Reducing Risks Associated With Preparing Patent Applications Abroad

I was a co-chair of a convention for attorneys that recently concluded.  Some panels at the convention related to intellectual property issues, and several legal process outsourcing vendors attended.  I asked one of the vendors what effect the guidance the USPTO published last year on the scope of foreign filing licenses had on the vendor's business. She informed me that while the USPTO's guidance confused some of her clients, her outsourcing business continues to flourish.

In these trying economic times, it is likely that many companies and their counsel are trying to reduce costs wherever possible, including by outsourcing some services to service providers with foreign operations. However, sending information overseas for preparing a patent application that is to be filed in the United States (or for other reasons) is not without risk.

In general, U.S. applicants must first receive a "foreign filing license" from the USPTO before filing a patent application outside the U.S. Sometimes, the applicant is ordered not to file the patent application abroad (this can occur, e.g., when the applicant's technology relates to military use.) When a patent application is filed abroad despite an order not to do so, the applicant can be barred from receiving a patent. (35 U.S.C. §§ 182 and 185.) Moreover, the applicant and anyone involved can be fined and/or imprisoned. (35 U.S.C. § 186.)

As a corollary, it is possible that a patent that issues from an application prepared abroad based on information sent by a U.S.-based applicant without first receiving permission from the Department of Commerce could similarly be invalid, and may even subject the patent applicant and anyone involved to fines and imprisonment. (Because offshoring patent work is a relatively recent activity, there is scant authoritative information on point.)

Some applicants may nevertheless feel that rewards deriving from the use of foreign labor are worthwhile. One way to mitigate the concomitant risks may be to first request and receive permission from the Department of Commerce before transmitting information overseas, as the USPTO's guidance suggests.

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