Kshitij Malhotra
Section 39 of the Indian Patents Act as amended requires an applicant to obtain a Foreign Filing License (FFL) before applying for a patent for a technology in a foreign country, without applying for a corresponding patent in India. The implications of the violation of the section are very harsh, and may even include criminal liabilities on the defaulting applicants. Therefore, understanding the provision is of utmost importance, especially in today’s scenarios where joint development of technologies is the name of the game.
The scope and interpretation of the section has been widely debated since inception. Sec 39 of the patent act states that-
(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;
(b) the Controller shall not grant permit without the prior consent of the Central Government; and
(c) 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has been given under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked.
In my opinion, the determination of obtaining FFL is independent of citizenship, and, even the residency of the applicant. Instead, the real test to be applied is the “Place of Conception” test. If the invention is conceived in India, the applicant irrespective of character (organization or individual) or nationality (Indian or alien) HAS TO OBTAIN AN FFL for first filing abroad. In case not, then the requirement should be answered in negative. However, it should be clearly understood that the term conception does not in any way means mere envisaging of an invention, and should be construed as much more than a mere gestation of an idea.
This can be understood if we read the section 39 purposively rather than just reading the section in isolation. While interpreting any law, the foremost criteria is to determine the true intention of the legislature in invoking the law. Any meaning given to the law in isolation of legislative intent is ultra vires and void, and CAN NOT be sustained.
To appreciate the true meaning of sec 39, firstly, we should note when and why sec 39 was enacted? Sec 39 was inserted in the Patent Act, 1970 (parent act) by means of Patents (Amendment) Act, 2002 (2002 act). However, the sec 39 in 2002 act read differently from the present day law. According, to section 39 of 2002 amendment:
(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 relevant for the defense purposes or related to atomic energy 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;
(b) the Controller shall not grant permit without the prior consent of the Central Government; and
(c) 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.
Next, it should be noted where was sec 39 introduced in the act? It was inserted in CHAPTER VII of the Act, which reads “PROVISIONS FOR SECRECY OF CERTAIN INVENTIONS”. There has to be a conspicuous purpose of such classification, and such purpose CAN NOT be ignored. Therefore, section 39 has to be read in light of the other provisions of the chapter, namely sec 35 (Secrecy directions relating to inventions relevant for defence purposes), section 37 (Consequences of secrecy directions) and section 38 (Revocation of secrecy directions and extension of time). I STRONGLY believe, the indication of the legislature in invoking these provisions (sections 35, 37, and 38 in the parent act) is to keep certain class of inventions, especially inventions for defense purposes or atomic energy, as secret because of primarily national security considerations. Therefore, the said purpose should be reasonably applied to section 39. Accordingly, it can reasonably be said that by invoking section 39, the legislature wanted to screen the inventions exported from India to ensure that no invention for defense purposes or related to atomic energy leaves India. The provision is similar to patent law of United States, and specifically 35 USC 184, in the US Patent Act.
Section 39 was later amended by the PATENTS (AMENDMENT) ACT, 2005. The amended section 39 and in the present form reads as above. Clearly, the legislature increased the ambit of the section in the 2005 amendment to include “any invention” and not just restrict the scope only to inventions related to atomic energy and defense. This should be understood in light of the fact that numerous inventions, which prima facie might be seemingly innocuous, can actually be a potential threat to national security of a state. For example, a simple HEAT INSULATION SUIT can be an innocuous invention that may be considered to be doing great benefit to the state, but, if seen from the perspective of national security may be subvert (what if this suit gets into the hands of an enemy state, and is used by the enemy army against the state in times of war?). Of course, the above example is just one proposition. Therefore, it is the responsibility of the state to address to such situations, and establish a mechanism, wherein such inventions are thoroughly scrutinized before being exported. That’s why the law requires the applicant to obtain a written permission from the Patent authority, or first file the patent application in India. This mechanism clearly provides a process by which the government can clearly check what technologies are being exported out of India.
The law also requires the patent office not to grant the FFL, without the prior consent of the Central Government, if the invention is relevant for defense purpose or atomic energy. In case the applicant has filed a patent application, and the controller or central government finds that the invention is one of a class notified to him by the Central Government as relevant for defense purposes, then obviously, the patent office can take action against such impugned application by either denying the FFL, and if the impugned application has already been filed, by preventing its publication. In hindsight, the essence of the chapter is to make sure that NO TECHNOLOGY CONCEIVED AND DEVELOPED IN INDIA SHOULD LEAVE ITS SHORES WITHOUT PROPER THE SCRUTINY, whether that scrutiny is through screening of the application, or through the process of granting a FFL.
Based on the foregoing, the onus while determining the question of FFL should essentially be based on answering whether the technology was conceived and developed in India? And, this question should be answered irrespective of the fact that whether the applicant is an Indian citizen, foreigner, or a company, or a natural person. The term “resident” in the section is actually inserted to exclude any restrictions that can be imposed on the applicability of the provision, and to widen the ambit. The term “resident” in law is supposedly construed to be broader than term “citizen”. For example, our tax laws define a foreign national (even residing abroad) to be a resident of India if he satisfies certain conditions for the purpose of taxation.
In absence of any specific definition of term “resident” in the act, the interpretation should be restricted to the dictionary meaning of the term. However, reading the meaning of the term resident independently, without considering the operative part of the section 39 (which allows for scrutiny of inventions to be exported from India) will be contrary to the principle of having the section in the first place. Therefore, the true test while determining FFL should be to check where the invention was conceived.