An innovation business is a strange business model where confidentiality is supreme at every stage right from conception of an idea to the actual invention development. It will not stop here as the moment you contact any other individual to divulge you secret invention, you would look forward to sign a non- disclosure agreement. That other individual could be an employer /investor /partner / patent practitioner. Confidentiality remains the hall mark of every new invention as the fear of theft or copying is natural apprehension of every inventor.
A non-disclosure agreement (NDA) is basically a legal contract between the consenting parties where the parties share the information on confidential material and/or knowledge on condition that the information so shared would be used for the purpose for which agreed with a restriction of access to the third party. The agreement may take form of a simple confidentiality agreement (CA) between two or mare individuals or a confidential disclosure agreement (CDA) attorney and inventor or a proprietary information agreement (PIA) between firm with partners and employees or merely a secrecy agreement (SA) in general. Whatever name it may be called it is essentially an agreement keep to something confidential.
Patent office and secrecy of applications
When an application is filled in an IP office it is kept secret for 18 months in most of the IP jurisdictions. For example Section 11A (1) of the Indian Patent Act ,1970 read with Rule 24 of Patents Rule 2003 envisage that “no application shall ordinarily be open public before 18 months from date of filing or priority date. Patent office is duty bound to keep such applications secret and officers and employee are barred from furnishing any information subject to the provisions of section 76.The inventors who wish to file the application are rest assured that the information relating to their invention would not be disclosed to the third parties. Since patent office accept filing of application using online mode patent office uses the robust cyber security measures to meet the security requirements of the law.
National security and patent law
Every Patent office not only maintain the secrecy of the applications for patents up to 18 months but also is duty bound to scrutinise all such applications to check whether any invention is one of a class notified by the Central Government as relevant for defence purpose or where otherwise the invention appears to the Controller to be so relevant. In such situations Controller may give directions for prohibiting or restricting the publication of the information with respect to the invention or communication of such information under Section 35. The restriction is applicable to Indian residents only. Section 39 envisage that residents not to apply for patents outside India without prior permission. This restriction 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 under section 39 (3).
“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.”
Foreign Filing license
In order to facilitate filing of patent application outside by Indian resident inventor Indian patent law gives two options under section 39. First option being to file an application for a patent for the same invention in India and wait for six weeks for issue of either secrecy direction under sub-section (1) of section 35 in relation to the application in India, or all such directions have been revoked. If no direction is received within six weeks Indian resident inventor is free to file the application outside India. In case Indian resident inventor seeks to file PCT application he is required to seek Foreign filing Permission from the Controller before such application is processed further under PCT. This is the second option available under section 39. For obtaining Foreign Filing license [FFL] application on Form 25 giving details of the invention for which permission is sought is required to be filed. This procedure is quick for the cases where no secrecy direction issues are involved. But where secrecy directions are issued the Indian resident inventor can expect a delay in grant of FFL or no permission is forthcoming due to nation security reasons in relation to inventions relevant for defence purpose. It may be noted that secrecy directions are reviewed by central government at intervals of six months or the applicant can make a request to seek reconsideration. [section36]
Central Government to maintain Secrecy
This concept of keeping inventions originating in the country secret for the purpose of national security of any country is a sovereign power inherent in patent law of every jurisdiction. Protection of security of India under section 157A even envisages that the Central Government shall not disclose any information relating to any patentable invention or any application relating to the grant of patent under this Act, which it considers prejudicial to the interest of security of India. The expression “Security of India” includes any action necessary for the security of India which—
(i) relates to fissionable materials or the materials from which they are derived; or
(ii) relates to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment; or
(iii) is taken in time of war or other emergency in international relations.
This provision binds Central Government also to keep invention so disclosed secret. Thus national security is kept at highest pedestal when it is a matter of protecting information which is prejudicial to the interest of security of India. Every Indian Resident inventor is duty bound to keep such information secret till the authorities give permission to disclose or file patent applications outside India.
Imposition of Secrecy direction not fatal to a patent
It is invariably asked what would be the fate of such application where secrecy direction is in force. Since these applications will not be published no information to the public would be available. However, the procedure for grant will not stop as such applications will proceed up to the stage of grant of the patent ,but the application and the specification found to be in order for grant of the patent shall not be published, and no patent shall be granted in pursuance of that application. [Proviso to section 37] There is also a provision for compensation if this invention is used by the Central government under chapter XVII. The Indian resident inventor is also eligible to seek payment by way of solatium for the hardships suffered by reason of the continuance in force of the secrecy directions. [Section 37(2)(b)] Therefore, the secrecy direction is not fatal to the Indian resident inventor except that he is prevented from disclosing the invention relevant for security of India to any one and filing patent application outside India. Such security provisions are used by every patent granting jurisdictions to protect the national interest.
It true that in view of the imposition of secrecy directions Indian resident inventors feels deprived to use their inventions. But such steps are essential to protect the national knowledge from being stealthily appropriated. There are certain issues relating to Indian resident inventors working in multinational organisation along with nationals of other countries which need to be resolved. In such joint inventive ventures which involve multiple nationals’ imposition of condition of first filling in the country of origin at time become problematic. If every patent jurisdiction make such demand it would be impossible to meet secrecy directions by every national. There is urgent need to address the issue of imposition of secrecy directions in such cases. Needless to add that all the inventors would have shared the application details irrespective of their nationality in order to file application for patent. It is high time to include some more exceptions under section 39(3) to address this issue effectively. But until such exceptions are added Indian resident inventors are duty bound to keep the inventions secret till the secrecy directions are in force. The silver lining under the Indian law is that the patents will be kept ready for grant without publication. The inventors who faced hardships due to imposition of secrecy direction may claim to seek payment by way of solatium for the hardships suffered by reason of the continuance in force of the secrecy directions.