These days I am reading a lot about Patent Outsourcing and the new notice issued by USPTO. What I am not able to understand is the uproar that the new notice has made in the community. Nobody has tried to understand the right situation and instead people are interpreting it in different manners, as done by few bloggers.
I was aghast when I looked at the posts from these learned individuals. I would like to quote one paragraph from the blog:
“Outsourcing has be going on in the open in the patent area for at least 5 or 6 years without anyone raising any issues. For a long time I have thought that all of this violated the EAR, but no one seemed to agree with me. I personally think strict interpretation of the EAR is going to prevent the exporting of not only the preparation of patent applications but also the outsourcing of patent illustrations and patent searches. This is because the EAR specifically prevents the sending abroad of any information relating to technology that has been developed in the US. The way I read the EAR there is no patent application exception that would save outsourcing. There is a patent application exception, but it relates to the sending of information from the US outside the US for purposes of obtaining a signature by an inventor not located in the US. There are other patent application exceptions, but these apply to published applications. If you look at the EAR the primary exceptions relate to publicly available information and scientific information that is normally shared within the scientific community. Given that patent applications by their nature need to apply to inventions that are not known to exist previously and because the outsourcing would occur before filing (i.e., well before the information would be publicly available and/or published) in almost all situations there would be a prohibition against sending information related to proprietary information overseas, thus killing patent related outsourcing.”
The above paragraph clearly states that EAR would stop outsourcing. This is completely wrong. There is a very beautiful explanation that has been given in the same blog from a very learned individual who try to clear the misunderstsanding of the fellow bloggers and other lawyers in the community:
Let me get this straight. Export control becomes an issue only in very small numbers of very specialized cases; cases which will probably never be outsourced to India anyway.
why, then, is there such a hullabullo about it?
similarly in client confidentiality measures: the san diego bar opinion on this issue was given because, apparently, an indian lpo put some sensitive client material on the net because said client refused to pay up for services rendered.
that could very well have been done by an US attorney.
so why is the indian lpo industry being chosen as the main threat to US client confidentiality? what can I really do by disclosing the name of some defendant in some case somewhere in the ninth circuit? how can i gain from it? why should i bother?
is this another example of a paranoia whose roots can be traced to an anti-globalisation group?
what arrant hypocrisy!
Gene Quinn Says:
July 30th, 2008 at 5:33 pm
Implying or stating that US export regulations apply only to a small number of inventions is simply wrong. If actually enforced as written and as the United States Patent Office has recently informed US patent practitioners, outsourcing of patent related preparation to India or any other country has come to an end. You simply cannot export proprietary technology outside the US without a proper license or exception.
Dear Mr Quinn,
Thank you for your comment. I had the opportunity to go through the article that you have recently posted on your website. I also had a look at the BIS website and the EAR, and here are my thoughts:
1. Not all patents that have been filed become “publicly available.” There are classified patents, which, due to various security reasons, or otherwise, can never become public knowledge.
2. But most patents, once filed, become public knowledge and their documentations can be sent outside the US. see http://www.bis.doc.gov/deemedexports/deemedexportsfaqs.html#14
3. Therefore there exists a certain difference between patent information that is kept secret and patent information that becomes public knowledge. This difference is in their dual-use capabilities, or lack thereof, or possible defense uses, or lack thereof, or their relation to prohibited exports like encryption technology, high-performance computers etc, or lack thereof.
4. This difference is determined at an individual level, and there are very precise methods of performing that determination. see http://www.bis.doc.gov/licensing/exportingbasics.htm
5. BIS does not regulate the process of this determination, but has an enforcement and compliance wing in case what an exporting entity determines turns out to be incorrect.
6. There is nothing the present author could discover in the entire legislative literature which prohibits export of information pertaining to patent application where said patent would not, once granted, fall under the various export regulations.
7. This makes sense too. It is the prerogative of the inventor to determine, as an honest US citizen, if exporting his invention information will harm his country’s security interests. If, after careful determination, following existing methodology, an inventor determines that the new method of producing macaroni, or disclosure of the new health food made out of south east Asian fiber extracts, does not harm his country’s security interests if exported, why would he not consider saving money by outsourcing part of the patent process? If some American lawyers are loosing jobs through outsourcing, some American inventors are saving a few hard-earned dollars, too. And it is hard to throw macaroni and bring down a building.
8. As to the comment about India’s poor work-product in re US patent work, I have only to say that if all the Indian scientists, professors, managers, software experts, professionals, governors, senators, businessmen, writers, and even grocery store owners left the US shores this fine evening, the US would be a much poorer country indeed with regard to its intellectual assets.
9. Lets not, therefore, make hasty comments about a nation’s intellectual acumen by looking at a few baser instances. If a large number of US citizens are being benefited through LPO/PPO, a very contrary note in a register will probably not be able to stop that industry. Free market is a very realistic concept, and mindless entrenchment paranoia will perhaps not find much of a foothold against the onslaught of such reality.
10. Finally, I appreciate the moderator’s publishing comments which are admittedly un-supportive of the industry. That is how free speech works, and a free market is not an altogether different concept.