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Indian LPO Industry Put on Notice

 The estimated US 2.2 billion LPO industry in India has been shaken with a report appearing in Economic Times today about th USPTO move to put restrictions on export of information regarding Patent applications. According to the report US law firms outsourcing their patent related work to India would now require “Government Clearance”.

 While some have interpreted this as the result of lobbying by the anti outsourcing segment of the US industry, some suggest that this is just a re-iteration of the current provisions.

 Legal outsourcing from US was just picking up and was considered to be one of the lucrative areas of outsourcing business in India.  According to some experts, the cost of preparing a Patent application in India is around US $ 2000 while the similar cost in US would between US $ 8000 to US $ 15000. The USPTO move would therefore dramatically increase the cost of patent applications in USA and the US inventors and Corporates may feel the pinch of high costs in an economy under recession.

 It is expected that USPTO would realize the futility of such anti people measures and provide for some flexibility through its “Clearance Guidelines”.

 If “Information Security” is a concern, USPTO may be surprised to note that India is far better prepared than other countries to meet the higher information security requirements that would be required to take care of confidential information entrusted to an Indian outsource partner. More details about this would be presented in the sequel to this article.

 If however the concern of US is limited to prevention of export of  “National Secrets”, US is perfectly entitled to impose restrictions on export. This would mean that the applicant may have to declare that the invention to be applied for does not contain technology disclosures which donot adversely affect US national security. It must however be remembered that at the time of making an initial application for clearance, the applicant may not like to reveal much of the intended specifications and hence the declaration is as much worth as the integrity of the person making it.

 Alternatively, USPTO can make it mandatory for all Patent applicants who may use outsourcing services to use a modified “Provisional Patent System” where the Provisional patent application will be examined as to its sensitivity for national interests before clearance is given. This will protect the interests of the applicant since the priority gets recorded and at the same time will provide enough disclosures to the USPTO so that they may while giving a certificate of Provisional Patent indicate whether “Export of Information for Specification drafting” is permitted or not.

 In the meantime, I would like to state that Indian LPOs need not be unduly worried about the development and the dooms day predictions are unwarranted. 


October 9, 2008

Related Article: LIPS, Indian answer to USPTO Concerns