore, patents may help spread technology (also known as technology transfer or dissemination of technology).
Companies in the technology industry work on products that they may or may not release in the future. What matters more to them is obtaining patents for their inventions so that they are protected in the event that they decide to launch a new product. Patents can be used to track rates of technical change or progress, as well as to monitor the state of research and development. Where certain patents are related to firms, they can occasionally be used as a barometer for gauging a company’s current or future interests. However, one must remember patent is a territorial right and to secure it one must file a patent in the respective jurisdictions in which they seek protection.
In the excitement of filing a patent application to protect an invention, practitioners and patent applicants frequently overlook the timing, or even the necessity, of completing a critical part of the patent application filing process: obtaining a foreign filing license.
What is a foreign filing license?
A foreign filing license allows an applicant to seek patent protection in a country other than the inventor’s or invention’s country with permission from the patent office of that country. There are now known filing limits in 29 of the Patent Cooperation Treaty (PCT) contracting states, according to the World Intellectual Property Organization (WIPO). The policy reasons for requiring a foreign filing license are usually to prevent the exportation of national security-sensitive information. For example, due to limited or no market potential in India, the invention being considered a non-patentable subject matter in India, and the presence of R&D teams working together in more than one country, the applicant may first file the patent application in a foreign country. In such instances, the applicant or inventors may need a Foreign Filing License (FFL) from the Indian Patent Office.
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.”
However, the particular requirements for international filing licenses differ per country and may even clash. For example, one country’s laws may require a foreign filing license if the application contains an inventor who is a resident of that country, whereas another country’s laws may only require a foreign filing license if the invention was made in that country, regardless of the inventor’s residency or citizenship status.
Compliance with these various laws can add difficulties to managing patent application writing and filing procedures, especially as global partnerships grow. The location of the invention, as well as the inventor’s citizenship and nationality, are sometimes included in the conditions for a foreign filing license. Noncompliance can result in the invalidation of any resulting patents, as well as fines and, in certain situations, imprisonment.
Let’s get to the most basic question: can a foreigner or a non-resident/non-citizen obtain a US patent?
The answer is a yes!
Let us look at some foreign patent laws in the US
The patent laws of the United States do not discriminate based on the inventor’s citizenship. Any inventor, regardless of citizenship, is eligible to apply for a patent in the same way as a U.S. citizen is. However, if you are an applicant from another nation, there are a few requirements that must be met (that is foreign to the United States).
The requirement for a foreign filing license in the United States is based on the location of the inventive activity, independent of the inventor’s nationality. A foreign filing license can be granted retroactively if the application was filed abroad “by error and the application does not disclose an invention within the scope of section 181,” that is, the application does not contain subject matter that could jeopardise national security. If an applicant fails to get a foreign filing license for an invention made in the United States, the applicant will be unable to seek a patent in the United States for that invention.
Furthermore, if a patent has already been issued but a foreign filing license has not been obtained, the patent will be invalidated “unless the failure to secure such license was due to error, and the patent does not reveal subject matter within the scope of section 181.” A fine of up to $10,000 and/or imprisonment for up to two years may be imposed 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 those who caused such publication or disclosure are found to have willfully done so.
If any of the following events occurs, a patent application can be submitted in the patent office of another country: a foreign filing license is granted in the filing receipt received after filing the patent application; a separate petition for an expedited foreign filing license is granted. When the filing receipt has not yet been issued or does not include a foreign filing license, and there is no corresponding U.S. patent application filing, an expedited foreign filing license can be used; there is new subject matter that hasn’t been licensed yet, or expedited processing is required. Note that a patent applicant who wishes to file a PCT patent application with the USPTO as the receiving office does not need to request a foreign filing license from the US before doing so.
Given the varying rules and requirements for obtaining foreign filing licenses in key regions where an applicant may wish to exercise patent rights, it is critical to know: what options are available for obtaining a foreign filing license; and what exactly is prohibited in each country’s foreign filing license provisions, and ensure that no activity is conducted that violates any country’s requirements. Other challenges that arise from the numerous criteria and considerations that affect a patent acquisition strategy, albeit outside the focus of this article, include: adherence to compensation criteria, ownership difficulties, and determinations of inventorship.
What if a collaborative discovery was created by innovators from the United States and other countries?
Patent laws must be followed in each nation where an inventor resides. In the case of a joint invention between an inventor in the United States and an inventor in another country, the foreign country’s patent laws must be followed in addition to US patent law.
Consider the case when a foreign government requires a patent application for an innovation created in their country to be submitted with the foreign country first, and you have a situation involving both US and foreign inventors. One possibility is to seek the US government for a Foreign Filing License. The applicant may file the first patent application in the foreign jurisdiction after the US granted the FFL.
Some interesting facts about the USPTO
First to Invent / First to File — What is Valid?
In the United States, the inventor who invented the innovation first used to get priority, but the America Invents Act of 2013 changed that. The applicant that submits their patent application first now has priority. (In some circumstances, such as patents with multiple claims or foreign patent registration dates, there may be exceptions.) This system aligns the United States with the majority of foreign patent regimes like PCT. As a result, an inventor can no longer obtain a patent based on the fact that they invented a product or procedure before anyone else.
The First-to-File Rule’s Justifications
The first-to-file rule is far less complicated and time-consuming to implement than the first-to-invent system. If many inventors claimed priority for a patent, the USPTO would have to convene a separate hearing for each one, during which the inventors would explain when they originated and developed the invention. (They sought to show that they had “reduced it to practise” before their competitors.) Even after a hearing, determining which inventor had precedence could be difficult.
Another motive for implementing the first-to-file rule was to align the United States’ patent system with those of other countries. Many American businesses do business internationally and would benefit from a more standardised framework.
What does an application need to have under US patent law?
A patent application must be filed with the US Patent Office, and the inventor must sign an oath or declaration. This is in contrast to the law in many nations, which does not require the inventor’s signature or an oath of inventorship.
Without going into too much legalese, international candidates are required to sign a declaration that states:
• Each inventor is identified by their full name.
• Identifies each inventor’s country of citizenship
• Declares that the individual taking the oath or making the declaration believes the inventors are the original inventors.
• Determine which application is being discussed
• Declare that the person administering the oath or declaration has read and comprehended the application
• Declare that the person taking the oath or making the declaration understands that he or she has a duty to disclose to the Office all information that is material to patentability.
Foreign applicants should provide an Information Disclosure Statement (IDS) that outlines the previous art that the applicant believes is closest to the applicant’s innovation. Outside of the United States, most countries do not require this.
US — The Hot Choice for Patent Seekers!
As the US is the breeding ground for technologies, all companies and businesses need to have patent protection there. The huge market, the trade relations and the push for improvement of various sectors are some major driving factors for inventors seeking patent protection in the US.
China is desperately trying to make a mark in the world of patenting! No wonder it is rigorously filing patents in one of the most powerful countries in the world. Instead of being motivated by innovation, the majority of patent applications in China are motivated by other factors such as obtaining government subsidies or job promotions, enhancing the reputation of individuals, universities, and institutions, or obtaining certification as national high-tech enterprises. Europe and Japan are on the other side, very technologically driven, and focused on quality and quantity as well. Other countries too, are in the race but still have to contribute towards patenting at a greater level in terms of R&D and investments.
As the world is experiencing the digital era now more than ever, it is evident from the technology domains of the patent filings. The amount of investment and the effort in the direction of making human lives easier is commendable. With the advent of Metaverse and other such experience-driven augmented realities, it has become imperial to develop and boost the technologies that underly.
Samsung topped the list of global firms with the most issued patent families for various sectors, as well as the most patent families filed in Europe, the United States, or under the Patent Cooperation Treaty (PCT). Over 3,000 engineers have received patent training since 2012. This particular team also hosted theme-based ideation workshops, which brought employees together to cooperate on specific technologies like augmented reality and virtual reality, to mention a few, and to focus on areas that were essential to Samsung at the time.
Out of all the 38,724 patents, 22% are held by the top 10 players and 1,779 are declared as SEPs.
As more American companies hire foreign inventors, the necessity for overseas filing licenses grows, especially if patent rights are sought first in the United States. Obtaining overseas filing permissions may pose financial and linguistic challenges, risking a patent application’s priority date or patent rights in the foreign country. If you are a foreign inventor seeking to file a patent application in the United States, we are ready to assist you. For more information, contact us at firstname.lastname@example.org.
- 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).
- 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.
- U.S. Patent & Trademark Office, Manual of Patent Examining Procedure (MPEP) § 140 (9th ed. Rev. 07.2015, Nov. 2015).