Authors: Mr. Sonal Mishra (Principal Attorney) and Mr. Antriksh Mishra (Sr. Attorney)

A foreign filing license refers (FFL) to a license issued by the Indian Patent Office for a patent applicant to file the patent application in a country foreign to India. This license is issued as per Section 39 of the Indian Patents Act, 1970.

Sec 39 of the Patents Act states:

"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has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.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."1

As would be clear from the reading of the Section, only when a resident of India who files, or causes to be filed, a patent application in a jurisdiction foreign to India, without first filing said application in India, they are required to apply for a FFL. Furthermore, the license is also required, if a Indian resident filer wishes to file the application in a foreign jurisdiction before six weeks from the date of first filing of the application in India.

It may be noted that Section 39(3) of the Patents Act also explicitly exempts non-resident filers. It states that the Section does not apply if an application for patent is filed in a foreign country by a person not residing in Indian. This means that residents of India who are planning to directly file (or before expiry of six months from the date of Indian filing), a patent application in a foreign country, need to apply for an FFL. The form prescribed by the Indian Patent Office for this purpose is Form-25.

Who should apply for a Foreign Filing License:

The reader may note that in practice, in a scenario where either the Applicant(s) and/or inventor(s) are residents of India, it is preferable to obtain an FFL from the Indian Patent Office to avoid any challenges in the future. In this regard, one may refer to the wording of Section 39(1) which reads "make or cause to be made", whereby in a case an Applicant of the foreign patent is not an Indian resident, but the inventors are, the clause may be interpreted to mean that the inventors have caused the foreign application to be made. Furthermore, in a scenario where multiple Applicants or Inventors are present, as per the present patent practice in India, an FFL should be obtained in case even one of the multiple Applicants or multiple Inventors are Indian residents. It may be noted that in view of lack of any judicial precedent on many such scenarios, and the process of obtaining of FFL being streamlined and time-bound in India, it should be preferred to obtain a FFL before making any application in a foreign country.

Provided below is a table containing scenarios of when an FFL should preferably be obtained in the present patent practice, based on resident status of Applicant(s) and Inventor(s):

Applicant in foreign Country
(Whether Indian Resident)		 Inventor
(Whether Indian Resident)		 FFL requirement
Yes Yes Yes
Yes No Yes
No No No
No Yes Yes


Who is a resident of India:

In the pursuit of filing a patent application in different jurisdiction in a time sensitive manner, the determination of whether an entity (legal or natural) is a resident of India becomes crucial. It is interesting to note that the Indian Patents Act is silent regarding this determination. In common parlance, in such scenarios, we have to refer to other legislations where the term is defined. In India, two Act which are referred to in this regard are, the Income Tax Act, and the Foreign Exchange Maintenance Act. The provisions of these sections are discussed below:

Section 6 of the Income-Tax Act provides the definition of resident.

An entity can therefore be determined to be a resident of India using the requirements of Section 6 of The Income-Tax Act, 19612 as the criteria.

Specifically, Section 6 of the Income-Tax Act states that,

A person/individual is said to be a resident of India, if:

  1. In the previous year, he has lived in India for more than or equal to 182 days in total.
  2. He has lived for more than 365 days in India preceding the previous year in total and has lived in India in the past year for more than or equal to 60 days.

A company is said to be a resident of India, if:

  1. It is an Indian company.
  2. The company is managed from India. Or the place of "effective management" is in India.

Same as Section 6 of the Income-Tax Act, Section 2(v) of the Foreign Exchange Maintenance Act (FEMA)3, 1999 also defines the "resident of India". This Section states that:

"(v)"person resident in India" means—

(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;"

As per this Section there are certain scenarios where a person working outside India is not a resident of India even though he has resided in India for equal to or more than 182 days in India in the previous year. But as per the Income-Tax Act the determination of resident status is different. At present there is no clarity as to which definition will have precedence to determine residency even though usually reference is made to the definition under the Income-Tax Act when dealing with residency status.

The determination of whether an entity is a resident of India is a highly contested aspect of in India (even under tax laws), especially with individuals and entities having presence across nations. With the complexities of patent law added to the mix, determinations pertaining to resident status of Inventors and Applicants becomes even more tedious.

Moreover, under Section 1184 of the Indian Patents Act, if an Applicant or Inventor is not compliant to Section 39 he/she is liable to be punished with an imprisonment term of 2 years or a fine or both. Furthermore, Non-compliance to Section 39 might also lead to any relevant Indian patent application filed in the name of the Applicant or the Inventor to be abandoned or if the patent is granted, revoked.

Hence, in cases of uncertainty, it is advisable generally to apply for an FFL should one believe that they may be determined as residents of India to avoid any penalties and other difficult situations.

Requirements in Form-25:

Since, it is imperative for entities to ensure applying for an FFL in scenarios defined under Section 39. The requirements for filing a request for FFL, in Form-25 becomes extremely crucial.

Broadly the requirements related to Form 25 are:

  1. Title and brief description of the invention.
  2. The name and addresses of the inventor or inventors or applicant/applicants.
  3. The countries in which filing of the application is intended.
  4. If the first filing is outside India, then the reasons for doing so need to be specified.5 For example lack one reason may be lack of a market for the product in India.

After receiving the application for FFL, the Office and the Controller are bound to dispose of the application within 21 days or 3 weeks as per Rule 71(1) of the Patent Rules. In practice, obtaining FFL is a straight forward and time bound process if all documents and details are in order and the invention does not relate to defense or atomic energy.

Footnotes

1. Section 39, The Indian Patents Act, 1970.

2. Section 6 of the Income-Tax Act, 1961.

3. Section 2(v) of The FEMA Act, 1999. Accessed at: https://legislative.gov.in/sites/default/files/A1999-42_0.pdf

4. Section 118, The Patents Act, 1970.

5. Form 25, Indian Patent Office. Accessed at: https://ipindia.gov.in/writereaddata/Portal/IPOFormUpload/1_37_1/form-25.pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.