Section 39 of Patents Act: Resident in India

I have had discussions with quite a few practitioners on Section 39 of the Patents Act; there is a school of thought according to which, so long as the invention is conceptualized in India, Section 39 applies to the situation. Before I proceed further, here’s Section 39:

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 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

2.  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

3. either no directions have been given under sub- section (1) of section 35 in relation to the application in India, or all such directions have been revoked.

4. The Controller shall not grant written permission to any person to make any application outside India without the prior consent of the Central Government.

5.  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.

Sub-section (1) clearly requires only a person resident in India who makes or causes to make an application for patent outside India to:

A. either seek from the Controller written exemption from first filing for an application for patent in India: or

B. File an application for patent outside India only six weeks after filing one in India

For the first filing requirement of Section 39 to apply to an individual/entity, he or it must be a “resident in India”. The Patents Act does not define “resident in India”, but Section 6 of the Income Tax Act does; the portions of Section 6 of the Income Tax Act which are relevant for this post are as follows:

Section 6: For the purposes of this Act,-

 (1) An individual is said to be resident in India in any previous year, if he - (a) Is in India in that year for a period or periods amounting in all to one hundred and eighty-two days or more; or

(c) Having within the four years preceding that year been in India for a period or periods amounting in all to three hundred and sixty-five days or more, is in India for a period or periods amounting in all to sixty days or more in that year.

(b) Being a citizen of India, or a person of Indian origin within the meaning of Explanation to clause (e) of section 115C, who, being outside India, comes on a visit to India in any previous year, the provisions of sub-clause (c) shall apply in relation to that year as if for the words "sixty days", occurring therein, the words "one hundred eighty-two days" had been substituted.

(3) A company is said to be resident in India in any previous year, if – 

(i) It is an Indian company; or

 (ii) During that year, the control and management of its affairs is situated wholly in India.

(4) Every other person is said to be resident in India in any previous year in every case, except where during that year the control and management of his affairs is situated wholly outside India.

If a person does not qualify as “resident in India” within the meaning of Section 6, I am not sure Section 39 applies to him. Further, Section 39 does not apply to all residents in India, it applies only to those residents who make or cause to make an application for a patent outside India.

Broken down into simple terms, Section 39 applies only to those residents who have the power to decide whether or not to apply for a patent outside India. In short, it applies only to applicants/assignees, but does not seem to apply to inventors.

It seems a stretch of an argument to contend that even an inventor in India could be considered as “causing to make an application”. Participating in the act of creating the invention is different from taking a decision to apply for a patent. 

An inventor, in most situations, is simply not the person who can take a call on whether or not to apply for a patent. To apply or not to apply for a patent is the call of the assignee for whom the inventor works.

Even if the inventor is aware of the fact that the invention may ultimately become the subject-matter of a patent application, I don’t think he “causes to make the (patent) application”. He merely makes or causes to make the invention, which may or may not be the subject-matter of a patent application.

What does this translate to? If there is an invention which is the product of the efforts of an entity which is situated in India, but whose control and management is situated outside India, Section 39 does not seem to apply to such entity located in India, notwithstanding the fact that the invention is made in India or the inventors are Indians. This is so because the entity located in India is not a “resident in India”, according to Section 6 of the Income Tax Act.

It’s a wholly different issue that as practitioners, prudence tells us that it is better to err on the side of caution and hence file an Indian application (only to be abandoned later); but strictly speaking, if one had to take a call on pure legal grounds, however academic, Section 39 does not seem to require non-residents to seek written permission from the Controller or file an application for patent in India first.

It is possible that Section 39’s history may allude to a different line of thought. However, legislative intent may be deciphered and used from external aids of interpretation such as legislative debates or committee reports or history of the provision, only when there is an ambiguity in the provision on a plain reading of the provision, not when ambiguity is the product of uninformed or mis-informed “office practice”.

I would like to know the opinions of our better-informed readers.