Under the patent Law, what are the national security restrictions and requirements prior to patent filings by MNC Applicants, what are the national security provisions (in general); national security provisions in China, India and other ASEAN countries?
At this day and age, more and more multi-national companies are expanding their businesses and R&D operations overseas, hoping to take advantage of the accessibility of diverse ideas and experience of the global human capitals through setting up of research facilities and conducting research and development in multiple countries. Management of innovations and IPs derived from these global R&D operations can be quite a challenging task and requires the IP Manager/ attorney to be familiar with the respective national laws governing the protection of the invention created in those countries.
For example, some pertinent issues may arise when it comes to patenting inventions developed in countries remote from the home office and even greater issues when inventions are jointly conceived by inventors in several countries or by non-native inventors residing in the countries. It is absolutely critical to know the laws of those countries having national security restriction and provisions requiring that inventions made within their territory and/or inventions made by residents of their country first file locally or separately obtain a security clearance before filing outside the country.
The consequences of not complying with or contravening all applicable national security requirements can be harsh and severe, ranging from fines, through loss of local patent rights, to criminal penalties, including imprisonment. In this article we will examine national security requirements in general and looking in detail at the requirements in India, China and S.E. Asia, regions which are enjoying the influx of R&D activities from foreign MNC entities.
National Security Provisions - In General
National security provisions in patent laws are not new. Many countries have similar laws to protect their national security interests. For example, the United States of America has had a requirement for patent applicants to obtain security clearance before filing patents outside the US for many years. 35 U.S.C. 184 states:
"Except when authorized by a license obtained from the Commissioner of Patents a person shall not file or cause or authorize to be filed in any foreign country prior to six months after filing in the United States an application for patent or for the registration of a utility model, industrial design, or model in respect of an invention made in this country ....”
The penalty for filing outside the US without obtaining a "foreign filing license" from the USPTO is loss of US patent rights (35 U.S.C. 185):
"Notwithstanding any other provisions of law any person, and his successors, assigns, or legal representatives, shall not receive a United States patent for an invention if that person, or his successors, assigns, or legal representatives shall, without procuring the license prescribed in section 184, have made, or consented to or assisted another's making, application in a foreign country for a patent or for the registration of a utility model, industrial design, or model in respect of the invention .... "
(If a foreign filing is made without a §184 license in error and without deceptive intent, a retroactive license may be obtained.)
It is interesting to note that the US restriction relates only to inventions "made in this country [i.e. US]." As such, the restriction does not apply if the invention is made overseas by inventor who is a US citizen or resident. China (Article 20.1) and Russia (Article 35) too have similar provisions and only concerned with inventions made within its countries.
Other countries, however, impose their requirements not on where the invention is made, but on the residence of the inventor and/or applicant for a patent. While the residency requirement will generally be applicable for all inventions made in those countries, the laws may also extend to patent applications on inventions made by their residents anywhere in the world.
For example, Section 23 of the UK law provides similar provisions on inventions with military technology or whose publication would be detrimental to national security filed by residents of the UK. However, their statute essentially leaves the decision regarding military technology or detrimental publication to the applicant. Likewise, Article 41 of the Republic of Korea seems similar to the UK. There is no mandatory first filing for a security review required, but there are provisions for a security "hold" to be put on an application as well as procedures for obtaining permission to file abroad for inventions related to national security. The decision on whether such permission is required seems to be left to the applicant. Sections 50, et seq. of the German patent law are parallel to the UK and KR, leaving the decision on whether to first file or seek permission to file abroad to the applicant. The German law does give some non-specific guidance by defining a state secret in Section 93 of the criminal code.
These examples show the wide variety of requirements related to national security provisions in global patent laws. With researchers and inventors easily travelling around the globe in their pursuit of research opportunities and with the ease of collaboration between inventors in various countries leading to a single invention, it is a daunting task to keep track and be in full compliance with the provisions of all the applicable national security requirements.
National Security Provisions in China. India and the ASEAN Countries
China, India and the ASEAN countries are some of the fastest growing areas for R&D activity. Not only are more and more multi-national companies are setting up R&D centers in these countries, personnel who may be considered residents of these countries may find themselves contributing to inventions in countries outside their country of residence. For example, it is now common to find that a company employee resident in India, Singapore or Malaysia is the sole or a joint inventor on an invention made in China or the US. A graduate research student resident in one of these countries may contribute to a patentable invention while doing research at a cooperating foreign university. These practical situations again raise important questions regarding how to best protect the inventions while at the same time be in compliance with national security laws.
Peoples Republic of China:
For inventions developed in China, knowledge of the law regarding national security should provide sufficient guidance to avoid problems. As mentioned above, China has a national security law similar to the US. If the invention was developed in China, clearance to file outside China must be obtained before any foreign filings are made on inventions developed in China. Clearance can be obtained either by filing a domestic patent application along with a request for clearance, or filing an international (PCT) application in the Chinese receiving Office. Additionally, a request for clearance may be made without filing a patent application. A domestic patent application filing and a request for clearance without a domestic patent filing must be made in the Chinese language. An international application can be filed in the ROICN in either Chinese or English. If the applicant is not received notification that the application is undergoing a security examination within four months of the request or filing, then the applicant is free to file outside China. Similarly, if a decision on a security examination is not issued within six months of the request or filing by either a permanent security hold or granting clearance, the applicant is free to file outside China. It generally takes between 2 to 3 months to receive security clearance based on a request for clearance. The penalty for failure to comply with the law is loss of Chinese patent rights. If the application is judged to disclose Chinese State secrets, the penalty ranges from disciplinary sanctions up to criminal prosecution.
India, Malaysia and Singapore:
India, Malaysia and Singapore have national security restrictions based on the residency of the inventor or applicant regardless of where the inventive activity occurred (India, Section 39; Malaysia, Section 23A; Singapore, Section 34). The laws and procedures in all three countries are similar as are the penalties for failure to comply with the security requirements. Security clearance can be obtained by filing a patent application locally and then waiting the specified time period before making any foreign filings. The time period varies by country:
6 weeks in India and 2 months in Malaysia and Singapore. Security clearance can also be obtained by applying for permission to file abroad (foreign filing license) in the absence of filing a local patent application. Following an application, a foreign filing license will be issued in about 21 days in India (although it has been known to take up to a month), 1 to 2 days in Singapore and 3-5 working days in Malaysia. The penalties for failing to comply with the law are a fine and up to 2 years imprisonment in all three countries. India, like China and the US, further considers the patent application for the invention to be abandoned.
Other Countries in S.E. Asia:
Indonesia, Vietnam, Thailand and the Philippines do not have such provisions in their laws and one need not be concerned regarding inventions developed in these countries or with residents of these countries inventing elsewhere.
Discussion
When an applicant has to be in compliance with a number of national security laws, determining how best to proceed can be difficult. Fortunately, each of these countries has provisions for obtaining security clearance without first filing a patent application. Some of these clearance procedures are quick (SG and MY) while others can delay the time needed before the first filing can be made (IN and CN). Careful planning, allowing adequate time, is necessary to insure filings are made in sufficient time to insure that there is no public exposure or other novelty destroying event prior to the actual first filing date.
In addition to planning for the additional time to comply with national requirements (and translation in some cases), the position of each national law regarding seeking security clearance from another country must be determined. Since these laws are designed to keep state secrets from becoming part of the public domain, the applicant must ensure that the act of petitioning for clearance with a full enabling disclosure in one country does not inadvertently put the applicant in violation of the law in another country.
Finally, for countries establishing their requirements on the residency of the inventor(s) or applicant(s), a clear definition on who is considered as a resident is needed. Under Indian law the term "resident" is not defined in the patent law. Some people have turned to the Indian tax statutes for the definition of residency (i.e. person living in India for more than 182 days in the preceding year). This may or may not be acceptable as the patent law itself is silent on the qualification. Under Singapore law, we find the definition of resident is very broad and encompasses people who are residing in Singapore with a valid pass issued under the Immigration Act to enter and remain in Singapore for any purpose regardless of the nature of the stay. Because obtaining a foreign filing license in these countries is relatively easy and quick, taking a very conservative view of whether an inventor or applicant could be considered a resident seems the best practice.
It is always best to work closely with your local agent in each of the relevant countries to help resolve any problems associated with national security clearance and help to set up a standard procedure to keep one in compliance with all national security laws when inventions are made by residents of one of the countries having their requirements on residency and in cases where developments occur in multiple countries. Remember that it is important to do it right, up front, as most countries outside of the US do not have provisions for obtaining a foreign filing license retroactively after a filing has been made. Once the security law has been contravened, the consequences of being in violation can be severe including loss of patent rights, monetary penalty, or jail terms not exceeding 2 years.
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