USPTO needs to update its Foreign Filing License rule

The USPTO has known for a couple of years now that it needed to update its rule (37 CFR § 5.15) that spells out what you can and cannot do when you have a Foreign Filing License.  Things came to a head in May of 2016 and one would have hoped that USPTO would have taken action at that time.  Even now in October 2016, USPTO has not taken action.  This blog article will hopefully serve as a reminder to USPTO that the update continues to be needed.  What is needed is an update to the rule making clear that a PCT filer can use ePCT to generate a PCT Request for e-filing in EFS-Web.  I will explain.

Anybody who needs to file a patent application in a patent office must, of course, somehow communicate the bibliographic data.  By this we mean such things as the inventor names, the applicant name, priority claims, and the title.  Someone filing an ordinary US patent application will communicate the “bib data” using an Application Data Sheet.  In the world of PCT, the name that is given to the document that communicates the bib data is the “Request”.

For over ten years now, WIPO has provided sophisticated software which may be used by a filer to assemble the bib data into a Request, as part of the PCT filing process.  The software, initially known by the name PCT-Easy, came more recently to be known as PCT-SAFE.  The software is loaded onto one’s Windows computer and requires frequent updates.  PCT-SAFE is thus not available to Mac users or Linux users.

A very important aspect of PCT-SAFE (as with PCT-Easy before it) is that the software carries out dozens of validations.  Plainly put, the validations greatly reduce the risk of embarrassment or malpractice for the patent practitioner.  Despite this, and it is astonishing that I have to say it, about 30% of PCT applications filed in RO/US are filed by patent practitioners who forgo these validations and instead stubbornly use the legacy practice of completing a PDF fillable form.  The PDF fillable form does not, of course carry out any validations upon the user data entries.  (See Revisions to Best Practice for filing a PCT application in RO/US.)

The way that PCT-SAFE works, the filer enters the bib data into the software.  The software constructs a ZIP file which contains the Request in a computer-readable format.  The Request in turn contains the validated bib data.  The filer then uploads the ZIP file into EFS-Web as part of the e-filing process for e-filing a PCT application at RO/US.

About six months ago, WIPO released a new functionality in its ePCT system so that the filer could use ePCT, instead of PCT-SAFE, to build the PCT Request.  Just as with PCT-SAFE, the goal is that the filer will enter the bib data into ePCT, validations will be carried out, and a ZIP file will be constructed.  The ZIP file contains the Request in a computer-readable format.  The Request in turn contains the validated bib data.  The filer then uploads the ZIP file into EFS-Web as part of the e-filing process for e-filing a PCT application at RO/US.

There are many reasons why the US patent practitioner should use ePCT rather than PCT-SAFE.

First, from the malpractice-avoidance point of view, ePCT carries out more validations than PCT-SAFE, thus reducing the malpractice risk more with ePCT than with PCT-SAFE.  (Either approach reduces the malpractice risk substantially as compared with the legacy practice of hand-keying data into a fillable PDF form.)

Second, again from the malpractice-avoidance point of view, ePCT is always up to date because it is web-based. In contrast, the copy of PCT-SAFE on a user’s computer may well be out of date.

Third, ePCT is designed from the ground up to facilitate collaborative workflows.  With ePCT, one user can start an e-filing project and then save it.  A colleague can then log in and open the saved project and continue with the task.  (PCT-SAFE has no such collaborative capability.)

Fourth, ePCT permits users to share their “address books”, which are places where inventor names and applicant names and practitioner names may be stored and shared.  This permits the filer to populate the various “name” boxes of the Request with the click of a mouse, based upon one’s own address book or the address book of a colleague.  This saves having to hand-key such information, thus reducing errors.

Fifth, the web-based nature of ePCT means that it can be employed by Mac users and Linux users just as by Windows users.

Sixth, it is only a matter of time before WIPO drops PCT-SAFE completely, at which time the filer will have no choice but to have migrated to ePCT.  The savvy filer will want to do the migration to ePCT now so as to avoid the rush when PCT-SAFE gets dropped.

The alert reader, taking all of this into account, will ask why it is that everyone has not already migrated to ePCT as their method for creating ZIP files for this RO/US filing process in EFS-Web.  And the answer is simple.  As soon as WIPO announced this new feature of ePCT, the USPTO fired a shot across WIPO’s bow.  On May 6, 2016, the USPTO published a Federal Register notice warning filers that they risked violating export control laws if they were to use ePCT to create a ZIP file for use in EFS-Web.  You can see the Federal Register notice, entitled Use of WIPO’s ePCT System for Preparing the PCT Request for Filing as Part of an International Application With the USPTO as Receiving Office, at this link.

So what exactly is the problem here?  Every time we instruct foreign counsel to file a patent application for our US-based client, we export an invention.  Why does this not violate export control laws?  The answer, of course, is that before we send a copy of the patent application to foreign counsel, we check to make sure that USPTO gave us a Foreign Filing License in the US priority application.  The FFL insulates the patent practitioner from liability under the export control laws.

Why, exactly, is it that the use of PCT-SAFE does not trigger any export-control-law worries?  The reason is that the PCT-SAFE software is on your own computer, which for purposes of discussion we assume is physically located in the US.  Thus when you load the bib data into PCT-SAFE, you are not exporting it from the US.

But with ePCT, you are visiting a web site.  The web server is physically located outside of the US (in Switzerland).  When you load the bib data into PCT-SAFE, you are exporting it from the US.

But wait a minute, the alert reader might ask.  The bib data is not information that explains how to construct an atom bomb.  How can the export of bib data possibly amount to a risk of violating export control laws?  USPTO’s hyper-technical answer, as explained in the shot-across-the-bow Federal Register notice, is that there is always a risk that the mere title of the patent application might reveal how to make an atom bomb.  (Likewise the abstract, which is also part of the ZIP file, presents a risk of disclosing how to make an atom bomb.)

Again returning to the world of common sense.  If you were simply sending filing instructions to foreign counsel, you could send anything you wish about how to make an atom bomb.  So long as you have an FFL for the patent application that explains how to make an atom bomb, you can export the patent application to foreign counsel without risking a violation of law.  Such a patent application is permitted to contain not only a title and an abstract, but also a specification and claims and drawings.  The FFL makes it okay to export the entire patent application.

So now we try to apply common sense to the “shot across the bow” Federal Register notice.  If an FFL makes it okay to email a how-to-make-an-atom-bomb patent application to foreign counsel, how can it possibly be that the very same FFL does not make it okay to paste the title and abstract of that same patent application into ePCT for the construction of a ZIP file for use in filing a PCT application here in the good old US of A?

The answer lies in the carefully crafted wording of the FFL rule (which you can see at 37 CFR § 5.15).  The rule was carefully crafted to address something that happened about twenty years ago.  About twenty years ago there were companies gearing up to provide patent application drafting outsourcing services in India.  The idea was that a cost-sensitive US corporation could email its inventor disclosures to an outsourcing company in India which would then prepare the patent applications and send them back to the US.  The US corporation would then file the patent applications in the US patent office, probably saving gobs of money as compared with having to pay high-priced US patent counsel to prepare the applications.  And if you are the US corporation, what you would hope is that if you have an FFL, this would make it okay to email the inventor disclosure to the outsourcing company in India.  It would not risk being an illegal export.

But if you read the rule, you will see that somebody somewhere went to a lot of trouble to word the rule very artfully so that an FFL would not make it okay to export the inventor disclosure to the outsourcing company in India.

This super-artfully worded aspect of the FFL rule cannot possibly have happened by accident.  It surely must be that US-based patent practitioners lobbied the USPTO to get the FFL rule worded this way, so as to try to put the outsourcing companies out of business.

Which then brings us to today’s problem.  Today’s situation is that US patent practitioners need to be able to “export” the title and abstract of a patent application into ePCT as part of the process of e-filing a PCT application in RO/US.  US patent practitioners need to be able to rely upon an FFL as a way of knowing that it is okay to do so.   And as things now stand, the wording of this FFL rule explicitly states that the existence of the FFL does not make it okay to make use of ePCT in this way.

This harm to the ePCT system is essentially collateral damage from the war against outsourcing of patent application drafting.

So to be clear about what is needed.  What has been needed for some six months now is that USPTO has needed to amend the FFL rule so as to accommodate the many US patent practitioners who would like to avoid malpractice risks by using ePCT as part of the PCT e-filing process in EFS-Web.  The change could be as simple as adding the following sentence to the rule:

For purposes of this rule, the filing of an international patent application in the PCT Receiving Office of the USPTO shall be deemed to be a filing of application papers in foreign countries or with international agencies.

USPTO should have done this six months ago.  USPTO should do this without further delay.

(Tip for practitioners.  Between now and when USPTO corrects the wording of this FFL rule, if you have an FFL in your priority application, and wish to obtain the malpractice-avoidance benefits of ePCT, just e-file in RO/IB rather than RO/US.  Be sure to keep track of the time of day when it will be midnight in Switzerland.)


9 Replies to “USPTO needs to update its Foreign Filing License rule”

  1. Carl, I’m located outside the USA, as are my clients, so I tend not to worry too much about this whole export restriction thing. Nevertheless, this is something I looked into a number of years ago and IIRC, (a) the whole concept of what constitutes an “export” is antiquated and in need of updating, but (b) in most fields exporting the information is not per se a problem. It’s just that most lawyers are risk-averse and don’t want to do anything that might possibly maybe in someone’s mind theoretically be construed as perhaps exporting data improperly, and therefore want to have a FFL to cover their behind, because they’re too scared to rely on their own judgment and common sense. But a new pharmaceutical is not going to be subject to export restrictions. Neither is a new carburetor, or a toothbrush, or a back massager. A fortiori not a patent application *title* that reads, “New antibiotic” or an abstract that reads, “New antibiotic compounds and their uses are disclosed.” (And if practitioners are saying more than that in their titles and abstracts…well, that’s a different discussion.)

    From the practical side, if we’re not talking about a defense-related invention, is the DOJ going to come after someone for creating the PCT 101 form on ePCT while they were sitting in the USA? Come on. (Yes, I know, there’s a first time for everything, and no one wants to be the first…)

    Don’t get me wrong, I fully agree that the USPTO was asinine to try to scare practitioners into not using ePCT to create PCT Request forms, and I agree that the rule needs to be changed as you propose. But I don’t think practitioners should as a rule be as scared as you present them to be.

    BTW, there’s another advantage to filing at the RO/IB, if one has the time, that you didn’t mention: by filing at the IB, you avoid giving some fees to the USPTO, which seems to be a just dessert for the USPTO’s small-minded approach to this whole thing.

  2. Would your proposed rule change cover the case where there is no priority application at all, and therefore no FFL? Also, what about the case where there is an FFL in a US case and a PCT case is prepared for filing with ePCT but then the client decides at the last minute not to file at all?

    1. Thank you for posting. These are very good questions.

      First, we consider the case where there is no priority application at all, and therefore no FFL. If the invention was not made in the US, then no problem, we could file in RO/IB without having to run afoul of US export restrictions. But more likely the invention was made in the US. In such a case, to be safe when using ePCT to generate the ZIP file, we would omit the title and abstract.

      In your second hypothetical, suppose the USPTO were to make the rule change as requested. And suppose there is an FFL (perhaps because of the priority case, or because of a fax-filed FFL). And we prepare the ZIP file using ePCT. And as I understand your hypo, we have the ZIP file in our hot little hands, and at the last moment the client suddenly changes its mind and says “no let’s not file a PCT after all”. Your question is, did we do an illegal export, given that the ZIP file never actually got used in an actual RO/US filing? On a first reflection, I think I would not worry about it. Maybe if I think about it more, I might reach a different view.

  3. Carl,

    I emailed the USPTO back in August and asked them if there was any discussions or plans to change the law based on this. I received a response a few weeks later saying that internal discussions were happening, but that was all (at least at that time). I’ll bet you have more insider knowledge than I do, but thought this might be of interest.

  4. Carl, can you please explain why you recommend filing in the RO/IB, rather than RO/US? It would seem that filing in the RO/IB is more problematic than filing in the RO/US, since the filing in the RO/IB occurs in a foreign country, while filing in the RO/US occurs in the US.

    1. Let’s start with the assumption that you already have a Foreign Filing License that covers the subject matter in the to-be-filed PCT application. In this case, then it is not “problematic” at all to file in RO/IB. If you read 37 CFR § 5.15 carefully you will see that the rule expressly says that you can file in RO/IB without having to worry that you are improperly exporting the subject matter.

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