Patents As a Defense in the Customs Office

The shortage of key personnel in cutting-edge technology industries has been a bane to technology companies that for the last decade have found themselves relying more and more on imported brainpower. This problem has particularly affected smaller companies that are less able to pay the highest salaries in order to attract employees. U.S. companies often find themselves turning to Europe, India and the Far East to import key technical staff. To hire a foreign national, appropriate government approval, in the form of an H-1B visa, is required. However, H-1B visas last only 3 years and can be renewed for only one additional three-year term. Thus, these employees often return to their home countries once their visas expire.

Regulation of Export of Technical Information

The United States export regulations prohibit the export of certain technologies. Most companies believe this only applies to the sale of products to rogue nations or the sale of products, such as weaponry, which are vital to the nation's security. What many companies do not realize is that the U.S. Customs Office, which enforces export regulations, considers the departure of these workers from the United States, with the knowledge they have retained from their work, to be an export of technical information, potentially in violation of U.S. export statutes. Accordingly, the Customs Office may prevent companies from hiring foreign nationals.

Compliance with United States Export Regulations

It should be noted that the Customs Office takes this type of export very seriously and the burden of proof is on the company to demonstrate compliance with the export statutes. There are a few ways to keep the Customs Office at bay. A company may comply with the export regulations by obtaining an export license. However, a more prudent way to proceed may be to prove that a license is unnecessary. Whatever course of action a company decides to pursue, it should keep in mind that export regulations regarding illegal exports are technology and country specific. Certain technologies are only prohibited from export to so-called 'rogue states.' Therefore, in these cases, a company need only show that its employees are not nationals of a rogue state.

Patents as a Defense to Export Violation

Companies may encounter a more challenging hurdle in showing that the technology in question is not a prohibited technology for export in general. As a first step, companies should check the export statutes for the enumerated banned technologies. If there is a question as to whether a specific technology is indeed a prohibited technology, the USPTO may provide some assistance. Within several weeks of a patent application being filed, the USPTO makes a decision whether it will grant a license for filing of patent applications for the same technology in foreign countries around the world. In other words, the USPTO considers the technology to determine whether or not it should grant a license to 'le corresponding applications having the same technical disclosure in other countries. In effect, the USPTO implies that this technical information should be allowed to be published throughout the world. Foreign applications are usually made public within 18 months of their earliest filing date for priority.

The license granted by the USPTO does not in any way diminish the responsibility of a licensee to comply with existing espionage or national security laws pertaining to the export of technical data. However, the license may be used to show compliance with the relevant export regulations. The USPTO does not simply rubber stamp licenses for filing applications in foreign countries, rather the USPTO initially screens the subject matter of the application for compliance with certain restricted export lists before granting applications. Thus the USPTO license could be used to make a prima facie case to the Customs Office that the data going home with the foreign national employees has already been exposed to the public and that therefore no export license should be required.

Conclusion

In summation, if a company finds itself employing either key personnel or a significant number of personnel from foreign countries, it may be advisable for the company to patent technology as it develops. This is true not only from a standpoint of protecting innovations against competitors, but it is a helpful strategy for keeping its foreign national staff intact.

The shortage of key personnel in cutting-edge technology industries has been a bane to technology companies that for the last decade have found themselves relying more and more on imported brainpower. This problem has particularly affected smaller companies that are less able to pay the highest salaries in order to attract employees. U.S. companies often find themselves turning to Europe, India and the Far East to import key technical staff. To hire a foreign national, appropriate government approval, in the form of an H-1B visa, is required. However, H-1B visas last only 3 years and can be renewed for only one additional three-year term. Thus, these employees often return to their home countries once their visas expire.

Regulation of Export of Technical Information

The United States export regulations prohibit the export of certain technologies. Most companies believe this only applies to the sale of products to rogue nations or the sale of products, such as weaponry, which are vital to the nation's security. What many companies do not realize is that the U.S. Customs Office, which enforces export regulations, considers the departure of these workers from the United States, with the knowledge they have retained from their work, to be an export of technical information, potentially in violation of U.S. export statutes. Accordingly, the Customs Office may prevent companies from hiring foreign nationals.

Compliance with United States Export Regulations

It should be noted that the Customs Office takes this type of export very seriously and the burden of proof is on the company to demonstrate compliance with the export statutes. There are a few ways to keep the Customs Office at bay. A company may comply with the export regulations by obtaining an export license. However, a more prudent way to proceed may be to prove that a license is unnecessary. Whatever course of action a company decides to pursue, it should keep in mind that export regulations regarding illegal exports are technology and country specific. Certain technologies are only prohibited from export to so-called 'rogue states.' Therefore, in these cases, a company need only show that its employees are not nationals of a rogue state.

Patents as a Defense to Export Violation

Companies may encounter a more challenging hurdle in showing that the technology in question is not a prohibited technology for export in general. As a first step, companies should check the export statutes for the enumerated banned technologies. If there is a question as to whether a specific technology is indeed a prohibited technology, the USPTO may provide some assistance. Within several weeks of a patent application being filed, the USPTO makes a decision whether it will grant a license for filing of patent applications for the same technology in foreign countries around the world. In other words, the USPTO considers the technology to determine whether or not it should grant a license to 'le corresponding applications having the same technical disclosure in other countries. In effect, the USPTO implies that this technical information should be allowed to be published throughout the world. Foreign applications are usually made public within 18 months of their earliest filing date for priority.

The license granted by the USPTO does not in any way diminish the responsibility of a licensee to comply with existing espionage or national security laws pertaining to the export of technical data. However, the license may be used to show compliance with the relevant export regulations. The USPTO does not simply rubber stamp licenses for filing applications in foreign countries, rather the USPTO initially screens the subject matter of the application for compliance with certain restricted export lists before granting applications. Thus the USPTO license could be used to make a prima facie case to the Customs Office that the data going home with the foreign national employees has already been exposed to the public and that therefore no export license should be required.

Conclusion

In summation, if a company finds itself employing either key personnel or a significant number of personnel from foreign countries, it may be advisable for the company to patent technology as it develops. This is true not only from a standpoint of protecting innovations against competitors, but it is a helpful strategy for keeping its foreign national staff intact.